e.i. sturdza funds plc meeting of the board of … pack 22.05... · 2018. 5. 31. · e.i. sturdza...

E.I. STURDZA FUNDS PLC

MEETING OF THE BOARD OF DIRECTORS

TO BE HELD AT

SARNIA HOUSE, LE TRUCHOT, ST PETER PORT, GUERNSEY, GY1 1GR

ON TUESDAY 22ND DAY OF MAY 2012

AT 9.45AM (IRISH TIME)

Conference Dial-In No.: + 353 1 489 7330Guest Code: 352711#

Directors:Denise KinsellaBrian DillonGeorges GutmansJohannes YntemaMarcel KramerGavin Farrell

Registered Office:33 Sir John Rogerson’s Quay,Dublin 2.

E. I. Sturdza Funds PLC

TAKE NOTICE that a Meeting of the Directors of the above Company will take place at Sarnia House, Le Truchot,St Peter Port, Guernsey, GY1 1GR on the 22 May 2012 at 9.45am.

AGENDAPreliminaries

1. Constitution of Meeting

2. Chairperson

3. Apologies for Absence (if any)

Service Providers

4. Administrator's Report

5. Trustee Report

6. Designated Individual Report

7. Compliance Calendar

8. MLRO Report

9. Risk Report

Investment & Marketing

10. Investment Manager's Report for:- Strategic Euro Bond Fund Strategic Emerging Europe Fund Strategic Europe Value Fund Nippon Growth (UCITS) Fund Strategic China Panda Fund

11. Discussion on the Eurozone Crisis

12. Marketing & Distribution Report

13. Exceptional Trades

14. Stale pricing during the period

15. Policy update

16. Directors fees

Legal & Regulatory

17. Legal Update

18. Corporate Governance Code

19. Revised Fund documentation

20. Strategic US Momentum and Value Fund and Strategic US Equity Hedge Fund update

21. Central Bank of Ireland Correspondence

22. Related Party Transactions

General Matters

23. Minutes of Board Meeting held on the 23 March 2012

24. Matters Arising from the Board Meeting held on the 8 February 2012 and on the 23 March2012

25. Directors Information

26. Dates for Future Board Meetings

Any Other Business

Vivienne Feaheny___________________________________

For and on behalf ofTudor Trust Limited

SecretaryDated this 10 day of May 2012

Constitution of Meeting

Chairperson

Apologies for Absence (if any)

Administrator’s Report

RESTRICTED

Administrator’s Report to the Board of Directors E.I. Sturdza Funds plc

Strategic China Panda Fund

Strategic Euro Bond Fund

Nippon Growth (UCITS) Fund

Strategic Emerging Europe Fund

Strategic Europe Value Fund

Period from : 1st January 2012

Period to : 30th April 2012

Board Meeting: 22nd May 2012

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Index

Accounting & Valuations

Fund Profile Page 3

Key Performance Indicators Page 4

Pricing Page 5

Expense Ratios Page 5

Statutory Reporting Page 5

Investors Services

Fund Profile Page 6

Other Service Matters Page 6

Pending Trades > 30 Days Page 6

Exception Trades Log Page 6

Exception Cash Log Page 6

Below Minimums Trades & Holdings Page 6

Anti Money Laundering Page 7

Politically Exposed Persons Page 7

US Resident Shareholders Page 7

Shareholder Register Page 7

Appendices

Appendix 1 – Late Cash Report Page 8

Appendix 2 – Below Minimum Trades Report Page 9

Appendix 3 – Below Minimum Holdings Report Page 10

Appendix 4 - Shareholder Register Page 11

Appendix 5 – Expense Ratios Page 31

Prepared by: Helena Gilsenan

Reviewed by: Ciaran Byrne

Page 2 of 35

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Accounting & Valuations Fund Profile

Total Class NAV as at

NAVPS as at


NAVPS as at Fund Name Share Class

Launch date of Class

30.12.11 30.12.11 30.04.12 30.04.12

Fiscal Year To Date % movement

Strategic China Panda

USD Class Oct-08 $86,249,290.87

$1,694.03

$84,442,069.26

$1,767.86

4.36%


Hedged Euro Class

Oct-08 €33,787,988.96

€1,669.09

€34,246,973.91

€1,740.78

4.30%


Hedged Sterling Class

Oct-08 £1,515,535.24

£1,607.56

£1,493,564.43

£1,678.52

4.41%


NAVPS as at


NAVPS as at Fund Name Share Class

Launch date of Class

30.12.11 30.12.11 30.04.12 30.04.12


Apr-09 €37,345,013.67

€1,079.89 €38,851,318.72 €1,100.04 1.87% Strategic Euro Bond

Euro Accumulating Class

Apr-09 €25,312,245.07 €1,031.15 €28,830,771.82 €1,050.38 1.86% Strategic Euro Bond

Euro Distributing Class

Fund Name Share Class Launch date of

Class

Total Class NAV as at 28.12.2011

NAVPS as at

28.12.11

Total Class NAV as at 24.04.2012

NAVPS as at

24.04.2012


Nippon Growth (UCITS)

JPY Class A Oct-09 ¥1,167,339,676 ¥49,964 ¥1,197,429,429 ¥56,825 13.73%


JPY Class B Oct-09 ¥574,809,215 ¥42,124 ¥775,459,288 ¥47,909 13.73%


JPY Class C Mar-10 ¥29,348,696 ¥40,788 ¥24,101,39 ¥46,390 13.73%


Class Total Class NAV as at

NAVPS as at


NAVPS as at


30.12.11 30.12.11 30.04.12 30.04.12

Strategic Europe Value

Euro Class Oct-10 €34,591,608.32 €98.50 €42,113,211.20 €105.98 7.59%


Class Total Class NAV as at

NAVPS as at


NAVPS as at


30.12.11 30.12.11 30.04.12 30.04.12

Strategic Emerging Europe

Euro Class Oct-10 €10,757,889.63 €846.84 €12,185,186.56 €992.56 17.21%

Strategic Emerging Europe

USD Class Oct-10 $4,570,242.35 $849.72 $4,641,879.70 $998.15 17.47%

Page 3 of 35

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Accounting & Valuations (Cont…)

Key Performance Indicators

► NAV Timeliness

Fund Name NAV Frequency

NAV Delivery Time to Investment Manager

No. of NAV’s produced on Time

% NAV’s delivered on Time

Strategic China Panda Fund Daily 14:00 hours on Business Day following Valuation Point

73 of 78 94%

Strategic Euro Bond Fund Daily 14:00 hours on Business Day following Valuation Point

82 of 82 100%

Strategic Europe Value Fund Daily 14:00 hours on Business Day following Valuation Point

81 of 82 98%


Weekly 17:00 hours on Business Day following Valuation Point

20 of 20 100%

Nippon Growth (UCITS) Fund Weekly 17:00 hours on Business Day following Valuation Point

14 of 17 82%

► NAV Accuracy

Fund Name NAV Frequency

No. of NAV’s produced accurately

% NAV’s delivered accurately

Comments

Strategic China Panda Fund Daily 78 of 78 100%

Strategic Euro Bond Fund Daily 82of 82 100%

Strategic Europe Value Fund Daily 82 of 82 100%


Weekly 20 of 20 100%

Nippon Growth (UCITS) Fund Weekly 17of 17 100%

In addition, two small errors were logged in February 2012 on Strategic Europe Value Fund.

Logged 13-Feb-2012

Impact: 0.00026bps - due to incorrect manual performance fee calculation on Valuation of 8-Dec-2011.

Logged 13-Feb-2012

Impact: 0.0000053bps - due to incorrect manual performance fee calculation on Valuation of 9-Dec-2011

► Reconciliations ( Cash & Assets)

There are zero cash reconciliation items that need to be brought to the attention of the Board.

There are zero asset reconciliation items that need to be brought to the attention of the Board.

Page 4 of 35

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Accounting & Valuations (Cont…)

Pricing

► Board Of Director’s Resolutions

On Strategic Europe Value Fund the following price decision, already approved by the Directors via email, requires formal

ratification:

The Huabao International Holdings (336 HK) price of 27th April 2012 was reduced by 20% to HKD 3.184. This price was

further reduced by 30% to HKD 2.786 on 1st May 2012 as advised by the Investment Manager. The reduction was due to the

suspension of Huabao International Holdings trading on 24th April 2012. The price was written down with the approval of the

Directors in accordance with the Stale Pricing Policy. The holding has since started to trade again as of 4th May 2012.

The Administrator also wishes to bring the following to the attention of the Board.

On Strategic China Panda all prices were exchange traded and there were no stale or suspended securities during the

period. However, there was a zero price movement on ENN Holdings Limited position during the period 7th -13th December

2011. Bloomberg quoted a price every day but there was no movement throughout the period.

On Strategic Emerging Europe Fund there are a number of holdings on the portfolio which are not actively traded. As

instructed by the Investment Manager, these holdings are priced using the latest available local currency line and converted to

USD at the latest valuation point FX rate. The following Russian stocks are impacted and their % of 30 Apr 2012 valuation is

detailed as follows:

� Federal Grid Co Unified. 1.32%

� Transneft Pref Shrs (USD) 2.69%

� Surgutneftegaz Pfd 5.45%

---------

Total 9.46%

Expenses Ratio

See Appendix 4

Statutory Reporting The Annual Financial Statements for year-ending 31st December 2012 were filed with the Central Bank of Ireland on 27th April

2012.

Page 5 of 35

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Investors Services Fund Profile

REDEMPTION SUBSCRIPTION Number Value Number Value

Strategic China Panda USD 51 $ 19,231,181.62 20 $ 14,031,386.80

Strategic China Panda EUR 46 € 4,630,866.82 28 € 3,677,454.18

Strategic China Panda GBP 5 £ 142,811.17 4 £ 58,000.00

Eurobond Distributing EUR 23 € 1,264,503.12 25 € 4,274,520.00

Eurobond Accumulating EUR 27 € 3,655,077.51 16

€ 4,429,740.00

Nippon Growth Class A JPY 12 JPY 153,727,027.00 0 Nil

Nippon Growth Class B JPY 11 JPY 92,613,752.00 10 JPY230,416,704.00

Nippon Growth Class C JPY 1 JPY 9,510,200.00 0 Nil

Strategic Emerging Europe Hedged EUR 16 € 711,331.25 8 € 322,095.00

Strategic Emerging Europe USD 4 $ 728,975.63 2 $ 49,250.00

Strategic Europe Value EUR 36 € 2,082,766.46 31 € 7,064,740.95

Other Service Matters

Pending Trades > 30 Days

There were no pending trades as at 30-Apr-2012

Exception Trades Log There were 0 exception trades for the period

Exception Cash Log There was 2 late cash trades for the period

Below Minimum Trades & Holdings Appendix 1 - There were 6 below minimum trades. Appendix 2 - There were 3 Investors with below minimum holdings as at 30-Apr-2012.

Page 6 of 35

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Investor Services (Cont…)

Anti Money Laundering

The following is a schedule detailing the current list of non-compliant investors, their status and aged analysis.

Total Number of Master Investors: 64

Total No. of Verified Shareholders: 64 (100%)

Total No. of Unverified Shareholders 0 ( 0%)

Politically Exposed Persons

In accordance with HSBC Group revised policies and procedures, we are required to report to the Board of Directors the details

and names of all investors who have been noted as being Politically Exposed Persons( PEPs) in the course of undertaking our

Anti Money-Laundering/Know Your Client procedures. There were 0 such persons to report as at 30-Apr-2012.

US Resident Shareholders

There are 0 US Resident shareholders to report to the Board

Shareholder Register

Appendix 3

Page 7 of 35

Fund Name Tran TypeDealing

DateFund CCY

Transaction Amount

Due Date Payment Date

STRATEGIC CHINA PANDA FUND HEDGE EURO CLASS SUBSCRIPTION 02-Feb-2012 EUR 49,813.20 07-Feb-2012 10-Feb-2012

STRATEGIC CHINA PANDA FUND HEDGE EURO CLASS SUBSCRIPTION 08-Feb-2012 EUR 1,004,118.00 13-Feb-2012 14-Feb-2012

Appendix 1: Late Cash Report

Report from : 01-01-2012 to 30-04-2012

Page 8 of 35

Appendix 2: Below Minimum Trades Report

FUND NAME HOLDER NAME DEAL DATE TRAN TYPETRANSACTION GROSS

STRATEGIC CHINA PANDA Rahn & Bodmer Co 17-Jan-2012 REDEMPTION USD 4,976.25 5,000.

STRATEGIC CHINA PANDA

BANQUE PARIS BERTRAND STURDZA S.A. 03-Feb-2012 REDEMPTION USD 85.13 5,000.

STRATEGIC CHINA PANDA

AUGSBURGER AKTIENBANK AG 15-Feb-2012 REDEMPTION EUR 688.54 5,000.

STRATEGIC CHINA PANDA MWI NOMINEES LIMITED 20-Feb-2012 SUBSCRIPTION USD 3,580.37 5,000.

STRATEGIC CHINA PANDA MWI NOMINEES LIMITED 27-Feb-2012 SUBSCRIPTION USD 3,202.70 5,000.

EI STURDZA FUNDS PLC-

Banque Baring Brothers Sturdza SA 15-Mar-2012 REDEMPTION JPY 311,297.00 500,000.

USD

USD

JPY

MIN TRANS AMOUNT/UNITS

USD

USD

EUR

Page 9 of 35

Appendix 3: Below Minimum Holdings Report

FUND NAME HOLDER ID REGISTERED NAME RES VALUE OF HOLDING% OF TOTAL HOLDING

EI STURDZA FUNDS PLC- IRLRA0003002 Citco Global Custody NV ref

UBS AG Zurich NLD JPY 492,360.79 0.0636 %

EL STURDZA - STRATEGIC IRLRA0003087 Citco Global Custody NV

Cash NLD EUR 4,474.62 0.0369 %

EL STURDZA - STRATEGIC IRLRA0004463 CITCO GLOBAL CUSTODY

NV REF 190043 NLD EUR 2,898.08 0.0239 %

Page 10 of 35

Shareholder Register (with Nil Holders) as at Price Date: 30-04-2012

Fund ID: Fund Name D6501 : USD : STRATEGIC CHINA PANDA FUND USD CLASS

NAV on 30-04-2012 or last available NAV: 1,752.0200

Unitholder No. ClientStatus

Unitholder Name InvtType UH IDS Settled Units Unsettled

Units Total Units Market Valuein FBC UH%

IRLRA0003517 ACCUMULATOR LIMITED Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003161 BANK JULIUS BAER & CO LTD Cash 178.961 0.000 178.961 313,543.25 0.37

IRLRA0002647 Banque Baring Brothers SturdzaSA Cash 11,354.936 0.000 11,354.936 19,894,074.97 23.77

IRLRA0003600 BANQUE DE LUXEMBOURG -CLIENT ACCOUNT Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003953 BANQUE PARIS BERTRANDSTURDZA S.A. Cash 58.219 0.000 58.219 102,000.85 0.12

IRLRA0004078BBH INV SERV LTD/ CUST BANKHAPOALIM BM LONDON CL MUTFND AC (REINV) 1379692 REINV

Cash REINVESTMENT 24.424 0.000 24.424 42,791.34 0.05

IRLRA0003452 BNP Paribas Securities ServicesLuxembourg A/C KAIROS Cash 3,237.374 0.000 3,237.374 5,671,944.00 6.78

IRLRA0003515 CACEIS/OLYMPIA CAPITAL Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003295 CITCO GLOBAL CUSTODY NVA/C LTSB LUXBG REINVEST Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003683CITCO GLOBAL CUSTODY NVA/C MIRABAUD CANADA INC - INTRUST FOR CLIENTS

Cash PAYOUT 36.022 0.000 36.022 63,111.26 0.08

IRLRA0003407 CITCO GLOBAL CUSTODY NVBUY LIST Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003087 Citco Global Custody NV Cash Cash 2,851.602 0.000 2,851.602 4,996,063.74 5.97

IRLRA0003530 CITCO GLOBAL CUSTODY NVREF 191292 Cash 25.000 0.000 25.000 43,800.50 0.05

IRLRA0003767 CITCO GLOBAL CUSTODY N.V.REF: 200245 Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0004287 CITCO GLOBAL CUSTODY NVREF 215045 Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003926 CITCO GLOBAL CUSTODY N.V.REF A/C PAEF Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0004384 CITCO GLOBAL CUSTODY NVREF PAOF SPC BSSP Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004225CITCO GLOBAL CUSTODY NVREF TINTINIIISPC: SEG PORTNO 84

Cash 3,922.627 0.000 3,922.627 6,872,520.96 8.21

IRLRA0003002 Citco Global Custody NV ref UBSAG Zurich Cash 126.504 0.000 126.504 221,637.54 0.26

IRLRA0003841 CLEARSTREAM BANKING SA Cash PAYOUT 1,550.835 0.000 1,550.835 2,717,093.94 3.25

IRLRA0003858CLUCASGRAY LIMITED ONBEHALF OF OXFORD CIRCLEPROVIDENT FUND

Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003798 CREDIT AGRICOLE (SUISSE) SA Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0004265 DAVID BARNES Cash PAYOUT 833.977 0.000 833.977 1,461,144.38 1.75

IRLRA0003732DEUTSCHE BANK NOMINEES(JERSEY) LIMITED A/C DAWNAYDAY MILROY

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003430 DZ PRIVATBANK SA REInvestmentfonds Cash 0.000 0.000 0.000 0.00 0.00

Executed By : 43259040HDUBRThis is a computer-generated report and requires no signature.

Page 1 of 20Printed: 01-May-2012 11:22 PM

dublin shareholder register detail (with hsbc logo & nil holders) fm-sr-031-05-en.rep v07 With NIL Holders

Appendix 4:

Page 11 of 35







IRLRA0003347 DZ PRIVATBANK SA RESAUREN FUNDS Cash 7,106.000 0.000 7,106.000 12,449,854.12 14.88

IRLRA0003431 FAIRBAIRN NOMINEES (IOM)LIMITED Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003433 FAIRBAIRN NOMINEES(JERSEY) LIMITED Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003672 FS/11445/HSBC PRIVATE BANK(SUISSE) SA GENEVA/SHARES Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003477 FS/12927/CITI6412454003/FAIRBAIRN NOMS (JSY) LTD GERJSY Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003670 FS/21547/BPERE Cash REINVESTMENT 2,679.190 0.000 2,679.190 4,693,994.46 5.61

IRLRA0004021 FS/DEUTSCHE BANK SUISSESA/CASH Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003395 FS/VP BANK VADUZ ACC.16084 Cash 10.000 0.000 10.000 17,520.20 0.02

IRLRA0003966 FUND NOMINEES LIMITED Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003464 Fundsettle EOC Nominees Ltd forFS/12927-6412453003/CITI Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004296FUNDSETTLE EOC NOMINEESLTD FOR FS/BANK SALOPPENHEIM LUX/REINV

Cash REINVESTMENT 1,584.000 0.000 1,584.000 2,775,199.68 3.32

IRLRA0004204FUNDSETTLE EOC NOMINEESLTD FOR FS/JP MORGAN(SUISSE) SA

Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0004368FUNDSETTLE EOC NOMINEESLTD FOR FS/SG PRIVATEBANKING SUISSE SA/CASH

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003616FUNDSETTLE EOC NOMINEESLTD. FOR FS/UNION BANCAIREPRIVEE/CASH

Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003475

FUNDSETTLE EOC NOMINEESLTDFS/14864/CITI/6082026422/FNNOM UK ROW/CASH

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003380 FUNDSETTLE EOC NOMINEESLTD FS/23481/CS ZURICH Cash 209.551 0.000 209.551 367,137.54 0.44

IRLRA0003933 GRANGE NOMINEES LTD A/CCCIOM Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003391 HAUCK & AUFHAUSERPRIVATBANKIERS KGAA Cash 424.000 0.000 424.000 742,856.48 0.89

IRLRA0003947 HSH NORDBANK SECURITIESS.A. Cash PAYOUT 1,730.704 0.000 1,730.704 3,032,228.02 3.62

IRLRA0003917 HYPOSWISS PRIVATE BANKGENEVE SA Cash 18.451 0.000 18.451 32,326.52 0.04

IRLRA0003432 KREISSPARKASSE KOELN Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003707 MARTELLO NOMINEES LIMITEDA/C CLIENT Cash 91.601 0.000 91.601 160,486.78 0.19

IRLRA0003835 MARTELLO NOMINEES LTD A/CN647 Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003451 MIRABAUD & CIE Cash REINVESTMENT 1,656.950 0.000 1,656.950 2,903,009.54 3.47

IRLRA0004043 MWI NOMINEES LIMITED Cash PAYOUT 500.231 0.000 500.231 876,414.72 1.05

IRLRA0003671 OAKFIELD VENTURE CAPITALSPC LTD - CLASS B Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003284 PICTET & CIE Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004319PICTET & CIE (EUROPE) SALUXEMBOURG REF ALLSEASONS ASIA

Cash REINVESTMENT 624.227 0.000 624.227 1,093,658.19 1.31




Appendix 4:

Page 12 of 35







IRLRA0004380 PICTET & CIE (EUROPE) SALUXEMBOURG REF B.R.I.C Cash 5,650.334 0.000 5,650.334 9,899,498.17 11.83

IRLRA0003298 PIGUET GALLAND & CIE SA Cash 491.791 0.000 491.791 861,627.67 1.03

IRLRA0003844 Rahn & Bodmer Co Cash 592.000 0.000 592.000 1,037,195.84 1.24

IRLRA0003638 RICHARD MCGILLIVRAY Cash REINVESTMENT 6.137 0.000 6.137 10,752.15 0.01

IRLRA0004069 SGBT LUX/ ALTOBELLA Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003897 SGBT LUX/CUSTODY Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0004376 SGBT LUX / MIRABAUD Cash PAYOUT 155.804 18.239 174.043 304,926.82 0.36

IRLRA0003898 SGBT LUX/ MO SELECT + Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0004067 SGBT LUX/ OFI OPTIMUM Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0004066 SGBT LUX/OFI PALMARES FLEX Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0004068 SGBT LUX/ROYANCESELECTION INTERNATIONALE Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003839 SGBT LUX/ UMR SELECT OCDE Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003635 SIMON COX Cash 15.342 0.000 15.342 26,879.49 0.03

IRLRA0003948 SOMERS DUBLIN LTD A/C1010248 Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0002664 Susie Scott Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003693

UBS FUND SERVICES(CAYMAN) LTD REF:PERSISTENT EDGE CHINAPARTNERS MASTER FUND LP


IRLRA0003811 UBS (LUXEMBOURG) S.A. REFNOTZ STUCKI GROUP Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

Count of UH: 70 47,746.794 18.239 47,765.033 83,685,293.12 100.00

Invt Type Count of UH Settled Units UnsettledUnits Total Units Market Value

in FBC UH%

Cash 70 47,746.794 18.239 47,765.033 83,685,293.12 100.00

Total 70 47,746.794 18.239 47,765.033 83,685,293.12 100.00

Agent Bank Count of UH Settled Units UnsettledUnits Total Units Market Value

in FBC UH%

Total

UH IDS Count of UH Settled Units UnsettledUnits Total Units Market Value

in FBC UH%

PAYOUT 14 4,807.573 18.239 4,825.812 8,454,919.14 10.10

REINVESTMENT 19 6,574.928 0.000 6,574.928 11,519,405.35 13.77

37 36,364.293 0.000 36,364.293 63,710,968.62 76.13

Total 70 47,746.794 18.239 47,765.033 83,685,293.12 100.00

SRS Operator Bank Count of UH Settled Units UnsettledUnits Total Units Market Value

in FBC UH%

Total




Appendix 4:

Page 13 of 35


Fund ID: Fund Name D6502 : EUR : STRATEGIC CHINA PANDA FUND HEDGE EURO CLASS





IRLRA0004320 ABN AMRO GLOBAL CUSTODYSERVICES NV RE CAPVEST Cash 168.574 0.000 168.574 290,769.92 0.86

IRLRA0004223 AUGSBURGER AKTIENBANK AG Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004341 BANCO NOMINEES(GUERNSEY) LTD A/C 7076557 Cash 499.277 0.000 499.277 861,192.91 2.54

IRLRA0003161 BANK JULIUS BAER & CO LTD Cash 15.536 0.000 15.536 26,797.74 0.08

IRLRA0003786 BANK OF IRELAND NOMINEESLIMITED A/C SISCASH Cash PAYOUT 0.000 0.000 0.000 0.00 0.00


IRLRA0003600 BANQUE DE LUXEMBOURG -CLIENT ACCOUNT Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003953 BANQUE PARIS BERTRANDSTURDZA S.A. Cash 1,489.233 0.000 1,489.233 2,568,748.22 7.57

IRLRA0004382 BNP PARIBAS SECURITIESSERVICES/ CONVICTIONS AM Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004000BNP PARIBAS SECURITIESSERVICES LUXEMBOURG A/CHEDGE INVEST

Cash 229.448 0.000 229.448 395,770.27 1.17

IRLRA0004295BNP PARIBAS SECURITITESSERVICES LUXEMBOURG A/CFBB MAIN

Cash 5.699 0.000 5.699 9,830.09 0.03

IRLRA0003737 CACEIS/AVIVA COURTAGE Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003231 CA TITRES BRUNOY S/A BNOBC Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003958 CA TITRES S/A CHOLETDUPONT Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003087 Citco Global Custody NV Cash Cash 263.960 0.000 263.960 455,299.32 1.34

IRLRA0003530 CITCO GLOBAL CUSTODY NVREF 191292 Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004299 CITCO GLOBAL CUSTODY NV -REF ERSTE BANK Cash PAYOUT 5.000 0.000 5.000 8,624.40 0.03

IRLRA0003002 Citco Global Custody NV ref UBSAG Zurich Cash 961.237 0.000 961.237 1,658,018.48 4.89

IRLRA0003841 CLEARSTREAM BANKING SA Cash 3,571.223 0.000 3,571.223 6,159,931.13 18.15

IRLRA0003601 CM CIC SECURITIES/ FLINVEST Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003596 CONSTANTIA PRIVATBANK AG Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0004361 CREDIT AGRICOLELUXEMBOURG Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003798 CREDIT AGRICOLE (SUISSE) SA Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003455 DEXIA BIL FOR CUSTOMERACCOUNT Cash REINVE

STMENT 4.000 0.000 4.000 6,899.52 0.02

IRLRA0003430 DZ PRIVATBANK SA REInvestmentfonds Cash 336.000 0.000 336.000 579,559.68 1.71





Appendix 4:

Page 14 of 35







IRLRA0003477 FS/12927/CITI6412454003/FAIRBAIRN NOMS (JSY) LTD GERJSY Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003900 FS/22561/CLARIDEN LEUZURICH Cash PAYOUT 149.619 0.000 149.619 258,074.82 0.76

IRLRA0003966 FUND NOMINEES LIMITED Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004307 FUNDSETTLE EOC NOMINEESLIMITED FOR FS/ODDO AND CIE Cash 45.000 0.000 45.000 77,619.60 0.23

IRLRA0003464 Fundsettle EOC Nominees Ltd forFS/12927-6412453003/CITI Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004145FUNDSETTLE EOC NOMINEESLTD FOR FS/ABN AMROGLOBAL CUSTODY

Cash 81.540 0.000 81.540 140,646.72 0.41

IRLRA0004345 FUNDSETTLE EOC NOMINEESLTD FOR FS/BOSLTD/SHARES Cash 39.476 0.000 39.476 68,091.36 0.20

IRLRA0004227FUNDSETTLE EOC NOMINEESLTD FOR FS/HSBC PRIVATEBANK MONACO/SHARES

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004395

FUNDSETTLE EOC NOMINEESLTD FORFS/NORDEABANKDENMARK/CLIENT/RE-INVESTMENT

Cash 14.284 0.000 14.284 24,638.19 0.07

IRLRA0004237FUNDSETTLE EOC NOMINEESLTD FOR FS/SAL OPPENHEIMCOLOGNE

Cash 2,000.000 600.000 2,600.000 4,484,688.00 13.22


Cash 0.000 0.000 0.000 0.00 0.00


IRLRA0004311FUNDSETTLE EOC NOMINNESLTD FOR FS/FALCON PRIVATEBANK

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003391 HAUCK & AUFHAUSERPRIVATBANKIERS KGAA Cash 187.000 0.000 187.000 322,552.56 0.95

IRLRA0003499HSBC PRIVATE BANKINGNOMINEE 1 JERSEY LIMITEDA/C 2035928

Cash 39.622 0.000 39.622 68,343.20 0.20

IRLRA0003599 HSBC TRINKAUS & BURKHARDT(INTL) SA Cash PAYOUT 43.638 0.000 43.638 75,270.31 0.22

IRLRA0003947 HSH NORDBANK SECURITIESS.A. Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003917 HYPOSWISS PRIVATE BANKGENEVE SA Cash REINVE

STMENT 115.153 0.000 115.153 198,625.11 0.59

IRLRA0003626 IVAN POWELL PENSION TRUST Cash REINVESTMENT 92.117 0.000 92.117 158,890.77 0.47

IRLRA0003645KREDIETBANK S.A.LUXEMBOURGEOISE FORCUSTOMERS ACCOUNT

Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003758LIECHTENSTEINISCHELANDESBANK, REFINTEGRATED AI

Cash REINVESTMENT 214.366 0.000 214.366 369,755.63 1.09

IRLRA0003688 LOMBARD ODIER DARIERHENTSCH & CIE Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003744 LYNCHWOOD NOMS LTD A/C2006420 Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003707 MARTELLO NOMINEES LIMITEDA/C CLIENT Cash 73.665 0.000 73.665 127,063.29 0.37

IRLRA0003451 MIRABAUD & CIE Cash 14.826 0.000 14.826 25,573.07 0.08

IRLRA0003284 PICTET & CIE Cash 149.857 0.000 149.857 258,485.34 0.76

IRLRA0003844 Rahn & Bodmer Co Cash 0.000 0.000 0.000 0.00 0.00




Appendix 4:

Page 15 of 35







IRLRA0004221 RAIFFEISEN BANKINTERNATIONAL Cash PAYOUT 12.000 0.000 12.000 20,698.56 0.06

IRLRA0003598RBC DEXIA INVESTORSERVICES BANK FRANCE A/CFLINVEST


IRLRA0003110 Somers Dublin Ltd a/c ALTS Cash 450.000 0.000 450.000 776,196.00 2.29

IRLRA0003806 STATE STREET BANK GMBH ONBEHALF OF DWS/DEAM Cash 0.000 0.000 0.000 0.00 0.00

Count of UH: 58 19,073.310 600.000 19,673.310 33,934,098.95 100.00


in FBC UH%

Cash 58 19,073.310 600.000 19,673.310 33,934,098.95 100.00

Total 58 19,073.310 600.000 19,673.310 33,934,098.95 100.00


in FBC UH%

Total


in FBC UH%

PAYOUT 10 210.257 0.000 210.257 362,668.09 1.07

REINVESTMENT 7 425.636 0.000 425.636 734,171.02 2.16

41 18,437.417 600.000 19,037.417 32,837,259.83 96.77

Total 58 19,073.310 600.000 19,673.310 33,934,098.95 100.00


in FBC UH%

Total




Appendix 4:

Page 16 of 35


Fund ID: Fund Name D6503 : GBP : STRATEGIC CHINA PANDA FUND HEDGE STERLING CLASS





IRLRA0002647 Banque Baring Brothers SturdzaSA Cash 154.026 0.000 154.026 256,154.48 17.31

IRLRA0003953 BANQUE PARIS BERTRANDSTURDZA S.A. Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004423

BROWN BROTHERS HARRIMAN& CO - OMNIBUS FOR THEBENEFIT OF IT'S CLIENTSREINVEST

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004214 CHASE NOMINEES LIMITED A/CCAZCAP Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003087 Citco Global Custody NV Cash Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003841 CLEARSTREAM BANKING SA Cash 95.000 0.000 95.000 157,990.70 10.68



IRLRA0003431 FAIRBAIRN NOMINEES (IOM)LIMITED Cash 0.000 0.000 0.000 0.00 0.00


IRLRA0004367FRIENDS PROVIDENTINTERNATIONAL LTD A/C768511

Cash 4.444 0.000 4.444 7,390.64 0.50

IRLRA0003477 FS/12927/CITI6412454003/FAIRBAIRN NOMS (JSY) LTD GERJSY Cash PAYOUT 72.636 0.000 72.636 120,798.03 8.16

IRLRA0003458 FS/CITI 6412453004/FairbairnNoms (IOM) Ltd GERIOMDR Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003966 FUND NOMINEES LIMITED Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003464 Fundsettle EOC Nominees Ltd forFS/12927-6412453003/CITI Cash 18.687 0.000 18.687 31,077.60 2.10

IRLRA0003668FUNDSETTLE EOC NOMINEESLTD FOR FS/CITI/6042080060/FNNOM UK/CASH

Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003475

FUNDSETTLE EOC NOMINEESLTDFS/14864/CITI/6082026422/FNNOM UK ROW/CASH

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004404 HUNTRESS (CI) NOMINEESLIMITED RE: KGCLT Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003707 MARTELLO NOMINEES LIMITEDA/C CLIENT Cash PAYOUT 269.588 0.000 269.588 448,341.02 30.30

IRLRA0003959 MARTELLO NOMINEES LIMITEDA/C N675 Cash PAYOUT 143.859 0.000 143.859 239,246.15 16.17

IRLRA0003835 MARTELLO NOMINEES LTD A/CN647 Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004263 MATTEO SANTORO Cash REINVESTMENT 17.625 0.000 17.625 29,311.43 1.98

IRLRA0004333 MICHELE GESUALDI Cash 15.000 0.000 15.000 24,945.90 1.69

IRLRA0003298 PIGUET GALLAND & CIE SA Cash 10.000 0.000 10.000 16,630.60 1.12

IRLRA0003804 ROCK NOMINEES (LIMITED) A/C1400159 Cash 0.000 0.000 0.000 0.00 0.00




Appendix 4:

Page 17 of 35


Fund ID: Fund Name D6503 : GBP : STRATEGIC CHINA PANDA FUND HEDGE STERLING CLASS





IRLRA0003805 ROCK NOMINEES (LIMITED) A/C1400162 Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003989 ROCK NOMINEES LIMITED A/C1707687 Cash 34.548 0.000 34.548 57,455.40 3.88

IRLRA0003977 ROCK (NOMINEES) LTD A/C1400502 Cash 48.173 0.000 48.173 80,114.59 5.41

IRLRA0003816 SHEILA ANNE WARRANDER Cash REINVESTMENT 6.224 0.000 6.224 10,350.89 0.70

IRLRA0002664 Susie Scott Cash 0.000 0.000 0.000 0.00 0.00

Count of UH: 29 889.810 0.000 889.810 1,479,807.42 100.00


in FBC UH%

Cash 29 889.810 0.000 889.810 1,479,807.42 100.00

Total 29 889.810 0.000 889.810 1,479,807.42 100.00


in FBC UH%

Total


in FBC UH%

PAYOUT 6 486.083 0.000 486.083 808,385.19 54.63

REINVESTMENT 4 23.849 0.000 23.849 39,662.32 2.68

19 379.878 0.000 379.878 631,759.91 42.69

Total 29 889.810 0.000 889.810 1,479,807.42 100.00


in FBC UH%

Total




Appendix 4:

Page 18 of 35


Fund ID: Fund Name D6504 : EUR : STRATEGIC EURO BOND FUND EURO DISTRIBUTING CLASS SHARES





IRLRA0003786 BANK OF IRELAND NOMINEESLIMITED A/C SISCASH Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0002647 Banque Baring Brothers SturdzaSA Cash PAYOUT 24,855.253 0.000 24,855.253 26,080,119.87 90.55

IRLRA0003354 CA TITRES SUB A/C BN RBC Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

IRLRA0003087 Citco Global Custody NV Cash Cash PAYOUT 0.000 0.000 0.000 0.00 0.00


IRLRA0003929 CITCO GLOBAL CUSTODY NVREF 190030 Cash PAYOUT 29.925 0.000 29.925 31,399.70 0.11


IRLRA0003002 Citco Global Custody NV ref UBSAG Zurich Cash PAYOUT 2,513.808 0.000 2,513.808 2,637,688.46 9.16

IRLRA0003841 CLEARSTREAM BANKING SA Cash 8.666 0.000 8.666 9,093.06 0.03

IRLRA0004133 FUNDSETTLE EOC NOMINEESLIMITED FOR FS/NTC/CASH Cash PAYOUT 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004368FUNDSETTLE EOC NOMINEESLTD FOR FS/SG PRIVATEBANKING SUISSE SA/CASH

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003917 HYPOSWISS PRIVATE BANKGENEVE SA Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003284 PICTET & CIE Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

IRLRA0003353 PICTET & CIE Cash PAYOUT 0.000 0.000 0.000 0.00 0.00

Count of UH: 15 27,447.949 0.000 27,447.949 28,800,583.93 100.00


in FBC UH%

Cash 15 27,447.949 0.000 27,447.949 28,800,583.93 100.00

Total 15 27,447.949 0.000 27,447.949 28,800,583.93 100.00


in FBC UH%

Total


in FBC UH%

PAYOUT 9 27,398.986 0.000 27,398.986 28,749,208.03 99.82

REINVESTMENT 1 0.000 0.000 0.000 0.00 0.00

5 48.963 0.000 48.963 51,375.90 0.18


in FBC UH%

Total




Appendix 4:

Page 19 of 35


in FBC UH%

Total 15 27,447.949 0.000 27,447.949 28,800,583.93 100.00




Appendix 4:

Page 20 of 35


Fund ID: Fund Name D6505 : EUR : STRATEGIC EURO BOND FUND EURO ACCUMULATING CLASSSHARES





IRLRA0003161 BANK JULIUS BAER & CO LTD Cash 0.000 0.000 0.000 0.00 0.00


IRLRA0003953 BANQUE PARIS BERTRANDSTURDZA S.A. Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003378 BANQUE SYZ & CO. SA Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0003385 BNP PARIBAS (SUISSE) SA Cash 0.000 0.000 0.000 0.00 0.00


IRLRA0004254 CITCO GLOBAL CUSTODY NV -REF MIRABAUD AND CIE Cash 9.340 0.000 9.340 10,263.63 0.03


IRLRA0003502 CITCO GLOBAL CUSTODY NVREF UBS AG ZURICH 190991 Cash 200.000 0.000 200.000 219,778.00 0.57

IRLRA0003841 CLEARSTREAM BANKING SA Cash 0.000 0.000 0.000 0.00 0.00


IRLRA0003504FUNDSETTLE EOC NOMINEESLTD FORFS/14929-1/BMCE-OPCVM/CASH

Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00



IRLRA0003298 PIGUET GALLAND & CIE SA Cash 0.000 0.000 0.000 0.00 0.00

Count of UH: 18 35,318.063 0.000 35,318.063 38,810,666.25 100.00


in FBC UH%

Cash 18 35,318.063 0.000 35,318.063 38,810,666.25 100.00

Total 18 35,318.063 0.000 35,318.063 38,810,666.25 100.00


in FBC UH%

Total


in FBC UH%

Total




Appendix 4:

Page 21 of 35


in FBC UH%

18 35,318.063 0.000 35,318.063 38,810,666.25 100.00

Total 18 35,318.063 0.000 35,318.063 38,810,666.25 100.00




Appendix 4:

Page 22 of 35


Fund ID: Fund Name D6506 : JPY : EI STURDZA FUNDS PLC-NIPPON GROWTH (UCITS) FUND JPY CLASSA





IRLRA0002647 Banque Baring Brothers SturdzaSA Cash 19,276.799 0.000 19,276.7991,095,404,103.18 93.29


Cash 0.000 0.000 0.000 0.00 0.00




IRLRA0004430 CITCO GLOBAL CUSTODY NVREF 190076 Cash 142.000 0.000 142.000 8,069,150.00 0.69

IRLRA0004469 CITCO GLOBAL CUSTODY N.V.REF 190087 Cash 43.789 0.000 43.789 2,488,309.93 0.21

IRLRA0003002 Citco Global Custody NV ref UBSAG Zurich Cash 1,048.273 0.000 1,048.273 59,568,113.23 5.07



Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004076FUNDSETTLE EOC NOMS LTDFOR FS/FORTIS BANQUELUXEMBOURG

Cash PAYOUT 0.000 0.000 0.000 0.00 0.00


IRLRA0003284 PICTET & CIE Cash 153.443 0.000 153.443 8,719,398.48 0.74


IRLRA0004413 SIX SIS AG/CH104000 Cash 0.000 0.000 0.000 0.00 0.00

Count of UH: 16 20,664.304 0.000 20,664.3041,174,249,074.80 100.00


in FBC UH%

Cash 16 20,664.304 0.000 20,664.304 1,174,249,074.80 100.00

Total 16 20,664.304 0.000 20,664.304 1,174,249,074.80 100.00


in FBC UH%

Total


in FBC UH%


in FBC UH%

Total




Appendix 4:

Page 23 of 35


in FBC UH%

PAYOUT 2 0.000 0.000 0.000 0.00 0.00

14 20,664.304 0.000 20,664.304 1,174,249,074.80 100.00

Total 16 20,664.304 0.000 20,664.304 1,174,249,074.80 100.00




Appendix 4:

Page 24 of 35


Fund ID: Fund Name D6507 : JPY : EI STURDZA FUNDS PLC-NIPPON GROWTH (UCITS) FUND JPY CLASSB





IRLRA0004341 BANCO NOMINEES(GUERNSEY) LTD A/C 7076557 Cash 2,016.851 0.000 2,016.851 96,625,314.56 12.48


IRLRA0003600 BANQUE DE LUXEMBOURG -CLIENT ACCOUNT Cash 2,100.000 0.000 2,100.000 100,608,900.00 12.99

IRLRA0003953 BANQUE PARIS BERTRANDSTURDZA S.A. Cash REINVE

STMENT 190.710 0.000 190.710 9,136,725.39 1.18

IRLRA0003775 CITCO GLOBAL CUSTODY N.V.REF 190023 Cash PAYOUT 0.000 0.000 0.000 0.00 0.00


IRLRA0004362 CREDIT AGRICOLELUXEMBOURG Cash REINVE

STMENT 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00


Cash 470.628 0.000 470.628 22,547,316.85 2.91


IRLRA0004198 PICTET & CIE REF EIM Cash REINVESTMENT 0.000 0.000 0.000 0.00 0.00

Count of UH: 12 16,162.692 0.000 16,162.692 774,338,411.03 100.00


in FBC UH%

Cash 12 16,162.692 0.000 16,162.692 774,338,411.03 100.00

Total 12 16,162.692 0.000 16,162.692 774,338,411.03 100.00


in FBC UH%

Total


in FBC UH%

PAYOUT 1 0.000 0.000 0.000 0.00 0.00

REINVESTMENT 3 190.710 0.000 190.710 9,136,725.39 1.18

8 15,971.982 0.000 15,971.982 765,201,685.64 98.82

Total 12 16,162.692 0.000 16,162.692 774,338,411.03 100.00


in FBC UH%

Total




Appendix 4:

Page 25 of 35


Fund ID: Fund Name D6508 : JPY : EI STURDZA FUNDS PLC-NIPPON GROWTH (UCITS) FUND JPY CLASSC





IRLRA0002647 Banque Baring Brothers SturdzaSA Cash 306.659 0.000 306.659 14,225,911.01 59.03

IRLRA0003284 PICTET & CIE Cash 212.881 0.000 212.881 9,875,549.59 40.97


Count of UH: 3 519.540 0.000 519.540 24,101,460.60 100.00


in FBC UH%

Cash 3 519.540 0.000 519.540 24,101,460.60 100.00

Total 3 519.540 0.000 519.540 24,101,460.60 100.00


in FBC UH%

Total


in FBC UH%

3 519.540 0.000 519.540 24,101,460.60 100.00

Total 3 519.540 0.000 519.540 24,101,460.60 100.00


in FBC UH%

Total




Appendix 4:

Page 26 of 35


Fund ID: Fund Name D6509 : EUR : EL STURDZA - STRATEGIC EMERGING EUROPE FUND HEDGED EURCLASS

NAV on 30-04-2012 or last available NAV: 988.4300




IRLRA0004341 BANCO NOMINEES(GUERNSEY) LTD A/C 7076557 Cash 559.135 0.000 559.135 552,665.81 4.55

IRLRA0003161 BANK JULIUS BAER & CO LTD Cash 0.000 0.000 0.000 0.00 0.00





IRLRA0004377FUNDSETTLE EOC NOMINEESLTD FOR FS/BK OF NOVASCOTIA TRUST BAH/SHARES

Cash 2,500.000 0.000 2,500.000 2,471,075.00 20.36

IRLRA0004345 FUNDSETTLE EOC NOMINEESLTD FOR FS/BOSLTD/SHARES Cash 44.047 0.000 44.047 43,537.38 0.36


Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00


Cash 53.661 0.000 53.661 53,040.14 0.44


IRLRA0004374 MILLENNIUM SECURITIESSERVICES INC Cash 0.000 0.000 0.000 0.00 0.00



Count of UH: 15 12,231.646 44.843 12,276.489 12,134,450.02 100.00


in FBC UH%

Cash 15 12,231.646 44.843 12,276.489 12,134,450.02 100.00

Total 15 12,231.646 44.843 12,276.489 12,134,450.02 100.00


in FBC UH%

Total


in FBC UH%

15 12,231.646 44.843 12,276.489 12,134,450.02 100.00

Total 15 12,231.646 44.843 12,276.489 12,134,450.02 100.00


in FBC UH%

Total




Appendix 4:

Page 27 of 35


Fund ID: Fund Name D6510 : USD : EL STURDZA - STRATEGIC EMERGING EUROPE FUND USD CLASS





IRLRA0004113 ARMAJARO HOLDINGS LIMITED Cash 500.000 0.000 500.000 497,000.00 10.75




Count of UH: 4 4,650.474 0.000 4,650.474 4,622,571.16 100.00


in FBC UH%

Cash 4 4,650.474 0.000 4,650.474 4,622,571.16 100.00

Total 4 4,650.474 0.000 4,650.474 4,622,571.16 100.00


in FBC UH%

Total


in FBC UH%

4 4,650.474 0.000 4,650.474 4,622,571.16 100.00

Total 4 4,650.474 0.000 4,650.474 4,622,571.16 100.00


in FBC UH%

Total




Appendix 4:

Page 28 of 35


Fund ID: Fund Name D6512 : EUR : EL STURDZA - STRATEGIC EUROPE VALUE FUND EUR CLASS





IRLRA0004445 AURORA NOMINEES LIMITEDA/C 2157400 Cash 8,724.023 0.000 8,724.023 926,316.76 2.20

IRLRA0004325

AZURE TRUST COMPANYLIMITED AS TRUSTEE OF THE9583211 INTERNATIONALPENSION TRUST

Cash 989.585 0.000 989.585 105,074.14 0.25

IRLRA0004341 BANCO NOMINEES(GUERNSEY) LTD A/C 7076557 Cash 16,683.192 0.000 16,683.192 1,771,421.33 4.20

IRLRA0002647 Banque Baring Brothers SturdzaSA Cash 349,995.575 -1,460.045 348,535.530 37,007,502.58 87.71


Cash 0.000 0.000 0.000 0.00 0.00



IRLRA0003002 Citco Global Custody NV ref UBSAG Zurich Cash 11,502.054 0.000 11,502.054 1,221,288.09 2.89

IRLRA0003841 CLEARSTREAM BANKING SA Cash 2,014.151 0.000 2,014.151 213,862.55 0.51


IRLRA0003798 CREDIT AGRICOLE (SUISSE) SA Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004123 DB RETIREMENT INVESTMENTSCHEME A/C 037 Cash 296.913 0.000 296.913 31,526.22 0.07

IRLRA0004125FUNDSETTLE EOC NOMINEESA/C 24504 FS/24504/FORTISBANQUE LUXEMBOURG

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004345 FUNDSETTLE EOC NOMINEESLTD FOR FS/BOSLTD/SHARES Cash 1,319.887 0.000 1,319.887 140,145.60 0.33

IRLRA0004292

FUNDSETTLE EOC NOMINEESLTD FOR FS/HSBC PRIVATEBANKING NOMINEES 1(JERSEY) LIMITED CASH

Cash 328.299 0.000 328.299 34,858.79 0.08


Cash 0.000 0.000 0.000 0.00 0.00


Cash 0.000 0.000 0.000 0.00 0.00



Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004076FUNDSETTLE EOC NOMS LTDFOR FS/FORTIS BANQUELUXEMBOURG

Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004224HARGREAVES LANSDOWNNOMINESS LIMITED A/C61286022

Cash 903.461 0.000 903.461 95,929.49 0.23




Appendix 4:

Page 29 of 35


Fund ID: Fund Name D6512 : EUR : EL STURDZA - STRATEGIC EUROPE VALUE FUND EUR CLASS






Cash 295.857 0.000 295.857 31,414.10 0.07


IRLRA0004226 JAN WILLEM GOUDRIAAN Cash 387.784 0.000 387.784 41,174.91 0.10


Cash 3,611.038 0.000 3,611.038 383,420.01 0.91



IRLRA0004119 STRAND NOMINEES LIMITED Cash 0.000 0.000 0.000 0.00 0.00

IRLRA0004121 SUFFOLK LIFE ANNUITIESLIMITD RE 712949 Cash 1,068.420 0.000 1,068.420 113,444.84 0.27

IRLRA0004126 UBS AG ZURICH Cash 97.739 0.000 97.739 10,377.93 0.02

IRLRA0004120ZURICH TRUST LTD ASTRUSTEE OF THE 9583211 INTLPENSION TRUST

Cash 0.000 0.000 0.000 0.00 0.00

Count of UH: 31 398,845.691 -1,460.045 397,385.646 42,194,407.89 100.00


in FBC UH%

Cash 31 398,845.691 -1,460.045 397,385.646 42,194,407.89 100.00

Total 31 398,845.691 -1,460.045 397,385.646 42,194,407.89 100.00


in FBC UH%

Total


in FBC UH%

31 398,845.691 -1,460.045 397,385.646 42,194,407.89 100.00

Total 31 398,845.691 -1,460.045 397,385.646 42,194,407.89 100.00


in FBC UH%

Total




Appendix 4:

Page 30 of 35

Appendix 5: Expense Ratios

STRATEGIC CHINA PANDA FUNDStrategic China

FundStrategic China

FundStrategic China

FundStrategic China

FundSTRATEGIC CHINA

PANDA FUND

USD Class GBP Class EUR Class TOTALS USD

Jan 1st 2012 - Apr 30th 2012

Jan 1st 2012 - Apr 30th 2012

Jan 1st 2012 - Apr 30th 2012

Jan 1st 2012 - Apr 30th 2012 YTD 2012

Administration Fees Expense 33,029.94 948.07 17,744.41 51,722.42 51,722.42 Agent Fees 271.73 7.80 145.98 425.51 425.51 Annual Fee Expense 28,640.48 822.08 15,386.29 44,848.85 44,848.85 Audit Fees Expense - - - Bank Charges Expense 233.18 6.69 125.27 365.15 365.15 Commission Fees Expense - - - Consulting Fees Expense 4,506.22 129.34 2,420.84 7,056.41 7,056.41 Corporate Secretarial Fees Expense 1,324.26 38.01 711.42 2,073.69 2,073.69 Credit Facility Fee Expense 2,715.44 77.94 1,458.79 4,252.17 4,252.17 Custodian Fees Expense 13,211.93 379.23 7,097.74 20,688.90 20,688.90 Directors Fees Expense 27,364.33 785.45 14,700.72 42,850.50 42,850.50 Financial Statement Prep Expense 1,133.18 32.53 608.77 1,774.47 1,774.47 FuturesCommissionExpense 1,091.48 31.33 586.37 1,709.18 1,709.18 German Tax Expense 4,507.32- 129.38- 2,421.43- 7,058.13- 7,058.13- Insurance Fees Expense 1,090.77 31.31 585.98 1,708.06 1,708.06 Re-organisation Fee ExpenseLegal Fees Expense 17,002.42 488.03 9,134.08 26,624.53 26,624.53 MarketingExpense 4,108.71 117.93 2,207.29 6,433.94 6,433.94 Mgmt Fee Expense 396,366.15 11,377.06 212,936.64 620,679.85 620,679.85 Migration Fee Expense - - - Miscellaneous Fee Expense 0.24 0.01 0.13 0.37 0.37 Operating Fees Expense 0.84 0.02 0.45 1.32 1.32 Other Interest Expense 767.65 22.03 412.40 1,202.08 1,202.08 Out of Pocket Expenses 1,014.76 29.13 545.15 1,589.04 1,589.04 Professional Fees Expense 7,889.54- 226.46- 4,238.43- 12,354.43- 12,354.43- Publication Expense 2,708.30 77.74 1,454.96 4,241.00 4,241.00 Ratings Fee Expense 2,063.90- 59.24- 1,108.77- 3,231.92- 3,231.92- Listing Fees Expense 3,320.02 95.30 1,783.59 5,198.91 5,198.91 Registrar and Transfer Agent Fee Expenses - - - Registration Fee Expense 7,452.82- 213.92- 4,003.82- 11,670.56- 11,670.56- Servicing Expense 773.57 22.20 415.58 1,211.35 1,211.35 Setting-Up Expense 3,567.19 102.39 1,916.38 5,585.96 5,585.96 Investor Servicing Fee 8,419.27 241.66 4,523.02 13,183.95 13,183.95 Sub Custodian Fee Expense 12,153.61 348.85 6,529.19 19,031.65 19,031.65 Tax Expense - - - Transaction Fees Expenses 458.59 13.16 246.36 718.11 718.11 Hedge Revaluation Expense - 558.35 10,225.38 10,783.73 10,783.73 Crystalised Performance Fees Expense - - - - - Performance Fees Expense 65,550.36 264.05 14,444.55 80,258.96 80,258.96

Total Expenses* 608,143.40 16,396.67 316,162.87 940,702.94 940,702.94

Average NAV 78,141,634.85 2,358,176.52 43,521,223.33 124,021,035 124,021,035

Expenses RatiosFormation expenses 0.01% 0.01% 0.01% 0.01% 0.01%Operating Expenses 2.35% 2.10% 2.20% 2.29% 2.29%Op Exp Excluding Mgmt & Performance fee 0.57% 0.61% 0.62% 0.58% 0.58%

* Total expenses exclude interest expense**Expense ratio excludes management and incentive fees.

Page 31 of 35


STRATEGIC EURO BOND FUNDAccumulating Class

EuroDistributing Class

Euro TOTAL TOTAL

1st Jan to 30th April 12

1st Jan to 30th April 12

1st Jan to 30th April 12 YTD 2012

Administration Fees Expense - - - - Annual Fee Expense 2,112.44 1,567.58 3,680.02 3,680.02 Audit Fees Expense 5,992.06 4,446.52 10,438.58 10,438.58 Bank Charges Expense 17.96 13.33 31.29 31.29 Commision Fee Expense - - - - Consulting Fees Expense 2,254.69 1,673.14 3,927.83 3,927.83 Corporate Secretarial Fees Expense 662.21 491.41 1,153.62 1,153.62 Credit Facility Fee Expense 1,913.44 1,419.91 3,333.35 3,333.35 Custodian Fees Expense 6,410.96 4,757.38 11,168.34 11,168.34 Directors Fees Expense 11,835.92 8,783.07 20,618.99 20,618.99 Distribution Fees Expense 292.28 216.89 509.17 509.17 Financial Statement Prep Expense 538.38 399.51 937.89 937.89 FuturesCommissionExpense 57.40 42.60 100.00 100.00 Insurance Fees Expense 313.09 232.33 545.42 545.42 Legal Fees Expense 6,671.32 4,950.59 11,621.91 11,621.91 Listing Fees Expense 1,247.28 925.56 2,172.84 2,172.84 MarketingExpense 4,331.58 3,214.34 7,545.92 7,545.92 Mgmt Fee Expense 96,134.68 71,338.59 167,473.27 167,473.27 Operating Fee Expense 0.01 0.01 0.02 0.02 Other Interest Expense 151.95 112.76 264.71 264.71 Out of Pocket Expenses 713.52 529.48 1,243.00 1,243.00 Professional Fees Expense 2,514.62- 1,866.03- - 4,380.65 - 4,380.65 Publication Expense 1,110.54 824.10 1,934.64 1,934.64 Registration Fee Expense 2,186.79 1,622.75 3,809.54 3,809.54 Reorganisation Fee Expense - - - - Set up Fee - - - - Shareholder Services Fee 2,408.06 1,786.94 4,195.00 4,195.00 Sponsoring Broker Annual Fee Expense - - - - Sub Custodian Fees Expense 4,879.09 3,620.63 8,499.72 8,499.72 Tax Expense 2,400.39 1,781.26 4,181.65 4,181.65 Third Party Corp Sec Fees Expense - - Total Expenses* 151,969.48 112,771.88 264,741.36 264,741.36

Average NAV 39,443,807.29 27,409,034.84 66,852,842.13 66,852,842

Expenses RatiosFormation expenses 0.00% 0.00% 0.00% 0.00%Operating Expenses 1.17% 1.24% 1.20% 1.20%

Op Exp less Mgt & Incentive fee 0.43% 0.46% 0.44% 0.44%

* Total expenses exclude interest expense**Expense ratio excludes management and incentive fees.

Page 32 of 35

Nippon Growth (UCITS) Fund CLASS JPY A Jan 1st-

24th April 2012

CLASS JPY B Jan 1st-

24th April 2012

CLASS JPY C Jan 1st-

24th April 2012

Total Jan 1st-

24th April 2012 YTD 2012

Administration Fees Expense 517,790 335,317 10,423 863,530 863,530 Annual Fee Expense 81,784 52,963 1,646 136,393 136,393 Audit Fees Expense 90,156 58,385 1,815 150,356 150,356 Bank Charges Expense 9,966 6,454 201 16,620 16,620 Consulting Fees Expense 53,661 34,750 1,080 89,491 89,491 Corporate Secretarial Fees Expense 15,759 10,205 317 26,281 26,281 Credit Facility Fee Expense 195,916 126,874 3,944 326,733 326,733 Custodian Fees Expense 517,790 335,317 10,423 863,530 863,530 Directors Fees Expense 380,938 246,693 7,668 635,299 635,299 Financial Statement Prep Expense 16,257 10,528 327 27,113 27,113 Insurance Fees Expense 16,757 10,852 337 27,946 27,946 Investor Servicing Fee 165,169 106,962 3,325 275,456 275,456 Legal Fees Expense 202,276 130,993 4,072 337,341 337,341 Listing Fees Expense 163,106 105,626 3,283 272,015 272,015 MarketingExpense 131,112- 84,907- 2,639- 218,658- 218,658- Mgmt Fee Expense 5,721,110 3,704,953 115,163 9,541,226 9,541,226 Miscellaneous Expense 31 20 1 51 51 Operating Fees Expense 34 22 1 57 57 Other Interest Expense 4,714 3,053 95 7,861 7,861 Out of Pocket Expenses 75,618 48,970 1,522 126,110 126,110 Preliminery FeesProfessional Fees Expense 168,527- 109,137- 3,392- 281,057- 281,057- Publication Expense 177,151 114,722 3,566 295,438 295,438 Ratings Fee Expense 156,812- 101,550- 3,157- 261,519- 261,519- Registration Fee Expense 272,928 176,747 5,494 455,169 455,169 Sub Custodian Fees Expense 279,436 180,961 5,625 466,022 466,022 Trader Management Fees Expense 953,519 617,493 19,194 1,590,206 1,590,206

- Total Expenses 9,450,700 6,120,212 190,237 15,761,149 15,761,149

Average NAV 1,255,724,993 688,391,873 29,336,532 1,973,453,398 1,973,453,398

Formation expenses 0.00% 0.00% 0.00% 0.00% 0.00%Operating Expenses 2.28% 2.69% 1.96% 2.42% 2.42%

Operating Exp less Mgt & Inc. fee 0.67% 0.79% 0.58% 0.71% 0.71%

.* Total expenses exclude interest expense**Expense ratio excludes management and incentive fees.

Expenses Ratios


Page 33 of 35


Strategic Emerging Europe Fund Euro Class USD Class TOTAL TOTAL1st Jan -

30th April 20121st Jan -

30th April 20121st Jan -

30th April 2012 YTD 2012

Administration Fees Expense 8,294 2,392 10,686 10,686 Annual Fee Expense 1,248 360 1,608 1,608 Audit Fees Expense 3,650 1,053 4,703 4,703 Bank Charges Expense 64 19 83 83 Consulting Fees Expense 675 195 870 870 Corporate Secretarial Fees Expense 199 57 256 256 Credit Facility Fee Expense 3,427 988 4,415 4,415 Crystalised Performance Fees Expense - - - - Custodian Fees Expense 8,294 2,392 10,686 10,686 Directors Fees Expense 4,866 1,403 6,269 6,269 Dividend withholding tax - - - Financial Statement Prep Expense 226 65 291 291 FuturesCommissionExpense 2,897 836 3,733 3,733 Insurance Fees Expense 199 58 257 257 Investor Servicing Fee 2,633 759 3,392 3,392 Legal Fees Expense 2,579 744 3,323 3,323 Listing Fees Expense 2,134 616 2,750 2,750 Mgmt Fee Expense 79,760 23,001 102,761 102,761 Operating Fees Expense - - - - Other Interest Expense 216 62 278 278 Out of Pocket Expenses 1,243 359 1,602 1,602 Performance Fees Expense 17,048 7,577 24,625 24,625 Preliminary Expense - - - - Professional Fees Expense - 1,576 - 454 - 2,030 - 2,030 Publication Expense 1,954 564 2,518 2,518 Registration Fee Expense 4,168 1,202 5,370 5,370 Sub Custodian Fees Expense 11,653 3,361 15,014 15,014 Trade Fee Expense - - -

Total Expenses* 155,639 47,543 203,182 203,182

Average NAV 15,820,778 4,686,348 20,507,126 20,507,126

Expenses RatiosFormation expenses 0.00% 0.00% 0.00% 0.00%Operating Expenses 2.98% 3.07% 3.00% 3.00%**Op Exp less Mgt & Incentive fee 1.12% 1.10% 1.12% 1.12%

* Total expenses exclude interest expense

**Expense ratio excludes management and incentive fees.

Page 34 of 35


Strategic Europe Value Fund Class Euro TOTAL1st Jan 12 to 30th Apr 2012

YTD2012

Administration Fees Expense 16,619.02 16,619.02 Annual Fee Expense 1,434.71 1,434.71 Audit Fees Expense 6,571.73 6,571.73 Bank Charges Expense 14.81 14.81 Broker Fee Expense - - Consulting Fees Expense 2,241.67 2,241.67 Corporate Secretarial Fees Expense 658.36 658.36 Credit Facility Fee Expense - 6,603.05 - 6,603.05 Crystalised Performance Fees Expense - - Custodian Fees Expense 8,132.28 8,132.28 Directors Fees Expense 12,149.00 12,149.00 Financial Statement Prep Expense 542.51 542.51 FuturesCommissionExpense 228.94 228.94 Insurance Fees Expense 329.60 329.60 Investor Servicing Fee 2,725.00 2,725.00 Legal Fees Expense 8,680.35 8,680.35 Listing Fees Expense 1,391.94 1,391.94 Mgmt Fee Expense 191,657.54 191,657.54 Operating Expense 0.11 0.11 Other Interest Expense 424.04 424.04 Out of Pocket Expenses 1,213.16 1,213.16 Performance Fees Expense 148,379.33 148,379.33 Preliminary Expense - - Professional Fees Expense - 2,368.15 - 2,368.15 Publication Expense 966.97 966.97 Marketing Fee Expense 5,000.00 5,000.00 Registration Fee Expense 5,739.71 5,739.71 Sub Custodian Fees Expense 5,749.39 5,749.39

Total Expenses* 411,454.93 411,454.93

Average NAV 38,197,233.17 38,197,233.17

Expenses RatiosFormation expenses 0.00% 0.00%Operating Expenses 3.26% 3.26%Operating Expenses less Mgt & Incentive Fees 0.57% 0.57%

* Total expenses exclude interest expense

**Expense ratio excludes management and incentive fees.

Page 35 of 35

Trustee Report

RESTRICTED

E.I. Sturdza Funds plc Trustee Report to the Directors 1 January 2012 to 31 March 2012

Prepared by: HSBC Institutional Trust Services (Ireland) Limited Date: 22 May 2012

Headi ng

RESTRICTED 2

Report for Period Set out below is the Trustee Report commenting specifically on our fiduciary responsibilities for E.I. Sturdza Funds plc. During the period such testing was undertaken by the Trustee on the following valuation dates:

Fund Valuation Dates

Strategic China Panda Fund 31 January 2012, 29 February 2012 & 30 March 2012

Strategic Euro Bond Fund 31 January 2012, 29 February 2012 & 30 March 2012

Nippon Growth (UCITS) Fund 31 January 2012, 28 February 2012 & 27 March 2012

Strategic Emerging Europe Fund 25 January 2012, 29 February 2012 & 28 March 2012

Strategic Europe Value Fund 31 January 2012, 29 February 2012 & 30 March 2012

1. Investment Restriction Breaches

There were no investment restriction breaches identified by, or reported to, the Trustee during the period under review.

2. Material Pricing Errors

There were no material pricing errors (greater than 50bps) identified by, or reported to, the Trustee during the period.

3. Immaterial Pricing Errors

One immaterial pricing error (less than 50bps) was identified by the Trustee during the period.

E.I. Sturdza Strategic Europe Value Fund

On calculating the performance fee for 08 December 2011 on the Euro Share Class, the Administrator failed to correctly update the level of the index which led to the incorrect fee being accrued. The index level was corrected following the 12 December 2011 valuation and the impact of the error on the NAV was approximately EUR 80 being less than one basis point. The error was detected by the Trustee when reviewing the 31 December 2011 valuation point. The Administrator has advised that there is a maker/checker process in place for all performance fees and the importance of correctly calculating the performance fee was reiterated to the team. This error is now closed on Trustee records as there is no compensation payable and no further action to be taken.

4. Unit Dealing Errors

One unit dealing errors was reported to the Trustee during the period.

E.I. Sturdza Strategic China Panda Fund

On 01 February 2012, a redemption request for 4.987 shares from the E.I. Sturdza Strategic China Panda Fund was received by the Administrator and should have been placed for the 03 February 2012 dealing. However it was not processed until 02 February 2012 and placed for dealing date 06 February 2012 because the Administrator did not recognise that the trade had been received before the cut off point for that date. The error was discovered on 08 February 2012 when the shareholder contacted the Administrator to query the dealing date received. On 09 February 2012, the original trade was reversed and reprocessed for correct dealing date and due to a change in the NAV from 03 February 2012 to 06 February 2012, additional proceeds of EUR 8 was paid out to shareholder. To prevent reoccurrence, the Administrator’s Investor Services team has been advised to review the time quoted on all trade instructions to ensure that all trades are processed for the correct dealing date. This error is now closed on the records of the Trustee.

5. Complaints

No complaints have been identified by, or reported to, the Trustee during the period.

6. Custody Issues

No custody errors were identified by, or reported to, the Trustee during the period under review.

Headi ng

RESTRICTED 3

7. Failed Trades

Please find a summary of failed trades during the period in Appendix 1.

8. Communication with the Investment Manager

As part of our oversight obligations we approach the Investment Manager on a monthly basis requesting confirmation that the Fund has been managed in accordance with the applicable investment and borrowing restrictions. This confirmation has been received for the Fund up to 31 March, 2012. The Trustee also reviews the Investment Managers monthly report for any identified breaches.

9. Monthly reporting - Business Plan requirements

During the period, the Trustee provided a monthly report to the relevant parties in accordance with the Business Plan requirements.

10. Inadvertent Technical Excess/Shortfall

No matters were identified by the Trustee during the period under review.

11. Other Issues

E.I. Sturdza Funds plc - E.I. Sturdza Strategic Europe Value Fund – Incorrect Distribution of Valuation Pack

E.I. Strurdza Strategic Emerging Europe Fund and E.I. Sturdza Strategic Europe Value Fund appointed Investment Advisors, Armajaro and Lofoten Asset Management respectively. Upon approval of the 23 February 2012 valuation for E.I. Sturdza Strategic Europe Value Fund NAV, the Administrator inadvertently distributed the NAV pack to Armajaro, as opposed to Lofoten Asset Management. The error was detected by E.I.Sturdza who informed the Administrator that the NAV had been distributed incorrectly and requested that Amajaro be contacted to rectify the error. Amajaro confirmed that the NAV pack had been deleted from their system. To prevent reoccurrence, the importance of checking all externally distributed reporting has been reiterated to the team and e-mail etiquette training was completed by the team in March 2012. This issue is now closed on the records if the Trustee.

► There are no other significant issues that the Trustee wishes to bring to the attention of the Board from the end of the reporting period, 31 March 2012, to the report submission date 8 May 2012. The Trustee will provide a verbal update regarding the period from the report submission date to today, the date of the Board Meeting.

Headi ng

RESTRICTED 4

APPENDIX 1 – FAILED TRADES


Month Volume Total Fails %Success Rate Fail Reasons

January 2012 25 0 100% No Failing Trades February 2012 25 0 100% No Failing Trades March 2012 63 0 100% No Failing Trades Total 113 0 100%



January 2012 0 0 100% No Failing Trades February 2012 49 0 100% No Failing Trades March 2012 3 0 100% No Failing Trades

Total 52 0 100%



January 2012 3 0 100% No Failing Trades February 2012 11 0 100% No Failing Trades March 2012 26 0 100% No Failing Trades Total 40 0 100%



January 2012 18 0 100% No Failing Trades

February 2012 19 2 89.47% 1 - Counterparty lack of stock 1 - Late trade

March 2012 13 1 92.31% 1 - Late trade

Total 50 3 94%



January 2012 31 2 93.55% 1 – Counterparty lack of stock 1 – Counterparty Missing Instruction

February 2012 22 2 90.91% 1 – Counterparty Missing Instruction 1 – Counterparty lack of stock

March 2012 25 1 96% 1 – Counterparty lack of stock

Total 78 5 93.59%

Designated Individual Report

Designated Individual Report

E.I. Sturdza Funds plc (‘Sturdza’)

Strategic China Panda Fund Strategic Euro Bond Fund

Nippon Growth (UCITS) Fund Strategic Europe Value Fund


For the period 1 January 2012 – 30 April 2012

2

Reporting Area Status Nature of issue

Monitoring Compliance

� Central Bank Correspondence -

Hedging Process � Internal Mandate Breach

� UCITS IV update � Fitness & Probity � Corporate Governance Code

Complaints Handling

No issues to report

Risk Management

� Pricing Exceptions � Below Minimum Trades � Delayed settlement of trades � Dealing Error � NAV Distribution Error � Performance Fee issue � NAV Timeliness

Monitoring Investment Policy, Investment Strategies and Performance

No issues to report

Financial Control

� Annual financial statements � Annual FDI report

Accounting Policies and Procedures

No issues to report

Monitoring of Capital

No issues to report

Internal Audit

No issues to report

Supervision of Delegates

No issues to report

3

Key to traffic lights symbols

Services provided to E.I. Sturdza Funds plc during the period under review On a monthly basis Bridge Consulting reviews the reporting received from the Investment Manager, the Administrator and the Custodian to the Fund against the requirements of the Business Plan as outlined in Appendix 1. The results of this review are documented in this Designated Individual Report. All parties have submitted the information required under the Business Plan on a timely and complete basis. The report covers the period from 1 January 2012 – 30 April 2012. * * Reporting from the Trustee covers the period from 1 January 2012 to 31 March 2012

Summary of Changes in Assets under Management

Fund Name NAV April 30

2012 Change in NAV over period Key Drivers

Strategic China Panda Fund $132,181,871 -0.24%

Performance 4.36%

Net Outflows -2.80%

Nippon Growth (UCITS) Fund JPY 1,996,990,536 11.97%

Performance 12.53%

Net Outflows -1.41%

Strategic Euro Bond Fund € 67,682,091 8.02%

Performance 1.87%

Net Inflows 5.81%

Strategic Emerging Europe Fund $20,776,285 12.25%

Performance 17.47%

Net Outflows -6.39%

Strategic Europe Value Fund € 42,113,211 21.74%

Performance 7.59%

Net Inflows 14.51%

Performance is calculated based on the change in value of the base currency accumulating share classes.

Green: No issues identified. Amber: Please be aware of the item presented. However in our view no immediate action is required. Red: Issues have been identified which in our view

require a decision by the Board or Board intervention.

4

Compliance Monitoring Central Bank Correspondence - FX Hedging Process - Update As noted at recent board meetings, a letter was issued to the Central Bank by the Company to highlight the difficulty presented by the requirement to adhere to Guidance Note 3/99 which sets an upper limit of 105% of NAV when placing Forward Foreign Currency hedges. This letter was issued to the Central Bank on September 30 2011. The communication highlighted that the Investment Manager’s hedging process is based on their calculation of the NAV adjusted for anticipated subscription and/or redemption activity and that this has on a number of occasions, depending on the volume of investor activity, resulted in a breach at the time of placing the hedge. The letter highlighted a number of issues in relation to the process and requested that the Central Bank consider a more flexible approach when considering the definition of the NAV. The Central Bank reverted in early November with a number of questions and a request for worked examples. A written response, together with the examples, was sent to the Central Bank. There followed a call with the Central Bank in February 2012. The Central Bank responded formally to the Company on February 16 2012 and noted that there would be no change to the requirement of the Guidance Note and that it considered it was a matter for the Custodian to determine if the Fund was in breach of the requirements. Internal Mandate Guideline – breach In the period covered by the report the Investment Manager advised of a breach of the mandate guidelines for the Nippon Growth Fund in February. The fund breached the 100% investment guideline (100.22%). The breach occurred on February 28 2012 and was rectified on March 6 2012 following investor dealing. UCITS IV Update Business Plan We noted in our last report that the Central Bank had indicated that they would commence their review of UCITS IV business plans of Self Managed Investment Companies (‘SMICs’) in the first quarter of 2012. We also noted that the business plan for E.I. Sturzda has been scheduled for review in the second tranche of SMIC reviews which would need to be submitted to the Central Bank between August and October 2012. However, in the interim period, following a request from the fund industry for clarity in relation to the timing of the implementation of certain aspects of the UCITS IV regulations the submission schedule for all SMICs is being delayed. We will keep the board updated of developments in this regard and the revised submission date once this is known.

5

Fund Policies and Procedures In the period covered by the report Bridge Consulting have reviewed and provided comments on the UCITS IV fund policy handbook. Apart from the inclusion of a redemption gate policy the changes were relatively minor. A further update is scheduled for later in the year. Fitness & Probity Regime (F&P) In the period covered by the report, Bridge Consulting provided feedback on the Fitness and Probity matrix, which was compiled by the Investment Manager. A confirmation was issued to the Central Bank that the exercise had been completed by the deadline of March 31 2011. The board will have to determine an appropriate policy in respect of the requirement to consider fitness and probity on an annual basis. Corporate Governance Code The IFIA issued a Voluntary Corporate Governance Code (the “Code”) for the Irish investment funds industry on 14 December 2011. While the Code is voluntary, non-adoption of the Code is subject to a ‘comply or explain’ principle. The board pack is to include a paper, prepared by the Investment Manager, which highlights the areas that need to be considered by the board should the code be adopted. The areas that will need to be considered include both a formal and informal process for the review of board composition and performance, a documented process for recording time commitments and a conflict of interest policy for the board. Please note that the process for approval of a fund director by the Central Bank has been updated and the application requires a confirmation of the fund specific time commitment. Risk Management Pricing Exceptions Strategic Europe Value Fund – Huabao International Holdings In the period covered by the report the above referenced security was suspended on the Hong Kong Stock Exchange on April 24 2012. The ADR equivalent was suspended on the US markets on April 26 2012. During the two day period of trading on the US market there was a fall in value of over 30%. The Directors, on the advice of the Investment Manager, elected to apply the following pricing adjustments:

(1) 27.4.2012 Reduction of 20% to HKD 3.184 (1) 1.5.2012 Reduction of 30% to HKD 2.786

The decision to write the position down is to be ratified at the forthcoming board meeting. The holding recommenced trading on May 4 2012. Strategic Emerging Europe Fund The Administrator has noted that at April 30 2012 there were three securities held on the portfolio that were priced at latest available currency line, rather than a USD line,

6

due to the fact that they are thinly traded securities. These securities in total represent approximately 9.46% of the value of the fund. Below Minimum Trades There were six below minimum trades in the period covered by the report which is broadly speaking consistent with that which has been previously reported to the board. Delayed settlement of trades In the period under review, 5 from a total of 333 (1.5%) trades, experienced late settlement. The delays were experienced on the Strategic Emerging Europe Fund and Strategic Europe Value Fund. The delays have been attributed to a variety of factors including late delivery of the instruction, insufficient stocks held by the counterparty and an inability to match the instructions. This is broadly consistent with statistics that have been previously reported. Dealing Error- China Panda Fund There was a delay in the processing of a redemption request trade which was received on February 1 2012 and which should have been placed for February 3 2012. The one day delay in processing resulted in the investor trade being placed for February 6 2012. This was queried by the investor and once investigated by the Administrator the trade was corrected resulting in an additional payment to the investor of Euro 8. The Administrator has implemented an additional control (review of time stamp) to prevent a recurrence of this type of issue. NAV Distribution Error On February 23 2012 the Administrator inadvertently distributed the NAV pack for the Strategic Europe Value Fund to Armajaro, who is the Investment Advisor for the Strategic Emerging Europe Fund instead of to Lofoten Asset Management who is the Investment Advisor of the sub-fund. The error was identified by E.I. Sturzda who informed the Administrator. The Administrator subsequently contacted Armajaro to advise of the error. Armajaro has since confirmed that the NAV pack has been deleted from their records. The importance of adhering to agreed procedures has been emphasised by the Administrator. In addition specific email distribution training has been arranged for the team responsible to avoid similar errors in future. We have confirmed with the Administrator that a typical NAV pack would include the a statement of net assets, a NAV reconciliation (P&L), position appraisal (portfolio), and cash report together with supporting fee calculations. Performance fee issue Strategic Europe Value Fund In February 2012 the Trustee identified that there has been an error in the accrual of

January February March Total

1 4 1 6

7

the performance fee for the Euro share class of the Strategic Europe Value Fund. This arose as a result of a failure to reset the level of the benchmark index on December 8 2011. The index was reset on December 12 2011 but in the meantime there was an impact of less than one basis point on the performance fee accrual for both December 8 and December 9 2011. The Administrator has advised that there is a maker/checker process in place for all performance fee calculations and we can confirm that there has been no recurrence of the issue since then. NAV Timeliness NAV timeliness statistics are noted in the table below:

Fund Name NAV

Timeliness-Average

Jan Feb Mar Apr

Strategic China Panda Fund*

90% 89% 90% 86% 94%

Strategic Euro Bond Fund* 95% 100 % 95% 95% 100%

Nippon Growth Fund** 76% 80% 100% 75% 50%

Strategic Emerging Europe Fund**

100% 100% 100% 100% 100%

Strategic Europe Value Fund*

95% 95% 90% 100% 95%

* Daily priced Funds * * Weekly priced Funds

The NAV timeliness statistics noted above are based on the Investment Manager’s reporting. As noted in recent reports there continues to be occasional minor discrepancies in the reporting of timeliness between the Investment Manager and the Administrator however in general the reporting is closely aligned. Financial Control The annual financial statements and FDI report for the year ended December 31 2011 were reviewed by Bridge Consulting. The annual financial statements were filed with the Central Bank on 27 April 2012. The annual FDI report was filed with the Central Bank on May 9 2012.

8

Items to Note

1. New corporate structure for Irish funds 2. Disclosure of related party transactions 3. Disclosure of transaction costs 4. Emailing of financial statements 5. Directors’ fees 6. Indian tax update 7. Foreign Account Tax Compliance Act

1. New corporate structure for Irish funds

The Irish government has approved, in principle, the development of legislative proposals for a new corporate structure for the Irish funds industry. One of the primary advantages of the new structure, being termed a “SICAV”, will be to provide for a corporate entity that can elect for either corporation or partnership classification under the US check-the-box taxation rules, allowing for a corporate entity that is treated for US tax purposes in the same way as a limited partnership. At present Irish unit trusts can make this election but corporate funds cannot. The most likely application for these structures is for funds which combine US and non-US taxpayer investors, which at the moment require more complicated structures than should be necessary to put into a fund structure. The proposed legislation is likely to be enacted by the end of 2012, well ahead of the implementation deadline for the AIFM Directive in July 2013. The new structure should also offer a more streamlined approach to fund structures by dispensing with some traditional features of the public company format that do not fit especially well with investment fund requirements. While the public companies or plc structures still function well, the creation of a structure which is designed specifically for investment funds and which is not subject to rules which were designed for other forms of company will give added flexibility. Plcs will continue to be available to promoters who wish to use them and conversion to the new structure will be optional for existing plcs. 2. Disclosure of related party transactions The Central Bank has recently issued a letter outlining in more detail the types of parties and the types of transactions which should be disclosed in the annual and half yearly financial reports, in order to satisfy the requirements set out in paragraph 4 of UCITS Notice 14 in the related party transactions report. This applies to dealings by a fund with a promoter, manager, trustee, investment adviser and/or associated group companies of these. Accordingly it is transactions with these parties which need to be disclosed in the related party transactions report.

9

The scope of this report is different to the “related party disclosures” currently required under FRS8 which focuses on parties which exercise control over the reporting entity. The principle of exercising control is not a feature of UCITS Notice 14.

A list of all the transactions concerned must be included in the related party transactions report. This includes for example, fee payments, dealing in units, foreign exchange transactions, deposits and OTC transactions including financial derivatives, securities lending and repos.

As the disclosure requirement will apply to the annual reports for financial years beginning after 1 July 2011, the first set of financial statements affected will be the interim financial statements for the 6 months ended 30 June 2012.

3. Disclosure of transaction costs

Following the implementation of UCITS IV, the information required in the annual report now includes the disclosure of "transaction costs". This disclosure requirement is effective for financial years commencing on or after 1 July 2011 so the first set of financial statements affected will be the interim financial statements for the 6 months ended 30 June 2012. The Technical Committee of the IFIA has proposed using the definition of costs from IAS39 as to what constitutes "transaction costs" and also proposed a separate accounting policy which defines such costs.

4. Emailing of financial statements

Historically it was not possible to circulate fund’s financial statements by email or by publishing on a website, and the perception was that paper copies had to be sent to each shareholder by post. We are aware that there have been some changes in practice in this area, and a number of funds are looking at moving to electronic distribution of financial statements. There are still differences in practice, however, and the proposition is not universally accepted. We will provide further updates when the issues are resolved, but in the meantime, for funds that are intended in taking this forward in the short term, it may be worth investigating further.

5. Directors’ Fees

Following on from the decision by the Irish Revenue Commissioners that the correct approach to tax the fees of directors is to deduct PAYE, PRSI and the Universal Social

10

Charge, we have received further clarification in relation to the liability for PRSI whereby Irish resident directors are liable for PRSI at a rate of 4% and non-resident directors may be exempt from PRSI if they are making equivalent social insurance contributions in another EU country or in a country with which Ireland has bilateral agreements on social security. Furthermore any person aged 66 years or over is exempt from PRSI. 6. Indian Tax Update The Indian tax authorities have issued General Anti Avoidance Rules (“GAAR”) which are due to come into effect from 1 April 2012, which it is feared could affect FII investments through the Mauritius or the participatory note route which form the majority of institutional flows into India. The most recent view is that the participatory note holders will have no tax liability in India. However we expect clarification on this in due course and feel that there is insufficient certainty at present to start accruing CGT on these holdings.

7. Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act (“FATCA”) is a new US tax law designed to discourage offshore tax abuses by US persons. Non-US financial institutions are required to enter into disclosure agreements with the US tax authorities and agree to identify and report information on their customers or else suffer 30% withholding tax on certain US source income. As the implementation date is 1 January 2014, we believe it is time to start considering the impact on funds in order to ensure timely compliance with these regulations.

11

E.I. STURDZA FUNDS PLC -Reporting Matrix Management Functions Key: Monitoring Compliance: MC Complaints Handling CH Risk Management: RM Monitoring Investment Policy, Investment Strategies and Performance MIP Financial Control: FC Accounting Policies and Procedures AP Monitoring of Capital: MOC Internal Audit: IA Supervision of Delegates: SD

Report Issued By Received By Frequency/ Date to be received

Mgmt Function

Board Agenda Company Secretary Entire Board Quarterly

Breach/Error/Loss Reports

Investment Manager Administrator Custodian

Tara Gordon & Patrick Robinson

As they occur MC/CH

Compliance Report Administrator Custodian


Monthly to designated individual Quarterly to Board

MC/CH

Anti-Money Laundering Report

Administrator Natalie Courtney (MLRO)

Monthly MC

Late & Abusive Dealing Reports

Administrator Tara Gordon & Patrick Robinson

Late deals quarterly to Board. Abusive deals as they occur

MC

Site Visit Reviews

Custodian Tara Gordon & Patrick Robinson

Periodically (details in appropriate monthly report)

MC

Complaints Investment Manager Administrator Custodian Distributor


As they occur MC/CH

Investment Manager’s Report

Investment Manager Tara Gordon & Patrick Robinson

Monthly RM

Administrator’s Report Administrator Tara Gordon & Patrick Robinson

Monthly RM

Custodian’s Report Custodian Tara Gordon & Patrick Robinson

Monthly RM

Risk Management Statement + related Disclosures


Semi – Annually or as required by FR

RM

Risk Management Statement review


Annually RM

12

Risk Management Issues

Investment Manager Administrator Custodian


As they occur RM

Investment Managers Report


Monthly MIP

Sub-Fund Portfolios Administrator Tara Gordon & Patrick Robinson

Monthly MIP

Timetable for production of annual and semi-annual A/C


Semi-annually FC

Annual and semi-annual accounts


Semi-annually FC/AP

Audit review Auditor The Board Annually FC/AP

Management Letter Auditor The Board Annually FC

Custodian’s report to shareholders

Custodian The Board Annually FC

NAV Report Administrator Tara Gordon & Patrick Robinson

Monthly, any breach during month will be reported to designatedindividual immediately

MOC

Internal audit issues Investment Manager Administrator Custodian


Annually and as soon as an issue arises

IA

Management Letter Auditors Tara Gordon & Patrick Robinson

Annually IA

All periodic reporting Each service provider Tara Gordon & Patrick Robinson

See above SD

Annual service level Review


The Board Annually or as required by Board

SD

Investment Managers Report

Investment Manager The Board Quarterly

Quarterly Board Report

The Designated Individual for Risk Management will also review all reports relating to the Monitoring Compliance function in order to assess operational risk. Service Providers: Investment Advisor: EI Sturdza Strategic Management Limited Administrator: HSBC Securities Services (Ireland) Ltd. Registrar and Transfer Agent: HSBC Securities Services (Ireland) Ltd. Custodian: HSBC Institutional Trust Services (Ireland) Limited Company Secretary: Tudor Trust (from 1.10.2011)

Compliance Calendar

COMPLIANCE CALENDAR

Month Requirement Requirement deadline

May In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.

Monthly report submitted to Bridge Consulting within 10 business days from the end of the month

KPMG as auditors prepare on an annual basis an audit report which is submitted to the Central Bank of Ireland.

The Audit Report needs to be filed with the Central Bank of Ireland with the Investment Managers response by 30 May

June In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


July In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


On an annual basis the Investment Manager will table for the Board to review and comment the policies adopted by the board, this review will also include the use of Financial Derivative Instruments (“FDI”)

This annual review will take place in June/July each year.

The Business Plan of the Company requires that each delegated service provider must have an annual service provider review

Annual Service provider reviews are undertaken during July of each year, and will include that each delegate has appropriate arrangements for suitable electronic systems so as to permit the timely and proper recording of each portfolio transaction or subscription or redemption order.

August The UCITS rules require a meeting of the Board of Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business.

A board meeting of the Directors shall be held on a quarterly basis.

1

COMPLIANCE CALENDAR

In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


Interim financial statements are required to be filed with the Central Bank

The Central Bank requires interim financial statements to be filed by the 31 August.

Irish law and the Company’s memorandum and Articles of Association must: (1) The AGM must be held within 9 months of the financial year end; (2) The Company must hold an AGM in each calendar year; and (3) Not more than fifteen months shall elapse between the date of one AGM of the Company and the next.

The Company must hold its next AGM by August 2012

2

MLRO Report

E.I. Sturdza Strategic Management Limited

Sarnia House, Le Truchot, St Peter Port, Guernsey GY1 1GR

T +44 (0) 1481 722322 F + 44 (0) 1481 710884

www.eisturdza.com

(Registered No. 35985)

A wholly-owned subsidiary of

BANQUE BARING BROTHERS STURDZA SA

E.I. Sturdza Strategic Management Limited: Risk Management Reporting Period: January to April 2012

Background

Following the implementation of UCITS IV, changes in the Business Plan required that additional

reporting be provided to the Board of Directors on an ongoing basis outlining the risk monitoring

process in place. This report provides additional information relating to each of the Funds within the E.I.

Sturdza Funds plc in relation to the risk management and monitoring aspects undertaken by the

Investment Manager.

Risk Management Criteria

The Investment Manager has identified that there are a number of risk management criteria apply to all

funds within the E.I. Sturdza Funds E.I. Sturdza Funds plc, outlined as follows:

Maximum Position Exposure Limited to 10% of NAV

Maximum holding in ETFs and CIS Limited to 10% of NAV unless classified as a transferable security

Maximum in unlisted securities Limited to 10% of NAV

Minimum diversification requirements Maximum of 40% of NAV in assets that each make up more than 5% of NAV

Maximum Counterparty Exposure Limited to 20% of NAV

Maximum Cash Holdings Limited to 20% of NAV at one depository

Uncovered short sales Not permitted

Global Exposure Leveraged FDI exposure less than 100% of NAV

Liquidity Profile Match the requirements of investors

General diversification Minimum holdings of 20 positions / issuers

Legal / Management Control Not permitted, so holdings must represent a suitably small percentage of available market cap.

In addition, each Fund has specific guidelines to which the investment portfolio is monitored:

Strategic China Panda Fund:

Investment Allocation Minimum 70% equity securities, maximum 30% in fixed income securities for investment purposes

Regional Exposure Focus on markets of Hong Kong, China, Taiwan and Singapore or companies operating in these markets.

Net Investment Exposure Should be within the range 0% to 100%

Government Bonds For investment purposes: Unrated or minimum CC rating permitted, maximum 30% For cash purposes: Strong credit rating issued / backed by by EU member or US or HK governments

Sector Allocation Maximum 35% in any one sector

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Strategic Euro Bond Fund:

Currency Allocation Assets denominated in Euro only

Asset Class Directly or Indirectly in fixed income securities including corporate bonds and government bonds

Average Credit Risk No less than A- or 90 in S&P Risk Matrix

Investment Allocation Minimum 50% in investment grade corporate bonds; maximum 10% in convertible or equity linked debt


Cash Allocation Maximum 50% in MMIs and short dated government bonds and 10% in cash

Nippon Growth (UCITS) Fund:

Country Allocation Minimum 67% in securities listed in Japan or issued by Japanese issuers


Investment Allocation Minimum 51% in equities and maximum 10% in warrants

Strategic Emerging Europe Fund:

Regional Exposure Primarily Central and Eastern Europe including Russia, Czech Republic, Hungary, Poland and Turkey. Maximum 10% in Middle East or Africa

Country Exposure Maximum 30% in securities on Russian exchanges, maximum 50% in any one economy

Currency Exposure Currency hedging at portfolio level within 2% tolerance to base currency, maximum 50% exposure to currencies other than base currency

Sector Exposure Maximum exposure 50% of NAV

Long/ Short Ratio Maximum 150/50

Asset Class Directly or indirectly in equity or equity related securities, maximum 20% in ADRs/ GDRs, maximum 30% in corporate bonds / investment portfolio government bonds

Government Bonds For investment purposes: Unrated or minimum C rating permitted, maximum 30% For cash purposes: Strong credit rating minimum A issued / backed by by EU member or US governments

Strategic Europe Value Fund:

Regional Exposure Limited to 25% of NAV outside Europe and 20% in Emerging Markets

Minimum Market Capitalisation Limited to EUR 300 million upon purchase

Stop Loss Monitoring Review down 10%, review further at 15% and 20%

Primarily equity / equity related Minimum of 50% of NAV


Government Bonds Should be minimum rating of A+ issued/ backed by EU member or US or Swiss governments

These criteria are monitored on a daily basis as part of the review outlined below.

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Risk Monitoring

In addition to these risk monitoring statistics prepared by the Investment Manager to assist in the risk

monitoring profile of the fund and to assist investors with their assessment of the risks, the Investment

Manager reviews portfolio activity on a daily basis to assess a number of other factors that will affect the

overall risk profile of the specific fund in question, as well as to ensure that the funds meet their

obligations under the UCITS rules and specific investment policy, guidelines and restrictions contained

within the relevant supplement and investment advisory mandate.

This includes review of the following factors:

Trading:

Review of each trade placed for suitability of the asset to the investment portfolio of the Fund or is unusual in the context of the fund‟s general trading activity;

Review of each trade placed to determine that the size of the trade is in line with any mandated limits on any one trading day or is unusual in the context of the fund‟s general trading activity;

Review the quantity of trades placed each day to ensure that these are not unusual in the context of the standard number of transactions generally placed by the Fund and that the same stocks are not overly purchased and sold to any degree that might indicate churning or excessive turnover without basis or rationale;

Review of commissions charged for each trade to ensure that these are in line with expectations / pre-agreed arrangements;

Review of the execution price to ensure that this is in line with expectations. Any trades executed at price levels more than 50 bps away from the daily VWAP are investigated further;

Review of daily volume and transaction size to ensure that each trade will not have a significant market impact or is unusual in the context of the fund‟s general trading activity;

Review of all trades in line with trade confirmations from brokers and advices / trade files received from the Trading Team (whether internal or external investment adviser);

Daily follow up of executed trades pending settlement to ensure that all trades are booked appropriately by the Custodian and broker to ensure that trades settle on time without incident;

Daily follow up of executed trades to ensure that these are reported to the Custodian and booked as appropriate.

Portfolio Monitoring:

Daily review of all trades placed to ensure that the inclusion of the day‟s trades / market movements in asset valuations do not cause any breaches in the investment portfolio to arise, e.g. maximum stock, sector or currency allocations;

Daily review of the liquidity profile of the investment portfolio to ensure that this meets with the liquidity profile offered to investors and as disclosed in the supplement e.g. no investment in unlisted securities if policy is only to invest in listed securities etc.;

Daily review of book cost of transactions, price moves to book cost and triggers of review under stop/loss limits or guidelines;

Daily review of market capitalisation of portfolio to ensure that this meets with both the investment policy and specific guidelines, e.g. investing predominantly in large cap securities or specific limits on minimum market capitalisation of positions;

Daily review of the diversification of the investment portfolio to ensure prudence as well as in line with specific requirements of the supplement e.g. minimum of fixed number of holdings or maximum exposure to investments not part of the primary objective / policy;

Daily review of total portfolio to ensure that maximum exposure guidelines are not exceeded, i.e. that the fund meets UCITS restrictions on global exposure as well as mandate restrictions on

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leverage and net allocation;

Daily review of the price movements of individual assets, investigating any price differences outside a set tolerance parameter further;

Daily review of the portfolio movement against the benchmark, including the performance contribution of each individual position;

Daily review of counterparty and credit exposure in line with UCITS requirements and the Risk Management Process;

Daily review of use of FDIs to ensure that these are fully capitalised and comply with UCITS requirements and the Risk Management Process;

Daily review of corporate actions pertaining to the fund to ensure that these are reviewed and voted on appropriately and incorporated within the investment portfolio where necessary;

For fixed income funds, daily review of the average credit scores for the investment portfolio and any changes in asset credit ratings that will affect the credit risk profile of the fund.

Cash Management and Monitoring:

Daily review of cash balances across multiple currencies for each fund to determine sufficient cash to meet obligations in terms of trade settlement, shareholder redemptions and fee expenditure, raising cash in the appropriate currency where necessary;

Daily review of cash balances held in line with agreed cash management policies and placing necessary cash adjustments, e.g. converting sale proceeds in a local currency back to base currency of the fund where it is the policy to do so;

Regular review (dependent on periodicity of shareholder activity) of any share class currency hedges in place, making any necessary adjustments and rolling hedges forward on a periodic basis;

Daily review of the overall counterparty exposure and cash limits for the balances held within each fund for compliance with UCITS requirements, investing or moving capital as required to ensure operational efficiency and ongoing compliance with regulations;

Daily review of the performance of currency hedges at portfolio level to ensure ongoing accuracy with set tolerance bands, placing adjustment trades as necessary and rolling hedges forward on a periodic basis;

Daily review of financial derivatives margin accounts to ensure that all margin calls are met and excess free equity held in margin accounts returned to the designated fund accounts;

Operational Risk:

Daily review of asset holdings to the Custodian to ensure both records up to date and accurate;

Daily review of cash balances and transactions in multiple currencies across funds to ensure transactions posted are accurate and timely;

Regular review (dependent on periodicity of NAV calculation) of Administrator records to ensure that NAV calculations are accurate and in line with expectations.

The purpose of these extensive reviews is to ensure that the funds remain compliant with all necessary

guidelines and restrictions and that operational risk are minimised as far as possible and any issues are

identified immediately. Reviews are undertaken for each fund by a designated individual within the team

familiar with the investment portfolio and requirements for the Fund. In all cases this review is then

checked by another senior individual (and in many cases, two) before this is completed. Where any issues

are identified these are logged internally and escalated as necessary for rectification to senior management

or directly with the appropriate investment adviser.

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In addition to the daily review of portfolio information described above wider portfolio activity is

reviewed on a monthly basis to determine the contribution of asset returns to performance, changes in

risk profile of the funds over time and the factors associated with this, and also changes in statistics such

as the Sharpe Ratio, Information Ratio and volatility over time as well as the explanations for this and if

this can be attributed to a change in stance for a short term or a longer term indicator of style drift.

There is also a constant flow of information with the portfolio management teams to each fund which

provides the Investment Manager with information in relation to the investment strategy, such as when

trading levels are escalated as a result of a strategic shift within the portfolio, as well as assists with the

planning of cash management and currency hedging activities. In addition, this relationship and the level

of monitoring undertaken provides for potential issues to be identified ahead of time, not just when a

breach actually occurs, with the result that action can be taken to rectify the situation ahead of this

becoming a formal breach situation. This can include reconciliation to the Investment Adviser‟s records

on their behalf, but more usually involves the transfer of information and data from the Investment

Manager to the Investment Adviser to facilitate their portfolio management activities based on the

analysis undertaken by the Investment Manager.

Breaches of Risk / Mandate Limits and Parameters

During the period the following breaches of risk or mandate limits and parameters have been observed:

Nippon Growth (UCITS) Fund Net Investment Exposure Should be within the range 0% to 100%

On one occasion during the period this mandate restriction was breached for a short period as follows:

Breach recorded on: Breach rectified on: Extent of Breach:

28 February 2012 8 March 2012 100.22% net exposure

This breach arose from market movements or shareholder activity in the form of redemptions from the

Fund where the allocation within the portfolio was reduced on the following trading days to rectify the

breach.

All other guidelines in all other funds have been complied with and all funds have complied with limits in

place excepting the above.

Stale Pricing

During the period negative rumours and revelations regarding the results of Huabao International

Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchange from 24 April

onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at

which time this position was also suspended from trading. During the two days in which the US stock

traded on 25 and 26 April the price of the stock declined by over 30% prior to the stock being suspended.

As a result, and based upon the suspension of the stock from trading in the primary market and the

process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at the

recommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the

primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary

exchange up until 26 April 2012. The impact of this discount was applied over two valuation points to

limit the impact upon the NAV calculation as there was no shareholder activity over the period. At the

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time of writing the position continued to be suspended from trading awaiting a response from the

company as to the accuracy of the allegations. The position is held in Strategic Europe Value Fund.

Risk Profile and Fund Statistics as at end April 2012:

There have been no significant changes in the annualised returns or standard deviations for any of the

Funds over the period.

During the period however the SRRI for the Strategic Euro Bond Fund was reduced from a level of 4 to

a level of 2. This change is as a result of the inputs into the calculation based on the approved

methodology as opposed to any changes in the risk parameters of the Fund itself: the calculation requires

data for the previous five years to be included and, where this is not available for the Fund itself this

should be substituted for sample returns. Within the calculation for the Strategic Euro Bond Fund

therefore a large proportion of the returns utilised have related to a corporate bond index rather than the

performance of the Fund itself, but over time as the Fund‟s own actual returns have been incorporated

instead of the index figures the risk reward indicator has reduced commensurate to the lower level of risk

inherent in the Fund as opposed to the bond index. We would expect a SRRI figure of 2 to be more

reflective of the risk profile of the Fund and to maintain this level for the longer term. A revised KIID

was prepared and filed with the Central Bank during April 2012 to incorporate these changes. There were

no other changes to the indicators produced for any of the other funds over the period.


Figures from inception on 3rd October 2008

Fund (USD Class) MSCI China Index (USD terms) Benchmark Index

Mean Monthly return 0.23% 0.16%

Annualised Return 1.63% 1.12%

Annualised Standard Deviation 27.26% 33.75%

Sharpe Ratio (RFR=3%) -0.05 -0.06

SRRI (extrapolated to 5 years) 7 7

Over the period the annualised return for the Fund and the benchmark index have reduced slightly.

However, the annualised standard deviation for both the Fund and the benchmark index have also

Data as at: 30/04/2012

YTD Return

Annualised

Return

Annualised

Standard Deviation Sharpe Ratio

Strategic China Panda Fund 4.40% 1.65% 27.26% (0.05)

Strategic Euro Bond Fund 1.85% 0.67% 1.74% (1.44)

Nippon Growth (UCITS) Fund 14.11% -1.09% 28.79% (1.08)

Strategic Emerging Europe Fund 17.00% 0.39% 37.48% (0.07)

Strategic Europe Value Fund 7.45% -0.09% 20.12% (0.10)

Fund SRRI

Benchmark

SRRI

Previous Fund

SRRI

Previous

Benchmark SRRI

Strategic China Panda Fund 7 7 7 7

Strategic Euro Bond Fund 2 1 2 1

Nippon Growth (UCITS) Fund 7 7 7 7

Strategic Emerging Europe Fund 7 7 7 7

Strategic Europe Value Fund 6 6 6 6

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increased, which has in turn resulted in a slightly more negative Sharpe Ratio being produced for both the

Fund and the index. The negative Sharpe Ratio outlines that the risk-adjusted return is negative.

Compared to the benchmark index the Fund has a slightly higher annualised return with a slightly lower

annualised standard deviation, which indicates that there is added value being generated by the selection

of investments within the investment portfolio over the benchmark index and the Fund does not rely on

beta to generate performance.

The Fund has an annualised standard deviation of 27.26% vs the MSCI China Index of 33.75%. Over the

period the annualised standard deviation of the Fund has increased by 7% but that of the benchmark

index only increased by 2%. This continues to put the Fund in the highest category of 7 for the synthetic

risk reward indicator, even though the statistics for the Fund are in line with the index. There is no

change in this indicator since the last reporting period.

This is in line with our expectations given that the Fund is a single country emerging market equity fund,

and the investment objectives of the Fund are to invest a minimum of 70% in equity investments.

However, the Fund has a portfolio beta of only 0.21 for the year to date, indicating that the Fund will

reflect a move substantially less than that measured by the index the majority of the time. This is reflected

in the performance of the Fund over the Year to Date: up 4.36% vs the index performance of 13.8% to

the end of April 2012. The underperformance has been driven by the construction of the investment

portfolio in that this has been defensively allocated at the beginning of the year: an allocation of 25% to

utilities and a further 12% to telecoms with a further 25-30% allocated to cash. Over the period the

conservative stance of the portfolio has been reduced slightly, with cash being reduced to 12% from as

high as 30%, but remains defensively allocated to utilities (25%) and telecoms (11%) with substantially

less allocated to consumer related sectors.

The beta of the Fund since inception however is 0.65, however we consider that this figure is somewhat

low, influenced by the extended period at inception of the Fund when the investment portfolio was

strategically allocated to cash and was not fully invested.


Figures from inception on 28th April 2009

Fund (Accumulating Class) HVB3MRE Index (EUR terms) Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have increased slightly

while the annualised standard deviation for both the Fund and the benchmark index have remained

constant which has in turn resulted in a slightly less negative Sharpe Ration being produced for both the

Fund and the index. The Fund has a negative Sharpe Ratio, outlining that the risk-adjusted return is

negative. Compared to the benchmark index the Fund has a slightly higher annualised return with a

slightly higher annualised standard deviation, expected given the Fund‟s focus on corporate bonds with a

lower average credit rating than the cash index. Therefore, extrapolating the data over 5 years as is

necessary for KIID reporting, the SRRI of the Fund is equivalent to 2, exceeding the benchmark index

(the risk free asset) which is in line with expectations. The changes in the indicators over the last reporting

period have been detailed further above. There have not been any significant changes to any of the

remaining figures over the period.

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Figures from inception on 22nd October 2009

Fund (JPY Class A) Nikkei 225 Index (JPY terms) Benchmark Index

Mean Monthly return -0.18% -0.16%

Annualised Return -1.31% -1.16%








Compared to the benchmark index the Fund has a slightly lower annualised return but with a

commensurately slightly higher annualised standard deviation, indicating that investment in the

benchmark is optimal to investment in the Fund. However, extrapolating the data over 5 years as is

necessary for KIID reporting, the SRRI of the Fund is equivalent to 7, the same as the benchmark index

which is in line with expectations given that the Nippon Growth (UCITS) Fund is single country focus

fund that operates a relatively concentrated portfolio with typically high net exposure with a low tracking

error to the benchmark index. There is no change in this indicator since the last reporting period.

Over the period there has been a slight increase in both annualised return and annualised standard

deviation in both the Fund and the benchmark index, reflecting a slight increase in volatility in Japanese

equities since the end of last year.


Figures from inception on 14th October 2010

Fund (USD Class) MSCI Emerging Europe Index (in local terms)

Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have increased: these are

now both positive for both the Fund and the benchmark index vs negative figures at the end of last year.


increased significantly, more evidently in the Fund (37.5% from 15.5%) than the benchmark index (38.7&

from 25%), which has in turn resulted in little impact on the Sharpe Ratio being produced for both the



annualised standard deviation. These figures are becoming more in line with our expectations for the

long term performance of the Fund now that the track record extends to over 18 months. Extrapolating

the data over 5 years as is necessary for KIID reporting, the SRRI of the Fund is equivalent to 7, the same

as the benchmark index which is in line with expectations given that benchmark returns have been

utilised to provide the missing data points and that the Strategic Emerging Europe Fund is an emerging

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market focus fund that operates a relatively concentrated portfolio. There is no change in this indicator

since the last reporting period.



Fund MSCI Europe TR Index (in EUR terms) Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have reduced slightly: that

of the index has become more negative while that of the Fund has moved into a negative position from

slightly positive at the end of 2011. However, the annualised standard deviation for both the Fund and

the benchmark index have also increased. Overall, the Sharpe Ratio for the benchmark index has

remained constant while that for the Fund has increased slightly, although this is still negative. The

negative Sharpe Ratio outlines that the risk-adjusted return is negative.


annualised standard deviation which indicates that there is added value being generated by the selection of

investments within the investment portfolio over the benchmark index and the Fund does not rely on

beta to generate performance. These figures are becoming more in line with our expectations for the




utilised to provide the missing data points and that the Strategic Europe Value Fund is an equity fund

with a regional focus that operates a relatively concentrated portfolio.

Use of Financial Derivative Instruments

An outline of the commonly used financial derivative instruments (“FDIs”) on a Fund by Fund basis is

provided below:

Type of FDI Commonly Utilised Purpose of FDI Fund Name

Equity Index Futures Efficient Portfolio Management in the event of large subscriptions or to increase market exposure (long futures);

Hedging against market exposure (short futures).

Strategic China Panda Fund Strategic Emerging Europe Fund Strategic Europe Value Fund

Bond Index Futures Efficient Portfolio Management in the event of large subscriptions or to increase market exposure (long futures);

Hedging against market exposure and duration (short futures).


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Single Stock Participation Notes To gain indirect exposure to China „A‟ listed equities.


Convertible Bond Includes an embedded derivative linked to equity performance at certain price levels;


Equity Index Options To provide protection in the event that markets perform positively (long calls);

To provide protection in the event that markets perform negatively (long puts).


Single Stock Index Options To provide protection in the event that markets perform positively (long calls or short puts);

To provide protection in the event that markets perform negatively (long puts or short calls);

All short positions are covered.


Forward Currency Contracts To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging;

To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Emerging Europe Fund Strategic Europe Value Fund Strategic China Panda Fund Strategic Emerging Europe Fund

Use of FDI within the Period

Within the period the following types of FDI have been utilised by each Fund:

Strategic China Panda Fund Equity Index Futures Single Stock Participation Notes Forward Currency Contracts

Hedging against market exposure (short futures); To gain indirect exposure to China „A‟ listed equities; To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Euro Bond Fund Bond Index Futures Hedging against market exposure and duration (short futures).

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Nippon Growth (UCITS) Fund None N/A

Strategic Emerging Europe Fund Equity Index Futures Convertible Bond Forward Currency Contracts

Hedging against market exposure (short futures); Includes an embedded derivative linked to equity performance at certain price levels; To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging; To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Europe Value Fund Equity Index Options Forward Currency Contracts

To provide protection in the event that markets perform negatively (long puts); To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging

FDI Exposure at the end of the period

Strategic China Panda Fund Forward Currency Contracts to hedge Class currency exposure Single Stock Participation Notes

99.70% of the EUR Class NAV 98.46% of the GBP Class NAV 7.20% of Fund NAV

Strategic Euro Bond Fund Bond Index Futures 16.67% of Fund NAV


Strategic Emerging Europe Fund Forward Currency Contracts to hedge Class currency exposure Forward Currency Contracts to hedge investment exposure Convertible Bond Equity Index Futures

100.15% of EUR Class NAV 44.97% of Fund NAV 5.81% of Fund NAV 20.12% of Fund NAV

Strategic Europe Value Fund Equity Index Options

2.59% of Fund NAV

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Risk Management Process

The Funds have been managed in accordance with the latest Risk Management Process, recently updated

to take into account UCITS IV requirements. There are no changes required to the RMP and the

Investment Manager considers that this continues to be adequate and effective to measure the risks

inherent in the funds.

Best Execution Policy

As outlined above, each trade placed on behalf of the funds is monitored for price, liquidity and

commission charges. Additionally, monthly reviews as to the extent that each broker is utilised is

undertaken. Any potential issues or observations with regards to trade execution are noted internally

within the Investment Manager and escalated as necessary. There have been no observations that the best

execution policy has not been complied with fully during the period. Further detail on brokerage charges

and allocations are included within the Investment Manager report.

Conclusion

There have been some minor breaches of the internal mandate risk management guidelines for the

Nippon Growth (UCITS) Fund during the period, which are entirely in line with expectations given that

this is as a result of the mismatch in timings between shareholder redemptions and the realisation of

assets from the investment portfolio, which can be preferable to liquidating a large number of positions

on unfavourable terms on one trading day to reduce exposure within a fund already fully invested.

That aside, there have been no breaches of guidelines, and the RMP and best execution policy have been

complied with, with no changes required.

The calculation of risk-adjusted returns and SRRI figures have produced results in line with expectations

given the nature of the funds‟ underlying investments, the historic return profile of each fund and the

similarities between the benchmark and the fund investment portfolios.

In conclusion therefore, the funds are operating as anticipated with risk profiles as would be expected

given the investment objectives and policies adopted by each fund and as disclosed in the relevant

supplement.

Prepared by JW on 02-05-12

Risk Report



T +44 (0) 1481 722322 F + 44 (0) 1481 710884

www.eisturdza.com




E.I. Sturdza Strategic Management Limited: Risk Management Reporting Period: January to April 2012

Background

Following the implementation of UCITS IV, changes in the Business Plan required that additional

reporting be provided to the Board of Directors on an ongoing basis outlining the risk monitoring

process in place. This report provides additional information relating to each of the Funds within the E.I.

Sturdza Funds plc in relation to the risk management and monitoring aspects undertaken by the

Investment Manager.

Risk Management Criteria

The Investment Manager has identified that there are a number of risk management criteria apply to all

funds within the E.I. Sturdza Funds E.I. Sturdza Funds plc, outlined as follows:

Maximum Position Exposure Limited to 10% of NAV

Maximum holding in ETFs and CIS Limited to 10% of NAV unless classified as a transferable security

Maximum in unlisted securities Limited to 10% of NAV

Minimum diversification requirements Maximum of 40% of NAV in assets that each make up more than 5% of NAV

Maximum Counterparty Exposure Limited to 20% of NAV

Maximum Cash Holdings Limited to 20% of NAV at one depository

Uncovered short sales Not permitted

Global Exposure Leveraged FDI exposure less than 100% of NAV

Liquidity Profile Match the requirements of investors

General diversification Minimum holdings of 20 positions / issuers

Legal / Management Control Not permitted, so holdings must represent a suitably small percentage of available market cap.

In addition, each Fund has specific guidelines to which the investment portfolio is monitored:

Strategic China Panda Fund:

Investment Allocation Minimum 70% equity securities, maximum 30% in fixed income securities for investment purposes

Regional Exposure Focus on markets of Hong Kong, China, Taiwan and Singapore or companies operating in these markets.


Government Bonds For investment purposes: Unrated or minimum CC rating permitted, maximum 30% For cash purposes: Strong credit rating issued / backed by by EU member or US or HK governments

Sector Allocation Maximum 35% in any one sector

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Strategic Euro Bond Fund:

Currency Allocation Assets denominated in Euro only

Asset Class Directly or Indirectly in fixed income securities including corporate bonds and government bonds

Average Credit Risk No less than A- or 90 in S&P Risk Matrix

Investment Allocation Minimum 50% in investment grade corporate bonds; maximum 10% in convertible or equity linked debt


Cash Allocation Maximum 50% in MMIs and short dated government bonds and 10% in cash

Nippon Growth (UCITS) Fund:

Country Allocation Minimum 67% in securities listed in Japan or issued by Japanese issuers


Investment Allocation Minimum 51% in equities and maximum 10% in warrants

Strategic Emerging Europe Fund:

Regional Exposure Primarily Central and Eastern Europe including Russia, Czech Republic, Hungary, Poland and Turkey. Maximum 10% in Middle East or Africa

Country Exposure Maximum 30% in securities on Russian exchanges, maximum 50% in any one economy

Currency Exposure Currency hedging at portfolio level within 2% tolerance to base currency, maximum 50% exposure to currencies other than base currency

Sector Exposure Maximum exposure 50% of NAV

Long/ Short Ratio Maximum 150/50

Asset Class Directly or indirectly in equity or equity related securities, maximum 20% in ADRs/ GDRs, maximum 30% in corporate bonds / investment portfolio government bonds

Government Bonds For investment purposes: Unrated or minimum C rating permitted, maximum 30% For cash purposes: Strong credit rating minimum A issued / backed by by EU member or US governments

Strategic Europe Value Fund:

Regional Exposure Limited to 25% of NAV outside Europe and 20% in Emerging Markets

Minimum Market Capitalisation Limited to EUR 300 million upon purchase

Stop Loss Monitoring Review down 10%, review further at 15% and 20%

Primarily equity / equity related Minimum of 50% of NAV


Government Bonds Should be minimum rating of A+ issued/ backed by EU member or US or Swiss governments

These criteria are monitored on a daily basis as part of the review outlined below.

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Risk Monitoring

In addition to these risk monitoring statistics prepared by the Investment Manager to assist in the risk

monitoring profile of the fund and to assist investors with their assessment of the risks, the Investment

Manager reviews portfolio activity on a daily basis to assess a number of other factors that will affect the

overall risk profile of the specific fund in question, as well as to ensure that the funds meet their

obligations under the UCITS rules and specific investment policy, guidelines and restrictions contained

within the relevant supplement and investment advisory mandate.

This includes review of the following factors:

Trading:

Review of each trade placed for suitability of the asset to the investment portfolio of the Fund or is unusual in the context of the fund‟s general trading activity;

Review of each trade placed to determine that the size of the trade is in line with any mandated limits on any one trading day or is unusual in the context of the fund‟s general trading activity;

Review the quantity of trades placed each day to ensure that these are not unusual in the context of the standard number of transactions generally placed by the Fund and that the same stocks are not overly purchased and sold to any degree that might indicate churning or excessive turnover without basis or rationale;

Review of commissions charged for each trade to ensure that these are in line with expectations / pre-agreed arrangements;

Review of the execution price to ensure that this is in line with expectations. Any trades executed at price levels more than 50 bps away from the daily VWAP are investigated further;

Review of daily volume and transaction size to ensure that each trade will not have a significant market impact or is unusual in the context of the fund‟s general trading activity;

Review of all trades in line with trade confirmations from brokers and advices / trade files received from the Trading Team (whether internal or external investment adviser);

Daily follow up of executed trades pending settlement to ensure that all trades are booked appropriately by the Custodian and broker to ensure that trades settle on time without incident;

Daily follow up of executed trades to ensure that these are reported to the Custodian and booked as appropriate.

Portfolio Monitoring:

Daily review of all trades placed to ensure that the inclusion of the day‟s trades / market movements in asset valuations do not cause any breaches in the investment portfolio to arise, e.g. maximum stock, sector or currency allocations;

Daily review of the liquidity profile of the investment portfolio to ensure that this meets with the liquidity profile offered to investors and as disclosed in the supplement e.g. no investment in unlisted securities if policy is only to invest in listed securities etc.;

Daily review of book cost of transactions, price moves to book cost and triggers of review under stop/loss limits or guidelines;

Daily review of market capitalisation of portfolio to ensure that this meets with both the investment policy and specific guidelines, e.g. investing predominantly in large cap securities or specific limits on minimum market capitalisation of positions;

Daily review of the diversification of the investment portfolio to ensure prudence as well as in line with specific requirements of the supplement e.g. minimum of fixed number of holdings or maximum exposure to investments not part of the primary objective / policy;

Daily review of total portfolio to ensure that maximum exposure guidelines are not exceeded, i.e. that the fund meets UCITS restrictions on global exposure as well as mandate restrictions on

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leverage and net allocation;

Daily review of the price movements of individual assets, investigating any price differences outside a set tolerance parameter further;

Daily review of the portfolio movement against the benchmark, including the performance contribution of each individual position;

Daily review of counterparty and credit exposure in line with UCITS requirements and the Risk Management Process;

Daily review of use of FDIs to ensure that these are fully capitalised and comply with UCITS requirements and the Risk Management Process;

Daily review of corporate actions pertaining to the fund to ensure that these are reviewed and voted on appropriately and incorporated within the investment portfolio where necessary;

For fixed income funds, daily review of the average credit scores for the investment portfolio and any changes in asset credit ratings that will affect the credit risk profile of the fund.

Cash Management and Monitoring:

Daily review of cash balances across multiple currencies for each fund to determine sufficient cash to meet obligations in terms of trade settlement, shareholder redemptions and fee expenditure, raising cash in the appropriate currency where necessary;

Daily review of cash balances held in line with agreed cash management policies and placing necessary cash adjustments, e.g. converting sale proceeds in a local currency back to base currency of the fund where it is the policy to do so;

Regular review (dependent on periodicity of shareholder activity) of any share class currency hedges in place, making any necessary adjustments and rolling hedges forward on a periodic basis;

Daily review of the overall counterparty exposure and cash limits for the balances held within each fund for compliance with UCITS requirements, investing or moving capital as required to ensure operational efficiency and ongoing compliance with regulations;

Daily review of the performance of currency hedges at portfolio level to ensure ongoing accuracy with set tolerance bands, placing adjustment trades as necessary and rolling hedges forward on a periodic basis;

Daily review of financial derivatives margin accounts to ensure that all margin calls are met and excess free equity held in margin accounts returned to the designated fund accounts;

Operational Risk:

Daily review of asset holdings to the Custodian to ensure both records up to date and accurate;

Daily review of cash balances and transactions in multiple currencies across funds to ensure transactions posted are accurate and timely;

Regular review (dependent on periodicity of NAV calculation) of Administrator records to ensure that NAV calculations are accurate and in line with expectations.

The purpose of these extensive reviews is to ensure that the funds remain compliant with all necessary

guidelines and restrictions and that operational risk are minimised as far as possible and any issues are

identified immediately. Reviews are undertaken for each fund by a designated individual within the team

familiar with the investment portfolio and requirements for the Fund. In all cases this review is then

checked by another senior individual (and in many cases, two) before this is completed. Where any issues

are identified these are logged internally and escalated as necessary for rectification to senior management

or directly with the appropriate investment adviser.

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In addition to the daily review of portfolio information described above wider portfolio activity is

reviewed on a monthly basis to determine the contribution of asset returns to performance, changes in

risk profile of the funds over time and the factors associated with this, and also changes in statistics such

as the Sharpe Ratio, Information Ratio and volatility over time as well as the explanations for this and if

this can be attributed to a change in stance for a short term or a longer term indicator of style drift.

There is also a constant flow of information with the portfolio management teams to each fund which

provides the Investment Manager with information in relation to the investment strategy, such as when

trading levels are escalated as a result of a strategic shift within the portfolio, as well as assists with the

planning of cash management and currency hedging activities. In addition, this relationship and the level

of monitoring undertaken provides for potential issues to be identified ahead of time, not just when a

breach actually occurs, with the result that action can be taken to rectify the situation ahead of this

becoming a formal breach situation. This can include reconciliation to the Investment Adviser‟s records

on their behalf, but more usually involves the transfer of information and data from the Investment

Manager to the Investment Adviser to facilitate their portfolio management activities based on the

analysis undertaken by the Investment Manager.

Breaches of Risk / Mandate Limits and Parameters

During the period the following breaches of risk or mandate limits and parameters have been observed:

Nippon Growth (UCITS) Fund Net Investment Exposure Should be within the range 0% to 100%

On one occasion during the period this mandate restriction was breached for a short period as follows:

Breach recorded on: Breach rectified on: Extent of Breach:

28 February 2012 8 March 2012 100.22% net exposure

This breach arose from market movements or shareholder activity in the form of redemptions from the

Fund where the allocation within the portfolio was reduced on the following trading days to rectify the

breach.

All other guidelines in all other funds have been complied with and all funds have complied with limits in

place excepting the above.

Stale Pricing

During the period negative rumours and revelations regarding the results of Huabao International

Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchange from 24 April

onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at

which time this position was also suspended from trading. During the two days in which the US stock

traded on 25 and 26 April the price of the stock declined by over 30% prior to the stock being suspended.

As a result, and based upon the suspension of the stock from trading in the primary market and the

process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at the

recommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the

primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary

exchange up until 26 April 2012. The impact of this discount was applied over two valuation points to

limit the impact upon the NAV calculation as there was no shareholder activity over the period. At the

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time of writing the position continued to be suspended from trading awaiting a response from the

company as to the accuracy of the allegations. The position is held in Strategic Europe Value Fund.

Risk Profile and Fund Statistics as at end April 2012:

There have been no significant changes in the annualised returns or standard deviations for any of the

Funds over the period.

During the period however the SRRI for the Strategic Euro Bond Fund was reduced from a level of 4 to

a level of 2. This change is as a result of the inputs into the calculation based on the approved

methodology as opposed to any changes in the risk parameters of the Fund itself: the calculation requires

data for the previous five years to be included and, where this is not available for the Fund itself this

should be substituted for sample returns. Within the calculation for the Strategic Euro Bond Fund

therefore a large proportion of the returns utilised have related to a corporate bond index rather than the

performance of the Fund itself, but over time as the Fund‟s own actual returns have been incorporated

instead of the index figures the risk reward indicator has reduced commensurate to the lower level of risk

inherent in the Fund as opposed to the bond index. We would expect a SRRI figure of 2 to be more

reflective of the risk profile of the Fund and to maintain this level for the longer term. A revised KIID

was prepared and filed with the Central Bank during April 2012 to incorporate these changes. There were

no other changes to the indicators produced for any of the other funds over the period.


Figures from inception on 3rd October 2008

Fund (USD Class) MSCI China Index (USD terms) Benchmark Index








Data as at: 30/04/2012

YTD Return

Annualised

Return

Annualised

Standard Deviation Sharpe Ratio

Strategic China Panda Fund 4.40% 1.65% 27.26% (0.05)

Strategic Euro Bond Fund 1.85% 0.67% 1.74% (1.44)

Nippon Growth (UCITS) Fund 14.11% -1.09% 28.79% (1.08)

Strategic Emerging Europe Fund 17.00% 0.39% 37.48% (0.07)

Strategic Europe Value Fund 7.45% -0.09% 20.12% (0.10)

Fund SRRI

Benchmark

SRRI

Previous Fund

SRRI

Previous

Benchmark SRRI

Strategic China Panda Fund 7 7 7 7

Strategic Euro Bond Fund 2 1 2 1

Nippon Growth (UCITS) Fund 7 7 7 7

Strategic Emerging Europe Fund 7 7 7 7

Strategic Europe Value Fund 6 6 6 6

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annualised standard deviation, which indicates that there is added value being generated by the selection

of investments within the investment portfolio over the benchmark index and the Fund does not rely on

beta to generate performance.

The Fund has an annualised standard deviation of 27.26% vs the MSCI China Index of 33.75%. Over the

period the annualised standard deviation of the Fund has increased by 7% but that of the benchmark

index only increased by 2%. This continues to put the Fund in the highest category of 7 for the synthetic

risk reward indicator, even though the statistics for the Fund are in line with the index. There is no

change in this indicator since the last reporting period.

This is in line with our expectations given that the Fund is a single country emerging market equity fund,

and the investment objectives of the Fund are to invest a minimum of 70% in equity investments.

However, the Fund has a portfolio beta of only 0.21 for the year to date, indicating that the Fund will

reflect a move substantially less than that measured by the index the majority of the time. This is reflected

in the performance of the Fund over the Year to Date: up 4.36% vs the index performance of 13.8% to

the end of April 2012. The underperformance has been driven by the construction of the investment

portfolio in that this has been defensively allocated at the beginning of the year: an allocation of 25% to

utilities and a further 12% to telecoms with a further 25-30% allocated to cash. Over the period the

conservative stance of the portfolio has been reduced slightly, with cash being reduced to 12% from as

high as 30%, but remains defensively allocated to utilities (25%) and telecoms (11%) with substantially

less allocated to consumer related sectors.

The beta of the Fund since inception however is 0.65, however we consider that this figure is somewhat

low, influenced by the extended period at inception of the Fund when the investment portfolio was

strategically allocated to cash and was not fully invested.


Figures from inception on 28th April 2009

Fund (Accumulating Class) HVB3MRE Index (EUR terms) Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have increased slightly

while the annualised standard deviation for both the Fund and the benchmark index have remained

constant which has in turn resulted in a slightly less negative Sharpe Ration being produced for both the

Fund and the index. The Fund has a negative Sharpe Ratio, outlining that the risk-adjusted return is

negative. Compared to the benchmark index the Fund has a slightly higher annualised return with a

slightly higher annualised standard deviation, expected given the Fund‟s focus on corporate bonds with a

lower average credit rating than the cash index. Therefore, extrapolating the data over 5 years as is

necessary for KIID reporting, the SRRI of the Fund is equivalent to 2, exceeding the benchmark index

(the risk free asset) which is in line with expectations. The changes in the indicators over the last reporting

period have been detailed further above. There have not been any significant changes to any of the

remaining figures over the period.

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Figures from inception on 22nd October 2009

Fund (JPY Class A) Nikkei 225 Index (JPY terms) Benchmark Index










Compared to the benchmark index the Fund has a slightly lower annualised return but with a

commensurately slightly higher annualised standard deviation, indicating that investment in the

benchmark is optimal to investment in the Fund. However, extrapolating the data over 5 years as is

necessary for KIID reporting, the SRRI of the Fund is equivalent to 7, the same as the benchmark index

which is in line with expectations given that the Nippon Growth (UCITS) Fund is single country focus

fund that operates a relatively concentrated portfolio with typically high net exposure with a low tracking

error to the benchmark index. There is no change in this indicator since the last reporting period.

Over the period there has been a slight increase in both annualised return and annualised standard

deviation in both the Fund and the benchmark index, reflecting a slight increase in volatility in Japanese

equities since the end of last year.



Fund (USD Class) MSCI Emerging Europe Index (in local terms)

Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have increased: these are

now both positive for both the Fund and the benchmark index vs negative figures at the end of last year.


increased significantly, more evidently in the Fund (37.5% from 15.5%) than the benchmark index (38.7&

from 25%), which has in turn resulted in little impact on the Sharpe Ratio being produced for both the



annualised standard deviation. These figures are becoming more in line with our expectations for the




utilised to provide the missing data points and that the Strategic Emerging Europe Fund is an emerging

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market focus fund that operates a relatively concentrated portfolio. There is no change in this indicator

since the last reporting period.



Fund MSCI Europe TR Index (in EUR terms) Benchmark Index






Over the period the annualised return for the Fund and the benchmark index have reduced slightly: that

of the index has become more negative while that of the Fund has moved into a negative position from

slightly positive at the end of 2011. However, the annualised standard deviation for both the Fund and

the benchmark index have also increased. Overall, the Sharpe Ratio for the benchmark index has

remained constant while that for the Fund has increased slightly, although this is still negative. The

negative Sharpe Ratio outlines that the risk-adjusted return is negative.


annualised standard deviation which indicates that there is added value being generated by the selection of

investments within the investment portfolio over the benchmark index and the Fund does not rely on

beta to generate performance. These figures are becoming more in line with our expectations for the




utilised to provide the missing data points and that the Strategic Europe Value Fund is an equity fund

with a regional focus that operates a relatively concentrated portfolio.

Use of Financial Derivative Instruments

An outline of the commonly used financial derivative instruments (“FDIs”) on a Fund by Fund basis is

provided below:

Type of FDI Commonly Utilised Purpose of FDI Fund Name

Equity Index Futures Efficient Portfolio Management in the event of large subscriptions or to increase market exposure (long futures);

Hedging against market exposure (short futures).

Strategic China Panda Fund Strategic Emerging Europe Fund Strategic Europe Value Fund

Bond Index Futures Efficient Portfolio Management in the event of large subscriptions or to increase market exposure (long futures);

Hedging against market exposure and duration (short futures).


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Single Stock Participation Notes To gain indirect exposure to China „A‟ listed equities.


Convertible Bond Includes an embedded derivative linked to equity performance at certain price levels;


Equity Index Options To provide protection in the event that markets perform positively (long calls);

To provide protection in the event that markets perform negatively (long puts).


Single Stock Index Options To provide protection in the event that markets perform positively (long calls or short puts);

To provide protection in the event that markets perform negatively (long puts or short calls);

All short positions are covered.


Forward Currency Contracts To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging;

To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Emerging Europe Fund Strategic Europe Value Fund Strategic China Panda Fund Strategic Emerging Europe Fund

Use of FDI within the Period

Within the period the following types of FDI have been utilised by each Fund:

Strategic China Panda Fund Equity Index Futures Single Stock Participation Notes Forward Currency Contracts

Hedging against market exposure (short futures); To gain indirect exposure to China „A‟ listed equities; To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Euro Bond Fund Bond Index Futures Hedging against market exposure and duration (short futures).

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Strategic Emerging Europe Fund Equity Index Futures Convertible Bond Forward Currency Contracts

Hedging against market exposure (short futures); Includes an embedded derivative linked to equity performance at certain price levels; To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging; To protect the value of the class against currency movements to base currency i.e. class hedging.

Strategic Europe Value Fund Equity Index Options Forward Currency Contracts

To provide protection in the event that markets perform negatively (long puts); To protect the value of the assets in the portfolio against currency movements i.e. portfolio hedging

FDI Exposure at the end of the period

Strategic China Panda Fund Forward Currency Contracts to hedge Class currency exposure Single Stock Participation Notes

99.70% of the EUR Class NAV 98.46% of the GBP Class NAV 7.20% of Fund NAV

Strategic Euro Bond Fund Bond Index Futures 16.67% of Fund NAV


Strategic Emerging Europe Fund Forward Currency Contracts to hedge Class currency exposure Forward Currency Contracts to hedge investment exposure Convertible Bond Equity Index Futures

100.15% of EUR Class NAV 44.97% of Fund NAV 5.81% of Fund NAV 20.12% of Fund NAV

Strategic Europe Value Fund Equity Index Options

2.59% of Fund NAV

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Risk Management Process

The Funds have been managed in accordance with the latest Risk Management Process, recently updated

to take into account UCITS IV requirements. There are no changes required to the RMP and the

Investment Manager considers that this continues to be adequate and effective to measure the risks

inherent in the funds.


As outlined above, each trade placed on behalf of the funds is monitored for price, liquidity and

commission charges. Additionally, monthly reviews as to the extent that each broker is utilised is

undertaken. Any potential issues or observations with regards to trade execution are noted internally

within the Investment Manager and escalated as necessary. There have been no observations that the best

execution policy has not been complied with fully during the period. Further detail on brokerage charges

and allocations are included within the Investment Manager report.

Conclusion

There have been some minor breaches of the internal mandate risk management guidelines for the

Nippon Growth (UCITS) Fund during the period, which are entirely in line with expectations given that

this is as a result of the mismatch in timings between shareholder redemptions and the realisation of

assets from the investment portfolio, which can be preferable to liquidating a large number of positions

on unfavourable terms on one trading day to reduce exposure within a fund already fully invested.

That aside, there have been no breaches of guidelines, and the RMP and best execution policy have been

complied with, with no changes required.

The calculation of risk-adjusted returns and SRRI figures have produced results in line with expectations

given the nature of the funds‟ underlying investments, the historic return profile of each fund and the

similarities between the benchmark and the fund investment portfolios.

In conclusion therefore, the funds are operating as anticipated with risk profiles as would be expected

given the investment objectives and policies adopted by each fund and as disclosed in the relevant

supplement.

Prepared by JW on 02-05-12

Investment Manager’s Report for:-

Strategic Euro Bond Fund Strategic Emerging Europe Fund Strategic Europe Value Fund Nippon Growth (UCITS) Fund Strategic China Panda Fund

E.I. Sturdza Funds for the period

Introduction This report contains information on the following funds which together comprise E.I. Sturdza Funds plc (the “Company”): 1. Strategic China Panda Fund (“SCPF”); 2. Nippon Growth (UCITS) Fund (“NG3. Strategic Euro Bond Fund (“SEBF”);4. Strategic Emerging Europe Fund (“SEEF5. Strategic Europe Value Fund (“SEVF”). Registrations The Company is eligible for distribution in Switzerland, France, Germany, the Netherlands, the United Kingdom and Italy in respect of the following funds.Company is also looking to register the remaining three sub funds that are not registered in Germany for distribution.

Fund Name Switzerland

SCPF �

NGF UCITS

�

SEBF �

SEEF �

SEVF �

* The funds permitted to be distributed to professional and institutional investors only Annual Review of Documentation and Reporting In line with the provisions of the Business Plan and the Risk Management Process for the Company, the Investment Manager will review each of these documents following the financial year-end of the Company to ascertain if any periodic updates are required. The Policy Handbook was adopted by the board in June 2011 and being reviewed by the Investment Manager and the Directors. The Business Plan and the Risk Management Process have been updated to ensure that they are UCITS IV compliant and will be required to be filed with the Central Ahead of this they will be further updated to include any further changes as well as new funds. E.I. Sturdza Strategic Management Limited

Sarnia House , Le Truchot, St Peter Po rt, Guern sey GY1 1GR

T +44 (0) 1481 722322

www.e isturdza.com



BANQUE BARIN

E.I. Sturdza Funds plc: Investment Management Report

or the period January to April 2012

contains information on the following funds which together comprise E.I. Sturdza Funds plc (the “Company”):

Strategic China Panda Fund (“SCPF”); Nippon Growth (UCITS) Fund (“NGUF”); Strategic Euro Bond Fund (“SEBF”); Strategic Emerging Europe Fund (“SEEF”); and Strategic Europe Value Fund (“SEVF”).

The Company is eligible for distribution in Switzerland, France, Germany, the Netherlands, the United Kingdom and Italy in respect of the following funds.Company is also looking to register the remaining three sub funds that are not registered in Germany for distribution.

Switzerland France Germany Netherlands

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* The funds permitted to be distributed to professional and institutional investors only

Annual Review of Documentation and Reporting

In line with the provisions of the Business Plan and the Risk Management Process for the Company, the Investment Manager will review each of these documents following

end of the Company to ascertain if any periodic updates are required. The Policy Handbook was adopted by the board in June 2011 and is in the process of

Investment Manager and the Directors. The Business Plan and the Risk Management Process have been updated to ensure that they are UCITS IV

and will be required to be filed with the Central Bank in Quarter 3Ahead of this they will be further updated to include any further changes as well as new

dza Strategic Management Limited


+44 (0) 1481 722322 F + 44 (0) 1481 710884

e isturdza.com


owned subsidiary of


Investment Management Report

contains information on the following funds which together comprise E.I.

The Company is eligible for distribution in Switzerland, France, Germany, the Netherlands, the United Kingdom and Italy in respect of the following funds. The Company is also looking to register the remaining three sub funds that are not registered

United Kingdom

Italy*

GBP reporting class only

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* The funds permitted to be distributed to professional and institutional investors only

In line with the provisions of the Business Plan and the Risk Management Process for the Company, the Investment Manager will review each of these documents following

end of the Company to ascertain if any periodic updates are required. is in the process of

Investment Manager and the Directors. The Business Plan and the Risk Management Process have been updated to ensure that they are UCITS IV

Quarter 3 2012. Ahead of this they will be further updated to include any further changes as well as new

of 52

We have reported previously that we are working on updating the general prospectus, to include consolidation of all appendices and issue of revised supplements. This process was delayed while we await Central Bank comments on wording that we wish to insert regarding the hedging process undertaken by the funds with currency classes. The issue of this documentation has been further delayed as this will be further revised upon the launch of the Strategic Global Bond Fund. Annual Internal Audit The internal audit process for the Investment Manager for 2011 has been completed and the final report was tabled at the December board meeting of the Investment Manager for formal approval. A copy of the full internal audit report was provided to the Designated Individuals in line with established policy. Service Review meetings Regular service meetings between E.I. Sturdza Strategic Management Limited (the “Investment Manager”) and HSBC Securities Services (Ireland) Limited, the Administrator and Company Secretary, (“HSBC”) continue to be held once a fortnight as the levels of communication between both parties have improved with few new issues being identified on a weekly basis. These meetings are preceded with a performance measure document compiled by the Investment Manager highlighting any issues to be raised at the meeting with the Administrator. The Administrator will receive this document within three business days of the end of each month. The next annual service onsite review will take place in August 2012 Audited Financial Statements The audited financial statements for the period ended December 2011 were completed and approved at the board meeting held in Dublin on 19 April 2012. The financials were also translated into French and filed with the relevant regulatory authorities prior to the end of April 2012. These will be tabled for shareholder approval on 8th June 2012. Work continues to provide the necessary information for the application for reporting fund status for 2011. AGM and EGM The Annual General Meeting for E.I. Sturdza Funds plc is scheduled to be held on 8 June. Shareholders will be requested to approve the financial statements for the Company. In addition to this an EGM will be held in relation to the Strategic Euro Bond Fund to approve the proposal to pay the final 2011 dividend on 11 June 2012. Significant Shareholdings Shareholders who hold more than 30% in a sub-fund class are as detailed below: Details of the subscription/redemption transactions for these Shareholders will be detailed in the Administrator’s Report to be provided to the Board on a quarterly basis.

of 52

Banque Baring Brothers Sturdza SA, Switzerland (“BBBSA”)

Fund name % of shares Strategic China Panda Fund – EUR Class 38.87 Nippon Growth (UCITS) Fund – JPY Class A 93.62 Nippon Growth (UCITS) Fund – JPY Class B 70.42 Nippon Growth (UCITS) Fund – JPY Class C 59.03 Strategic Euro Bond Fund – Accumulating Shares 97.43 Strategic Euro Bond Fund – Distribution Shares 90.55 Strategic Emerging Europe Fund – USD Class 86.40 Strategic Emerging Europe Fund – Hedged Euro Class 74.00 Strategic Europe Value Fund 87.71

Third Parties Pictet & Cie, Nippon Growth (UCITS) Fund – JPY Class C 40.97 Martello Nominees Limited – Strategic China Pand Fund – GBP Class 30.30

Related Parties and Connected Persons As part of the ongoing monthly monitoring of related party and connected person transactions, please find below the holdings that have been recorded as at the end of the period: 1. Directors’ Shareholdings

The directors listed below currently hold shares in the following sub-funds. Director Sub Fund No Shares Marcel Kramer Strategic China Panda Fund 111.82 L. Georges Gutmans Strategic Emerging Europe Fund (EUR) Class 53.66

Strategic Europe Value Fund 295.86 Strategic China Panda Fund (EUR) Class 54.62

2. Connected Party Shareholdings

We are aware that the wife and brother of the portfolio manager of the Strategic Europe Value Fund have invested in the Fund and the proportion of shares held by them at the end of the period is as follows:

Investor Name % of Shares Azure Trust Company Limited 0.27 Jan Willem Goudriaan 0.11 DB Retirement Investment Scheme 0.08

In addition to this, there are investments in the USD Class of the Strategic China Panda Fund by Richard McGillivray, an employee of E.I. Sturdza Strategic Management Limited. He owns 0.01% of this class.

of 52

Third Parties Armajaro Asset Management- Strategic Emerging Europe Fund (USD) 10.69 Banque Paris Bertrand Sturdza S.A- Strategic China Panda Fund (EUR) 8.31 Banque Paris Bertrand Sturdza S.A- Strategic China Panda Fund (USD) 0.14 Banque Paris Bertrand Sturdza S.A- Nippon Growth (UCITS) Fund Class B 1.17 Simon Cox – Strategic China Panda Fund (USD) 0.04 Sauren via DZ Privatbank– Strategic China Panda Fund (USD) 16.73

Please find attached to this report Appendix 1. This details a table of dealing conducted by the related parties during this period. Non Resident Irish Investors Non resident Irish shareholders applying for shares in any of the underlying funds of E.I. Sturdza Funds Plc are required by the Irish Revenue Commissioners to make a declaration in order for them to receive payment without the deduction of tax. As part of the application process, potential investors are requested to complete a declaration, whose format has been approved by the commissioners, which clarifies their residency status or confirms their status as an “Exempt Irish Investor”. The Administrator ensures that all of the applications are correctly completed and they liaise directly with the applicant in the event of missing information. Upon review of the submitted application forms the Administrator liaises with the Central Bank to ensure that all shareholders adhere to the necessary filing and regulatory requirements. As part of the monthly report we have detailed all Irish domiciled investors and have provided details of their residency declarations. Please find below a table noting all Irish domiciled Investors at the end of the period:

Citco Global Custody Ref TINTINIIIS PC & Citco Global Custody Ref Mirabaud have both completed the Non Resident sections of the application form and therefore adhere to all required stipulations. Ivan Powell Pension Trust and Somers Dublin Ltd A/c ALTS have confirmed that they are Exempt Irish Investors and have completed the relevant declaration referred to in section 739D (6) in the Taxes Consolidation Act 1997, these investors are therefore also compliant with the Irish Revenue Commissioners stipulations. Fees and Expenses vs. Accruals for the Period and Budget are detailed below.

Investor name FundCountry of

domicile Units % of Class

CITCO GLOBAL CUSTODY NV REF TINTINIIISPC: SEG PORT NO 84 Strategic China Panda Fund USD Class IRELAND 3,922.627 8.21%

Somers Dublin Ltd a/c ALTS Strategic China Panda Fund Hedged EUR Class IRELAND 450.000 2.29%

IVAN POWELL PENSION TRUST Strategic China Panda Fund Hedged EUR Class IRELAND 92.117 0.47%

CITCO GLOBAL CUSTODY NV - REF MIRABAUD AND CIE Strategic Euro Bond Fund Accumlating Class IRELAND 9.340 0.03%

CCYPaid / budgeted

amount

Accrual /

Prepayment

Total Amount Accrued /

amount prepaid

Invoices paid in

periodComments


Autorite Des Marches Financiers Annual Fee EUR 2,000.00 Accrual 661.20 No Invoice for Period

BaFin USD 651.90 Prepayment 436.38 No Invoice for Period

D&O Insurance USD 5,124.13 Prepayment 3,430.09 No Invoice for Period

Financial Regulator EUR 475.00 Accrual 157.04 No Invoice for Period

Financial Times Listing USD 8,928.99 Prepayment 5,977.06 No Invoice for Period

FSA Registration USD 1,450.71 Prepayment 971.10 1,450.71 Annual Fee

German Agent (Marcard & Stein) USD 6,577.81 Prepayment 4,403.18 No Invoice for Period

German Tax Reporting - DDI Calculations USD 6,000.00 Accrual 1,983.61 No Invoice for Period

GFR UK Registration USD 948.32 Prepayment 634.80 948.32 Quarterly Fee

HSBC Credit Facility USD 12,744.36 Prepayment 8,531.06 12,744.36 Annual fee

HSBC German Tax Reporting USD 28,800.00 Accrual 9,521.31 No Invoice for Period

HSBC UCITS IV Reporting EUR 3,000.00 Accrual 991.80 1,034.33 HSBC Monthly Fees

International Herald Tribune Listing USD 11,340.00 Accrual 3,749.02 3,780.00 IHT Monthly Fees

Irish Stock Exchange Listing USD 2,817.39 Prepayment 1,885.96 No Invoice for Period

KPMG German Tax Audit EUR 14,596.01 Accrual 4,825.46 No Invoice for Period

KPMG Reporting Fund Status GBP 2,500.00 Accrual 826.50 No Invoice for Period

Legal EUR 40,000.00 Accrual 13,224.04 19,446.59 Q1 Fee

WM Daten Fund Reporting Service USD 697.40 Prepayment 233.74 697.40 Semi Annual Fee

WM German Tax Reporting USD 3,883.40 Prepayment 2,599.54 3,883.00 Annual Fee

Further Setup Expenses USD 94,802.00 Accrual 6,278.62 No Invoice for Period



D&O Insurance USD 770.71 Prepayment 515.91 No Invoice for Period


Financial Times Listing USD 5,433.84 Prepayment 3,637.41 No Invoice for Period

FSA Registration USD 210.00 Prepayment 140.57 No Invoice for Period

GFR UK Registration EUR 161.71 Prepayment 108.25 161.71 Quarterly fee

HSBC Credit Facility USD 13,050.00 Prepayment 8,735.66 13,050.00 Annual fee

HSBC UCITS IV Reporting EUR 3,000.00 Accrual 991.80 993.22 HSBC Monthly Fees


Irish Stock Exchange Listing USD 2,815.05 Prepayment 1,884.39 No Invoice for Period

KPMG Reporting Fund Status GBP 3,500.00 Accrual 1,157.10 No Invoice for Period




D&O Insurance EUR 989.14 Prepayment 662.13 No Invoice for Period


Financial Times Listing EUR 2,279.15 Prepayment 1,525.66 No Invoice for Period

FSA Registration EUR 285.01 Prepayment 190.79 No Invoice for Period

GFR UK Registration EUR 291.07 Prepayment 194.84 291.07 Quarterly fee

HSBC Credit Facility EUR 10,000.00 Prepayment 6,693.99 10,000.00 No Invoice for Period



Irish Stock Exchange Listing EUR 1,900.00 Accrual 628.14 No Invoice for Period





BaFin EUR 500.00 Prepayment 334.70 No Invoice for Period

D&O Insurance EUR 1,637.65 Prepayment 1,096.24 No Invoice for Period


Financial Times Listing EUR 4,516.51 Prepayment 3,023.35 No Invoice for Period

German Agent (Marcard & Stein)* EUR 2,539.93 Prepayment 1,700.23 2,539.93 Annual fee

German Tax Reporting - TID Fees USD 2,000.00 Accrual 661.20 No Invoice for Period

GFR UK Registration EUR 533.15 Prepayment 356.89 533.15 Quarterly Fee

HSBC Credit Facility EUR 10,000.00 Prepayment 6,693.99 10,000.00 Annual fee

HSBC German Tax Reporting USD 16,500.00 Accrual 5,454.92 No Invoice for Period



Irish Stock Exchange Listing EUR 2,000.00 Prepayment 1,338.80 2,000.00 Annual Fee




D&O Insurance JPY 86,671.00 Prepayment 58,017.47 No Invoice for Period


Financial Times Listing JPY 626,527.00 Prepayment 419,396.49 No Invoice for Period

FSA Registration JPY 24,116.00 Prepayment 16,143.22 No Invoice for Period

GFR UK Registration JPY 16,022.00 Prepayment 10,725.11 16,022.00 Quarterly fee

HSBC Credit Facility JPY 999,537.00 Prepayment 669,088.98 999,537.00 Annual fee

HSBC UCITS IV Reporting EUR 3,000.00 Accrual 942.62 942.47 HSBC Monthly Fees


Irish Stock Exchange Listing JPY 217,173.00 Prepayment 145,375.37 No Invoice for Period



Apportioned expenses for E.I. Sturdza Funds plc SCPF

Audit EUR 67,760.00 2,289.02 5,834.10 68,880.00 2011 Fee Paid

Bridge Consulting EUR 39,204.00 1,302.82 3,320.56 No Invoice for Period

Corporate Secretarial EUR 11,495.00 382.00 973.62 No Invoice for Period

Directors EUR 187,350.00 6,226.00 15,868.44 45,297.25 Q4 2011 Fee

Directors GBP 35,000.00 1,163.12 2,964.48 8,750.00 Q4 2011 Fee

Financial Accounting Service EUR 10,000.00 332.32 846.99 3,428.72 HSBC Monthly Fees

Financial Regulator Fee EUR 2,025.00 67.29 171.52 No Invoice for Period

French Agent (Caceis) EUR 10,000.00 498.48 1,270.49 10,000.00 2011 Fee Paid

Translation EUR 16,625.00 552.48 1,408.13 No Invoice for Period

Marketing Expenses EUR 99,339.37 869.21 1,686.48 No Invoice for Period

FSA Registration GBP 1,463.00 68.51 124.25 No Invoice for Period

Italian Agent (Consob) EUR 4,400.00 4,400.00 New prepayment - Annual Fee

Please be advised that the above fees are representative of only the invoices that have been recevied and paid for the period unless stated.

EI Sturdza Funds PLC - Expense Analysis - 1 January 2012 - 30 April 2012

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Strategic China Panda Fund (the “Fund”)

Registration The Fund is specifically authorised for distribution in France, Germany, Switzerland, and the United Kingdom. The Fund is also permitted to be distributed in the Netherlands and Italy for sale to professional and institutional investors. Following the implementation of UCITS IV and the approval of the Key Investor Information Documents (“KIID”) by the Central Bank of Ireland any further registrations will be considered on a case by case basis. Documentation update The revised supplement will be issued with the updated general prospectus to E.I. Sturdza Funds plc that will be issued in due course, subject to the wording in respect of the hedging policy being approved as mentioned earlier in the report. Additional Counterparties An additional broker account was established during the period with BOCOM International. The Fund also opened an additional bank account with RBSI (currently used by Strategic Emerging Europe Fund) for cash diversification purposes. Risk Management Guidelines and Investment Restriction Breaches During the period no breaches of the UCITS investment restrictions have occurred and all risk management guidelines as outlined in the risk management process for the Fund have been complied with. Errors & Compliance There have been no new pricing errors identified during the period. Complaints There have been no complaints identified during the period. Marketing and Investor Information At the end of the reporting period, the following shareholders were reflected on the register of shareholders for the Fund as detailed below.

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USD Class

Hedged GBP Class

Investor name Country of domicile Units % of Class

Banque Baring Brothers Sturdza SA SWITZERLAND 11,354.936 23.77%

DZ PRIVATBANK SA RE SAUREN FUNDS LUXEMBOURG 7,106.000 14.88%

PICTET&CIE (EUROPE) SA LUXEMBOURG REF B.R.I.C LUXEMBOURG 5,650.334 11.83%

CITCO GLOBAL CUSTODY NV REF TINTINIIISPC: SEG

PORT NO 84IRELAND 3,922.627 8.21%

BNP Paribas Securities Services Luxembourg A/C KAIROS LUXEMBOURG 3,237.374 6.78%

Citco Global Custody NV Cash THE NETHERLANDS 2,851.602 5.97%

FS/21547/BPERE BELGIUM 2,679.190 5.61%

HSH NORDBANK SECURITIES S.A. LUXEMBOURG 1,730.704 3.62%

MIRABAUD&CIE SWITZERLAND 1,656.950 3.47%

FUNDSETTLE EOC NOMINEES LTD FOR FS/BANK SAL

OPPENHEIM LUX/REINVBELGIUM 1,584.000 3.32%

CLEARSTREAM BANKING SA LUXEMBOURG 1,550.835 3.25%

DAVID BARNES SOUTH AFRICA 833.977 1.75%

PICTET&CIE (EUROPE) SA LUXEMBOURG REF ALL

SEASONS ASIALUXEMBOURG 624.227 1.31%

Rahn&Bodmer Co SWITZERLAND 592.000 1.24%

MWI NOMINEES LIMITEDGUERNSEY CHANNEL

ISLANDS 500.231 1.05%

PIGUET GALLAND&CIE SA SWITZERLAND 491.791 1.03%

HAUCK&AUFHAUSER PRIVATBANKIERS KGAA GERMANY 424.000 0.89%

FUNDSETTLE EOC NOMINEES LTD FS/23481/CS ZURICH THE NETHERLANDS 209.551 0.44%

BANK JULIUS BAER&CO LTD SWITZERLAND 178.961 0.37%

SGBT LUX / MIRABAUD LUXEMBOURG 174.043 0.36%

Citco Global Custody NV ref UBS AG Zurich THE NETHERLANDS 126.504 0.26%

MARTELLO NOMINEES LIMITED A/C CLIENTGUERNSEY CHANNEL

ISLANDS 91.601 0.19%

BANQUE PARIS BERTRAND STURDZA S.A. SWITZERLAND 58.219 0.12%

CITCO GLOBAL CUSTODY NV A/C MIRABAUD CANADA

INC - IN TRUST FOR CLIENTSTHE NETHERLANDS 36.022 0.08%

CITCO GLOBAL CUSTODY NV REF 191292 THE NETHERLANDS 25.000 0.05%

BBH INV SERV LTD/ CUST BANK HAPOALIM BM

LONDON CL MUT FND AC (REINV) 1379692 REINVUNITED KINGDOM 24.424 0.05%

HYPOSWISS PRIVATE BANK GENEVE SA SWITZERLAND 18.451 0.04%

SIMON COX HONG KONG 15.342 0.03%

FS/VP BANK VADUZ ACC.16084 BELGIUM 10.000 0.02%

RICHARD MCGILLIVRAY HONG KONG 6.137 0.01%



ISLANDS 269.588 30.30%

Banque Baring Brothers Sturdza SA SWITZERLAND 154.026 17.31%

MARTELLO NOMINEES LIMITED A/C N675 UNITED KINGDOM 143.859 16.17%

CLEARSTREAM BANKING SA LUXEMBOURG 95.000 10.68%

FS/12927/CITI6412454003/FAIRBAIRN NOMS (JSY) LTD

GERJSYBELGIUM 72.636 8.16%

ROCK (NOMINEES) LTD A/C 1400502 UNITED KINGDOM 48.173 5.41%

ROCK NOMINEES LIMITED A/C 1707687 UNITED KINGDOM 34.548 3.88%

Fundsettle EOC Nominees Ltd for FS/12927-6412453003/CITI BELGIUM 18.687 2.10%

MATTEO SANTORO UNITED KINGDOM 17.625 1.98%

MICHELE GESUALDI UNITED KINGDOM 15.000 1.69%

PIGUET GALLAND&CIE SA SWITZERLAND 10.000 1.12%

SHEILA ANNE WARRANDER UNITED KINGDOM 6.224 0.70%

FRIENDS PROVIDENT INTERNATIONAL LTD A/C 768511 ISLE OF MAN 4.444 0.50%

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Hedged EUR Class

Service Providers Administration: NAV Calculation: The valuations are agreed to be received by 14:00 on the day following the valuation point. Of the seventy seven valuation points within the period, 90% were produced in




FUNDSETTLE EOC NOMINEES LTD FOR FS/SAL

OPPENHEIM COLOGNEBELGIUM 2,600.000 13.22%

BANQUE PARIS BERTRAND STURDZA S.A. SWITZERLAND 1,489.233 7.57%


BANCO NOMINEES (GUERNSEY) LTD A/C 7076557GUERNSEY CHANNEL

ISLANDS 499.277 2.54%

Somers Dublin Ltd a/c ALTS IRELAND 450.000 2.29%

DZ PRIVATBANK SA RE Investmentfonds LUXEMBOURG 336.000 1.71%

Citco Global Custody NV Cash THE NETHERLANDS 263.960 1.34%

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG A/C

HEDGE INVESTLUXEMBOURG 229.448 1.17%

LIECHTENSTEINISCHE LANDESBANK, REF

INTEGRATED AILIECHTENSTEIN 214.366 1.09%

HAUCK&AUFHAUSER PRIVATBANKIERS KGAA GERMANY 187.000 0.95%

ABN AMRO GLOBAL CUSTODY SERVICES NV RE

CAPVESTTHE NETHERLANDS 168.574 0.86%


PICTET&CIE SWITZERLAND 149.857 0.76%

FS/22561/CLARIDEN LEU ZURICH BELGIUM 149.619 0.76%

HYPOSWISS PRIVATE BANK GENEVE SA SWITZERLAND 115.153 0.59%

IVAN POWELL PENSION TRUST IRELAND 92.117 0.47%

FUNDSETTLE EOC NOMINEES LTD FOR FS/ABN AMRO

GLOBAL CUSTODYBELGIUM 81.540 0.41%


ISLANDS 73.665 0.37%

FUNDSETTLE EOC NOMINEES LIMITED FOR FS/ODDO

AND CIEUNITED KINGDOM 45.000 0.23%

HSBC TRINKAUS&BURKHARDT (INTL) SA LUXEMBOURG 43.638 0.22%

HSBC PRIVATE BANKING NOMINEE 1 JERSEY LIMITED

A/C 2035928

GUERNSEY CHANNEL

ISLANDS 39.622 0.20%

FUNDSETTLE EOC NOMINEES LTD FOR

FS/BOSLTD/SHARESBELGIUM 39.476 0.20%

BANK JULIUS BAER&CO LTD SWITZERLAND 15.536 0.08%

MIRABAUD&CIE SWITZERLAND 14.826 0.08%


FS/NORDEABANKDENMARK/CLIENT/RE-

INVESTMENT

BELGIUM 14.284 0.07%

RAIFFEISEN BANK INTERNATIONAL AUSTRIA 12.000 0.06%

BNP PARIBAS SECURITITES SERVICES LUXEMBOURG

A/C FBB MAINLUXEMBOURG 5.699 0.03%

CITCO GLOBAL CUSTODY NV - REF ERSTE BANK THE NETHERLANDS 5.000 0.03%

DEXIA BIL FOR CUSTOMER ACCOUNT LUXEMBOURG 4.000 0.02%

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line with the agreed timescales with only minor adjustments having to be made to the accruals. Investor Services: Notifications of dealing received for each valuation point are due to be received by 12 pm on the business day following each cut-off point for receipt of trades to be received by HSBC as Administrator. All but two reports were received within the agreed timescales. Custody: There have been no other particular areas of issue during the period and all corporate actions have been actioned as appropriate, free from error. Investor Cash flows: During the period, the following net cash flows were received into and out of the Fund as follows:

Fund Performance The following performance statistics have been reported over the period:

USD Class Hedged EUR Class Hedged GBP Class

(in class currency) (in class currency) (in class currency)

Jan-12 USD ( 5,664,079.56) EUR (411,181.82) GBP (53,291.92)

Feb-12 USD ( 7,470,687.06) EUR (895,138.12) GBP 16,340.78

Mar-12 USD ( 1,231,407.05) EUR (1,091,733.15) GBP (47,860.03)

Apr-12 USD 23,098,938.00 EUR 1,543,864.94 GBP 0.00

Total for period USD 8,732,764.33 EUR (854,188.15) GBP (84,811.17)

Total for period (in USD) USD 7,461,616.61

USD Class Hedged EUR Class Hedged GBP Class

Opening NAV per

share

30-Dec-11 USD 1,694.03 EUR 1,669.09 GBP 1,607.56

Opening Total Assets USD 86,249,290.87 EUR 33,787,988.96 GBP 1,515,535.24

50,913.71 20,243.35 942.76

Total AUM in USD USD 132,505,425.17 USD 132,505,425.17 USD 132,505,425.17

Closing NAV per share 30-Apr-12 USD 1,767.86 EUR 1,740.78 GBP 1,678.52

Closing Total Assets USD 84,442,069.26 EUR 34,246,973.91 GBP 1,493,564.53

47,765.03 19,673.31 889.81

USD 132,181,869.73 USD 132,181,869.73 USD 132,181,869.73

4.36% 4.30% 4.41%

13.80% 13.80% 13.80%

-9.44% -9.51% -9.39%

30/12/2011 03/10/2008Summary

4.36% 4.30% 4.41%

13.80% 13.80% 13.80%

-9.44% -9.51% -9.39%

76.79% 74.08% 67.85%

31.68% 31.68% 31.68%

45.11% 42.40% 36.17%

MSCI China Index Performance (USD terms)

Relative Performance (USD terms)

Performance for reporting period



Performance YTD 2012


Shares in Issue

Shares In Issue


Performance since Inception

Total Fund AUM in USD

of 52

The Fund has underperformed the index significantly this year. A performance of 4.36% was recorded in USD terms, underperforming the benchmark index of 13.8% by 9.44%. The Fund now has a reported performance of 76.79% since inception, still outperforming the index by an impressive 45.11% despite the poor relative performance for the year to date. The Fund continues to experience some volatility of performance between the share classes. This continues to arise for a number of reasons, the imperfect hedges in place (target hedge is 100%), impacts of the interest rate differential between the currencies and the spread achieved on placing FX trades associated with the currency hedging process, as well as from the impact of performance fee accruals within each class. During the period however, the performance differential between the USD Class and each of the EUR Class and the GBP Class is in line with expectations. The impact of these operational constraints upon performance will usually impact upon the smaller currency classes to a greater extent, as demonstrated by the overall performance since inception of the Hedged GBP currency Class. An outline of the particular performance of the currency hedges is outlined later in this report. Portfolio Commentary The Fund has been positioned very defensively since the beginning of the year as the Portfolio Manager has become increasingly concerned with the viability of the growth story for China and the macroeconomic outlook, which she believed at the beginning of the year to be gloomy. This translated into a portfolio that was allocated between 25% and 30% in cash, with a further 25% and 12% in utilities and telecoms sectors respectively, both defensive sectors. As a result the Fund has not participated in the upward cycle that has been experienced by the wider market over the year to date, reflected in underperformance of the benchmark through to the end of April. Currently, the Portfolio Manager believes that there is currently limited downside risk with the current focussed policy support in place. The end of the reporting season has showed disappointing results but these were largely expected and have been priced into the market. She believes that the market is bottoming and therefore that markets will be trading range bound over the next 1 to 2 quarters as volatility will be driven by macro events. As a consequence the strategy is to remain defensively positioned and focus on quality names and yield while start accumulating positions slowly at current levels to position for the latter part of the year. As a result of this change in positioning the cash level within the portfolio has fallen from 30% at the beginning of the year to 12% at the end of April. This has included an increase in Financials, although this is more through exposure to insurance rather than banks, and a rotation of the smaller consumer driven allocation to shift out of domestic brands to international brands listed in Hong Kong that currently have limited penetration in China but are the target of the new wealthy, for example Prada.

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However, despite this the sector allocation of the portfolio has remained broadly consistent throughout the year with the three largest sectors being Utilities, Financials and Telecommunications, although the allocations to each have decreased. The portfolio remains cautiously positioned in defensive sectors and continues to reduce the allocation to consumer related and economic growth related sectors such as real estate and retail. In comparison to the benchmark index the Fund is most overweight in Utilities (24.78% vs 2.27%) and Telecoms (11.21% vs 13.02%) but significantly underweight in energy (zero vs 18.48%) and financial sectors (25.77% vs 35.16%) at the end of the period. Currency Hedging / Passive Hedging The currency hedging of the share classes of the Fund is reviewed and adjusted as necessary on a daily basis following the valuation point. From March 2012 onwards, following an extensive testing and parallel run period, this service has been automated through use of HSBC’s passive hedging service. The figures that are prepared and traded are reviewed by the Investment Manager on a daily basis. So far the process has run smoothly and has not become problematic, the trades and analysis are completed in a timely and organised manner. All reporting has been received in line with the SLD and in an acceptable form. During the period the following currency hedges were placed on behalf of the non-base currency share classes within the Fund: January

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

30/12/2011 43,897,355.26 43,366,949.84 43,231,437.06 Initial 98.48% 99.69%

03/01/2012 44,364,189.16 43,962,724.24 44,141,896.94 Yes 99.50% 100.41%

04/01/2012 43,873,601.69 44,451,807.58 44,141,896.94 No 100.61% 99.30%

05/01/2012 43,369,990.24 43,882,285.27 43,081,152.64 Yes 99.33% 98.17%

06/01/2012 42,585,026.96 43,357,161.03 43,081,152.64 No 101.17% 99.36%

09/01/2012 42,763,527.71 42,574,498.05 43,081,152.64 No 100.74% 101.19%

10/01/2012 42,992,947.37 42,812,846.97 43,081,152.64 No 100.21% 100.63%

11/01/2012 42,550,128.34 43,014,928.27 43,081,152.64 No 101.25% 100.15%

12/01/2012 42,914,186.73 42,370,993.73 43,081,152.64 No 100.39% 101.68%

13/01/2012 42,213,761.61 42,759,045.59 43,081,152.64 No 102.05% 100.75%

16/01/2012 41,841,473.45 42,201,858.69 42,187,681.04 Yes 100.83% 99.97%

17/01/2012 42,482,944.25 41,813,741.23 42,187,681.04 No 99.30% 100.89%

18/01/2012 42,455,898.43 42,063,826.68 42,187,681.04 No 99.37% 100.29%

19/01/2012 42,457,924.11 42,062,293.20 42,187,681.04 No 99.36% 100.30%

20/01/2012 42,772,159.41 42,475,718.73 42,187,681.04 No 98.63% 99.32%

26/01/2012 43,740,742.29 42,762,082.33 42,187,681.04 No 96.45% 98.66%

27/01/2012 43,992,875.84 43,851,077.21 42,187,681.04 No 95.90% 96.21%

30/01/2012 43,920,506.53 44,131,754.83 42,187,681.04 No 96.05% 95.59%

31/01/2012 43,975,491.65 43,757,015.38 42,845,624.23 Yes 97.43% 97.92%

EUR Class Hedge

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February

Date

Actual AUM

USD

Proje cte d AUM

USD

Forw ard He dge

USD

Adjus tm e nt

m ade

Actual He dge

Ratio

Proje cte d

Ratio

31/01/2012 43,975,491.65 43,757,015.38 43,968,057.48 Initial 99.98% 100.48%

02/02/2012 43,765,153.23 43,438,364.47 43,968,057.48 No 100.46% 101.22%

03/02/2012 43,541,370.20 43,754,147.52 43,968,057.48 No 100.98% 100.49%

06/02/2012 43,492,516.91 43,541,370.20 43,968,057.48 No 101.09% 100.98%

07/02/2012 43,996,410.50 44,847,552.30 45,185,954.88 Y es 102.70% 100.75%

08/02/2012 45,742,590.39 45,367,054.27 45,185,954.88 No 98.78% 99.60%

09/02/2012 46,163,604.26 45,720,666.38 45,185,954.88 No 97.88% 98.83%

10/02/2012 45,707,978.62 46,134,815.28 45,185,954.88 No 98.86% 97.94%

13/02/2012 45,841,836.20 45,669,941.60 45,185,954.88 No 98.57% 98.94%

14/02/2012 45,278,288.34 45,809,514.11 45,185,954.88 No 99.80% 98.64%

15/02/2012 45,450,503.35 43,662,396.72 43,267,115.98 Y es 95.20% 99.09%

16/02/2012 43,659,207.30 43,843,259.03 43,267,115.98 No 99.10% 98.69%

17/02/2012 44,109,487.00 43,279,367.50 43,267,115.98 No 98.09% 99.97%

20/02/2012 44,001,027.34 43,726,794.54 44,479,296.59 Y es 101.09% 101.72%

21/02/2012 44,211,431.31 44,017,069.80 44,479,296.59 No 100.61% 101.05%

27/02/2012 44,591,414.25 45,260,354.81 44,479,296.59 No 99.75% 98.27%

28/02/2012 45,492,688.74 44,759,018.70 44,836,639.70 Y es 98.56% 100.17%

EUR Clas s He dge

Date

Actual AUM

USD

Projected AUM

USD

Forw ard Hedge

USD

Adjus tm e nt

M ade

Actual He dge

Ratio

Projected

Ratio

31/01/2012 2,316,835.77 2,296,484.46 2,325,188.17 Initial 100.36% 101.25%

02/02/2012 2,327,296.73 2,307,445.87 2,325,188.17 No 99.91% 100.77%

03/02/2012 2,317,760.58 2,327,296.73 2,325,188.17 No 100.32% 99.91%

06/02/2012 2,322,097.94 2,288,301.40 2,325,188.17 No 100.13% 101.61%

07/02/2012 2,302,880.60 2,292,577.19 2,325,188.17 No 100.97% 101.42%

08/02/2012 2,312,837.28 2,302,880.60 2,325,188.17 No 100.53% 100.97%

09/02/2012 2,329,766.75 2,312,837.28 2,325,188.17 No 99.80% 100.53%

10/02/2012 2,314,377.66 2,329,766.75 2,325,188.17 No 100.47% 99.80%

13/02/2012 2,319,707.12 2,349,032.06 2,325,188.17 No 100.24% 98.98%

14/02/2012 2,325,408.59 2,354,427.52 2,325,188.17 No 99.99% 98.76%

15/02/2012 2,347,760.94 2,345,792.59 2,325,188.17 No 99.04% 99.12%

16/02/2012 2,371,949.37 2,368,165.74 2,325,188.17 No 98.03% 98.19%

17/02/2012 2,387,576.93 2,371,949.37 2,388,594.58 Yes 100.04% 100.70%

20/02/2012 2,389,586.72 2,387,576.93 2,388,594.58 No 99.96% 100.04%

21/02/2012 2,390,743.22 2,389,586.72 2,388,594.58 No 99.91% 99.96%

27/02/2012 2,407,207.66 2,425,659.23 2,388,594.58 No 99.23% 98.47%

28/02/2012 2,445,014.40 2,407,207.66 2,412,381.27 Yes 98.67% 100.21%

GBP Class Hedge

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

Made

Actual Hedge

Ratio

Projected

Ratio

30/12/2011 2,358,779.05 2,316,192.33 2,311,482.26 Initial 97.99% 99.80%

03/01/2012 2,386,303.06 2,358,779.05 2,369,424.37 Yes 99.29% 100.45%

04/01/2012 2,374,533.58 2,386,303.06 2,369,424.37 No 99.78% 99.29%

05/01/2012 2,350,073.96 2,374,533.58 2,369,424.37 No 100.82% 99.78%

06/01/2012 2,313,145.30 2,350,073.96 2,369,424.37 No 102.43% 100.82%

09/01/2012 2,320,235.37 2,313,145.30 2,369,424.37 No 102.12% 102.43%

10/01/2012 2,334,036.89 2,320,235.37 2,369,424.37 No 101.52% 102.12%

11/01/2012 2,301,126.13 2,334,036.89 2,302,353.35 Yes 100.05% 98.64%

12/01/2012 2,298,560.57 2,301,126.13 2,302,353.35 No 100.17% 100.05%

13/01/2012 2,288,447.64 2,298,560.57 2,302,353.35 No 100.61% 100.17%

16/01/2012 2,274,844.02 2,288,447.64 2,302,353.35 No 101.21% 100.61%

17/01/2012 2,301,816.30 2,274,844.02 2,302,353.35 No 100.02% 101.21%

18/01/2012 2,295,013.13 2,301,816.30 2,302,353.35 No 100.32% 100.02%

19/01/2012 2,311,209.64 2,295,013.13 2,302,353.35 No 99.62% 100.32%

20/01/2012 2,332,314.57 2,251,900.39 2,302,353.35 No 98.72% 102.24%

26/01/2012 2,309,669.72 2,272,752.25 2,302,353.35 No 99.68% 101.30%

27/01/2012 2,320,145.14 2,286,185.27 2,302,353.35 No 99.23% 100.71%

30/01/2012 2,296,484.46 2,296,683.12 2,302,353.35 No 100.26% 100.25%

31/01/2012 2,316,835.77 2,296,484.46 2,325,188.17 Yes 100.36% 101.25%

GBP Class Hedge

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March

April

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

28/02/2012 45,492,688.74 44,759,018.70 43,968,057.48 Initial 96.65% 98.23%

01/03/2012 45,025,929.88 45,050,349.51 43,968,057.48 No 97.65% 97.60%

02/03/2012 44,520,217.69 44,605,832.24 42,827,911.09 Yes 96.20% 96.01%

05/03/2012 44,386,714.37 44,507,983.03 42,827,911.09 No 96.49% 96.23%

06/03/2012 43,321,630.40 44,278,428.88 42,827,911.09 No 98.86% 96.72%

07/03/2012 43,070,272.86 42,984,397.93 42,827,911.09 No 99.44% 99.64%

08/03/2012 43,777,626.32 42,860,471.65 42,827,911.09 No 97.83% 99.92%

09/03/2012 43,527,141.95 43,770,769.76 42,827,911.09 No 98.39% 97.85%

12/03/2012 43,617,758.92 43,499,203.44 42,827,911.09 No 98.19% 98.46%

13/03/2012 43,526,523.07 43,589,718.07 42,827,911.09 No 98.39% 98.25%

14/03/2012 43,343,680.16 43,526,523.07 42,827,911.09 No 98.81% 98.39%

15/03/2012 43,328,887.33 43,140,769.88 43,497,146.06 Yes 100.39% 100.83%

16/03/2012 43,420,326.40 43,076,578.90 43,448,025.33 Yes 100.06% 100.86%

20/03/2012 43,006,474.52 43,371,435.40 43,448,025.33 No 101.03% 100.18%

21/03/2012 42,608,620.70 43,006,474.52 43,448,025.33 No 101.97% 101.03%

27/03/2012 43,273,347.91 42,922,539.54 43,463,841.05 Yes 100.44% 101.26%

28/03/2012 43,018,855.01 42,860,448.83 43,047,385.60 Yes 100.07% 100.44%

29/03/2012 42,393,321.41 42,600,490.56 43,047,385.60 No 101.54% 101.05%

30/03/2012 42,855,612.70 42,406,388.42 43,060,521.28 Yes 100.48% 101.54%

EUR Class Hedge

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

Made

Actual Hedge

Ratio

Projected

Ratio

28/02/2012 2,445,014.40 2,407,207.66 2,325,188.17 Initial 95.10% 96.59%

01/03/2012 2,452,649.04 2,468,007.22 2,381,405.01 Yes 97.10% 96.49%

02/03/2012 2,452,849.19 2,465,415.44 2,381,405.01 No 97.09% 96.59%

05/03/2012 2,456,667.75 2,453,041.66 2,381,405.01 No 96.94% 97.08%

06/03/2012 2,383,709.19 2,444,170.84 2,323,007.54 Yes 97.45% 95.04%

07/03/2012 2,374,265.52 2,383,709.19 2,323,007.54 No 97.84% 97.45%

08/03/2012 2,416,584.53 2,374,265.52 2,323,007.54 No 96.13% 97.84%

09/03/2012 2,408,901.57 2,416,584.53 2,323,007.54 No 96.43% 96.13%

12/03/2012 2,398,429.04 2,408,901.57 2,323,007.54 No 96.86% 96.43%

13/03/2012 2,417,477.01 2,398,429.04 2,323,007.54 No 96.09% 96.86%

14/03/2012 2,414,938.95 2,417,477.01 2,323,007.54 No 96.19% 96.09%

15/03/2012 2,408,804.85 2,414,938.95 2,323,007.54 No 96.44% 96.19%

16/03/2012 2,427,404.71 2,408,804.85 2,323,007.54 No 95.70% 96.44%

20/03/2012 2,401,933.30 2,451,142.21 2,346,788.68 Yes 97.70% 95.74%

21/03/2012 2,404,801.32 2,325,820.23 2,244,881.99 Yes 93.35% 96.52%

27/03/2012 2,337,043.66 2,314,694.49 2,244,632.00 Yes 96.05% 96.97%

28/03/2012 2,313,483.39 2,337,043.66 2,244,632.00 No 97.02% 96.05%

29/03/2012 2,315,977.06 2,313,483.39 2,244,632.00 No 96.92% 97.02%

30/03/2012 2,341,762.03 2,315,977.06 2,244,632.00 No 95.85% 96.92%

GBP Class Hedge

Date

Actual AUM

USD

Projected AUM

USD

Forw ard Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

27/03/2012 43,273,347.91 42,922,539.54 43,118,191.71 Initial 99.64% 100.46%

28/03/2012 43,018,855.01 42,860,448.83 42,701,736.26 Yes 99.26% 99.63%

29/03/2012 42,393,321.41 42,600,490.56 42,701,736.26 No 100.73% 100.24%

30/03/2012 42,855,612.70 42,406,388.42 42,714,871.94 Yes 99.67% 100.73%

02/04/2012 42,804,368.49 42,764,529.74 42,611,395.85 Yes 99.55% 99.64%

03/04/2012 43,060,598.67 42,700,279.57 42,611,395.85 No 98.96% 99.79%

05/04/2012 42,214,575.76 43,106,564.19 42,656,427.78 Yes 101.05% 98.96%

10/04/2012 41,922,627.48 42,239,580.27 42,636,180.70 Yes 101.70% 100.94%

11/04/2012 41,739,290.07 41,902,572.01 42,636,180.70 No 102.15% 101.75%

12/04/2012 42,469,424.87 41,739,290.07 42,636,180.70 No 100.39% 102.15%

13/04/2012 42,556,459.13 42,412,177.52 42,580,202.70 Yes 100.06% 100.40%

16/04/2012 42,362,770.87 42,499,628.97 43,438,666.31 Yes 102.54% 102.21%

17/04/2012 42,378,750.55 42,329,125.95 43,404,578.76 Yes 102.42% 102.54%

18/04/2012 42,481,375.91 42,202,748.40 43,262,709.00 Yes 101.84% 102.51%

19/04/2012 42,572,270.62 42,349,220.40 43,272,459.11 Yes 101.64% 102.18%

20/04/2012 43,090,214.90 43,131,799.66 43,825,636.06 Yes 101.71% 101.61%

23/04/2012 42,881,671.84 43,934,212.91 44,114,364.06 Yes 102.87% 100.41%

24/04/2012 43,302,072.45 43,170,531.84 44,114,364.06 No 101.88% 102.19%

25/04/2012 43,294,527.18 43,302,072.45 44,114,364.06 No 101.89% 101.88%

26/04/2012 43,615,875.01 43,294,527.18 43,769,120.85 Initial 100.35% 101.10%

27/04/2012 43,598,050.12 44,986,016.19 45,137,198.41 Yes 103.53% 100.34%

30/04/2012 45,315,595.88 45,101,028.96 45,267,527.77 Yes 99.89% 100.37%

EUR Class Hedge

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All hedging ratios have met with UCITS requirements for the maximum exposure not to exceed 105% of NAV. Please note that the hedge ratio cannot be relied upon unduly as the related AUM is calculated as at the previous valuation point. This does not include the actual figures for the profit or loss generated on the mark to market of the existing hedge or any investor dealing at that valuation point, both of which will correspondingly increase or reduce the opening AUM figures for that particular class. Thus, there will be significant disparity during periods of high volatility in FX performance that generates increased profits or losses for each class as well as when large volumes of shareholder activity are experienced. It might be re-iterated that opening hedges are based on the latest available AUM for each class, adjusted for shareholder transactions as well as profits and losses generated by the implementation of the hedging programme for each class. Please further note that the projected figures noted above are based on the AUM for each class taking into consideration the shareholder activity anticipated for the next dealing day, thus providing a more accurate representation of the hedge in place for any particular day. Portfolio Performance

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

Made

Actual Hedge

Ratio

Projected

Ratio

27/03/2012 2,337,043.66 2,314,694.49 2,350,380.99 Initial 100.57% 101.54%

28/03/2012 2,313,483.39 2,337,043.66 2,350,380.99 No 101.59% 100.57%

29/03/2012 2,315,977.06 2,313,483.39 2,350,380.99 No 101.49% 101.59%

30/03/2012 2,341,762.03 2,315,977.06 2,350,380.99 No 100.37% 101.49%

02/04/2012 2,345,412.28 2,341,762.03 2,350,380.99 No 100.21% 100.37%

03/04/2012 2,354,756.72 2,345,412.28 2,350,380.99 No 99.81% 100.21%

05/04/2012 2,334,213.09 2,354,756.72 2,350,380.99 No 100.69% 99.81%

10/04/2012 2,314,957.44 2,334,213.09 2,350,380.99 No 101.53% 100.69%

11/04/2012 2,309,063.57 2,314,957.44 2,350,380.99 No 101.79% 101.53%

12/04/2012 2,344,453.95 2,309,063.57 2,350,380.99 No 100.25% 101.79%

13/04/2012 2,353,872.80 2,344,453.95 2,350,380.99 No 99.85% 100.25%

16/04/2012 2,347,530.53 2,353,872.80 2,350,380.99 No 100.12% 99.85%

17/04/2012 2,346,350.95 2,347,530.53 2,350,380.99 No 100.17% 100.12%

18/04/2012 2,373,368.48 2,346,350.95 2,350,380.99 No 99.03% 100.17%

19/04/2012 2,388,657.44 2,373,368.48 2,350,380.99 No 98.40% 99.03%

20/04/2012 2,411,955.20 2,388,657.44 2,350,380.99 No 97.45% 98.40%

23/04/2012 2,380,029.08 2,411,955.20 2,350,380.99 No 98.75% 97.45%

24/04/2012 2,380,409.12 2,380,029.08 2,350,380.99 No 98.74% 98.75%

25/04/2012 2,380,029.26 2,380,409.12 2,368,729.36 Initial 99.53% 99.51%

26/04/2012 2,399,184.49 2,380,029.26 2,368,729.36 No 98.73% 99.53%

27/04/2012 2,402,917.78 2,399,184.49 2,368,729.36 No 98.58% 98.73%

30/04/2012 2,424,204.59 2,402,917.78 2,368,729.36 No 97.71% 98.58%

GBP Class Hedge

Performance

Annualised Standard

Deviation

Portfolio Beta

Tracking Error

Sharpe Ratio (RFR=3%)

SRRI

27.13%

7 7

0.00

MSCI China Index

(USD terms)

Fund (USD

Class)

0.43

0.17%

76.79% 31.68%

Weekly Points

Since Inception

Weekly Points Since

Inception

17.55%

of 52

Source: Morningstar Direct. Calculated using 2 year rolling data.

Peer Group: Performance Comparison The bar chart below compares the performance of the Fund to the benchmark index as well as the peer group. Please note that the index and peer group performance is based on calendar months and may differ from the statistics reported earlier.

60

80

100

120

140

160

180

200

220

240

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Cum

ulative

Per

form

ance

(re

bas

ed) (%

)

Mo

nth

ly P

erf

orm

an

ce (

%)

Strategic China Panda Fund vs MSCI China Index (both in USD terms)

Monthly Fund Performance Monthly Index Performance Cumulative Fund Performance Cumulative Index Perfomance

of 52

Trading Volumes and Commission Breakdown Year to date there have been 241 trades with an average value of US$ 0.62 million per trade and a PTR equating to 38.80%, annualised to 167.40. The use of brokers throughout the year is as follows:

Broker Name

MTD Total

Commissions

Paid

% of MTD

Volume

YTD Total

Commissions

Paid

% of YTD

Volume

China International Capital Corp 84,896.41 20.48% 212,120.16 17.81%

DBS Vickers (Hong Kong) Limtied 49,949.55 12.05% 187,897.78 15.77%

Credit Suisse Securities (HK) Ltd 120,712.80 29.13% 139,863.31 11.74%

Piper Jaffray Asia Securities Limited 49,844.35 12.03% 117,924.70 9.90%

HSBC 2,697.20 0.65% 73,153.65 6.14%

Standard Chartered Securities 11,903.36 2.87% 67,474.59 5.66%

UBS Securities Asia Limited 10,633.82 2.57% 57,117.61 4.79%

Macquarie Capital Securities Limited 35,552.26 8.58% 56,246.70 4.72%

Morgan Stanley 23,331.71 5.63% 53,056.00 4.45%

Credit Suisse Securities (HK) Ltd 3,624.76 0.87% 46,001.02 3.86%

Citigroup Global Markets Asia Limited 6,865.02 1.66% 38,195.54 3.21%

BNP Paribas Securities (Asia) Limited 3,668.48 0.89% 35,963.10 3.02%

Yuanta Securities (Hong Kong) Limited - 0.00% 29,219.72 2.45%

CCB International Securities Limited - 0.00% 19,147.21 1.61%

Samsung Securities HK - 0.00% 18,548.74 1.56%

Bank of China CI Securities Limited - 0.00% 18,547.50 1.56%

Jefferies International 5,781.76 1.40% 15,778.41 1.32%

Oriental Patron Securities 4,974.20 1.20% 4,974.20 0.42%

Morgan Stanley - 0.00% - 0.00%

Total Volume of Trades 414,435.68 100.00% 1,191,229.94 100.00%

of 52

Portfolio Construction The portfolio construction as at the end of the reporting period was as follows:

Broker Name Status

Hong Kong

'H'Shares

Hong Kong 'A'

Shares

Corporate

Bonds

BNP Paribas Securities (Asia) Limited - HK Yes No No Open

BOCI Securities Limited - HK Yes No No Open

Cazenove /Standard Charter Securities - HK Yes No No Open

CCB International Securities Limited Yes No No Open

CICC - HK Yes No No Open

Citigroup - HK Yes Yes Yes Open

CLSA - HK Yes No No Open

Credit Suisse (HK) Ltd -HK Yes In progress Yes Open

Daiwa Securities SMBC Hong Kong Limited - HKYes No Yes Open

DBS Vickers (Hong Kong) Ltd - HK Yes No No Open

Deutsche Bank AG, Hong Kong - HK Yes Yes No Open

Goldman Sachs (Asia) L.L.C - HK Yes Yes No Open

Available Trades

List of brokers for Strategic China Panda Fund

HSBC - HK Yes Yes LEPO Yes Open

J.P.Morgan Securities (Asia Pacific) Ltd - HK Yes No Yes Open

Jefferies HK Limited - HK Yes No No Open

Kingsway Financial Services Group Limited -

HKYes No No Open

Macquarie -HK Yes No No Open

Merrill Lynch -HK Yes Yes No Open

MF Global HK Limited Yes No No Open

Mirae asset - HK Yes No No Open

Morgan Stanley - HK Yes In progress No Open

Nomura - HK Yes No No Open

Oriental Patron HK Limited Yes No No Open

Piper Jaffray - HK Yes No No Open

RBS - HK Yes No No Open

Samsung Securities- HK Yes No No Open

UBS - HK Yes Yes Yes Open

UOB Kay Hian (Hong Kong) Limited - HK Yes No No Open

Yuanta Securities (HK) co. Ltd - HK Yes No No Open

of 52

Investment Portfolio Sector Allocation

Investment Portfolio Market Cap Allocation

Investment Type % of Portfolio

Direct Equity Investment 87.58%

Indirect Equity Investment (ETF and Derivatives etc.) 0.00%

Cash and Fee accruals/prepayments 14.60%

Pending Cash/Outstanding Settlements -1.87%

Currency Hedging for EUR and GBP classes -0.31%

Portfolio Hedging 0.00%

Net Portfolio Exposure 87.58%

Gross Portfolio Exposure 87.89%

Portfolio Construction Strategic China Panda Fund

of 52

Investment Portfolio The portfolio of the Fund is represented predominantly through holdings in equity securities and cash, although at times short futures positions are included also for hedging purposes. ETFs have previously been utilised for efficient portfolio management to increase the exposure within the portfolio for without unduly increasing stock specific risk but current exposure to these types of instruments is nil. Futures are often held as a short position and utilised for hedging purposes against wider market movements. During the period the Fund did not hold short position and therefore there were no futures at the end of the reporting period. The portfolio contained no equity swap type derivative instruments but did hold three pass-through securities at the end of the period. Full details of the investment portfolio at the end of the period are below.

` 2 3 4 5 6 8 9 10 11 13 14 16 17.000 19 20 21 22 23 24 25 29.00 30.00 31.00 34.00 35.00 36.00 37.00 38.00 39.00

600036 ch equity 30/04/2012

Strategic China Panda Fund Portfolio

CRNCY Trade Currency PX_last Volume_Avg_5DPX_volume

Asset Details 41,026.00 Valuation Details Risk Management Details

LBN Ticker

Bloomberg

3 Name ID_Sedol1 GICS Industry

GICS

Sector Market Cap

Listed

Exchange Local Currency

Trade

Currency

Counter

party

Current

Shareholding Asset Type

Previous Day

Closing Price

(local)

Closing Price

(local) FX Rate

Previous

FX Rate

Previous

Day Closing

Price (USD) Closing Price (USD) Market Value (local) Market Value (USD)

Book Cost

(trade) Book Cost (USD)

%

Portfolio % Assets Attribution

Daily Price

Performance

(USD)

Daily Price

Performance

(Local)

Counter party

Exposure

Potential Credit

Exposure Asset Type

Average Cost

Price (local)

Average

Price Move to

Cost

Liquidity (in

days) on 5 day

volume % of company held

2388 HK Equity 2388 HK EquityBOC HONG KONG HOLDINGS LTD 6536112 BANKS FINANCIALS L HK HKD HKD Exchange 1,764,000.00 COMMON STOCK 23.95 24.05 7.759 7.759 3.087 3.10 42,424,200.00 5,468,022.58 32,496,129.32 4,182,309.85 4.72% 4.12% 0.0202% 0.428% 0.418% - - COMMON STOCK 18.42 30.55% 0.13 0.02%

691 HK 691 HK Equity CHINA SHANSHUI CEMENT GROUP B39Z8W4 MATERIALS MATERIALS M HK HKD HKD Exchange 2,483,000.00 COMMON STOCK 6.20 6.29 7.759 7.759 0.799 0.81 15,618,070.00 2,013,001.06 14,099,116.34 1,814,581.44 1.74% 1.52% 0.03% 1.462% 1.452% - - COMMON STOCK 5.68 10.77% 1.13 0.09%

1038 HK Equity 1038 HK EquityCHEUNG KONG INFRASTRUCTURE 6212553 UTILITIES UTILITIES L HK HKD HKD Exchange 1,058,000.00 COMMON STOCK 45.50 46.05 7.759 7.759 5.864 5.94 48,720,900.00 6,279,599.41 49,012,554.17 6,308,003.21 5.42% 4.74% 0.0661% 1.219% 1.209% - - COMMON STOCK 46.33 -0.60% 0.75 0.04%

1083 HK 1083 HK EquityTOWNGAS CHINA CO LTD 6345460 Utilities Utilities M HK HKD HKD Exchange 1,619,000.00 Common Stock 5.50 5.50 7.759 7.759 0.709 0.71 8,904,500.00 1,147,694.17 8,531,267.13 1,097,989.31 0.99% 0.87% 0.00% 0.010% 0.000% - - Common Stock 5.27 4.37% 1.60 0.07%

552 HK Equity 552 HK Equity CHINA COMMUNICATIONS SERVI-HB1HVJ16 TELECOMMUNICATION SERVICESTELECOMMUNICATION SERVICESM HK HKD HKD Exchange 12,089,600.00 COMMON STOCK 4.02 3.99 7.759 7.759 0.518 0.51 48,237,504.00 6,217,294.87 43,889,100.73 5,648,605.61 5.37% 4.69% -0.0395% -0.736% -0.746% - - COMMON STOCK 3.63 9.91% 3.10 0.51%

2314 HK 2314 HK EquityLEE & MAN PAPER MANUFACTURIN6693772 MATERIALS MATERIALS M HK HKD HKD Exchange 815,000.00 COMMON STOCK 3.65 3.64 7.759 7.759 0.470 0.47 2,966,600.00 382,362.80 2,957,932.38 380,691.18 0.33% 0.29% 0.00% -0.264% -0.274% - - COMMON STOCK 3.63 0.29% 0.55 0.02%

1336 HK 1336 HK EQUITYNEW CHINA LIFE INSURANCE C-H B5730Z1 Insurance Financials L HK HKD HKD Exchange 635,800.00 Common Stock 34.10 35.05 7.759 7.759 4.395 4.52 22,284,790.00 2,872,269.48 20,212,686.04 2,601,408.77 2.48% 2.17% 0.07% 2.797% 2.786% - - Common Stock 31.79 10.25% 0.67 0.06%

1368 HK 1368 HK EQUITYXTEP INTERNATIONAL HOLDINGS B2RJYH8 Consumer Durables & ApparelConsumer Discretionary S HK HKD HKD Exchange 3,016,000.00 Common Stock 3.41 3.53 7.759 7.759 0.439 0.45 10,646,480.00 1,372,216.64 9,569,663.17 1,231,632.73 1.19% 1.04% 0.04% 3.530% 3.519% - - Common Stock 3.17 11.25% 1.28 0.14%

303 HK 303 HK Equity VTECH HOLDINGS LTD 6928560 TECHNOLOGY HARDWARE & EQUIPMENINFORMATION TECHNOLOGYM HK HKD HKD Exchange 187,600.00 COMMON STOCK 86.25 87.00 7.759 7.759 11.116 11.21 16,321,200.00 2,103,626.94 17,043,882.71 2,193,578.13 1.82% 1.59% 0.02% 0.880% 0.870% - - COMMON STOCK 90.85 -4.24% 0.53 0.08%

2628 HK Equity 2628 HK EquityCHINA LIFE INSURANCE CO-H 6718976 INSURANCE FINANCIALS L HK HKD HKD Exchange 703,000.00 COMMON STOCK 20.75 21.00 7.759 7.759 2.674 2.71 14,763,000.00 1,902,791.74 14,789,003.93 1,903,371.21 1.64% 1.44% 0.0200% 1.215% 1.205% - - COMMON STOCK 21.04 -0.18% 0.03 0.01%

1234 HK 1234 HK EquityCHINA LILANG LTD B4JMX94 CONSUMER DURABLES & APPARELCONSUMER DISCRETIONARYM HK HKD HKD Exchange 1,942,000.00 COMMON STOCK 7.20 7.17 7.759 7.759 0.928 0.92 13,924,140.00 1,794,671.72 19,039,263.22 2,450,387.16 1.55% 1.35% -0.0063% -0.406% -0.417% - - COMMON STOCK 9.80 -26.87% 1.62 0.16%

HSBC087 CH HSBC087 CH EquityCHINA MERCH BK-A B4Y6874 BANKS FINANCIALS L EC CNY USD HSBC 2,602,729.00 FDI 12.20 12.20 6.280 6.310 1.933 1.94 31,753,293.80 5,056,659.57 5,453,698.28 5,453,698.28 4.37% 3.81% 0.0211% 0.484% 0.000% - - EQUITY WRT 2.10 -7.28% 0.04 #VALUE!

2601 HK Equity 2601 HK EquityCHINA PACIFIC INSURANCE GR-H B2Q5H56 INSURANCE FINANCIALS L HK HKD HKD Exchange 920,400.00 COMMON STOCK 25.45 25.35 7.759 7.759 3.280 3.27 23,332,140.00 3,007,261.62 23,150,553.29 2,979,517.53 2.60% 2.27% -0.0099% -0.383% -0.393% - - COMMON STOCK 25.15 0.78% 0.05 0.04%

1313 HK 1313 HK EquityCHINA RESOURCES CEMENT B41XC98 MATERIALS MATERIALS L HK HKD HKD Exchange 3,858,000.00 COMMON STOCK 6.08 6.16 7.759 7.759 0.784 0.79 23,765,280.00 3,063,088.70 18,947,792.64 2,438,614.74 2.65% 2.31% 0.0351% 1.326% 1.316% - - COMMON STOCK 4.91 25.43% 0.46 0.06%

1193 HK Equity 1193 HK EquityCHINA RESOURCES GAS GROUP LT 6535517 UTILITIES UTILITIES M HK HKD HKD Exchange 2,750,000.00 COMMON STOCK 14.40 15.08 7.759 7.759 1.856 1.94 41,470,000.00 5,345,036.48 29,722,265.87 3,825,308.67 4.62% 4.03% 0.2185% 4.733% 4.722% - - COMMON STOCK 10.81 39.53% 0.90 0.13%

3988 HK Equity 3988 HK EquityBANK OF CHINA LTD - H B154564 BANKS FINANCIALS L HK HKD HKD Exchange 2,984,000.00 COMMON STOCK 3.19 3.25 7.759 7.759 0.411 0.42 9,698,000.00 1,249,967.78 10,159,211.44 1,307,508.65 1.08% 0.94% 0.02% 1.891% 1.881% - - COMMON STOCK 3.40 -4.54% 0.01 0.00%

728 HK Equity 728 HK Equity CHINA TELECOM CORP LTD-H 6559335 TELECOMMUNICATION SERVICESTELECOMMUNICATION SERVICESL HK HKD HKD Exchange 8,974,000.00 COMMON STOCK 4.13 4.18 7.759 7.759 0.532 0.54 37,511,320.00 4,834,805.25 42,431,123.42 5,460,961.33 4.18% 3.65% 0.0510% 1.221% 1.211% - - COMMON STOCK 4.73 -11.59% 0.23 0.06%

CITIC08V CH CITIC08V CH EquityCITI -CW15 CHINA VANKE C B4L89R0 REAL ESTATE FINANCIALS L CN HKD USD Citigroup 1,002,364.00 FDI 10.36 10.36 7.759 7.759 1.335 1.34 10,384,491.04 1,338,449.08 1,380,617.58 1,380,617.58 1.16% 1.01% 0.0001% 0.010% 0.000% - - EQUITY WRT 1.38 -3.05% 0.02 #VALUE!

2 HK 2 HK Equity CLP HOLDINGS LTD 6097017 UTILITIES UTILITIES L HK HKD HKD Exchange 871,000.00 COMMON STOCK 66.05 66.45 7.759 7.759 8.512 8.56 57,877,950.00 7,459,844.56 61,984,682.66 7,977,539.31 6.44% 5.63% 0.0397% 0.616% 0.606% - - COMMON STOCK 71.16 -6.63% 0.50 0.04%

27 HK Equity 27 HK Equity GALAXY ENTERTAINMENT GROUP L6465874 Consumer Services Consumer Discretionary L HK HKD HKD Exchange 709,000.00 Common Stock 23.35 24.25 7.759 7.759 3.009 3.13 17,193,250.00 2,216,024.80 13,283,914.65 1,709,663.53 1.91% 1.67% 0.0740% 3.865% 3.854% - - Common Stock 18.74 29.43% 0.06 0.02%

11 HK 11 HK Equity HANG SENG BANK LTD 6408374 BANKS FINANCIALS L HK HKD HKD Exchange 300,700.00 COMMON STOCK 105.60 106.60 7.759 7.759 13.609 13.74 32,054,620.00 4,131,495.37 32,581,408.89 4,193,285.49 3.57% 3.12% 0.0342% 0.957% 0.947% - - COMMON STOCK 108.35 -1.62% 0.20 0.02%

3 HK 3 HK Equity HONG KONG & CHINA GAS 6436557 UTILITIES UTILITIES L HK HKD HKD Exchange 1,684,000.00 COMMON STOCK 19.76 19.84 7.759 7.759 2.547 2.56 33,410,560.00 4,306,261.44 30,006,635.06 3,861,907.50 3.72% 3.25% 0.0154% 0.415% 0.405% - - COMMON STOCK 17.82 11.34% 0.22 0.02%

HSBCC09O CH EquityHSBCC09O CH EquityHSBC -CW21 YANTAI CHANGY B692YL7 FOOD BEVERAGE & TOBACCOCONSUMER STAPLES L EC HKD USD HSBC 296,518.00 FDI 82.00 82.00 7.759 7.759 10.568 10.57 24,314,476.00 3,133,874.15 3,221,281.45 3,221,281.45 2.71% 2.36% 0.0003% 0.010% 0.000% - - EQUITY WRT 10.86 -2.71% 0.00 #VALUE!

973 HK Equity 973 HK Equity L'OCCITANE INTERNATIONAL SA B3PG229 RETAILING CONSUMER DISCRETIONARYM HK HKD HKD Exchange 223,250.00 COMMON STOCK 20.80 20.70 7.759 7.759 2.681 2.67 4,621,275.00 595,632.59 4,465,310.65 574,693.45 0.51% 0.45% 0.00% -0.471% -0.481% - - COMMON STOCK 20.00 3.49% 0.20 0.02%

1910 HK Equity 1910 HK EquitySAMSONITE INTERNATIONAL SA B4Q1532 CONSUMER DURABLES & APPARELCONSUMER DISCRETIONARYM HK HKD HKD Exchange 565,500.00 COMMON STOCK 15.26 15.04 7.759 7.759 1.967 1.94 8,505,120.00 1,096,218.39 8,288,268.37 1,066,714.93 0.95% 0.83% -0.01% -1.432% -1.442% - - COMMON STOCK 14.66 2.62% 0.16 0.04%

2282 HK Equity 2282 HK EquityMGM CHINA HOLDINGS LTD B4P8HQ1 CONSUMER SERVICESCONSUMER DISCRETIONARYL HK HKD HKD Exchange 866,400.00 COMMON STOCK 14.28 14.38 7.759 7.759 1.840 1.85 12,458,832.00 1,605,809.30 12,395,734.32 1,595,353.13 1.39% 1.21% 0.01% 0.711% 0.700% - - COMMON STOCK 14.31 0.51% 0.31 0.02%

215 HK 215 HK EQUITYHUTCHISON TELECOMM HONG KONGB3XH0P3 Telecommunication ServicesTelecommunication ServicesM HK HKD HKD Exchange 4,132,000.00 Common Stock 3.42 3.45 7.759 7.759 0.441 0.44 14,255,400.00 1,837,367.57 12,698,506.85 1,634,320.50 1.59% 1.39% 0.0141% 0.888% 0.877% - - Common Stock 3.07 12.26% 2.11 0.09%

1398 HK 1398 HK EquityIND & COMM BK OF CHINA-H B1G1QD8 BANKS FINANCIALS L HK HKD HKD Exchange 4,328,000.00 COMMON STOCK 5.11 5.18 7.759 7.759 0.659 0.67 22,419,040.00 2,889,572.86 21,514,285.41 2,768,926.94 2.50% 2.18% 0.0345% 1.380% 1.370% - - COMMON STOCK 4.97 4.21% 0.02 0.00%

1157 HK Equity 1157 HK EquityZOOMLION HEAVY INDUSTRY - H B544N70 CAPITAL GOODS INDUSTRIALS L HK HKD HKD Exchange 1,928,200.00 COMMON STOCK 11.44 11.58 7.759 7.759 1.474 1.49 22,328,556.00 2,877,910.45 21,018,016.04 2,705,056.18 2.49% 2.17% 0.03% 1.234% 1.224% - - COMMON STOCK 10.90 6.24% 0.20 0.13%

220 hk equity 220 hk equity UNI-PRESIDENT CHINA HOLDINGS B29MKF5 Food Beverage & TobaccoConsumer Staples M HK HKD HKD Exchange 1,494,000.00 Common Stock 7.00 7.05 7.759 7.759 0.902 0.91 10,532,700.00 1,357,551.62 6,972,641.68 897,391.43 1.17% 1.02% 0.01% 0.725% 0.714% - - Common Stock 4.67 51.06% 0.14 0.04%

823 HK Equity 823 HK Equity LINK REIT B0PB4M7 REAL ESTATE FINANCIALS L HK HKD HKD Exchange 801,000.00 REIT 31.25 32.30 7.759 7.759 4.027 4.16 25,872,300.00 3,334,660.89 22,162,213.42 2,852,316.43 2.88% 2.52% 0.0971% 3.371% 3.360% - - REIT 27.67 16.74% 0.13 0.04%

2318 HK Equity 2318 HK EquityPING AN INSURANCE GROUP CO-H B01FLR7 INSURANCE FINANCIALS L HK HKD HKD Exchange 179,500.00 COMMON STOCK 63.80 64.90 7.759 7.759 8.222 8.36 11,649,550.00 1,501,501.56 11,069,071.48 1,424,609.26 1.30% 1.13% 0.0225% 1.735% 1.724% - - COMMON STOCK 61.67 5.24% 0.02 0.01%

1128 HK Equity 1128 HK EquityWYNN MACAU LTD B4JSTL6 Consumer Services Consumer Discretionary L HK HKD HKD Exchange 270,000.00 Common Stock 23.90 24.90 7.759 7.759 3.080 3.21 6,723,000.00 866,522.31 6,333,521.24 815,135.49 0.75% 0.65% 0.03% 4.195% 4.184% - - Common Stock 23.46 6.15% 0.04 0.01%

966 HK Equity 966 HK EQUITYCHINA TAIPING INSURANCE HOLD 6264048 Insurance Financials M HK HKD HKD Exchange 1,150,000.00 Common Stock 15.96 16.18 7.759 7.759 2.057 2.09 18,607,000.00 2,398,241.95 19,745,213.12 2,541,244.18 2.07% 1.81% 0.03% 1.389% 1.378% - - Common Stock 17.17 -5.76% 1.26 0.07%

6 HK 6 HK Equity POWER ASSETS HOLDINGS LTD 6435327 UTILITIES UTILITIES L HK HKD HKD Exchange 1,099,000.00 COMMON STOCK 57.45 58.00 7.759 7.759 7.404 7.48 63,742,000.00 8,215,657.46 65,161,502.09 8,386,401.64 7.10% 6.20% 0.0687% 0.968% 0.957% - - COMMON STOCK 59.29 -2.18% 0.58 0.05%

315 HK Equity 315 HK Equity SMARTONE TELECOMMUNICATIONS6856995 TELECOMMUNICATION SERVICESTELECOMMUNICATION SERVICESM HK HKD HKD Exchange 1,022,000.00 COMMON STOCK 15.32 14.60 7.759 7.759 1.974 1.88 14,921,200.00 1,923,182.02 13,096,881.47 1,685,592.02 1.66% 1.45% -0.0779% -4.690% -4.700% - - COMMON STOCK 12.81 13.93% 0.19 0.10%

1093 HK 1093 HK EQUITYCHINA PHARMACEUTICAL GROUP 6191997 PHARMACEUTICALS, BIOTECHNOLOGYHEALTH CARE S HK HKD HKD Exchange 2,154,000.00 COMMON STOCK 1.61 1.60 7.759 7.759 0.207 0.21 3,446,400.00 444,203.85 4,753,828.40 611,826.20 0.38% 0.34% -0.0023% -0.611% -0.621% - - COMMON STOCK 2.21 -27.50% 4.83 0.14%

81 HK EQUITY 81 HK EQUITY CHINA OVERSEAS GRAND OCEANS 6803247 Real Estate Financials M HK HKD HKD Exchange 192,000.00 Common Stock 10.28 10.44 7.759 7.759 1.325 1.35 2,004,480.00 258,355.89 1,805,720.87 232,399.50 0.22% 0.19% 0.0035% 1.567% 1.556% - - Common Stock 9.40 11.01% 0.09 0.01%

1913 HK 1913 HK EQUITYPRADA S.P.A. B4PFFW4 Consumer Durables & ApparelConsumer Discretionary L HK HKD HKD Exchange 328,600.00 Common Stock 50.95 52.70 7.759 7.759 6.566 6.79 17,317,220.00 2,232,003.20 14,553,152.72 1,873,016.73 1.93% 1.68% 0.0664% 3.445% 3.435% - - Common Stock 44.29 18.99% 0.18 0.01%

891 HK 891 HK Equity TRINITY LTD B5497Y0 CONSUMER DURABLES & APPARELCONSUMER DISCRETIONARYM HK HKD HKD Exchange 2,442,000.00 COMMON STOCK 6.35 6.49 7.759 7.759 0.818 0.84 15,848,580.00 2,042,711.31 11,313,886.90 1,456,117.44 1.76% 1.54% 0.0391% 2.215% 2.205% - - COMMON STOCK 4.63 40.08% 1.32 0.14%

6837 HK 6837 HK EquityHAITONG SECURITIES CO LTD-H B71SXC4 Diversified FinancialsFinancials L HK HKD HKD Exchange 2,572,000.00 Common Stock 10.60 10.86 7.759 7.759 1.366 1.40 27,931,920.00 3,600,123.73 27,497,735.60 3,539,007.66 3.11% 2.72% 0.0766% 2.463% 2.453% - - Common Stock - 0.03 0.19%

Total InvestmentsTotal Investments 79,013,161.00 890,761,337.84 115,773,547.16 100.00% 87.33% 1.1476%

5 HK Equity Cash HSBC Current Account USD Cash Cash Cash Cash USD HSBC 9,451,441.19 Cash 1.000 9,451,441.19 9,451,441.19 7.13% 9,451,441.19 - 9,451,441.19

5 HK Equity Cash HSBC Margin Account USD Cash Cash Cash Cash USD Margin USD HSBC - Cash 1.000 - - 0.00% - - -

Cash JP Morgan - Hong Kong USD Cash Cash Cash Cash JPM HK USD Cash USD JP Morgan 4,997,394.93 Cash 1.000 4,997,394.93 4,997,394.93 3.77% 4,997,394.93 - 4,997,394.93

Cash JP Morgan - London USD Cash Cash Cash Cash JPM LN USD Cash USD JP Morgan - CTE 699.72 Cash 1.000 699.72 699.72 0.00% 699.72 - 699.72

Cash Lloyds USD Cash Cash Cash Cash Lloyds USD Cash USD Lloyds 3,072,132.10 Cash 1.000 3,072,132.10 3,072,132.10 2.32% 3,072,132.10 - 3,072,132.10

5 HK Equity Cash HSBC HKD Cash Cash Cash Cash HKD HSBC 6,100,398.88 Cash 7.759 6,100,398.88 786,275.73 0.59% 786,275.73 - 786,275.73

Cash JP Morgan HKD Cash Cash Cash Cash HKD JP Morgan Cash 7.759 - - 0.00% - - -

Cash Counterparty HKD Cash Cash Cash Cash HKD Cash 7.759 - - 0.00% - - -

5 HK Equity Cash HSBC GBP Cash Cash Cash Cash GBP HSBC 47,188.47 Cash 0.615 47,188.47 76,766.66 0.06% 76,766.66 - 76,766.66

6 HK Equity Cash HSBC CNY Cash Cash Cash Cash CNY HSBC - Cash 6.280 - - 0.00% - - -

5 HK Equity Cash HSBC EUR Cash Cash Cash Cash EUR HSBC 86,956.73 Cash 0.756 86,956.73 115,006.91 0.09% 115,006.91 - 115,006.91

5 HK Equity Cash HSBC SGD Cash Cash Cash Cash SGD HSBC 0.00 Cash 1.236 0.00 0.00 0.00% 0.00 - 0.00

5 HK Equity Cash Pending Cash HSBC SGD Cash Cash Cash Cash SGD HSBC - Cash 1.236 - - 0.00% - - -

5 HK Equity Cash Pending Cash HSBC CNY Cash Cash Cash Cash CNY HSBC - Cash 6.280 - - 0.00% - - -

5 HK Equity Cash Pending Cash HSBC HKD Cash Cash Cash Cash HKD HSBC 19,157,907.75- Cash 7.759 19,157,907.75- 2,469,248.03- -1.86% - - -

5 HK Equity Cash Pending Cash HSBC USD Cash Cash Cash Cash USD HSBC 848,530.33 Cash 1.000 848,530.33 848,530.33 0.64% 848,530.33 - 848,530.33

5 HK Equity Cash Pending Cash HSBC EUR Cash Cash Cash Cash EUR HSBC 4,752.00 Cash 0.756 4,752.00 6,284.88 0.00% 6,284.88 - 6,284.88

5 HK Equity Cash Pending Cash HSBC GBP Cash Cash Cash Cash GBP HSBC - Cash 0.615 - - 0.00% - - -

Cash Pending JP Morgan - Hong Kong USD Cash Cash Cash Cash JPM HK USD Cash USD JP Morgan - Cash 1.000 - - 0.00% - - -

Cash Pending JP Morgan - London USD Cash Cash Cash Cash JPM LN USD Cash USD JP Morgan - CTE - Cash 1.000 - - 0.00% - - -

Cash Pending Lloyds USD Cash Cash Cash Cash Lloyds USD Cash USD Lloyds - Cash 1.000 - - 0.00% - - -

5 HK Equity Forward HSBC EUR EUR Class Cash Hedge Cash Forward 02-May EUR HSBC 34,044,160.45 Forward - 0.756 1.3226 34,044,160.45 45,026,002.45- 34,044,160.45 -45,137,198.41 111,195.96- -0.08% - - -

5 HK Equity Forward HSBC GBP GBP Class Cash Hedge Cash Forward 01-Jun GBP HSBC 1,470,575.42 Forward 1 0.615 1.6268 1,470,575.42 2,392,346.54- 1,470,575.42 -2,368,729.36 23,617.18 0.02% 23,617.18 236.17 23,853.35

Total Cash Total Cash 23,756,212.02 16,885,284.43 87,578.78- 12.67%

16,797,705.65

Total PortfolioTotal Portfolio 132,571,252.82 100.00%

Summary of Investment Restriction Breaches

Sum of Current Breach Global Exposure for FDIs (inc. hedge) 9,441,404 Leverage for FDIs (inc. hedge) 7.12%

Restriction Global Exposure for FDIs (exc.hedge) 9,441,404 Leverage for FDIs (exc. hedge) 7.12%

Total Global Position Exposure for FDIs 9,441,404 Total Leverage for FDIs 7.12%

Counterparty Exposure: Total Counterparty Exposure Fund FDIs Exc FDIs

Exchange Traded Contracts (nil exposure) - 0.00% Exchange 80.14% 0.00% 80.14%

FDI CounterpartiesHSBC Y - 0.00% HSBC Y 12.76% 6.18% 6.58%

Citigroup Y - 0.00% JP Morgan Y 3.77% 0.00% 3.77%

Forward Currency CounterpartiesHSBC Y 23,853.35 0.02% Citigroup Y 1.01% 1.01% 0.00%

Cash Counterparties (custodian)HSBC 11,284,306 8.51% JP Morgan - CTE Y 0.00% 0.00% 0.00%

JP Morgan 4,997,395 3.77% Lloyds Y 2.32% 0.00% 2.32%

JP Morgan - CTE 699.72 0.00% 100.00%

Lloyds 3,072,132 2.32%

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Nippon Growth (UCITS) Fund (the “Fund”)

Registration The Fund is registered for sale in the UK, Switzerland, and France. The Fund is also permitted to be distributed in the Netherlands and Italy for sale to professional and institutional investors. Following the implementation of UCITS IV and the approval of the Key Investor Information Documents (“KIID”) by the Central Bank of Ireland any further registrations will be considered on a case by case basis. Documentation update The revised supplement will be issued with the updated general prospectus to E.I. Sturdza Funds plc that will be issued in due course, subject to the wording in respect of the hedging policy being approved as mentioned earlier in the report. Brokers No additional broker accounts were established during the period. Risk Management Guidelines and Investment Restriction Breaches During the period no breaches of the UCITS investment restrictions have occurred and all risk management guidelines as outlined in the risk management process for the Fund have been complied with. There was one breach of the internal mandate guidelines for the Fund in February 2012 in relation to the maximum exposure of the investment portfolio which is limited to 100% of NAV. This reached a level of 100.22% on 28th February 2012 as a result of shareholder redemptions processed but was reduced below the maximum permitted level following the receipt of additional shareholder subscriptions on 8th March 2012. Errors & Compliance There have been no new pricing errors identified during the period. Complaints There have been no complaints identified during the period. Marketing and Investor Information At the end of the reporting period, the following shareholders were reflected on the share register for the Fund as detailed below.

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JPY Class A:

JPY Class B Accumulating Shares:

JPY Class C Distributing Shares:

Service Providers Administration: NAV Calculation:

The valuations are agreed to be received by 16:00 on the day following the valuation point. Of the seventeen valuation points within the period, 41% were produced in line with the agreed timescales with only minor adjustments having to be made to the accruals. Investor Services:

Notifications of dealing received for each valuation point are due to be received by close of business on the business date following each cut-off point for receipt of trades to be received by HSBC as Administrator. All dealing reports were produced and provided within the given timescales. Custody: There have been no particular areas of issue during the period and all trades and corporate actions have been actioned as appropriate, free from error. Investor Cash flows: During the period, the following net cash flows were received into and out of the Fund as follows:



Citco Global Custody NV ref UBS AG Zurich THE NETHERLANDS 1,048.273 4.97%





BANQUE DE LUXEMBOURG - CLIENT ACCOUNT LUXEMBOURG 2,100.000 12.97%


ISLANDS2016.851 12.46%

KREDIETBANK S.A. LUXEMBOURGEOISE FOR

CUSTOMERS ACCOUNTLUXEMBOURG 470.628 2.91%

BANQUE PARIS BERTRAND STURDZA S.A. SWITZERLAND 190.710 1.18%



Banque Baring Brothers Sturdza SA SWITZERLAND 306.659 59.03%


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During the period we have therefore seen total net redemptions out of the Fund totalling approximately JPY 25.4 million. Fund Performance

The Fund has performed well on an absolute and relative basis over the period. Year to date the Fund has returned 12.53% against a performance of 11.98% for the benchmark index. The Fund now has a reported performance of -6.44% since inception, still outperforming the index by 1.34%.

JPY Class A JPY Class B JPY Class C

(in class currency) (in class currency) (in class currency)

04-Jan-12 JPY (1,391,769.00) JPY (5,364,492.04) Nil

10-Jan-12 JPY (1,171,367.00) Nil Nil

17-Jan-12 JPY (1,195,491.00) JPY (8,573,842.56) Nil

24-Jan-12 JPY (3,325,736.00) JPY 681,127.50 Nil

31-Jan-12 JPY (7,088,136.00) JPY (46,474,726.51) Nil

07-Feb-12 JPY (33,894,650.00) JPY (19,405,339.12) Nil

14-Feb-12 Nil Nil Nil

21-Feb-12 JPY (4,690,171.00) JPY 148,668,328.71 Nil

28-Feb-12 JPY (57,658,482.00) JPY (1,601,338.53) Nil

06-Mar-12 Nil JPY 39,985,000.00 JPY (9,510,200.00)

13-Mar-12 Nil JPY (311,296.68) Nil

21-Mar-12 Nil Nil Nil

27-Mar-12 Nil JPY 34,891,750.00 Nil

03-Apr-12 JPY (17,841,895.00) JPY (917,838.00) Nil

10-Apr-12 JPY (2,295,640.00) JPY 1,970,000.00 Nil

17-Apr-12 Nil JPY (4,627,482.00) Nil

24-Apr-12 JPY (23,173,690.00) JPY (1,116,896.82) Nil

JPY Class A JPY Class B JPY Class C

NAV per share 30-Dec-11 JPY 50,497.00 JPY 42,574.00 JPY 41,224.00

Opening Total Assets JPY 1,178,143,038.00 JPY 575,657,682.00

23,330.73 13,521.27

JPY 1,783,462,925.00 JPY 1,783,462,925.00 JPY 0.00

NAV per share 24-Apr-12 JPY 56,825.00 JPY 47,909.00 JPY 46,390.00

Closing Total Assets JPY 1,197,429,929.00 JPY 775,459,288.00 JPY 24,101,319.00

21,072.11 16,186.00 519.54

JPY 1,996,990,536.00

04/11/2009

12.53% 12.53% 12.53%

11.98% 11.98% 11.98%

Relative performance 0.55% 0.55% 0.55%

JPY 50,497.00 JPY 42,574.00 JPY 41,224.00

12.53% 12.53% 12.53%

11.98% 11.98% 11.98%

Relative performance 0.55% 0.55% 0.55%

30/12/2011 22/10/2009

-6.44% -4.18% -7.22%

-7.78% -7.78% -7.78%

1.34% 3.60% 0.56%

Closing Total Assets 24-Apr-12 JPY 1,197,429,929.00 JPY 775,459,288.00 JPY 24,101,319.00

JPY 1,996,990,536.00Total Fund AUM

Performance for reporting period

Performance since Inception

NKY INDEX

Shares in Issue

Total AUM in JPY

Shares in Issue

Total AUM in JPY

Relative Performance

NKY Index for Period

Performance for YTD

NKY Index for YTD

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Portfolio Commentary During the period, a new position in Isuzu Motors Ltd, a road transportation manufacturer, was purchased whereas Daiichi Chuo Kisen, a marine transportation firm, was sold out. The sector allocation of the portfolio has remained consistent throughout the year with the three largest sectors being Commerce (21.41%), Chemicals (12.39%) and Banks (10.99%). In comparison to the benchmark index the Fund is most overweight in Commerce (21.41% vs 3.03%) and Banking (10.99% vs 1.64%) but significantly underweight in electricals (7.12% vs 21.24%) and communication (zero vs 8.54%). Over the period all sectors in the benchmark reported a positive contribution for the year to date. Comparatively, the portfolio has outperformed the benchmark with allocations to banking, commerce and real estate as well as construction and marine transportation sectors. However, the portfolio has underperformed the benchmark through the contribution from machinery, electrical and retail as well as precision instruments. Overall the portfolio added value over the period through sector allocation (0.93%), expected given the positioning of the investment portfolio towards sectors that will be influenced by macroeconomic factors, but lost relative performance through stock selection (-1.39%). Specific positions that lost relative performance over the period were NEC Corp and Kajima Corp, while Tokyu Land, Toyo Engineering and Tokyo Tatemono particularly added value through stock selection The portfolio manager continues to look at the long term macroeconomic situation as well as individual positions within each sector. Within the strategy for the rest of the year the Fund will continue to have a large exposure to the commerce sector (trading companies) as (1) commodity prices have hit the bottom in 4Q 2011 and are expected to rise further, (2) long term growth potentials are quite high in non-resource divisions as well, and (3) valuations are extremely cheap. The portfolio manager is starting to increase the weighting in the banking sector. On the other hand, defensive sectors such as utilities, foods and pharmaceuticals will remain very underweight. The portfolio manager will continue to place additional emphasis and focus on electric vehicles and lithium-ion battery related stocks. Currency Hedging There is no currency hedging required for the Nippon Growth (UCITS) Fund due to the fact that investors and all assets are denominated in JPY.

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Portfolio Performance

Source: Morningstar Direct. Calculated using 10 year rolling data for the strategy

Performance

Annualised Standard Deviation

Portfolio Beta

Tracking Error


SRRI 7 7

NIKKEI 225

Index

JPY CLASS A

-7.78%

1.05

0.01%

-0.86

Weekly points

since inception

22.32%

Weekly points

since inception

-6.44%

24.65%

80

90

100

110

120

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Cumulative Performance (rebased) (%)

Weekly Performance (%)

Nippon Growth (UCITS) Fund vs Nikkei 225 Index

Weekly Fund Performance Weekly Index Performance Cumulative Fund Performance Cumulative Index Performance

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Peer Group: Performance Comparison The bar chart below compares the performance for the Fund to the benchmark index as well as the peer group. Please note that the index and peer group performance is based on calendar months and may differ from the statistics reported earlier.

Trading Volumes and Commission Breakdown

The portfolio generally follows a buy and hold strategy of best ideas with a medium to long term view. The result of this is that positions are acquired over a period of time with the aim of providing returns to average cost. As a consequence trading activity is usually quite low unless transitioning a position into or out of the portfolio. Given that there have been no changes in the investment ideas over the period the trading has been relatively low, adjusting exposures to comply with mandate restrictions and to meet redemptions from the Fund. Year to date there have been 54 trades with an average value of JPY 6.3 million per trade. During 2012, there have been more subscription proceeds received than net trades in the Fund.

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The use of brokers throughout the period and the year are as follows:

Broker details Please find tabled below a list of the current brokers utilised on behalf of this Fund for equity trades:

Portfolio Construction The portfolio construction at the end of the reporting period was as follows:

Broker Name

MTD Total

Commissions Paid

% of MTD

Volume

YTD Total

Commissions Paid

% of YTD

Volume

Goldman Sachs - 0.00% 94,903.00 27.81%

Merrill Lynch - 0.00% 69,311.00 20.31%

Daiwa - 0.00% 67,025.00 19.64%

Nomura 33,138.00 82.41% 50,772.00 14.88%

Mizuho - 0.00% 44,430.00 13.02%

Deutsche Bank - 0.00% 7,686.00 2.25%

UBS Zürich 7,072.00 17.59% 7,072.00 2.07%

Total Volume of Trades 40,210.00 100.00% 341,199.00 100.00%

Broker Status

Deutsche Bank Open

Merrill Lynch Open

Nomura Bank Open

Credit Suisse Open

Daiwa Securities Open

Mitsubishi UFJ Financial Open

Goldman Sachs Open

Mizuho Bank Open

Morgan Stanley Open

UBS Open

Citibank Open

Brokers used for the Nippon Growth (UCITS) Fund



Dividends Receivable 1.17%



Total Investment Exposure 99.05%

Portfolio Hedging 0.00%



Portfolio Construction Nippon Growth (UCITS) Fund

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ELECTRICALS, 7.12%

BANK , 10.99%

CHEMICALS , 12.39%

COMMERCE , 21.41%

CONSTRUCTION , 8.91%SECURITIES, 2.02%AIR TRANSPORTATION,

0.69%

MACHINERY , 2.38%MARINE TRANSPORTATION , 4.64%

METAL PRODUCTS , 1.78%

NONFERROUS METALS , 1.58%

RETAIL , 2.15%

SERVICES , 4.79%

STEEL , 1.48%

TRANSPORTATION EQUIPMENT , 8.26%

REAL ESTATE, 8.45%

CASH , 0.95%

LARGE CAP (> JPY 500 BILLION), 52.93%

MEDIUM CAP (JPY 100-500 BILLION), 34.89%

SMALL CAP (<JPY 100 MILLION), 11.23%

CASH, 0.95%

Investment Portfolio Sector Allocation Investment Portfolio Market Cap Allocation Investment Portfolio The portfolio of the Fund invests predominantly in equity securities and equity-related securities including shares, warrants and debt securities convertible into shares of established Japanese companies listed on the Tokyo and Osaka Stock exchanges or traded on a recognised exchange. A minimum of 2/3 of the total assets of the Fund shall be invested at all times in securities of issuers established or having a majority of their assets or deriving a majority of their operating income from activities in Japan. In practise the Fund only invests in equities and cash, and is usually fully invested. The Investment policy of the Fund does not have a specific industry focus. The full details of the investment portfolio are below.

NIPPON GROWTH (UCITS) FUND PORTFOLIO BREAKDOWN

Common Stock JT 7 8 9 10 11 12 13 14 15 16 17.00

NGUF Portfolio 30/04/2012

Stock

ID Stock ID Stock ID Sector

SECURITY_TY

P

eqy

_pri

m_e

Current

Shareholding

Current Book

Cost

Current

Price Current Market Value

Previous

Price Previous Market Value

Current %

of Portfolio

Current %

of Assets

% Price

Change Attribution

Max. 10%

Holding

Diversifi

cation

Market

Value

Cash

Limits

Liquidity

(on 5 day)

Liquidity

(on 5 day)

Liquidity (on

1 day)

Average Price Move

to Cost

Average Price

Move to Cost

Potential Credit

Exposure % of company held

7201 7201 JT equity Nissan Motor TRANSPORTATION EQUIPMENTCommon Stock JT 140,000.00 93,925,658.05 836.00 117,040,000.00 836.00 117,040,000.00 5.97% 6.00% 0.00% 0.00% - - - - - 0.01 - - - - 0.00%

8830 8830 JT equity Sumitomo Realty & Development REAL ESTATE Common Stock JT 22,000.00 37,877,516.60 1,924.00 42,328,000.00 1,924.00 42,328,000.00 2.16% 2.17% 0.00% 0.00% - - - - - 0.01 - - - - 0.00%

4188 4188 JT equity Mitsubishi Chemical Holdings CHEMICALS Common Stock JT 160,000.00 59,275,357.78 422.00 67,520,000.00 422.00 67,520,000.00 3.44% 3.46% 0.00% 0.00% - - - - - 0.03 - - - - 0.01%

7251 7251 JT equity KEIHIN CORP TRANSPORTATION EQUIPMENTCommon Stock JT 26,000.00 41,750,793.55 1,374.00 35,724,000.00 1,374.00 35,724,000.00 1.82% 1.83% 0.00% 0.00% - - - - - 0.04 - - - - 0.04%

5713 5713 JT equity Sumitomo Metal Mining NONFERROUS METALS Common Stock JT 30,000.00 45,507,557.19 1,056.00 31,680,000.00 1,056.00 31,680,000.00 1.61% 1.62% 0.00% 0.00% - - - - - 0.01 - - - - 0.01%

4091 4091 JT equity Taiyo Nippon Sanso Corp CHEMICALS Common Stock JT 25,000.00 24,820,327.81 554.00 13,850,000.00 554.00 13,850,000.00 0.71% 0.71% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

8411 8411 JT equity Mizuho Financial Group BANK Common Stock JT 720,000.00 121,619,930.09 127.00 91,440,000.00 127.00 91,440,000.00 4.66% 4.69% 0.00% 0.00% - - - - - 0.01 - - - - 0.00%

7453 7453 JP equity Ryohin Keikaku Co Ltd RETAIL Common Stock JT 9,000.00 35,986,637.54 4,340.00 39,060,000.00 4,340.00 39,060,000.00 1.99% 2.00% 0.00% 0.00% - - - - - 0.04 - - - - 0.03%

7202 7202 JT equity ISUZU MOTORS LTD Transportation Equipment Common Stock JT 30,000.00 13,924,911.00 459.00 13,770,000.00 459.00 13,770,000.00 0.70% 0.71% 0.00% 0.00% - - - - - 0.00 - - - - 0.00%

6674 6674 JT equity GS YUASA CORP ELECTRICALS Common Stock JT 80,000.00 40,090,049.00 414.00 33,120,000.00 414.00 33,120,000.00 1.69% 1.70% 0.00% 0.00% - - - - - 0.03 - - - - 0.02%

3407 3407 JT equity ASAHI KASEI CORP Chemicals Common Stock JT 80,000.00 38,877,683.07 496.00 39,680,000.00 496.00 39,680,000.00 2.02% 2.03% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

9202 9202 JT equity All Nippon Airways AIR TRANSPORTATION Common Stock JT 60,000.00 18,229,010.80 234.00 14,040,000.00 234.00 14,040,000.00 0.72% 0.72% 0.00% 0.00% - - - - - 0.01 - - - - 0.00%

8316 8316 JT equity Sumitomo Mitsui Financial BANK Common Stock JT 20,000.00 50,100,149.00 2,584.00 51,680,000.00 2,584.00 51,680,000.00 2.63% 2.65% 0.00% 0.00% - - - - - 0.00 - - - - 0.00%

9603 9603 JT equity H I S CO LTD Services Common Stock JT 18,000.00 33,507,248.65 2,590.00 46,620,000.00 2,590.00 46,620,000.00 2.38% 2.39% 0.00% 0.00% - - - - - 0.14 - - - - 0.05%

8306 8306 JT equity Mitsubishi UFJ Financial BANK Common Stock JT 200,000.00 92,337,061.63 387.00 77,400,000.00 387.00 77,400,000.00 3.95% 3.97% 0.00% 0.00% - - - - - 0.00 - - - - 0.00%

5406 5406 JT equity KOBE STEEL LTD STEEL Common Stock JT 260,000.00 48,654,305.70 115.00 29,900,000.00 115.00 29,900,000.00 1.52% 1.53% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

9119 9119 JT equity Iino Kaiun Kaisha MARINE TRANSPORTATION Common Stock JT 140,000.00 59,691,714.57 401.00 56,140,000.00 401.00 56,140,000.00 2.86% 2.88% 0.00% 0.00% - - - - - 0.96 - - - - 0.13%

9104 9104 JP Equity MITSUI OSK LINES LTD Marine Transportation Common Stock JT 120,000.00 41,340,298.00 312.00 37,440,000.00 312.00 37,440,000.00 1.91% 1.92% 0.00% 0.00% - - - - - 0.01 - - - - 0.01%

4208 4208 JT equity UBE INDUSTRIES LTD Chemicals Common Stock JT 190,000.00 46,246,627.25 205.00 38,950,000.00 205.00 38,950,000.00 1.99% 2.00% 0.00% 0.00% - - - - - 0.04 - - - - 0.02%

1808 1808 JT equity Haseko Corp CONSTRUCTION Common Stock JT 200,000.00 13,914,842.63 58.00 11,600,000.00 58.00 11,600,000.00 0.59% 0.59% 0.00% 0.00% - - - - - 0.03 - - - - 0.01%

9783 9783 JO equity Benesse Corp SERVICES Common Stock JT 10,000.00 39,823,244.55 3,960.00 39,600,000.00 3,960.00 39,600,000.00 2.02% 2.03% 0.00% 0.00% - - - - - 0.06 - - - - 0.01%

8815 8815 JT equity TOKYU LAND CORP Real Estate Common Stock JT 150,000.00 53,744,315.63 388.00 58,200,000.00 388.00 58,200,000.00 2.97% 2.98% 0.00% 0.00% - - - - - 0.05 - - - - 0.03%

6135 6135 JT equity MAKINO MILLING MACHINE CO Machinery Common Stock JT 20,000.00 10,040,309.60 582.00 11,640,000.00 582.00 11,640,000.00 0.59% 0.60% 0.00% 0.00% - - - - - 0.01 - - - - 0.02%

4204 4204 JP equity Sekisui Chemical Co Limited CHEMICALS Common Stock JT 54,000.00 27,526,924.54 720.00 38,880,000.00 720.00 38,880,000.00 1.98% 1.99% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

7013 7013 JT equity IHI Corporation MACHINERY Common Stock JT 180,000.00 31,523,228.82 194.00 34,920,000.00 194.00 34,920,000.00 1.78% 1.79% 0.00% 0.00% - - - - - 0.03 - - - - 0.01%

4901 4901 JT equity Fuji Film Holdings Corp CHEMICALS Common Stock JT 28,000.00 71,522,348.73 1,707.00 47,796,000.00 1,707.00 47,796,000.00 2.44% 2.45% 0.00% 0.00% - - - - - 0.01 - - - - 0.01%

6330 6330 JT equity Toyo Engineering Group CONSTRUCTION Common Stock JT 160,000.00 52,174,485.18 365.00 58,400,000.00 365.00 58,400,000.00 2.98% 2.99% 0.00% 0.00% - - - - - 0.15 - - - - 0.08%

6963 6963 JO equity ROHM CO LTD ELECTRICALS Common Stock JT 9,000.00 45,761,215.50 3,620.00 32,580,000.00 3,620.00 32,580,000.00 1.66% 1.67% 0.00% 0.00% - - - - - 0.03 - - - - 0.01%

1911 1911 JO equity SUMITOMO FORESTRY CO LTD CONSTRUCTION Common Stock JT 30,000.00 20,581,974.25 697.00 20,910,000.00 697.00 20,910,000.00 1.07% 1.07% 0.00% 0.00% - - - - - 0.15 - - - - 0.02%

8604 8604 JT equity NOMURA HOLDINGS INC Securities Common Stock JT 120,000.00 45,165,642.67 330.00 39,600,000.00 330.00 39,600,000.00 2.02% 2.03% 0.00% 0.00% - - - - - 0.00 - - - - 0.00%

1925 1925 JT equity DAIWA HOUSE INDUSTRY CO LTD CONSTRUCTION Common Stock JT 36,000.00 34,855,594.46 1,034.00 37,224,000.00 1,034.00 37,224,000.00 1.90% 1.91% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

2768 2768 JT equity Sojitz COMMERCE Common Stock JT 280,000.00 50,242,385.90 135.00 37,800,000.00 135.00 37,800,000.00 1.93% 1.94% 0.00% 0.00% - - - - - 0.05 - - - - 0.02%

1812 1812 JP equity Kajima Corp CONSTRUCTION Common Stock JT 220,000.00 51,069,408.67 228.00 50,160,000.00 228.00 50,160,000.00 2.56% 2.57% 0.00% 0.00% - - - - - 0.05 - - - - 0.02%

5938 5938 JT equity JS Group Corp METAL PRODUCTS Common Stock JT 23,000.00 35,137,578.39 1,573.00 36,179,000.00 1,573.00 36,179,000.00 1.84% 1.85% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

8804 8804 JT equity Tokyo Tatemono Co Ltd REAL ESTATE Common Stock JT 240,000.00 94,378,393.48 298.00 71,520,000.00 298.00 71,520,000.00 3.65% 3.67% 0.00% 0.00% - - - - - 0.06 - - - - 0.06%

8002 8002 JT equity Marubeni COMMERCE Common Stock JT 220,000.00 109,235,286.80 558.00 122,760,000.00 558.00 122,760,000.00 6.26% 6.29% 0.00% 0.00% - - - - - 0.03 - - - - 0.01%

8058 8058 JT equity Mitsubishi Corp COMMERCE Common Stock JT 62,000.00 129,867,963.28 1,743.00 108,066,000.00 1,743.00 108,066,000.00 5.51% 5.54% 0.00% 0.00% - - - - - 0.01 - - - - 0.00%

8001 8001 JT equity Itochu Corp COMMERCE Common Stock JT 170,000.00 105,864,982.69 906.00 154,020,000.00 906.00 154,020,000.00 7.85% 7.89% 0.00% 0.00% - - - - - 0.02 - - - - 0.01%

6701 6701 JT equity NEC CORP Electricals Common Stock JT 500,000.00 120,245,469.26 145.00 72,500,000.00 145.00 72,500,000.00 3.70% 3.72% 0.00% 0.00% - - - - - 0.02 - - - - 0.02%

Total Portfolio 63 63 1,961,737,000.00 1,961,737,000.00 100.00% 100.53% 0.00%

Current Cash Balance 10,402,240.00-

Total Assets 1,951,334,760.00 63

Prepared by

PORTFOLIO COMPLIANT WITH INVESTMENT RESTRICTIONS Reviewed by

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Strategic Euro Bond Fund (the “Fund”)

Registration The Fund is registered for distribution in Switzerland, Germany and France. The Fund is also permitted to be distributed in the Netherlands and Italy for sale to professional and institutional investors. Following the implementation of UCITS IV and the approval of the Key Investor Information Documents (“KIID”) by the Central Bank of Ireland any further registrations will be considered on a case by case basis. Documentation update The revised supplement will be issued with the updated general prospectus to E.I. Sturdza Funds plc that will be issued in due course, subject to the wording in respect of the hedging policy being approved as mentioned earlier in the report. Brokers No additional broker accounts were established during the period. Risk Management Guidelines and Investment Restriction Breaches During the period no breaches of the UCITS investment restrictions have occurred and all risk management guidelines as outlined in the risk management process for the Fund have been complied with. Errors & Compliance There have been no errors and compliance issues in this period.

Complaints There have been no complaints identified during the period. Marketing and Investor Information At the end of the reporting period, the following shareholders were reflected on the share register for the Fund as detailed below. Accumulating Shares




CITCO GLOBAL CUSTODY NV REF UBS AG ZURICH 190991 THE NETHERLANDS 200.000 0.57%

CITCO GLOBAL CUSTODY NV - REF MIRABAUD AND CIE IRELAND 9.340 0.03%

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Distributing Shares


The valuations are agreed to be received by 14:00 on the day following the valuation point. Of the eighty four valuation points within the period, 99% were produced in line with the agreed timescales with only minor adjustments having to be made to the accruals. We continue to request that the Accounts and Valuation department in conjunction with the HSBC Market Data Team provide additional back up information to support their pricing. This is required due to their primary source being Reuters with the secondary source being Bloomberg, which differs to E.I. Sturdza Strategic Management Limited who use Bloomberg only. There have been on occasion minor discrepancies in the prices of instruments used by each party, which arise because of the different primary pricing sources. Investor Services:

Notifications of dealing received for each valuation point are due to be received by 12 pm on the business day following each cut-off point for receipt of trades to be received by HSBC as Administrator. All dealing reports were produced and provided within the given timescale. Custody: There have been no particular areas of issue during the period and all trades and corporate actions have been actioned as appropriate, free from error. Investor Cash flows: During the period, the following net cash flows were received into and out of the Fund as follows:






CLEARSTREAM BANKING SA LUXEMBOURG 8.6660 0.03%

EUR Accumulating EUR Distributing

(in class currency) (in class currency)

Jan-12 EUR 1,460,660.00 EUR 638,962.35

Feb-12 EUR 1,008,932.57 EUR 2,773,506.88

Mar-12 EUR (139,337.94) EUR 246,198.45

Apr-12 EUR (1,555,592.12) EUR (98,181.16)

Total for period EUR 774,662.50 EUR 3,560,486.51

Total for period (in EUR) EUR 4,335,149.01

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Fund Performance Over the period the Fund has reported the following performance statistics:

Year to date the Fund has returned 1.87% against a performance of 0.41% for the benchmark index. The Fund now has a reported performance of 10.00% since inception, outperforming the index by 6.68%. Portfolio Strategy

Over the year to date the total exposure of the fixed income investments has remained broadly constant at around 98% investment with 2% cash. The net exposure of the investment portfolio has been reduced however through the latter part of the period through the use of index futures to hedge the duration. At the end of the period nearly 17% of the portfolio exposure was hedged through the use of bond index futures. Over the year the weighted average maturity has increased to 4.4 years from 3.8 years while the average modified duration has reduced from 3.3 years to 2.5 years, largely through the use of the index futures as described above. The average yield to maturity and dividend yield have remained constant at 1.75% and 2.24% respectively. Over the year to date the Fund has taken more active credit risk, decreasing allocations to ‘AAA’ rated government bonds from 28% to 8% while increasing allocations to ‘A’ rated and ‘BBB’ rated corporate bonds to 65% and 22% respectively, from 52% and 13% respectively at the end of 2011. Average maturity has increased also: from 61% from 3-7 years at the end of 2011 to 77% in this range at the end of April. Correspondingly, shorter maturities of 0-3 years have decreased from 35% at the end of December to 21% at the end of April. At the end of the period the largest geographical exposures were held in Northern European countries such as Germany (35%), the Netherlands (18%), France (11%) and Sweden (10%) while there was no exposure to southern European countries. This is in line with the cautious view of the Portfolio Manager with regards to the sovereign risk inherent in many southern European economies. This view is unchanged over the year to

EUR Accumulating

Class

EUR Distributing

Class

Opening NAV per share 30-Dec-11 EUR 1,079.89 EUR 1,031.15

Opening Total Assets EUR 37,345,013.67 EUR 25,312,245.07

Total Fund AUM Opening EUR 62,657,258.74

#VALUE!NAV per share 30-Apr-12 EUR 1,100.04 EUR 1,050.38

Performance for reporting period 1.87% 1.86%

0.41% 0.41%

1.46% 1.46%

28/04/2009 28/04/2009Performance since Inception 10.00% 5.04%

3.32% 3.32%

6.68% 1.72%

Closing Total Assets 30-Apr-12 EUR 38,851,318.72 EUR 28,830,771.82

EUR 67,682,090.54Total Fund AUM


3 Month Rolling Euribor (HVB3MRE)


3 Month Rolling Euribor (HVB3MRE)

of 52

date, although the weighting in individual countries such as Germany and France have changed over the course of the year: Germany has reduced to 35% from 51%, largely as a result of switching from government bonds to corporate bonds, while France has increased from 3% to 11%. Currency Hedging

There is no currency hedging required for the Fund due to the fact that investors and all assets are denominated in Euro. Any hedging at the portfolio level will be managed through the use of exchange traded bond futures, primarily to manage duration. There were no futures traded throughout the period. Portfolio Performance

Source: Morningstar Direct Calculated using 2 year rolling data

Performance

Annualised standard deviation

Portfolio Beta


SRRI 2 1

HVB3MRE IndexAccumulating Class

(EUR terms)

-0.99

Weekly Points since

inception

0.08%

Weekly Points since

inception

10.00%

0.23%

1.69

3.32%

98

100

102

104

106

108

110

112

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Cumulative Perform

ance (rebased) (%

)

Mo

nth

ly P

erf

orm

an

ce (

%)

Strategic Euro Bond Fund vs HVB3MRE Index

Monthly Fund Monthly HVB3MRE Cumulative Fund Cumulative HVB3MRE

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Trading Volumes and Commission Breakdown Year to date there have been 50 trades with an average value of EUR 1.2 million per trade and a PTR equating to 52.55%, annualised to 254.99%. The use of brokers throughout the period and the year is as follows:

Broker details Please find tabled below a list of the current brokers utilised on behalf of this Fund:


Broker Name

MTD Total Trading

Volume

% of MTD

Volume

YTD Total

Trading Volume

% of YTD

Volume

MERRILL LYNCH BofA - 0.00% 12,606,406.52 19.91%

COMMERZBANK Frankfurt (German Market) - 0.00% 11,315,250.62 17.87%

NATIXIS Paris (French Market) - 0.00% 8,395,666.64 13.26%

ZURCHER KANTONALBANK Zurich - 0.00% 8,166,808.45 12.90%

ING Amsterdam - 0.00% 7,812,980.54 12.34%

MORGAN STANLEY London - 0.00% 6,198,478.82 9.79%

NATIXIS Paris - 0.00% 3,037,349.18 4.80%

BNP PARIBAS London 1,008,856.71 100.00% 2,978,912.65 4.70%

BNP PARIBAS Paris - 0.00% 2,808,490.99 4.44%

Total Volume of Trades 1,008,856.71 100.00% 63,320,344.41 100.00%

Broker Name Status

BARCLAYS PLC Open

BNP PARIBAS Open

BRIDPORT & CIE Open

CITIGROUP Open

COMMERZBANK Open

CREDIT AGRICOLE Open

CREDIT SUISSE EUROPE LTD Open

HSBC Futures Open

ING Open

JP MORGAN CHASE Bank Open

LLOYDS BANKING GROUP Open

MERRILL LYNCH BofA Open

MORGAN STANLEY Open

NATIXIS Open

ODDO ET CIE Open

ROYAL BANK OF CANADA Open

ROYAL BANK OF SCOTLAND PLC Open

SOCIETE GENERALE Open

UBS Open

ZURCHER KANTONALBANK Open

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Investment Portfolio Allocation by Sector

Investment Portfolio Allocation by Rating


Direct Security Investment 96.40%

Accrued Income 1.61%

Portfolio Hedging -16.67%


Pending Cash/Outstanding Settlements 0.00%

Total Investment Exposure 95.84%




Portfolio Construction: Strategic Euro Bond Fund

'AAA' Rated - 7.58%

'AA' rated - 4.18%

'A' Rated - 64.74%

'BBB' Rated - 21.51%

Cash/ Hedge - 2.00%

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Investment Portfolio Allocation by Maturity

Investment Portfolio Corporate & Government Exposure Duration

Investment Portfolio The portfolio of the Fund is predominantly invested in fixed income securities which include but are not limited to investment grade corporate bonds. The bonds may be issued with either fixed or floating rate coupons with defined parameters of credit risk and are denominated in the Euro currency. The Fund may at any one time be significantly invested in financial derivative investments for the purpose of efficient portfolio management, hedging purposes and to gain exposure to underlying fixed income securities where the investment manager feels it is more efficient to do so in order to manage the risk profile of the fund. The portfolio manager may also utilise futures to hedge against changes in the duration of the securities held within the portfolio. During the period Fund traded in Bund futures and maintained a short position to hedge duration at the end of the period. Full details of the investment portfolio are below.

Corporate (< 2 Years) - 1.61%

Corporate (2 - 4 Years) - 36.95%



Corporate (> 7 Years) - 2.52%

Government (< 2 Years) - 7.73%

Government (2 - 4 Years) - 0.00%



Government (> 7 Years) - 0.00%

Cash < 1 Year - 0.00%

Strategic Euro Bond Fund Portfolio Monitoring 30/04/2012

Top Ten Holdings by S&P Credit Score

Ticker Name ISIN

Portfolio

Weight Credit Score

Adjusted Risk

Score % of Credit Risk

1 WKLNA 6.38 04/10/18 WOLTERS KLUWER NV XS0357251726 CORP 4.46% 11.16 5.96 13.02%

2 SGOFP 4.75 11/04/17 COMPAGNIE DE ST GOBAIN XS0294547285 CORP 3.26% 8.15 4.80 9.51%

3 CARLSBERG BREWERIES A/S 3.375 10/13/17CARLSBERG BREWERIES A/S XS0548805299 CORP 3.11% 7.77 4.74 9.06%

4 PETROBRAS INTL FIN CO 4.875 03/07/18PETROBRAS INTL FIN CO XS0716979249 CORP 2.37% 5.92 4.55 6.90%

5 WPP 2008 LTD 6.625 05/12/16 WPP 2008 LTD XS0362329517 CORP 1.73% 4.33 3.15 5.05%

6 TPSA 6 05/22/14 TPSA EUROFINANCE FRANCE XS0429817538 CORP 1.61% 4.01 2.48 4.68%

7 IMERYS SA 5 04/18/17 IMERYS SA FR0010456475 CORP 1.60% 3.99 3.64 4.66%

8 EDENRED 3.625 10/06/17 EDENRED FR0010948562 CORP 1.54% 3.86 3.55 4.51%

9 COMPASS GROUP PLC 3.125 02/13/19COMPASS GROUP PLC XS0741004062 CORP 1.54% 3.85 3.78 4.49%

10 LINGR 6.75 12/08/15 LINDE FINANCE BV XS0403540189 CORP 4.41% 2.21 2.11 2.57%

Total in Top Ten Credit Risk 25.63% 55.25 38.75

64.46% 45.55%

Top Ten Holdings by Adjusted Credit Score

Ticker Name ISIN

Portfolio

Weight Credit Score

Adjusted Risk

Score

% of Adjusted

Risk

1 WKLNA 6.38 04/10/18 WOLTERS KLUWER NV XS0357251726 CORP 4.46% 11.16 5.96 7.00%

2 SGOFP 4.75 11/04/17 COMPAGNIE DE ST GOBAIN XS0294547285 CORP 3.26% 8.15 4.80 5.65%

3 CARLSBERG BREWERIES A/S 3.375 10/13/17CARLSBERG BREWERIES A/S XS0548805299 CORP 3.11% 7.77 4.74 5.58%

4 PETROBRAS INTL FIN CO 4.875 03/07/18PETROBRAS INTL FIN CO XS0716979249 CORP 2.37% 5.92 4.55 5.35%

5 COMPASS GROUP PLC 3.125 02/13/19COMPASS GROUP PLC XS0741004062 CORP 1.54% 3.85 3.78 4.44%

6 IMERYS SA 5 04/18/17 IMERYS SA FR0010456475 CORP 1.60% 3.99 3.64 4.27%

7 EDENRED 3.625 10/06/17 EDENRED FR0010948562 CORP 1.54% 3.86 3.55 4.17%

8 WPP 2008 LTD 6.625 05/12/16 WPP 2008 LTD XS0362329517 CORP 1.73% 4.33 3.15 3.70%

9 TELSTRA CORP LTD 4.25 03/23/20TELSTRA CORP LTD XS0496546853 CORP 2.46% 1.23 3.10 3.65%

10 DAIMLER AG 2.625 04/02/19 DAIMLER AG DE000A1MLXN3 CORP 2.24% 1.12 2.93 3.44% Risk Management Guidelines

Total in Top Ten Adjusted Risk 24.31% 51.38 40.19 Limit Current

59.95% 47.25% Maximum S&P score 90 85.71

Maximum Adjusted Score 90 85.06

Maximum Cash 20% 5.26%

Top Ten Holdings by Size

Ticker Name ISIN

Portfolio

Weight Credit Score

Adjusted Risk

Score

1 WKLNA 6.38 04/10/18 WOLTERS KLUWER NV XS0357251726 CORP 4.46% 11.16 5.96

2 LINGR 6.75 12/08/15 LINDE FINANCE BV XS0403540189 CORP 4.41% 2.21 2.11 Investment Restrictions

3 NEDERLANDSE GASUNIE N.V. 5.125 03/31/17NEDERLANDSE GASUNIE N.V. XS0419587745 CORP 4.27% 2.13 2.56

4 EOANGR 5.5 01/19/16 E.ON INTL FINANCE BV XS0408095387 CORP 4.23% 2.12 2.19 Limit Current

5 RDSALN 4.5 02/09/16 SHELL INTERNATIONAL FIN XS0412968876 CORP 4.15% 0.83 1.71 1 Maximum in one security 10% 4.46%

6 BASGR 5.125 09/06/15 BASF FINANCE EUROPE NV XS0412154378 CORP 4.14% 2.07 1.93 34 Maximum in top 5 securities 40% 21.52%

7 BMW FINANCE NV 3.875 01/18/17BMW FINANCE NV XS0478931354 CORP 4.03% 2.01 2.52 0.04463622 Maximum in one issuer 10% 4.46%

8 TLIASS 4.125 11/05/15 TELIASONERA AB XS0218734118 CORP 4.00% 2.00 1.96 WKLNA Issuer WKLNA

9 VATFAL 4.25 05/19/14 VATTENFALL AB XS0428149545 CORP 3.92% 1.96 1.64 0.04463622 Maximum in Govt. Securities 35% 2.22%

10 VOLKSWAGEN LEASING GMBH 3.25 05/10/18VOLKSWAGEN LEASING GMBH XS0702452995 CORP 3.92% 1.96 2.88 WKLNA Issuer SCHATZ

Total in Top Ten Holdings 41.53% 28.45 25.46

33.19% 29.93%

0

2

4

6

8

10

12

Ris

k S

co

re

Breakdown of Credit Risk by Adjusted Risk for Top Ten Riskiest Positions

of 52

Strategic Emerging Europe Fund (the “Fund”)

Registration The Fund is registered for distribution in France, Switzerland, and the UK. The Fund is also permitted to be distributed in the Netherlands and Italy for sale to professional and institutional investors. Following the implementation of UCITS IV and the approval of the Key Investor Information Documents (“KIID”) by the Central Bank of Ireland any further registrations will be considered on a case by case basis. Documentation Update The revised supplement will be issued with the updated general prospectus to E.I. Sturdza Funds plc that will be issued in due course, subject to the wording in respect of the hedging policy being approved as mentioned earlier in the report. . Brokers No additional broker accounts were established during the period. Custody Accounts There were no new custody accounts opened during the period Risk Management Guidelines and Investment Restriction Breaches During the period no breaches of the UCITS investment restrictions have occurred and all risk management guidelines as outlined in the risk management process for the Fund have been complied with. Errors & Compliance There have been no errors and compliance issues in this period. Complaints There have been no complaints identified during the period. Marketing and Investor Information At the end of the reporting period, the following shareholders were reflected on the share register for the Fund as detailed below. USD Class



ARMAJARO HOLDINGS LIMITED UNITED KINGDOM 500.000 10.75%


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Hedged Euro Class

Service Providers Administration: NAV Calculation: The valuations are agreed to be received by 17:00 on the day following the valuation point. Of the nineteen valuation points within the period, 100% were produced in line with the agreed timescales with only minor adjustments having to be made to the accruals. Investor Services: Notifications of dealing received for each valuation point are due to be received by 12pm on the business day following each cut-off point for receipt of trades to be received by HSBC as Administrator. All bar one dealing reports were produced and provided within the given timescales. Custody: There have been no particular areas of issue during the period and all trades and corporate actions have been actioned as appropriate, free from error. Investor Cash flows During the period, the following net cash flows were received into and out of the Fund as follows:


FUNDSETTLE EOC NOMINEES LTD FOR FS/BK OF NOVA

SCOTIA TRUST BAH/SHARESBELGIUM 2,500.000 20.36%


ISLANDS 559.135 4.55%


A/C 2035928

GUERNSEY CHANNEL

ISLANDS 53.661 0.44%


FS/BOSLTD/SHARESBELGIUM 44.047 0.36%




USD Class Hedged EUR Class

(in class currency) (in class currency)

04-Jan-12 Nil EUR (112,120.39)

11-Jan-12 Nil EUR (31,098.86)

18-Jan-12 Nil EUR (24,267.49)

25-Jan-12 USD ( 677,581.57) EUR (139,224.90)

01-Feb-12 USD ( 17,507.88) Nil

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During the period we have therefore seen total net redemptions out of the Fund totalling approximately USD 1.2 million. Fund Performance

The Fund has performed strongly over the year to date on both a relative and an absolute basis. Year to date the Fund has returned 17.47% against a performance of 6.88% for the benchmark index, outperforming by 10.58%. The Fund has a reported performance of -0.19% since inception, which is an outperformance of 7.47% when compared to the benchmark index performance of -7.66%. The performance differential between the USD Class and the Hedged EUR Class is in line with expectations over the period and since inception. The portfolio strategy seeks to add value by employing an active stock selection approach to identify investment opportunities combined with an asset allocation overlay. As such, trading decisions on the core portfolio positions tend to be made on a macroeconomic basis supported by bottom-up fundamental research.

08-Feb-12 Nil EUR (12,918.10)

15-Feb-12 USD 9,850.00 EUR (101,708.30)

22-Feb-12 USD 39,400.00 EUR (647.43)

29-Feb-12 Nil EUR 109,145.19

07-Mar-12 Nil EUR 26,280.46

14-Mar-12 Nil EUR 14,580.65

21-Mar-12 Nil Nil

28-Mar-12 USD ( 9,036.18) EUR 44,325.00

04-Apr-12 Nil EUR (160,069.01)

11-Apr-12 Nil Nil

18-Apr-12 Nil EUR (26,689.23)

25-Apr-12 USD ( 24,850.00) EUR 25,176.15

USD Class Hedged EUR Class

Opening NAV per share 30-Dec-11 USD 849.72 EUR 846.84

Opening Total Assets USD 4,570,242.35 EUR 10,757,889.63

NAV per share 30-Apr-12 USD 998.15 EUR 992.56

14/10/2010 14/10/2010Performance for reporting period 17.47% 17.21%

6.88%

10.58%

Performance since Inception -0.19% -0.74%

-7.66%

7.47%

Closing Total Assets 30-Apr-12 USD 4,641,879.70 EUR 12,185,186.49

USD 20,776,285.13

14-Oct


Total Fund AUM (in USD)

MSCI Emerging Europe Index Performance (USD terms)


MSCI Emerging Europe Index Performance (USD terms)

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Portfolio Strategy The total exposure within the investment portfolio has declined over the period from 99% invested at the beginning of the year to 90% invested at the end of April. The net exposure of the portfolio has varied more dramatically over the year through the use of index futures to hedge the equity exposure of the underlying investments. At some points during the year there has been no hedging in place, whereas at other points the net exposure of the Fund has been reduced to less than 20%. At the end of the period the portfolio maintained a hedge for 20% of the portfolio, effectively reducing net exposure to less than 70%. On a sectoral basis there have been some changes over the course of the YTD. Exposure to energy, although still the largest sector, has reduced to 28% from 34% while exposure to financials has become the second largest sector, increasing from 15% to 22%. A further notable increase has been within the allocation to Telecoms, which has increased to 9.4% from 5.9% over the year to date. On a geographical basis the largest allocation continues to be Russia, although this has decreased from 34.9% to 30.9% over the period Turkey, the second largest allocation, increased more significantly from 15% to 21.5% over the period. This was largely at the expense of Kazakhstan, which reduced from 5.5% at the end of March (but 2.9% at the end of 2011) to zero at the end of April, and also Poland, which has decreased from 8.7% to 6.8% over the course of the year to date. Currency Hedging Investor Level During the period the following currency hedges were placed on behalf of the Hedged EUR Class within the Fund: January

February

Date

Actual AUM

USD

Projected AUM

USD

Forw ard Hedge

USD

Adjustm ent

m ade

Actual Hedge

Ratio

Projected

Ratio

01/02/2012 15,773,052.89 15,404,425.38 15,501,585.21 Initial 98.28% 100.63%

08/02/2012 16,291,805.29 15,756,051.38 15,501,585.21 No 95.15% 98.38%

15/02/2012 15,948,096.10 16,139,787.76 15,924,546.12 Yes 99.85% 98.67%

22/02/2012 16,137,620.29 15,814,347.88 15,924,546.12 No 98.68% 100.70%

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

04/01/2012 14,245,822.90 13,793,723.21 13,577,728.67 Initial 95.31% 98.43%

11/01/2012 13,983,876.56 14,060,454.23 13,577,728.67 Yes 97.10% 96.57%

18/01/2012 14,729,233.14 13,913,528.07 14,074,433.87 Yes 95.55% 101.16%

25/01/2012 15,263,079.14 14,518,916.52 14,931,532.41 Yes 97.83% 102.84%

31/01/2012 15,404,425.38 15,080,597.06 15,256,362.83 Yes 99.04% 101.17%

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March

April

All hedging ratios have met with UCITS requirements for the maximum exposure not to exceed 105% of NAV. Please note that the hedge ratio cannot be relied upon unduly as the related AUM is calculated as at the previous valuation point. This does not include the actual figures for the profit or loss generated on the mark to market of the existing hedge or any investor dealing at that valuation point, both of which will correspondingly increase or reduce the opening AUM figures for that particular class. Thus, there will be significant disparity during periods of high volatility in FX performance that generates increased profits or losses for each class as well as when large volumes of shareholder activity are experienced. It might be re-iterated that opening hedges are based on the latest available AUM for the Hedged EUR Class, adjusted for shareholder transactions as well as profits and losses generated by the implementation of the hedging programme for that class. Please further note that the projected figures noted above are based on the AUM for the Hedged EUR Class taking into consideration the shareholder activity anticipated for the next dealing day, thus providing a more accurate representation of the hedge in place for any particular week. Portfolio Level The Fund is also actively hedging the currency exposure of the underlying assets of the Fund with the Fund base currency of USD through the use of forward transactions in place with the Custodian. The Investment Manager monitors the performance of this hedge on a daily basis in line with market movements and will actively look to adjust a currency hedge where the overall exposure to that currency within the Fund exceeds 2%. At the end of the period the largest currency exposure within the Fund (excluding exposure generated by shareholder activity and therefore hedged separately) was approximately 0.2% in relation to Euro. Full details of the currency exposure within the Fund are included within the portfolio appended at the end of this report.

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

29/02/2012 16,446,943.31 16,281,379.83 16,822,339.20 Initial 102.28% 103.32%

07/03/2012 16,047,498.24 16,627,397.99 15,784,762.48 Yes 98.36% 94.93%

14/03/2012 16,521,182.50 16,101,226.51 15,784,762.48 No 95.54% 98.03%

21/03/2012 16,505,987.54 16,540,185.46 17,125,413.23 Yes 103.75% 103.54%

28/03/2012 16,489,527.46 16,564,571.89 16,886,367.92 Initial 102.41% 101.94%

EUR Class Hedge

Date

Actual AUM

USD

Projected AUM

USD

Forward Hedge

USD

Adjustment

made

Actual Hedge

Ratio

Projected

Ratio

28/03/2012 16,489,527.46 16,564,571.89 16,886,367.92 Initial 102.41% 101.94%

30/03/2012 16,469,514.77 16,548,555.06 16,886,367.92 No 102.53% 102.04%

04/04/2012 16,209,278.72 16,255,918.69 15,816,051.07 Yes 97.57% 97.29%

11/04/2012 15,881,166.37 15,998,916.03 15,816,051.07 No 99.59% 98.86%

18/04/2012 15,928,191.44 15,846,179.45 15,816,051.07 No 99.30% 99.81%

25/04/2012 16,004,850.03 15,926,205.67 15,816,051.07 No 98.82% 99.31%

EUR Class Hedge

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Portfolio Performance

Source: Morningstar Direct


Performance


Portfolio Beta

Tracking Error


SRRI 7 7

MSCI Emerging

Europe Index

USD Class

-4.38%

0.56

0.00%

-0.11

Weekly points since

inception

22.97%

Weekly points since

inception

-0.29%

15.09%

80

90

100

110

120

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Cumulative Performance (rebased) (%)

Weekly Performance (%)

Strategic Emerging Europe Fund vs MSCI Emerging Europe Index

Weekly Fund Performance Weekly Index Performance Cumulative Fund Performance Cumulative Index Performance

of 52



Trading Volumes and Commission Breakdown Year to date there have been 101 trades with an average value of USD 0.2 million per trade and a PTR equating to 93.427%, annualised to 623.58. The use of brokers throughout the period and the year is as follows:

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The full list of brokers for the Fund is included below:

Broker Name

MTD Total

Commissions Paid

% of MTD

Volume

YTD Total

Commissions Paid

% of YTD

Volume

Wood & Co 302.02 2.35% 11,992.19 26.28%

DB - 0.00% 5,384.97 11.80%

HSBC 3,751.50 29.17% 3,751.50 8.22%

Citi 2,927.72 22.77% 2,927.72 6.42%

Credit Suisse 235.60 1.83% 2,200.05 4.82%

Troika Dialog - 0.00% 2,182.07 4.78%

Otkritie 495.00 3.85% 2,174.37 4.76%

Garanti Securities - 0.00% 2,139.16 4.69%

Bank of America Merrill Lynch - 0.00% 2,075.76 4.55%

Unicredit 1,035.82 8.05% 1,523.67 3.34%

Renaissance Capital 1,482.65 11.53% 1,482.65 3.25%

JP Morgan (ECS) 493.02 3.83% 1,419.60 3.11%

OYAK YATIRIM - 0.00% 1,270.51 2.78%

VTB Capital 1,247.03 9.70% 1,247.03 2.73%

Goldman Sachs - 0.00% 1,068.00 2.34%

BCG Partners - 0.00% 893.91 1.96%

YF Securities - 0.00% 812.25 1.78%

Ekpres Invest 433.70 3.37% 433.70 0.95%

JP Morgan 179.49 1.40% 265.89 0.58%

Alfa Capital Markets 196.88 1.53% 196.88 0.43%

HSBC 79.80 0.62% 192.90 0.42%

ING - 0.00% - 0.00%


Broker Name Status

AK Investments Open

Alfa Capital Markets Open

ATA Investment Open

Bank of America Merrill Lynch Open

BGC Partners Open

BNP Paribas Open

CF Global Open

Cheuvreux Open

Citibank Open

Credit Suisse Open

Deutsche Bank Open

Ekpres Invest Open

Erste Securities Istanbul Open

Garanti Securities Open

Goldman Sachs Open

HSBC Open

ING Bank Open

IS Investment Open

JP Morgan Open

JP Morgan (Equity Cash Settlement) Open

List of brokers for Strategic Emerging Europe Fund

of 52



Knight Capital Open

Louis Capital Markets Open

Meksa Investment Open

Otkritie Securities Limited Open

Oyak Yatirim Open

Renaissance Capital Open

Royal Bank of Scotland Open

Sardis Securities Inc Open

Standard Unlu Open

Troika Dialog Open

Unicredit Open

Uralsib Open

VTB Capital Open

Wood & Co Open

YF Securities Open



Direct Fixed Income Investment 14.72%

Indirect Equity Investment (ETF and Derivatives etc.) 0.00%

Indirect cash holdings / money market funds 0.00%



Currency Hedging for EUR class 0.24%

Currency Hedging at portfolio level -0.94%




Portfolio Construction Strategic Emerging Europe Fund

of 52

Investment Portfolio Geographical Allocation

Investment Portfolio The portfolio of the Fund is represented predominantly through holdings in equity securities and cash, although it is intended that derivative positions such as futures and options as well as synthetic short positions will be used within the portfolio both for efficient portfolio management and hedging purposes. During the period the fund traded in the following futures;

− WIG20 Index ( March and June 12)

− Euro STOXX 50 Index (March and June 12)

− FTSE/JSE Top 40 Index (March and June 12) At the end of the reporting period the fund held the following short positions;

− E-mini S&P 500 Index (June 12) The Fund also has the flexibility to invest in corporate bonds, however currently only holds five assets of this type. ETFs will be utilised for efficient portfolio management to increase the exposure within the portfolio without unduly increasing stock specific risk or to actively hedge market exposure but current exposure to these types of instruments is nil. Full details of the investment portfolio are below.

2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Strategic Emerging Europe Fund Investment Portfolio 30/04/2012 27/04/2012

Rank Bloomberg Name Underlying Crncy SECURITY_TYP2 SECURITY_TYPE Country Region Exchange GICS_sectorGICS_Industry Multiplier Portfolio

Market Cap (in

USD)

Current

Shareholding

Current Book

Cost (local)

Current Book

Cost (base) Current Price FX rate

Current Market

Value (local)

Current Market

Value (base) Previous Price

Previous Market

Value (local)

Previous Market

Value (base) Issuer Exposure

Current % of

Portfolio

Current % of

Assets

% Price

Change Attribution

% of

shares in

issue

35 AKFEN TI EQUITY AKFEN HOLDING AS AKFEN TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Industrials Industrial Conglomerates 1 L 817.81 29,803.00 358,218.79 230,492.03 9.88 1.76 294,453.64 167,560.26 9.98 297,433.94 169,256.21 0.80% 0.90% 0.80% -1.00% -0.01% 0.02%

33 ALARK TI EQUITY ALARKO HOLDING ALARK TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Industrials Industrial Conglomerates 1 L 551.74 90,000.00 323,927.16 228,673.30 4.34 1.76 390,600.00 222,272.80 4.38 394,200.00 224,321.40 1.06% 1.19% 1.06% -0.91% -0.01% 0.04%

18 ARCLK TI EQUITY ARCELIK AS ARCLK TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Consumer DiscretionaryHousehold Durables 1 L 5,203.11 98,918.00 673,869.31 364,490.11 7.70 1.76 761,668.60 433,431.17 7.62 753,755.16 428,927.99 2.06% 2.32% 2.06% 1.05% 0.02% 0.01%

24 EBS AV EQUITY ERSTE GROUP BANK AG EBS AV EQUITY EUR Common Stock Common Stock Central Europe EU 0 Financials Commercial Banks 1 L 9,079.75 14,000.00 185,551.16 235,232.20 17.40 0.76 243,530.00 322,385.49 17.13 239,820.00 317,474.19 1.54% 1.73% 1.54% 1.55% 0.03% 0.00%

7 XS0614325586 CORP FERREXPO FINANCE PLC XS0614325586 CORPUSD Fixed Income EURO-DOLLAR Ukraine EM Europe 0 Other Other 1 L - 800,000.00 783,475.00 783,475.00 93.85 1.00 754,976.00 754,976.00 0.94 754,331.00 754,331.00 3.59% 4.05% 3.59% 0.02% 0.00% 0.16%

10 FXPO LN EQUITY FERREXPO PLC FXPO LN EQUITY GBp Common Stock Common Stock Switzerland EU 0 Materials Metals & Mining 1 L 1,719.96 139,469.00 416,659.79 649,221.01 2.92 0.62 407,528.42 661,572.11 2.92 407,667.89 661,798.52 3.15% 3.55% 3.15% -0.03% 0.00% 0.02%

1 OGZD LI EQUITY GAZPROM OAO-SPON ADR OGZD LI EQUITY USD Depositary Receipt ADR Russia EM Europe 0 Energy Oil, Gas & Consumable Fuels 1 L 136,596.17 137,000.00 1,538,410.06 1,538,410.06 11.54 1.00 1,580,980.00 1,580,980.00 11.45 1,568,650.00 1,568,650.00 7.53% 8.47% 7.53% 0.79% 0.07% 0.00%

9 GLTR LI EQUITY GLOBALTRA-SPONS GDR REG S GLTR LI EQUITY USD Depositary Receipt GDR Russia EM Europe 0 Industrials Road & Rail 1 L 3,096.29 37,340.00 650,690.58 650,690.58 19.58 1.00 731,117.20 731,117.20 18.95 707,593.00 707,593.00 3.48% 3.92% 3.48% 3.32% 0.13% 0.02%

19 ISGYO TI EQUITY IS GAYRIMENKUL YATIRIM ORTAK ISGYO TI EQUITY TRY REIT REIT Turkey EM Europe 0 Financials Real Estate Investment Trusts 1 L 399.36 600,000.00 727,306.80 442,777.79 1.17 1.76 702,000.00 399,476.47 1.17 702,000.00 399,476.47 1.90% 2.14% 1.90% 0.00% 0.00% 0.10%

11 KER PW EQUITY KERNEL HOLDING SA KER PW EQUITY PLN Common Stock Common Stock Ukraine EM Europe 0 Consumer StaplesFood Products 1 L 1,754.59 28,459.00 1,740,339.00 584,271.06 69.50 3.15 1,977,900.50 627,287.59 68.90 1,960,825.10 621,872.16 2.99% 3.36% 2.99% 0.87% 0.03% 0.04%

25 KGH PW EQUITY KGHM POLSKA MIEDZ SA KGH PW EQUITY PLN Common Stock Common Stock Poland EU 0 Materials Metals & Mining 1 L 8,795.11 7,000.00 910,122.61 323,059.28 138.80 3.15 971,600.00 308,141.19 137.70 963,900.00 305,699.15 1.47% 1.65% 1.47% 0.80% 0.01% 0.00%

14 KOMB CP EQUITY KOMERCNI BANKA AS KOMB CP EQUITY CZK Common Stock Common Stock Czech EU 0 Financials Commercial Banks 1 L 131,704.14 3,000.00 10,534,488.52 566,139.03 3,465.00 18.84 10,395,000.00 551,818.96 3,460.00 10,380,000.00 551,022.68 2.63% 2.96% 2.63% 0.14% 0.00% 0.01%

32 MMK LI EQUITY MAGNITOGORS-SPON GDR REGS MMK LI EQUITY USD Depositary Receipt GDR Russia EM Europe 0 Materials Metals & Mining 1 L 4,538.50 42,340.00 229,659.41 229,659.41 5.28 1.00 223,555.20 223,555.20 5.32 225,248.80 225,248.80 1.06% 1.20% 1.06% -0.75% -0.01% 0.00%

4 XS0247761827 CORP MAGNOLIA FINANCE LTD XS0247761827 CORPEUR Fixed Income EURO NON-DOLLARHungary EU 0 Other Other 1 L - 1,000,000.00 622,065.22 850,862.02 71.04 0.76 714,896.52 946,381.42 70.77 707,751.30 936,922.56 4.51% 5.07% 4.51% 0.39% 0.02% 0.16%

20 MGROS TI EQUITY MIGROS TICARET A.S MGROS TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Consumer StaplesFood & Staples Retailing 1 L 3,088.82 40,000.00 607,497.88 330,737.09 17.35 1.76 694,000.00 394,924.03 17.30 692,000.00 393,785.92 1.88% 2.12% 1.88% 0.29% 0.01% 0.02%

16 XS0559140875 CORP MRIYA AGRO HOLDING PLC XS0559140875 CORPUSD Fixed Income EURO-DOLLAR Ukraine EM Europe 0 Consumer StaplesFood Products 1 L - 500,000.00 511,250.00 511,250.00 91.00 1.00 459,714.58 459,714.58 91.00 459,258.33 459,258.33 2.19% 2.46% 2.19% 0.00% 0.00% 0.20%

40 MTNAC111 TI EQUITY MTNA -CW12 EREGLI DEMIR MTNAC111 TI EQUITYTRY Warrant Equity WRT Turkey EM Europe 0 Materials Metals & Mining 1 L - 50,000.00 - - - 1.76 - - 0.00 5.00 2.85 0.00% 0.00% 0.00% -100.00% 0.00% Warrant

39 MTNAC113 TI EQUITY MTNA -CW12 EREGLI DEMIR MTNAC113 TI EQUITYTRY Warrant Equity WRT Turkey EM Europe 0 Materials Metals & Mining 1 L - 50,000.00 - - 0.00 1.76 245.00 139.42 0.01 260.00 147.95 0.00% 0.00% 0.00% -5.77% 0.00% Warrant

38 MTNAC115 TI EQUITY MTNA -CW12 EREGLI DEMIR MTNAC115 TI EQUITYTRY Warrant Equity WRT Turkey EM Europe 0 Materials Metals & Mining 1 L - 50,000.00 - - 0.01 1.76 570.00 324.36 0.01 550.00 312.98 0.00% 0.00% 0.00% 3.64% 0.00% Warrant

8 OMV AV EQUITY OMV AG OMV AV EQUITY EUR Common Stock Common Stock Central Europe EU 0 Energy Oil, Gas & Consumable Fuels 1 L 11,072.67 22,000.00 585,964.72 822,622.87 25.58 0.76 562,650.00 744,837.17 25.18 553,960.00 733,333.33 3.55% 3.99% 3.55% 1.57% 0.06% 0.01%

21 OTP HB EQUITY OTP BANK PLC OTP HB EQUITY HUF Common Stock Common Stock Hungary EU 0 Financials Commercial Banks 1 L 4,924.75 22,000.00 74,632,201.22 333,209.22 3,810.00 216.60 83,820,000.00 386,980.61 3,810.00 83,820,000.00 386,980.61 1.84% 2.07% 1.84% 0.00% 0.00% 0.01%

3 PZU PW EQUITY POWSZECHNY ZAKLAD UBEZPIECZE PZU PW EQUITY PLN Common Stock Common Stock Poland EU 0 Financials Insurance 1 L 8,721.96 9,500.00 3,486,500.00 1,269,618.73 318.80 3.15 3,028,600.00 960,515.05 324.50 3,082,750.00 977,688.62 4.57% 5.15% 4.57% -1.76% -0.09% 0.01%

26 XS0583616239 CORP REPUBLIC OF BELARUS XS0583616239 CORPUSD Fixed Income EURO-DOLLAR Other EM Europe 0 Other Other 1 L - 300,000.00 300,000.00 300,000.00 93.29 1.00 286,946.42 286,946.42 93.22 286,533.67 286,533.67 1.37% 1.54% 1.37% 0.07% 0.00% 0.04%

27 ROSN LI EQUITY ROSNEFT OJSC-REG S GDR ROSN LI EQUITY USD Depositary Receipt GDR Russia EM Europe 0 Energy Oil, Gas & Consumable Fuels 1 L 75,618.00 40,000.00 284,473.32 284,473.32 7.14 1.00 285,400.00 285,400.00 7.12 284,800.00 284,800.00 1.36% 1.53% 1.36% 0.21% 0.00% 0.00%

23 SSA LI EQUITY SISTEMA JSFC-REG S SPONS GDR SSA LI EQUITY USD Depositary Receipt GDR Russia EM Europe 0 Telecommunication ServicesWireless Telecommunication Ser 1 L 9,167.50 17,500.00 407,351.11 407,351.11 19.00 1.00 332,500.00 332,500.00 19.43 340,025.00 340,025.00 1.58% 1.78% 1.58% -2.21% -0.04% 0.00%

6 SPTT CP EQUITY TELEFONICA O2 CZECH REPUBLIC SPTT CP EQUITY CZK Common Stock Common Stock Czech EU 0 Telecommunication ServicesDiversified Telecommunication 1 L 6,481.37 40,000.00 15,718,492.27 846,806.31 380.00 18.84 15,200,000.00 806,892.56 379.00 15,160,000.00 804,769.16 3.84% 4.32% 3.84% 0.26% 0.01% 0.01%

31 TTRAK TI EQUITY TURK TRAKTOR VE ZIRAAT MAKIN TTRAK TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Industrials Machinery 1 L 935.13 15,000.00 282,519.15 199,441.70 30.80 1.76 462,000.00 262,903.32 30.50 457,500.00 260,342.57 1.25% 1.41% 1.25% 0.98% 0.01% 0.03%

17 TSKB TI EQUITY TURKIYE SINAI KALKINMA BANK TSKB TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Financials Commercial Banks 1 L 1,824.00 337,000.00 658,326.61 368,537.81 2.28 1.76 768,360.00 437,238.95 2.29 771,730.00 439,156.66 2.08% 2.34% 2.08% -0.44% -0.01% 0.04%

5 VAKBN TI EQUITY TURKIYE VAKIFLAR BANKASI T-D VAKBN TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Financials Commercial Banks 1 L 4,480.03 500,000.00 1,608,961.50 913,145.01 3.15 1.76 1,575,000.00 896,261.31 3.19 1,595,000.00 907,642.41 4.27% 4.80% 4.27% -1.25% -0.06% 0.02%

22 XS0594390816 CORP UKRAINE GOVERNMENT XS0594390816 CORPUSD Fixed Income EURO-DOLLAR Ukraine EM Europe 0 Other Other 1 L - 400,000.00 400,000.00 400,000.00 0.9075 1.00 368,918.33 368,918.33 0.8975 364,653.33 364,653.33 1.76% 1.98% 1.76% 1.11% 0.02% 0.03%

37 VTBR LI EQUITY VTB BANK OJSC-GDR-REG S VTBR LI EQUITY USD Depositary Receipt GDR Russia EM Europe 0 Financials Commercial Banks 1 L 21,920.06 30,000.00 131,451.38 131,451.38 4.19 1.00 125,730.00 125,730.00 4.30 129,000.00 129,000.00 0.60% 0.67% 0.60% -2.53% -0.02% 0.00%

15 PPC GA EQUITY PUBLIC POWER CORP PPC GA EQUITY EUR Common Stock Common Stock Other EM Europe 0 Utilities Electric Utilities 1 L 589.28 149,000.00 483,574.04 638,712.05 2.54 0.76 378,460.00 501,006.09 2.56 381,440.00 504,951.02 2.39% 2.69% 2.39% -0.78% -0.02% 0.06%

36 ANELE TI EQUITY ANEL ELEKTRIK PROJE TAAHHUT ANELE TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Industrials Construction & Engineering 1 L 246.40 130,000.00 289,566.70 161,615.62 2.24 1.76 291,200.00 165,708.76 2.24 291,200.00 165,708.76 0.79% 0.89% 0.79% 0.00% 0.00% 0.12%

30 XS0482875811 Corp PETROPAVLOVSK 2010 LTD XS0482875811 Corp USD Fixed Income EURO-DOLLAR Russia EM Europe 0 Other Other 1 L - 300,000.00 267,016.67 267,016.67 0.8840 1.00 267,636.33 267,636.33 0.8864 268,238.33 268,238.33 1.27% 1.43% 1.27% -0.26% 0.00% 0.08%

34 HGM LN EQUITY HIGHLAND GOLD MINING LTD HGM LN EQUITY GBp Common Stock Common Stock Other EM Europe 0 Materials Metals & Mining 1 L 403.24 100,000.00 108,501.18 175,596.66 1.2400 0.62 124,000.00 201,298.70 1.2500 125,000.00 202,922.08 0.96% 1.08% 0.96% -0.80% -0.01% 0.03%

12 TTKOM TI EQUITY TURK TELEKOMUNIKASYON AS TTKOM TI EQUITY TRY Common Stock Common Stock Turkey EM Europe 0 Telecommunication ServicesDiversified Telecommunication 1 L 26,950.00 140,000.00 1,100,452.21 609,803.95 7.70 1.76 1,078,000.00 613,441.07 7.86 1,100,400.00 626,187.90 2.92% 3.29% 2.92% -2.04% -0.07% 0.00%

28 FEES RX EQUITY FEDERAL GRID CO UNIFIED-T+0 FEES RX EQUITY RUB Common Stock Common Stock Russia EM Europe 1 Utilities Electric Utilities 1 L 336,895.53 30,000,000.00 375,750.00 375,750.00 0.27 29.38 8,046,000.00 273,841.13 0.27 8,046,000.00 273,841.13 1.30% 1.47% 1.30% 0.00% 0.00% 0.00%

29 RASP RX EQUITY RASPADSKAYA RASP RX EQUITY RUB Common Stock Common Stock Russia EM Europe 1 Materials Metals & Mining 1 L 76,190.45 80,741.00 236,117.37 236,117.37 97.58 29.38 7,878,706.78 268,147.40 97.58 7,878,706.78 268,147.40 1.28% 1.44% 1.28% 0.00% 0.00% 0.01%

2 SNGSP RX EQUITY SURGUTNEFTEGAS-PFD SNGSP RX EQUITY RUB Preference Preference Russia EM Europe 1 Energy Oil, Gas & Consumable Fuels 1 L 150,666.48 1,700,000.00 899,551.18 899,551.18 19.56 29.38 33,255,400.00 1,131,829.01 19.56 33,255,400.00 1,131,829.01 5.39% 6.07% 5.39% 0.00% 0.00% 0.02%

13 TRNFP RX EQUITY AK TRANSNEFT OAO-PREF TRNFP RX EQUITY RUB Preference Preference Russia EM Europe 1 Energy Oil, Gas & Consumable Fuels 1 L 85,210.26 300.00 571,220.89 571,220.89 54,802.00 29.38 16,440,600.00 559,546.66 54,802.00 16,440,600.00 559,546.66 2.66% 3.00% 2.66% 0.00% 0.00% 0.02%

Total Long Portfolio 18,731,481.79 18,663,637.12 18,642,399.82 100.03% 88.87% 0.09%

31 FEES RU EQUITY FEDERAL GRID CO UNIFIED-CLS FEES RU EQUITY USD Common Stock Common Stock Russia EM Europe 1 Utilities Electric Utilities 1 L 12,572.04 30,000,000.00 375,750.00 375,750.00 0.01 1.00 273,943.23 273,943.23 0.01 272,646.33 272,646.33 1.30% 1.47% 1.30% 0.48% 0.01% 0.00%

33 RASP RU EQUITY RASPADSKAYA RASP RU EQUITY USD Common Stock Common Stock Russia EM Europe 1 Materials Metals & Mining 1 L 2,693.76 80,741.00 236,117.37 236,117.37 3.32 1.00 268,147.40 268,147.40 3.28 264,429.27 264,429.27 1.28% 1.44% 1.28% 1.41% 0.02% 0.01%

3 SNGSP RU EQUITY SURGUTNEFTEGAS-PFD-CLS SNGSP RU EQUITY USD Preference Preference Russia EM Europe 1 Energy Oil, Gas & Consumable Fuels 1 L 5,083.32 1,700,000.00 899,551.18 899,551.18 0.67 1.00 1,131,829.01 1,131,829.01 0.66 1,130,039.20 1,130,039.20 5.39% 6.07% 5.39% 0.16% 0.01% 0.02%

15 TRNFP RU EQUITY AK TRANSNEFT OAO-PREF TRNFP RU EQUITY USD Preference Preference Russia EM Europe 1 Energy Oil, Gas & Consumable Fuels 1 L 3,018.01 300.00 571,220.89 571,220.89 1,865.16 1.00 559,546.66 559,546.66 1,913.64 574,092.46 574,092.46 2.66% 3.00% 2.66% -2.53% -0.08% 0.02%

Total Short Portfolio - - - 0.00% 0.00% 0.00%

Total Investments 18,731,481.79 18,663,637.12 18,642,399.82 100.03% 88.87% 0.09%

Rank Bloomberg Name Underlying Crncy SECURITY_TYP2 SECURITY_TYPE Country Region Exchange GICS_sectorGICS_Industry Multiplier Portfolio

Market Cap (in

USD)

Current

Shareholding

Current Book

Cost (local)

Current Book

Cost (base) Current Price FX rate

Current Market

Value (local)

Current Market

Value (base) Previous Price

Previous Market

Value (local)

Current P/L (in

local)

Current P/L (in

base)

Current % of

Portfolio

Current % of

Assets

% Price

Change Attribution

1 VGM2 Index EURO STOXX 50 Jun12 SX5E Index EUR Future Physical index future.Other EM Europe 0 Other Other 10 L 2,220,493.25 - - - - 0.76 - - - - - - 0.00% 0.00% 0.00% 0.00%

4 ESM2 Index S&P500 EMINI FUT Jun12 SPX Index USD Future Physical index future.Other EM Europe 0 Other Other 50 S 12,941,764.00 (60.00) (4,174,125.00) (4,174,125.00) 1,393.50 1.00 (4,180,500.00) (4,180,500.00) 1,398.50 (4,195,500.00) (6,375.00) (6,375.00) -22.41% -19.91% -0.36% 0.08%

1 AIM2 Index FTSE/JSE TOP 40 Jun12 TOP40 Index ZAR Future Physical index future.South Africa Africa 0 Other Other 10 L 704,479.02 - - - - 7.78 - - - - - - 0.00% 0.00% 0.00% 0.00%

1 WIM2 Index WIG20 INDEX FUT Jun12 WIG20 Index PLN Future Physical index future.Poland EU 0 Other Other 10 L 97,166.52 - - - - 3.15 - - - - - - 0.00% 0.00% 0.00% 0.00%

Total Derivatives (4,174,125.00) (4,167,750.00) (6,375.00) (6,375.00) -22.41% -19.91% 0.08%

Total Portfolio 14,557,356.79 18,657,262.12 18,636,024.82 77.63% 68.96% 0.17%

Cash Holdings Current Cash Pending Cash Effective Cash

Effective Cash in

USD

Cash

Exposure

Investment

Exposure (local)

Investment

Exposure (base)

Investment

Exposure

Investment

Exposure ex-

derivatives

(local)

Investment

Exposure ex-

derivatives (base)

Investment

Exposure ex-

derivatives Currency Hedging

Currency

Hedging (base)

Hedge

Exposure

Total

Exposure

USD USD USD USD 128,028.48 1,355,660.74 128,028.48 1,355,660.74 1,483,689.22 1,483,689.22 7.06% 1.00 2,610,229.08 3,470,440.37 16.52% 7,650,940.37 7,650,940.37 36.43% 10,327,249.36 10,327,249.36 49.17% 93.64%

TRY TRY TRY TRY 4,627.46 - 8,131.83 - 8,131.83 4,627.46 0.02% 1.76 7,018,097.24 3,993,681.92 19.02% 7,018,097.24 3,993,681.92 19.02% (7,100,000.00) (4,040,289.08) -19.24% -0.20%

ZAR ZAR ZAR ZAR 0.00 - 0.00 - 0.00 0.00 0.00% 7.78 - - 0.00% - - 0.00% - - 0.00% 0.00%

SEK SEK SEK SEK 7,863.74 - 52,869.50 - 52,869.50 7,863.74 0.04% 6.72 - - 0.00% - - 0.00% - - 0.00% 0.04%

HKD HKD HKD HKD 83.46 - 647.56 - 647.56 83.46 0.00% 7.76 - - 0.00% - - 0.00% - - 0.00% 0.00%

CZK CZK CZK CZK 378.86 - 7,136.78 - 7,136.78 378.86 0.00% 18.84 25,595,000.00 1,358,711.52 6.47% 25,595,000.00 1,358,711.52 6.47% (25,600,000.00) (1,358,976.95) -6.47% 0.00%

HUF HUF HUF HUF 1.90 - 411.55 - 411.55 1.90 0.00% 216.60 83,820,000.00 386,980.61 1.84% 83,820,000.00 386,980.61 1.84% (80,700,000.00) (372,576.18) -1.77% 0.07%

PLN PLN PLN PLN 1,646.40 - 5,191.25 - 5,191.25 1,646.40 0.01% 3.15 5,978,100.50 1,895,943.83 9.03% 5,978,100.50 1,895,943.83 9.03% (6,020,000.00) (1,909,232.18) -9.09% -0.06%

EUR EUR EUR EUR 11,436.71 58,677.52 8,639.29 44,325.00 52,964.29 70,114.23 0.33% 0.76 1,899,536.52 2,514,610.17 11.97% 1,899,536.52 2,514,610.17 11.97% (1,630,000.00) (2,157,797.19) -10.27% 2.03%

GBP GBP GBP GBP 51,272.98 (46,268.15) 31,584.15 (28,501.18) 3,082.98 5,004.83 0.02% 0.62 531,528.42 862,870.81 4.11% 531,528.42 862,870.81 4.11% (430,000.00) (698,051.95) -3.32% 0.81%

RUB RUB RUB RUB - 37,814.99 - 1,111,080.00 1,111,080.00 37,814.99 0.18% 29.38 - - 0.00% - - 0.00% - - 0.00% 0.18%

HSBC Margin (Futures) Closing Balance USD HSBC Margin (Futures) Movement USD HSBC Margin (Futures) Movement USDUSD 331,792.50 - 331,792.50 - 331,792.50 331,792.50 1.58% 1.00 - - 0.00% - - 0.00% 0.00% 1.58%

HSBC Margin (Futures) Closing Balance PLN HSBC Margin (Futures) Movement PLN HSBC Margin (Futures) Movement PLNPLN 40,307.22 - 127,092.70 - 127,092.70 40,307.22 0.19% 3.15 - - 0.00% - - 0.00% 0.00% 0.19%

HSBC Margin (Futures) Closing Balance ZAR HSBC Margin (Futures) Movement ZAR HSBC Margin (Futures) Movement ZARZAR (14,017.89) 14,143.54 (109,022.71) 110,000.00 977.29 125.66 0.00% 7.78 - - 0.00% - - 0.00% 0.00% 0.00%

HSBC Margin (Futures) Closing Balance TRY HSBC Margin (Futures) Movement TRY HSBC Margin (Futures) Movement TRYTRY 117,136.61 - 205,844.16 - 205,844.16 117,136.61 0.56% 1.76 - - 0.00% - - 0.00% 0.00% 0.56%

HSBC Margin (Futures) Closing Balance EUR HSBC Margin (Futures) Movement EUR HSBC Margin (Futures) Movement EUREUR 239,981.00 - 181,281.65 - 181,281.65 239,981.00 1.14% 0.76 - - 0.00% - - 0.00% 0.00% 1.14%

HSBC US$ Liquidity Fund HSBC Liquidity Fund USD USD - - - - - - 0.00% 1.00 - - 0.00% - - 0.00% 0.00% 0.00%

USD lloyds Other Transactions USD USD 1,503,222.38 (1,499,747.98) 1,503,222.38 (1,499,747.98) 3,474.40 3,474.40 0.02% 1.00 - - 0.00% - - 0.00% 0.00% 0.02%

USD RBSI Other Transactions USD USD - - - - - - 0.00% 1.00 - - 0.00% - - 0.00% 0.00% 0.00%

Total Cash 2,482,851.07 2,344,042.47 11.16% 14,483,239.23 68.96% 18,663,739.23 88.87% - (209,674.17) -1.00% 100.00%

Total Assets 21,001,304.60

WTD MTD

Current NAV 20,652,289.09 25/04/2012 21,131,663.02 30/03/2012 -

30 April 2012 Last Confirmed NAV: 20,652,289.09 Current Asset Valuation: 21,001,304.60

Currency Exposure:

Sector Breakdown

(inc. Hedge)

(in USD terms): Long Short

Net Exposure in

USD Long Short

Daily

Contribution

% Asset

NAV

% Latest

Fund NAV Cash Assets

Derivative

Exposure Hedging

Net Allocation (exc.

Derivatives)Consumer Discretionary 433,431.17 - 433,431.17 2.06% 0.00% 0.02% 2.06% 2.10% US USD 8.66% 36.43% -19.91% 49.17% 93.64%

Consumer Staples 1,481,926.20 - 1,481,926.20 7.06% 0.00% 0.04% 7.06% 7.18% EU RUB 0.18% 0.00% 0.00% 0.00% 0.18%

Energy 4,302,592.84 - 4,302,592.84 20.49% 0.00% 0.13% 20.49% 20.83% AU TRY 0.58% 19.02% 0.00% -19.24% -0.20%

Financials 4,080,406.83 - 4,080,406.83 19.43% 0.00% -0.15% 19.43% 19.76% CN ZAR 0.00% 0.00% 0.00% 0.00% 0.00%

Industrials 1,549,562.34 - 1,549,562.34 7.38% 0.00% 0.12% 7.38% 7.50% LN SEK 0.04% 0.00% 0.00% 0.00% 0.04%

Information Technology - - - 0.00% 0.00% 0.00% 0.00% 0.00% HKD 0.00% 0.00% 0.00% 0.00% 0.00%

Materials 1,663,178.38 - 1,663,178.38 7.92% 0.00% -0.01% 7.92% 8.05% CZK 0.00% 6.47% 0.00% -6.47% 0.00%

Telecommunication Services 1,752,833.64 - 1,752,833.64 8.35% 0.00% -0.09% 8.35% 8.49% HUF 0.00% 1.84% 0.00% -1.77% 0.07%

Utilities 774,847.22 - 774,847.22 3.69% 0.00% -0.02% 3.69% 3.75% PLN 0.20% 9.03% 0.00% -9.09% -0.06%

Other 2,624,858.50 (4,180,500.00) (1,555,641.50) 12.50% -19.91% 0.12% -7.41% -7.53% EUR 1.48% 11.97% 0.00% -10.27% 2.03%

Cash 2,344,042.47 2,344,042.47 11.16% 0.00% 0.00% 11.16% 11.35% GBP 0.02% 4.11% 0.00% -3.32% 0.81%Total 21,007,679.60 (4,180,500.00) 16,827,179.60 100.03% -19.91% 0.17% 80.12% 81.48% Total 11.16% 88.87% -19.91% -1.00% 96.51%

Geographical Breakdown

(inc. Hedge)

(in USD terms): Long Short

Net Exposure in

USD Long Short

Daily

Contribution

% Asset

NAV

% Latest

Fund NAV Top Ten Holdings: Holding Daily ContributionBalkans - - - 0.00% 0.00% 0.00% 0.00% 0.00%

Central Europe 1,067,222.66 - 1,067,222.66 5.08% 0.00% 0.09% 5.08% 5.17% 1 GAZPROM OAO-SPON ADR 7.53% 0.07%

Cyprus - - - 0.00% 0.00% 0.00% 0.00% 0.00% 2 SURGUTNEFTEGAS-PFD 5.39% 0.00%

Czech 1,358,711.52 - 1,358,711.52 6.47% 0.00% 0.02% 6.47% 6.58% 3 POWSZECHNY ZAKLAD UBEZPIECZE 4.57% -0.09%

Georgia - - - 0.00% 0.00% 0.00% 0.00% 0.00% 4 MAGNOLIA FINANCE LTD 4.51% 0.02%

Greece - - - 0.00% 0.00% 0.00% 0.00% 0.00% 5 TURKIYE VAKIFLAR BANKASI T-D 4.27% -0.06%

Hungary 1,333,362.03 - 1,333,362.03 6.35% 0.00% 0.02% 6.35% 6.46% 6 TELEFONICA O2 CZECH REPUBLIC 3.84% 0.01%

Kazakhstan - - - 0.00% 0.00% 0.00% 0.00% 0.00% 7 FERREXPO FINANCE PLC 3.59% 0.00%

Other 989,251.21 (4,180,500.00) (3,191,248.79) 4.71% -19.91% 0.05% -15.20% -15.45% 8 OMV AG 3.55% 0.06%

Poland 1,268,656.24 - 1,268,656.24 6.04% 0.00% -0.08% 6.04% 6.14% 9 GLOBALTRA-SPONS GDR REG S 3.48% 0.13%

Russia 5,780,282.93 - 5,780,282.93 27.52% 0.00% 0.13% 27.52% 27.99% 10 FERREXPO PLC 3.15% 0.00%

South Africa - - - 0.00% 0.00% 0.00% 0.00% 0.00%

Switzerland 661,572.11 - 661,572.11 3.15% 0.00% 0.00% 3.15% 3.20% Total Top Ten Holdings 43.88% 0.14%Turkey 3,993,681.92 - 3,993,681.92 19.02% 0.00% -0.11% 19.02% 19.34%

Ukraine 2,210,896.51 - 2,210,896.51 10.53% 0.00% 0.05% 10.53% 10.71%

Cash 2,344,042.47 - 2,344,042.47 11.16% 0.00% 0.00% 11.16% 11.35%Total 21,007,679.60 (4,180,500.00) 16,827,179.60 100.03% -19.91% 0.17% 80.12% 81.48%

Index Comparison 41026 41024 30/03/2012 30/12/2011 14/10/2010

Daily

Performance

Last Weekly

Valuation Point to

Date Month to Date Year to Date Inception to DateSEEF PortfolioStrategic Emerging Europe Fund 0.17% 0.76% 0.45% 17.87% 1.29%

MXMU indexMSCI EM Europe Index -0.19% 1.30% -3.20% 15.48% -11.88%

MXME indexMSCI EM Eastern Europe Index -0.06% 1.40% -3.11% 14.46% -6.97%

RTSI$ indexRussian RTS Index $ -0.24% -0.24% -1.95% -2.17% -22.10%

MICEX indexMICEX Index 0.26% 0.26% -2.45% -5.84% -18.48%

KZKAK indexKazakhstan KASE Stock Index -1.34% -1.21% -3.17% 5.10% -31.78%

WIG indexWSE WIG Index 0.06% 2.16% -2.41% 7.12% -12.60%XU100 indexISE National 100 Index -0.97% 0.12% -3.86% 17.06% -13.31%

0

21 Top Ten Performing Stocks: Holding Daily Contribution9

1 GLOBALTRA-SPONS GDR REG S 3.48% 0.13%

2 GAZPROM OAO-SPON ADR 7.53% 0.07%

3 OMV AG 3.55% 0.06%

4 KERNEL HOLDING SA 2.99% 0.03%

5 ERSTE GROUP BANK AG 1.54% 0.03%

6 ARCELIK AS 2.06% 0.02%

7 UKRAINE GOVERNMENT 1.76% 0.02%

8 RASPADSKAYA 1.28% 0.02%

9 MAGNOLIA FINANCE LTD 4.51% 0.02%

10 TURK TRAKTOR VE ZIRAAT MAKIN 1.25% 0.01%

Total Top Ten Performing Stocks 29.93% 0.42%

#N/A

STRATEGIC EMERGING EUROPE FUND DAILY PORTFOLIO SUMMARY

-1.60%

-1.40%

-1.20%

-1.00%

-0.80%

-0.60%

-0.40%

-0.20%

0.00%

0.20%

0.40%

SEEF Portfolio MXMU index MXME index RTSI$ index MICEX index KZKAK index WIG index XU100 index

Daily Performance Comparison vs Indices

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Strategic Europe Value Fund (the “Fund”)

Registration The Fund is registered for distribution in France, Switzerland, and the UK. The Fund is also permitted to be distributed in the Netherlands and Italy for sale to professional and institutional investors. Following the implementation of UCITS IV and the approval of the Key Investor Information Documents (“KIID”) by the Central Bank of Ireland any further registrations will be considered on a case by case basis. Documentation Update The updated general prospectus to E.I. Sturdza Funds plc that will be issued in due course, subject to the wording in respect of the hedging policy being approved as mentioned earlier in the report. Brokers No additional broker accounts were established during the period. Custody Accounts There were no new custody accounts opened during the period Risk Management Guidelines and Investment Restriction Breaches During the period no breaches of the UCITS investment restrictions have occurred and all risk management guidelines as outlined in the risk management process for the Fund have been complied with. Errors & Compliance There were no pricing errors identified during the period. Stale Pricing During the period negative rumours and revelations regarding the results of Huabao International Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchange from 24 April onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at which time this position was also suspended from trading. During the two days in which the US stock traded on 25 and 26 April the price of the stock declined by over 30% prior to the stock being suspended. As a result, and based upon the suspension of the stock from trading in the primary market and the process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at the recommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary exchange up until 26 April 2012. The impact of this discount was applied over two valuation points to limit the impact upon the NAV calculation as there was no shareholder activity over the period. At the time of writing

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the position continued to be suspended from trading awaiting a response from the company as to the accuracy of the allegations. Complaints There have been no complaints identified during the period. Marketing and Investor Information At the end of the reporting period, the following shareholders were reflected on the share register for the Fund as detailed below:


The valuations are agreed to be received by 14:00 on the day following the valuation point. Of the eight four valuation points within the period, 96% were produced in line with the agreed timescales with only minor adjustments having to be made to the accruals. Investor Services:

Notifications of dealing received for each valuation point are due to be received by 12 pm on the business date following each cut-off point for receipt of trades to be received




ISLANDS 16,683.192 4.20%


AURORA NOMINEES LIMITED A/C 2157400 UNITED KINGDOM 8,724.023 2.20%

KREDIETBANK S.A. LUXEMBOURGEOISE FOR

CUSTOMERS ACCOUNTLUXEMBOURG 3,611.038 0.91%



FS/BOSLTD/SHARESBELGIUM 1,319.887 0.33%

SUFFOLK LIFE ANNUITIES LIMITD RE 712949 UNITED KINGDOM 1,068.420 0.27%

AZURE TRUST COMPANY LIMITED AS TRUSTEE OF THE

9583211 INTERNATIONAL PENSION TRUST

JERSEY CHANNEL

ISLANDS 989.585 0.25%

HARGREAVES LANSDOWN NOMINESS LIMITED A/C

61286022UNITED KINGDOM 903.461 0.23%

JAN WILLEM GOUDRIAAN KENYA 387.784 0.10%


FUNDSETTLE EOC NOMINEES LTD FOR FS/HSBC

PRIVATE BANKING NOMINEES 1 (JERSEY) LIMITED

CASH

BELGIUM 328.299 0.08%

DB RETIREMENT INVESTMENT SCHEME A/C 037 UNITED KINGDOM 296.913 0.07%


A/C 2035928

GUERNSEY CHANNEL

ISLANDS 295.857 0.07%



UBS AG ZURICH SWITZERLAND 97.739 0.02%


of 52

by HSBC as Administrator. All dealing reports were produced and provided within the given timescales. Custody: There have been no particular areas of issue during the period and all trades and corporate actions have been actioned as appropriate, free from error. Investor Cashflows: During the period, the following net cash flows were received into and out of the Fund as follows:

Fund Performance

The Fund has performed strongly on both a relative and absolute basis over the period. Year to date the Fund has returned 7.59% against a performance of 6.05% for the benchmark index, outperforming by 1.54%. The Fund now has a reported performance of 5.98% since inception, which is an outperformance of 4.82% when compared to the benchmark index performance of 1.16%. Portfolio Strategy The net and gross exposures of the investment portfolio have remained broadly consistent over the period. At the end of last year the portfolio was 99% invested with

EUR Class

Jan-12 EUR 628,500.00

Feb-12 EUR 813,000.00

Mar-12 EUR 1,227,000.00

Apr-12 EUR 5,112,368.45

Total for period (in EUR) EUR 7,780,868.45

EUR Class

Opening NAV per share 30-Dec-11 USD 98.50

Opening Total Assets USD 98.70

NAV per share 30-Apr-12 USD 105.98

Period Performance 7.59%

6.05%

1.54%

Performance since Inception 5.98%

1.16%

4.82%

Closing Total Assets 30-Apr-12 USD 42,113,211.20

USD 55,724,201.06

29-Oct

Relative Performance (EUR terms)

Total Fund AUM (in USD)

MSCI Europe Total Return Index Performance (EUR terms)

Relative Performance (EUR terms)

MSCI Europe Total Return Index Performance (EUR terms)

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hedging levels of 3%, whereas at the end of April the portfolio was 97% invested with hedging levels in the region of 2.5%. The largest three sectors at the end of the period were consumer staples (30.8%), health care (23.5% and consumer discretionary (15.6%). There has been no change in the largest allocation to these three sectors but the exposure to each sector has changed over the period: Consumer Staples down to 30.8% from 40.8%; Health Care up to 23.5% from 15.7%; and Consumer Discretionary up to 15.6% from 10.6%. Smaller changes have occurred in the Telecoms (down to 3.1% from 3.9%) and Materials sectors (down to 2.5% from 5.9%). Relative to benchmark index the investment portfolio is overweight consumer staples (30.8% vs 14.4%), health care (23.5% vs 11.9%) and consumer discretionary (15.6% vs 8.9%). Conversely, the portfolio is significantly underweight energy (zero vs 11.9%), financials (3% vs 18.2%) and materials (2.5% vs 10%) On a geographical basis the investment portfolio has maintained its largest country weightings during the year, the largest exposures being to United Kingdom (22.7%), Germany (19.6%) and France (12.2%). Portfolio Hedging There is no currency hedging required for the Strategic Europe Value Fund at the investor level due to the fact that all investors are denominated in EUR. At times during the year the Fund has actively hedged the currency exposure of the underlying assets of the Fund with the Fund base currency of EUR through the use of forward transactions in place with the Custodian. However, there are no active forward currency positions in place and have not been for several months. The Investment Adviser continues their negative outlook on the EUR currency and we continue to maintain available cash balances in USD currency, a change to the usual cash management policy of the Fund. The Fund continues to hold a number of other derivative positions within the portfolio, at the end of the period the fund held two long put positions. These positions held on behalf of the portfolio do not represent portfolio hedging but are designed to provide additional investment exposure to the Fund. Portfolio Performance

Performance


Portfolio Beta

Tracking Error


SRRI 6 6

-0.15

MSCI Europe Total Return

Index (EUR terms)

Fund (EUR Class)

0.69

0.01%

5.98% 1.16%

Weekly Points Since Inception Weekly Points Since Inception

10.07% 13.47%

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Peer Group: Performance Comparison The bar chart below compares the performance for the fund to the benchmark index as well as the peer group. Please note that the index and peer group performance is based on calendar months and may differ from the statistics reported earlier.

-

20

40

60

80

100

120

-15%

-10%

-5%

0%

5%

10%

15%

Cumulative Perform

ance (rebased) (%

)

Monthly Perform

ance (%)

Strategic Europe Value Fund vs MSCI Europe Total Return Index (both in EUR terms)

Monthly Fund Performance Monthly Index Performance Cumulative Fund Performance Cumulative Index Perfomance

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Source: Morningstar Direct Trading Volumes and Commission Breakdown Year to date there have been 120 trades with an average value of EUR 0.19 million and a PTR equating to 36.71%, annualised to 155.52%.The use of brokers throughout the period and the year is as follows:

Broker Name

MTD Total

Commissions Paid

% of MTD

Volume

YTD Total

Commissions Paid

% of YTD

Volume

Berenberg (US Trades) 2,223.51 15.81% 13,645.69 26.12%

Bloomberg 2,997.50 21.31% 12,003.25 22.98%

Deutsche Bank 2,817.52 20.03% 7,981.37 15.28%

ABN AMRO 1,507.86 10.72% 3,089.91 5.91%

Kempen & Co 85.07 0.60% 2,106.95 4.03%

Collins Stewart 1,343.94 9.56% 2,076.87 3.98%

Commerzbank (non-US trades) 434.19 3.09% 1,828.58 3.50%

Credit Agricole Chevreux 113.33 0.81% 1,463.66 2.80%

ABG Sundal Collier Ltd 931.93 6.63% 1,261.90 2.42%

JP Morgan - 0.00% 1,237.14 2.37%

Exane BNP Paribas 675.03 4.80% 1,223.89 2.34%

Hauck & Aufhäuser - 0.00% 1,000.03 1.91%

Vontobel 407.88 2.90% 960.17 1.84%

Handelsbanken - 0.00% 852.71 1.63%

Societe Generale - 0.00% 838.18 1.60%

Bloomberg 526.17 3.74% 672.15 1.29%

Credit Agricole Chevreux - 0.00% - 0.00%


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The full list of brokers for the Fund is included below:


Broker Name Status

ABG Sundal Collier Ltd Open

ABN Amro Open

Berenberg Open

Bloomberg Open

Collins Stewart Open

Commerzbank Open

Credit Agricole Cheuvreux Open

Credit Suisse Open

Deutsche Bank Open

Exane BNP Paribas Open

Hauk and Anheuser Open

HSBC Bank Open

List of brokers for Strategic Europe Value Fund

JP Morgan Open

KBC Securities NV Open

Kempen & Co Open

Landesbank Baden-Wurttemberg Open

Natixis Securities Open

Oddo Securities Open

Societe Generale Open

Svenska Handelbankedn Open

TSAF Paris Open

Vontobel Open



Indirect Equity Exposure (long) 0.00%

Indirect Equity Exposure (hedge) -2.59%


Pending Cash/Outstanding Settlements 0.79%

Portfolio Currency Hedging 0.00%



Portfolio Construction Strategic Europe Value Fund

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Investment Portfolio Market Cap Allocation

Investment Portfolio The portfolio of the Fund is represented predominantly through holdings in equity securities and cash. Derivative positions such as options are held within the Fund, it is also intended to use synthetic short positions within the portfolio both for efficient portfolio management and hedging purposes. ETFs will be utilised for efficient portfolio management to increase the exposure within the portfolio without unduly increasing stock specific risk or to actively hedge market exposure with the current exposure to these types of instruments being minimal. Full details of the investment portfolio are below.

SEVF PORTFOLIO

1 2 3 4 5 12 13 14 15 16 17 18.00 19 20 21.00 22.00 23 24 25 26 27 29 30 34

30/04/2012 27/04/2012 Volume_Avg_5DVolume_Avg_5DPX_volume

TK Stock Name Bloomberg Currency Region Market Asset Type Asset Type

Market Cap

(EUR) Multiplier

Current

Shareholding

Current Price

(Local)

Current Price

(Base)

Current Book

Cost (Local)

Current Book Cost

(Base)

Current Market

Value (Local)

Current Market Value

(Base)

Previous Price

(Local)

Previous Price

(Base)

Previous Book

Cost (Local)

Previous Book

Cost (Base)

Previous Market

Value (Local)

Previous Market Value

(Base)

% Price

Change

Current %

of

Portfolio Attribution

Max. 10%

Holding

Diversific

ation Global Emerging Market Cap

Market

Value Cash Limits

Liquidity (on

5 day)

Liquidity (on

5 day)

Liquidity

(on 1 day)

Average Price

Move to Cost

Average Price

Move to Cost

Counterparty

Exposure

Potential

Credit

Exposure % of company held

EVD GY CTS EVENTIM EVD GY equity EUR Europe Developed Common StockExchange 1.40 1.00 44,106.00 29.49 29.49 982,976.78 982,976.78 1,300,685.94 1,300,685.94 29 29.00 982,976.78 982,976.78 1,279,074.00 1,279,074.00 1.69% 3.08% 0.052% - - - - - - - - 1.57 - - 0.00% - - 0.09%

RHM GY RHEINMETALL AG RHM GY equity EUR Europe Developed Common StockExchange 1.68 1.00 28,200.00 42.43 42.43 1,237,424.81 1,237,424.81 1,196,385.00 1,196,385.00 41.695 41.70 1,237,424.81 1,237,424.81 1,175,799.00 1,175,799.00 1.75% 2.83% 0.050% - - - - - - - - 0.07 - - 0.00% - - 0.07%

QIA GY QIAGEN N.V. QIA GY equity EUR Europe Developed Common StockExchange 2.96 1.00 106,300.00 12.49 12.49 1,222,498.73 1,222,498.73 1,327,687.00 1,327,687.00 12.33 12.33 1,222,498.73 1,222,498.73 1,310,679.00 1,310,679.00 1.30% 3.14% 0.041% - - - - - - - - 0.09 - - 0.00% - - 0.05%

FME GY FRESENIUS MEDICAL CARE AG & FME GY equity EUR Europe Developed Common StockExchange 16.28 1.00 15,800.00 53.63 53.63 857,453.41 857,453.41 847,354.00 847,354.00 52.67 52.67 857,453.41 857,453.41 832,186.00 832,186.00 1.82% 2.00% 0.037% - - - - - - - - 0.03 - - 0.00% - - 0.01%

WKL NA WOLTERS KLUWER WKL NA equity EUR Europe Developed Common StockExchange 3.93 1.00 157,450.00 13.04 13.04 2,403,969.64 2,403,969.64 2,053,148.00 2,053,148.00 12.95 12.95 2,403,969.64 2,403,969.64 2,038,977.50 2,038,977.50 0.69% 4.86% 0.034% - - - - - - - - 0.15 - CHECK -14.59% - - 0.05%

ZIGGO NA ZIGGO NV ZIGGO NA equity EUR Europe Developed Common StockExchange 4.75 1.00 55,000.00 23.76 23.76 1,256,460.27 1,256,460.27 1,306,800.00 1,306,800.00 23.52 23.52 1,256,460.27 1,256,460.27 1,293,600.00 1,293,600.00 1.02% 3.09% 0.032% - - - - - - - - 0.27 - - 0.00% - - 0.03%

SWMA SS SWEDISH MATCH AB SWMA SS equity SEK Europe Developed Common StockExchange 6.54 1.00 41,950.00 273.20 30.69 8,729,738.87 964,491.43 11,460,740.00 1,287,614.14 270.5 30.39 8,729,738.87 964,491.43 11,347,475.00 1,274,661.87 1.02% 3.05% 0.031% - - - - - - - - 0.07 - - 0.00% - - 0.02%

VMED US VIRGIN MEDIA INC VMED US equity USD Europe Developed Common StockExchange 5.17 1.00 77,000.00 24.61 18.59 1,894,848.73 1,371,864.43 1,894,970.00 1,431,354.33 24.45 18.45 1,894,848.73 1,371,864.43 1,882,650.00 1,420,331.95 0.78% 3.39% 0.026% - - - - - - - - 0.02 - - 0.00% - - 0.03%

2914 JT JAPAN TOBACCO INC 2914 JT equity JPY Global Developed Common StockExchange 41.58 1.00 369.00 443,500.00 4,196.93 118,556,713.23 1,056,849.35 163,651,500.00 1,548,666.87 443500 4,168.28 118,556,713.23 1,056,849.35 163,651,500.00 1,538,094.99 0.69% 3.66% 0.025% - - - - - - - - 0.02 - - 0.00% - - 0.00%

KD8 GY KABEL DEUTSCHLAND HOLDING AGKD8 GY equity EUR Europe Developed Common StockExchange 4.21 1.00 37,000.00 47.60 47.60 1,501,912.32 1,501,912.32 1,761,200.00 1,761,200.00 47.405 47.41 1,501,912.32 1,501,912.32 1,753,985.00 1,753,985.00 0.41% 4.17% 0.017% - - - - - - - - 0.16 - - 0.00% - - 0.04%

RCUS BB ARSEUS NV RCUS BB equity EUR Europe Developed Common StockExchange 0.40 1.00 66,500.00 12.80 12.80 710,626.18 710,626.18 851,200.00 851,200.00 12.73 12.73 710,626.18 710,626.18 846,545.00 846,545.00 0.55% 2.01% 0.011% - - - - - - - - 2.88 CHECK - 0.00% - - 0.21%

NESN VX NESTLE SA-REG NESN VX equity CHF Europe Developed Common StockExchange 152.71 1.00 27,400.00 55.60 46.28 1,473,435.89 1,143,124.55 1,523,440.00 1,267,959.11 55.4 46.11 1,473,435.89 1,143,124.55 1,517,960.00 1,263,398.11 0.36% 3.00% 0.011% - - - - - - - - 0.01 - - 0.00% - - 0.00%

GALN SW GALENICA AG-REG GALN SW equity CHF Europe Developed Common StockExchange 3.35 1.00 2,500.00 619.50 515.61 1,190,540.14 1,008,822.20 1,548,750.00 1,289,024.63 617.5 513.95 1,190,540.14 1,008,822.20 1,543,750.00 1,284,863.13 0.32% 3.05% 0.010% - - - - - - - - 0.20 - - 0.00% - - 0.04%

CPR IM DAVIDE CAMPARI-MILANO SPA CPR IM equity EUR Europe Developed Common StockExchange 3.10 1.00 134,000.00 5.34 5.34 681,553.20 681,553.20 715,560.00 715,560.00 5.31 5.31 681,553.20 681,553.20 711,540.00 711,540.00 0.56% 1.69% 0.010% - - - - - - - - 0.09 - - 0.00% - - 0.02%

NOVN VX NOVARTIS AG-REG NOVN VX equity CHF Europe Developed Common StockExchange 114.38 1.00 30,600.00 50.05 41.66 1,500,968.85 1,289,384.55 1,531,530.00 1,274,692.42 49.99 41.61 1,500,968.85 1,289,384.55 1,529,694.00 1,273,164.32 0.12% 3.02% 0.004% - - - - - - - - 0.01 - - 0.00% - - 0.00%

GSK LN GLAXOSMITHKLINE PLC GSK LN equity GBp Europe Developed Common StockExchange 88.25 1.00 125,500.00 14.25 17.47 1,780,426.97 2,133,551.85 1,788,375.00 2,192,905.43 14.235 17.47 1,780,426.97 2,133,551.85 1,786,492.50 2,192,204.95 0.03% 5.19% 0.002% - - - - - - - - 0.02 - - 0.00% - - 0.00%

ORK NO ORKLA ASA ORK NO equity NOK Europe Developed Common StockExchange 5.71 1.00 214,100.00 42.04 5.55 10,567,001.82 1,361,534.37 9,000,764.00 1,188,100.85 42.14 5.55 10,567,001.82 1,361,534.37 9,022,174.00 1,189,122.53 -0.09% 2.81% -0.002% - - - - - - - - 0.07 - CHECK -14.82% - - 0.02%

RB/ LN RECKITT BENCKISER GROUP PLCRB/ LN equity GBp Europe Developed Common StockExchange 31.99 1.00 27,150.00 35.87 43.98 878,201.97 1,004,089.07 973,870.50 1,194,160.01 35.89 44.04 878,201.97 1,004,089.07 974,413.50 1,195,702.81 -0.13% 2.83% -0.004% - - - - - - - - 0.02 CHECK - 0.00% - - 0.00%

CARLB DC CARLSBERG AS-B CARLB DC equity DKK Europe Developed Common StockExchange 10.00 1.00 13,000.00 484.40 65.10 5,602,600.62 751,912.93 6,297,200.00 846,343.68 486.7 65.41 5,602,600.62 751,912.93 6,327,100.00 850,362.24 -0.47% 2.00% -0.009% - - - - - - - - 0.03 - - 0.00% - - 0.01%

SWM US SCHWEITZER-MAUDUIT INTL INC SWM US equity USD Global Developed Common StockExchange 0.82 1.00 14,300.00 67.82 51.23 858,211.07 619,923.01 969,826.00 732,552.31 68.3 51.53 858,211.07 619,923.01 976,690.00 736,846.47 -0.58% 1.73% -0.010% - - - - - - - - 0.19 - - 0.00% - - 0.09%

ULVR LN UNILEVER PLC ULVR LN equity GBp Europe Developed Common StockExchange 77.52 1.00 51,500.00 21.03 25.79 979,490.21 1,134,385.74 1,083,045.00 1,328,029.78 21.09 25.88 979,490.21 1,134,385.74 1,086,135.00 1,332,796.26 -0.36% 3.14% -0.011% - - - - - - - - 0.02 - - 0.00% - - 0.00%

WDI GY WIRECARD AG WDI GY equity EUR Europe Developed Common StockExchange 1.56 1.00 70,350.00 14.00 14.00 823,068.53 823,068.53 984,900.00 984,900.00 14.07 14.07 823,068.53 823,068.53 989,824.50 989,824.50 -0.50% 2.33% -0.012% - - - - - - - - 0.25 - - 0.00% - - 0.06%

ATL IM ATLANTIA SPA ATL IM equity EUR Europe Developed Common StockExchange 7.22 1.00 55,100.00 11.45 11.45 675,338.15 675,338.15 630,895.00 630,895.00 11.57 11.57 675,338.15 675,338.15 637,507.00 637,507.00 -1.04% 1.49% -0.015% - - - - - - - - 0.02 - - 0.00% - - 0.01%

AMS SM AMADEUS IT HOLDING SA-A SHS AMS SM equity EUR Europe Developed Common StockExchange 6.91 1.00 83,100.00 15.44 15.44 1,190,299.78 1,190,299.78 1,283,064.00 1,283,064.00 15.53 15.53 1,190,299.78 1,190,299.78 1,290,543.00 1,290,543.00 -0.58% 3.04% -0.018% - - - - - - - - 0.03 - - 0.00% - - 0.02%

BN FP DANONE BN FP equity EUR Europe Developed Common StockExchange 34.14 1.00 15,100.00 53.15 53.15 685,942.87 685,942.87 802,565.00 802,565.00 53.68 53.68 685,942.87 685,942.87 810,568.00 810,568.00 -0.99% 1.90% -0.019% - - - - - - - - 0.01 - - 0.00% - - 0.00%

MTX GY MTU AERO ENGINES HOLDING AGMTX GY equity EUR Europe Developed Common StockExchange 3.31 1.00 13,700.00 63.62 63.62 681,762.74 681,762.74 871,594.00 871,594.00 64.33 64.33 681,762.74 681,762.74 881,321.00 881,321.00 -1.10% 2.06% -0.023% - - - - - - - - 0.06 - - 0.00% - - 0.03%

NEO FP NEOPOST SA NEO FP equity EUR Europe Developed Common StockExchange 1.45 1.00 38,250.00 43.44 43.44 1,889,024.25 1,889,024.25 1,661,388.75 1,661,388.75 43.73 43.73 1,889,024.25 1,889,024.25 1,672,672.50 1,672,672.50 -0.67% 3.93% -0.027% - - - - - - - - 0.27 - CHECK -12.05% - - 0.11%

RI FP PERNOD-RICARD SA RI FP equity EUR Europe Developed Common StockExchange 20.79 1.00 7,250.00 78.41 78.41 446,260.53 446,260.53 568,472.50 568,472.50 80.45 80.45 446,260.53 446,260.53 583,262.50 583,262.50 -2.54% 1.34% -0.034% - - - - - - - - 0.01 - - 0.00% - - 0.00%

BATS LN BRITISH AMERICAN TOBACCO PLCBATS LN equity GBp Europe Developed Common StockExchange 76.01 1.00 55,400.00 31.59 38.74 1,415,299.20 1,654,873.57 1,750,086.00 2,145,955.45 31.86 39.10 1,415,299.20 1,654,873.57 1,765,044.00 2,165,885.49 -0.92% 5.08% -0.047% - - - - - - - - 0.02 - - 0.00% - - 0.00%

SAN FP SANOFI SAN FP equity EUR Europe Developed Common StockExchange 77.32 1.00 36,600.00 57.66 57.66 1,978,938.63 1,978,938.63 2,110,356.00 2,110,356.00 58.21 58.21 1,978,938.63 1,978,938.63 2,130,486.00 2,130,486.00 -0.94% 4.99% -0.047% - - - - - - - - 0.01 - - 0.00% - - 0.00%

IMT LN IMPERIAL TOBACCO GROUP PLC IMT LN equity GBp Europe Developed Common StockExchange 30.16 1.00 41,200.00 24.64 30.21 844,351.60 972,558.34 1,015,168.00 1,244,799.00 25.03 30.71 844,351.60 972,558.34 1,031,236.00 1,265,429.70 -1.63% 2.94% -0.048% - - - - - - - - 0.03 - - 0.00% - - 0.00%

DB1 GY DEUTSCHE BOERSE AG DB1 GY equity EUR Europe Developed Common StockExchange 9.20 1.00 26,850.00 47.43 47.43 1,363,358.73 1,363,358.73 1,273,495.50 1,273,495.50 48.4 48.40 1,363,358.73 1,363,358.73 1,299,540.00 1,299,540.00 -2.00% 3.01% -0.060% - - - - - - - - 0.02 - - 0.00% - - 0.01%

336 HK HUABAO INTERNATIONAL HOLDING336 HK equity HKD Global Developed Common StockExchange 1.23 1.00 1,278,000.00 2.79 0.27 7,097,027.08 638,278.36 3,560,508.00 346,793.48 3.98 0.39 7,097,027.08 638,278.36 5,086,440.00 494,401.97 -29.86% 0.82% -0.245% - - - - - - - - 0.21 suspended suspended -49.83% - - 0.04%

Total Equities 37,694,513.30 40,865,702.17 (1,333,673.17) 37,694,513.30 41,015,376.77 96.68% -0.24%

SPX 12 P1300 December 12 Puts on SPX SPX 12 P1300 equity USD Global Developed Index Option Exchange - 100.00 15.00 56.00 42.30 142,250.00 107,447.69 84,000.00 63,448.90 53.4 40.29 142,250.00 107,317.99 80,100.00 60,430.03 5.00% 0.15% 0.007% - - - - - - - - 0.00% - -

SPX 12 P1350 December 12 Puts on SPX SPX 12 P1350 equity USD Global Developed Index Option Exchange - 100.00 15.00 70.00 52.87 135,300.00 102,198.05 105,000.00 79,311.13 68 51.30 135,300.00 102,074.69 102,000.00 76,952.09 3.07% 0.19% 0.006% - - - - - - - - 0.00% - -

Total Options 209,645.74 142,760.03 209,392.68 137,382.12 0.34% 0.01%

Total Portfolio 37,904,159.04 41,008,462.20 37,903,905.98 41,152,758.89 97.02% -0.23%

HSBC CHF Cash CHF Cash OTC 42,115.99 35,053.14 42,115.99 35,053.14 0.08% 35,053.14 -

HSBC CHF MARGIN CHF Cash OTC 101.00 84.06 101.00 84.06 0.00% 84.06 -

HSBC DKK Cash DKK Cash OTC 54,417.66 7,313.73 54,417.66 7,313.73 0.02% 7,313.73 -

HSBC EUR Cash EUR Cash OTC 400,282.19 400,282.19 505,410.33 505,410.33 0.95% 400,282.19 -

HSBC EUR MARGIN EUR Cash OTC 243,536.68 243,536.68 243,536.68 243,536.68 0.58% 243,536.68 -

HSBC GBP Cash GBP Cash OTC 48,629.68 59,629.72 48,629.68 59,673.49 0.14% 59,629.72 -

HSBC GBP MARGIN GBP Cash OTC 7,066.30 8,664.70 7,066.30 8,671.06 0.02% 8,664.70 -

HSBC HKD Cash HKD Cash OTC 4,898.86 477.15 4,898.86 476.17 0.00% 477.15 -

HSBC JPY Cash JPY Cash OTC 395,868.00 3,746.18 395,868.00 3,720.61 0.01% 3,746.18 -

HSBC NOK Cash NOK Cash OTC 3,014.39 397.90 3,014.39 397.30 0.00% 397.90 -

HSBC SEK Cash SEK Cash OTC 5,120.59 575.30 5,120.59 575.20 0.00% 575.30 -

HSBC SGD Cash SGD 2,030.22 1,239.45 2,030.22 1,237.83 0.00% 1,239.45 -

HSBC USD Cash USD Cash OTC 658,799.05 497,619.95 658,799.05 497,019.28 1.18% 497,619.95 -

HSBC USD MARGIN USD Cash OTC 2,308.76 1,743.91 2,308.76 1,741.80 0.00% 1,743.91 -

Total Cash 1,260,364.05 1,364,910.66 2.98%

Trade date Settlement date

JPY Forward OTC - -

EUR Forward OTC

JPY Forward OTC

EUR Forward OTC - -

Total FX P/L - - 0.00%

Total Portfolio 42,268,826.25 42,517,669.54 100.00%

Option Exposure ***HUABAO INTERNATIONAL HOLDING price written down by 30% due to suspension***

TK Stock Name Bloomberg Currency Region Underlying Asset Type Asset Type

Market Cap

(EUR) Multiplier

Current

Shareholding

Current

Underlying Price

(Local)

Current

Underlying Price

(Base) Current Delta FX Rate

Current

Exposure (Local)

Current Exposure

(Base) % of Portfolio

SPX 12 P1300 December 12 Puts on SPX SPX 12 P1300 equity USD Europe SPX index Index Option Exchange - 100.00 15.00 1397.91 1,055.90 (0.31) 1.32 (643,737.56) (486,243.34) -1.15%

SPX 12 P1350 December 12 Puts on SPX SPX 12 P1350 equity USD Europe SPX index Index Option Exchange - 100.00 15.00 1397.91 1,055.90 (0.38) 1.32 (796,808.70) (601,864.72) -1.42%

(1,440,546.26) (1,088,108.06)

Overall Currency Exposure Cash Cash (in EUR) FDI FDI (in EUR) Investments Investments (in EUR) Total (in local) Total (in EUR)

CHF CHF CHF 42,115.99 35,053.14 - - 4,603,720.00 3,831,676.16 4,645,835.99 3,866,729.29 9.15%

Credit Exposure

(in EUR) 1,260,364.05 2.98%

CHF MARGIN CHF MARGIN CHF 101.00 84.06 - - - - 101.00 84.06 0.00% WA Liquidity 0.18

DKK DKK DKK 54,417.66 7,313.73 - - 6,297,200.00 846,343.68 6,351,617.66 853,657.41 2.02% 1 day 91.59%

EUR EUR EUR 400,282.19 400,282.19 - - 21,546,750.69 21,546,750.69 21,947,032.88 21,947,032.88 51.92% 3 days 5.09%

EUR MARGIN EUR MARGIN EUR 243,536.68 243,536.68 - - - - 243,536.68 243,536.68 0.58% 5 days 0.00%

GBP GBP GBP 48,629.68 59,629.72 - - 6,610,544.50 8,105,849.67 6,659,174.18 8,165,479.38 19.32% >5 days 0.00%

GBP MARGIN GBP MARGIN GBP 7,066.30 8,664.70 - - - - 7,066.30 8,664.70 0.02%

HKD HKD HKD 4,898.86 477.15 - - 3,560,508.00 346,793.48 3,565,406.86 347,270.63 0.82%

JPY JPY JPY 395,868.00 3,746.18 - - 163,651,500.00 1,548,666.87 164,047,368.00 1,552,413.05 3.67%

NOK NOK NOK 3,014.39 397.90 - - 9,000,764.00 1,188,100.85 9,003,778.39 1,188,498.75 2.81%

SEK SEK SEK 5,120.59 575.30 - - 11,460,740.00 1,287,614.14 11,465,860.59 1,288,189.44 3.05%

SGD SGD SGD 2,030.22 1,239.45 - - - - 2,030.22 1,239.45 0.00%

USD USD USD 658,799.05 497,619.95 189,000.00 142,760.03 2,864,796.00 2,163,906.64 3,712,595.05 2,804,286.62 6.63%

USD MARGIN USD MARGIN USD 2,308.76 1,743.91 - - - - 2,308.76 1,743.91 0.00%

40,865,702.17 42,268,826.25 100.00%

Portfolio Constraints

Discussion on the Eurozone Crisis-verbal update

Marketing & Distribution Report



T +44 (0) 1481 722322 F + 44 (0) 1481 710884

www.eisturdza.com




E.I. Sturdza Funds Plc

Global Distributor Report

January to April 2012 Marketing Initiatives Conducted during the period: There was no change during the period to the regular reporting released by the Global Distributor in relation to the sub-funds of E.I. Sturdza Funds Plc. Marketing initiatives undertaken by E.I. Sturdza Strategic Management Limited as Global Distributor and its appointed representatives during the period: Specific strategic aims:

1. Increasing efforts to market the Nippon Growth (UCITS) Fund given increasing market commentary that Japan is being consider by many for reallocation;

2. Continuing marketing efforts in relation to the Strategic Europe Value Fund the quality value approach and low volatility returns being offered;

3. Increase the awareness of the Strategic Europe Value Fund in the Netherlands and Scandinavia given the appetite in these markets for defensive European equity strategies. Willem also has an excellent reputation in Scandinavia from his previous role.

4. Focus on Independent Wealth Managers in Hong Kong and Singapore; 5. Client retention in relation to the Strategic China Panda Fund; 6. Push the Strategic Euro Bond Fund to both Banque Baring Brothers Sturdza SA and other

Swiss family offices based on a cash enhancement strategy proposition; 7. Continue to develop awareness of all funds of the E.I. Sturdza Funds PLC within Italy,

with a particular focus on the Strategic Euro Bond Fund, Strategic China Panda Fund and Strategic Europe Value Fund

8. Increase communications in relation to the Strategic Emerging Europe Fund and Nippon Growth (UCITS) Fund given strong outperformance returned during 2012;

9. Promote the Strategic China Panda Fund through an article published in the Agefi; 10. Co-ordination and planning of a marketing/promotion opportunity at the Geneva Motor

Show, held in early March; 11. Completing registration of the Strategic China Panda Fund in Singapore; 12. Making arrangements for Uda-san and Lilian’s European marketing trips in May; 13. Communication with Banque Baring Brothers Sturdza SA regarding the new Strategic

Global Bond Fund; 14. Ongoing work with LGT in order to finalise the details and terms of their investment to

the Strategic China Panda Fund; 15. Develop the operational links between E.I. Sturdza Strategic Management Limited and

Allfunds in order to have all funds listed on their platform.

Product and Jurisdictional focus: During the period additional efforts were made to push the Strategic China Panda Fund and Strategic Emerging Europe Fund given their emerging market focus and market feedback that has suggested that our client base still foresee emerging markets as the growth drivers over the short to medium term.

Further efforts have been made to also raise the profile of the Strategic Europe Value Fund. The Fund has received increased attention over the past few months due to the quality value approach and the low volatility returns that the Fund has achieved. Client feedback has further highlighted that the 1 year track record, core allocations and daily dealing are additional elements that are acting to stimulate investor interest. Further the Fund’s strong relative performance YTD, especially given its low volatility, value profile have assisted with the development of the Fund’s marketing appeal. The Strategic China Panda Fund has performed poorly throughout 2012 on both an absolute and relative basis. As such efforts were made during the period to reassure investors regarding the Fund and to try and ensure client retention. Particular efforts were made in this respect with All Seasons Capital Management, RMB Private Bank and MWI. In order to address the poor relative performance over the short term, efforts were made to highlight the China growth story to both our existing and potential clients. Further we have during the period responded to an increasing number of requests in relation to the Nippon Growth (UCITS) Fund. Japan as an investment theme appears to be receiving more attention and the Fund has returned strong performance for the year, ranked 1st within its peer group for March 2012 and top ten for 2012 YTD performance. Currently we have a number of parties that are conducting reviews or due diligence on the Fund. From an Asian perspective we continue to see a lack of interest for European equities and bonds as the Eurozone crisis fallout continues. From a geographical perspective and given the marketing resources available to the Global Distributor, the following jurisdictions have been focused on during the month:

Switzerland France UK Monaco Hungary Australia Hong Kong South Africa Netherlands Belgium Luxembourg Sweden Norway Italy

Client Group Focus: E.I. Sturdza Funds Plc’s sub funds appeal to a diversified range of clients. As such the marketing activities undertaken during the period have focused on the following classifications of clients:

Fund of Funds Wealth Managers Private Banks Pension Funds Institutional Investors High Net Worth individuals Asset Managers Family Offices Multimanagers

The above were either contacted by electronic means (telephone/emails etc) or in person. Specific Initiatives undertaken during the period: During the month within Asia the following initiatives were undertaken:

Efforts were made to market the Strategic Emerging Europe Fund and Strategic Europe Value Fund to Chinese Mainland retail investors;

Focusing on Institutional investors that are potentially considering a switch in the Japanese equity allocation;

Meetings with Mercer, CIIC and Towers Watson to discuss regional trends and market sentiment and to push the Strategic China Panda Fund;

Meet with HSBC to maintain relations and discuss opportunities in their China FoF; Develop relationship with Lotus Peak and work on their due diligence requirements regarding a

number of funds, including the Nippon Growth (UCITS) Fund. In addition to specific tasks, work has been ongoing in all jurisdictions targeted to ensure that the E.I. Sturdza Funds PLC’s investment funds are well known and that all current and potential clients are kept informed of developments within the range. Further the following notable specific meetings/contacts were undertaken during the period:

Client Name Communication type

Focus Comments

Nextampartners Calls/meeting SEVF/NGUF

Initial investments have been received from Nextam during the month to both the Nippon Growth (UCITS) Fund and Strategic Europe Value Fund.

A second step is to introduce the fund range to the advisory mandate side of the Nextam business

Allfunds Calls All Work has continued during the month, with global agreements regarding the listing of the E.I. Sturdza Funds PLC on their platform

We are waiting for final conditions regarding the economic terms to be provided

We anticipate all agreements will be finalised during May 2012, with the exception of the Operating memorandum which will be completed once testing has been completed

Skandia Meeting SEEF A further meeting was undertaken with Skandia during the month, attended by Michel Danechi

Feedback has been positive with Skandia considering the strategy for a mandate project; unfortunately this has been put on hold

They have confirmed that they are now interested investing directly in the Fund with a possible allocation of between USD 20 – 30 million, switching out of the JPM Russia Fund that they currently hold

LGT Meeting SCPF LGT have been reviewing the Fund for several months and have made an allocation of USD 5 million during the period with a further USD 15 million to follow in early May.

Skandia Meeting SCPF LBN Advisers have been selected for the shortlist to provide advice to a concentrated best ideas portfolio that has been synthetically operated since 1 March

The portfolio will operate for six months before the client decides on the manager that will be selected for investment for GBP 20-30 million.

Furst Fugger Privatebank

Meeting NGUF &

SCPF

Currently have an allocation to Japan totalling 6.5%, all with GLG. They are potentially considering a switch and are interested in the Fund.

They also expressed an interest for China; however have never been invested and are cautious on timing as they missed both the 2005 and 2009 market rallies

Stated that Lilian was a “buy-candidate”. Will push the China story when the outlook improves further

Cheviot Meeting SEVF Meeting undertaken during the month, attended by 8 individuals from Cheviot, including the whole of the investment committee

The meeting was positive and they will meet mid May to discuss the Fund

They have raised the prospect of launching a GBP hedged share class

Doettinger/ Straubinger

Calls NGUF Doettinger have undertaken several calls with senior team members and have also meet with Uda-san during the month

Currently they are evaluating the investment opportunity represented by Japan

Analysis is currently being undertaken on the Fund

Pictet Call SEVF The client is launching a new fund of funds with assets of EUR 100 million.

Due diligence has been undertaken and the Fund approved, a further meeting to be undertaken in June to determine the allocation.

Andrew Russell Call SEVF Received confirmation during the month that one of their clients had decided to allocate EUR 250k to the Fund

Theodoor Gilissen

Meeting SEVF 4th largest bank in the Netherlands, but willing to consider smaller, more niche products. Initial investments tend to be in the region of EUR 2.5 – 5 million

The Strategic Europe Value Fund was introduced and feedback was positive

Currently they use 8 external managers for Europe however they are going to discuss internally the possibility of including the Fund as an addition

Contact was made with approximately 700 prospective and current clients during the period Client Feedback: General market feedback indicates that investors are still cautious; however becoming less risk adverse than has been the recent case. The European debt crisis is still weighing on sentiment; however the general feeling in the market seems to be that the worst is past and that a resolution will be reached. The caution regarding Europe is leading investors to consider alternative investment opportunities though, with interest increasing for Japan specifically.

Regarding China we have noted an increasing level of concern regarding the fundamentals of investing in China, specifically given the February and March retreat. This however is in line with Lilian’s view of the market, which she has held since the end of Q4 2011, which is constructive from a marketing perspective. We have also seen evidence of a number of investors realising profit from the rally experienced in early 2012 and reducing some equity positions. Further we continue to receive positive feedback regarding our funds within Italy; however it is increasingly evident that it is a requirement that all funds be included on the Allfunds platform. Work with Allfunds is ongoing and the initial documentation has been approved, with discussions regarding final terms still ongoing. In addition we continue to receive feedback that a number of investors have a preference for regional funds, over country specific strategies. Feedback from a product perspective has also been mixed across our range and is summarised below:

Strategic China Panda Fund – despite the fact that performance is starting to pick up, there is continued concern regarding the relative performance the Fund has offered in late 2011 and early 2012

Nippon Growth (UCITS) Fund – interest for Japan investing has been increasing and the Fund has performed particularly well in 2012 YTD. That said we have continued to receive feedback suggesting that the weekly liquidity and single currency class are barriers to investing for some prospects. The absolute performance fee structure remains a barrier for some investors

Strategic Europe Value Fund – continuing to receive good feedback and is very marketable as a core European exposure

Strategic Euro Bond Fund – the investment philosophy is well received especially in relation to dedicated mandates

Notable trades received during the period: Fund Sub/Red Amount Investor Note

SEVF Sub EUR 2.5 million Banque Baring Brothers Sturdza SA

This is a single transaction, not total for the month

SEVF Sub EUR 1.5 million Banque Baring Brothers Sturdza SA


SCPF Sub USD 1.3 million HSBC Trinkhaus & Burkhardt

SCPF Sub USD 3.0 million Banque Privee Edmond de Rothschild

SCPF Red USD 2.7 million Lloyds TSB International Private Banking

Portfolio rebalancing – note additional smaller redemptions were also received

SCPF Red USD 8.9 million Penjing Asset Management Total redemption, disappointed with performance

SCPF Sub USD 5.4 million Kairos Partners

SCPF Sub USD 5 million LGT Capital Management

SEBF Red EUR 1.9 million Banque Baring Brothers Sturdza SA


Follow up to be undertaken and planned initiatives: As has been our objective for some time, we are currently focused on raising the profile of our current product range and to provide a superior level of service to both potential and current investors. We believe that this will assist with the retention of clients through periods of volatility or disappointing performance, but also ensure that our funds are well positioned to be considered by investors when their allocation outlooks change. We strive to form long lasting relationships with our clients. In addition the following initiatives are planned for the coming months:

Finalise all arrangements in relation to both Uda-san’s and Lilian’s European tours; Finalise all agreements with Allfunds; Follow up with Nextam regarding institutional sales; Continue regular correspondence with active accounts; Internal marketing at Banque Baring Brothers Sturdza SA regarding the new Strategic Global

Bond Fund; Structured calling effort to global consultants; Continued support for LGT and All Seasons Asset Management in relation to their current and

prospective investments to the Strategic China Panda Fund; Ongoing communication with Australian institutional clients in advance of a trip planned for

early July; Follow up with most promising investors, interested in the Strategic Europe Value Fund; Start to prompt the new Strategic Global Bond Fund, once necessary approvals have been

received; Make arrangements for a two days trip for Willem Vinke to Italy to promote the Strategic Europe

Value Fund to institutional clients.

Profile of existing and target client base As at the end of the period the client base for each sub fund was as follows:

Strategic China Panda Fund – fifty nine registered shareholders; Strategic Euro Bond Fund – registered shareholders; Nippon Growth (UCITS) Fund – eight registered shareholders; Strategic Emerging Europe Fund – seven nine registered shareholders; Strategic Europe Value Fund – eighteen registered shareholders.

It should be noted that the above comprise of an investor base of private clients, high net worth individuals and institutions, either investing directly or through nominees. Currently it is the objective of the marketing function to the E.I. Sturdza Funds PLC to raise the sub-funds profile, with the current focus being primarily in relation to institutional clients. High net worth individuals and private clients are also a key priority within the current strategy. Registered Jurisdictions As at the end of the period the sub funds were registered for distribution in the following countries:

Strategic China Panda Fund: United Kingdom (reporting status for GBP class) Switzerland

Germany (with Tax transparency) France

Netherlands Italy

Strategic Euro Bond Fund Switzerland Germany France Netherlands Italy

Nippon Growth (UCITS) Fund United Kingdom (reporting status for C share class) Switzerland

France Netherlands Italy

Strategic Emerging Europe Fund United Kingdom (reporting status both share classes) Switzerland France

Netherlands Italy

Strategic Europe Value Fund United Kingdom (with reporting status) Switzerland France The Netherlands Italy

In addition all sub-funds are authorised for distribution in the Bailiwick of Guernsey by virtue of the Global Distributor’s registration with the Guernsey Financial Services Commission. Distribution Arrangements The following have been appointed to distribute the sub-funds of the E.I. Sturdza Funds Plc:

E.I. Sturdza Strategic Management Limited - Global Distributor Banque Baring Brothers Sturdza SA - Swiss Representative and Paying Agent

In addition, the following distributors have been appointed that have mandates that would include E.I. Sturdza Funds Plc;

Sauren Fonds – appointed distributor in Germany and Austria; Fabien Koening and Cie – appointed distributor in Holland; Savanna Capital – appointed introducer in Hong Kong; Nextam – appointed distributor in Italy.

Performance and Investor Reporting The Fund’s performance continues to be reported by E.I. Sturdza Strategic Management Limited to clients on a weekly basis, with prices also being made available via the Company’s website www.eisturdza.com. All sub funds have been successfully listed with the following platforms:

Bloomberg Financial Times (Both in print and electronically) The International Herald Tribune (Both in print and electronically)

http://www.eisturdza.com/

Eurekahedge Lipper Morningstar Financial Express Alpha Portfolio Advisors GmbH

The Strategic China Panda Fund also listed with the following additional platforms:

Cambridge Associates Mercer GIMD Transact – A UK IFA platform BarclayHedge Hedge Fund Research Standard & Poor’s – the Fund has been awarded a “A” rating Quantalys – A French Fund database provider (who have stated that they have already received

interest in the Strategic Euro Bond Fund; however they need the Fund to be registered for distribution in France prior to the Funds inclusion in their database).

China Hedge Fund (Offshore) Directory 2010 – registration process was undertaken during early August.

The Nippon Growth (UCITS) Fund has been listed with the following:

Mercer GIMD Standard & Poor’s – the Fund has been awarded a “A” rating

The Strategic Euro Bond Fund has also been listed with the following:

Mercer GIMD The Strategic Europe Value Fund has been listed with the following:

Mercer GIMD eVestment Analytics

We continue to try and identify other suitable sources to list the funds with, in order to ensure that information regarding the funds is widely available to all potential and existing clients. In addition to the regular mailings that are sent to stakeholders, E.I. Sturdza Strategic Management Limited continues to distribute documentation regarding the funds upon request. Conclusion: Equity markets offered mixed results for April, with investors redeeming from equity markets at the highest rate for 17 years as the markets became more volatile. Investor sentiment remains cautious, with some profit taking following the recent rally and doubts still remaining over the European debt crisis. Our funds are well positioned to take advantage of market developments that our managers foresee for the mid to long term. Produced by AT on 03/05/12

Exceptional Trades



T +44 (0) 1481 722322 F + 44 (0) 1481 710884

www.eisturdza.com




E.I. Sturdza Funds plc: Exceptional Trades Report

1 January 2012 to 30 April 2012

As per the Exceptional Trade Policy, the Investment Manager has recommended to the Directors that orders are accepted on the basis that (a) subscriptions below the minimum transaction size are acceptable provided that the investor is a shareholder, nominee shareholder or global custodian who already has sufficient investment in the fund to meet the minimum holding requirements, or (b) redemptions below the minimum transaction size are acceptable provided that the investor is a shareholder, nominee shareholder or global custodian and will retain sufficient investment in the fund to meet the minimum holding requirements. The below exceptional trades have been accepted:

January 2012 18 January 2012 – China Panda Fund USD Class Redemption request was received from Rahn & Bodmer for 3 shares. This was accepted as the investor is an existing shareholder and retained sufficient funds to meet the minimum holding requirements.

February 2012 3 February 2012 - China Panda Fund USD Class Redemption request was received from Banque Paris Bertrand for 0.5 shares in order to correct a trading error. This was accepted as they were an existing shareholder and retained sufficient funds to meet the minimum holding requirements. 14 February 2012 – China Panda Fund EUR Class Transfer request was received from Augsburger Akteinbank AG for 2 shares to be transferred to Clearstream Banking SA. This was accepted as Augsburger Akteinbank AG retained sufficient funds to meet the minimum holding requirements and Clearstream Banking SA were existing investors. 16 February 2012 – China Panda Fund USD Class Subscription request was received from MWI Nominees Limited for the amount of USD 3,580.37. This was accepted as they were an existing shareholder.

17 February 2012 – China Panda Fund EUR Class Redemption request was received from Augsburger Aktienbank AG for 0.408 shares. This was accepted as the nominee shareholder retained sufficient funds to meet the minimum holding requirements. 3 February 2012 – China Panda Fund USD Class Subscription request was received from MWI Nominees Limited for the amount of USD 3,202.70. This was accepted as they were an existing shareholder.

March 2012 9 March 2012 – Strategic Emerging Europe Fund Transfer request was received from BBBSA to transfer 4.52 shares to Citco Global Custody. This was accepted as BBBSA retained sufficient funds to meet the minimum holding requirements and Citco Global Custody was an existing client. 15 March 2012 – Nippon Growth (UCITS) Fund Redemption request was received from BBBSA for 6.166 shares, which is below the minimum trade. This was accepted BBBSA was an existing shareholder and retained sufficient funds to meet the minimum holding requirements.

April 2012 25 April 2012 – Nippon Growth (UCITS) Fund Redemption request was received from BBBSA for 7.68 shares, which is below the minimum trade. This was accepted as BBBSA is an existing shareholder and retained sufficient funds to meet the minimum holding requirements.

Stale pricing during the period

E.I. Sturdza Funds plc: Stale Pricing

The Board of Directors are duly advised that there the implementation of the stale pricing policy, however there was one the Reporting Period as detailed below. During the Reporting Period negative rumours and revelations regarding the results of Huabao International Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchafrom 24 April onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at which time this position was also suspended from trading. During the two days in which the US stock traded on 25 and 26 April the price of tsuspended. As a result, and based upon the suspension of the stock from trading in the primary market and the process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at trecommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary exchange up until 26 April 2012. The impact olimit the impact upon the NAV calculation as there was no shareholder activity over the period.



T +44 (0) 1481 722322

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BANQUE BARIN

E.I. Sturdza Funds plc: Stale Pricing 1 January 2012 to 30 April 2012.

The Board of Directors are duly advised that there were no stale prices during the period that required ion of the stale pricing policy, however there was one stale prices that occurr

the Reporting Period as detailed below.

During the Reporting Period negative rumours and revelations regarding the results of Huabao International Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchafrom 24 April onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at which time this position was also suspended from trading. During the two days in which the US stock traded on 25 and 26 April the price of the stock declined by over 30% prior to the stock being suspended. As a result, and based upon the suspension of the stock from trading in the primary market and the process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at trecommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary exchange up until 26 April 2012. The impact of this discount was applied over two valuation points to limit the impact upon the NAV calculation as there was no shareholder activity over the period.

dza Strategic Management Limited


+44 (0) 1481 722322 F + 44 (0) 1481 710884

e isturdza.com


owned subsidiary of


during the period that required prices that occurred outside

During the Reporting Period negative rumours and revelations regarding the results of Huabao International Holdings caused the stock to be suspended on the primary Hong Kong Stock Exchange from 24 April onwards. The ADR equivalent of the stock continued to trade in US markets until 26 April 2012, at which time this position was also suspended from trading. During the two days in which the US

he stock declined by over 30% prior to the stock being suspended. As a result, and based upon the suspension of the stock from trading in the primary market and the process as outlined in the Stale Pricing Policy adopted by the Company, the Directors, at the recommendation of the Investment Manager, elected to apply a discount of 30% to the stale price on the primary exchange as at 24 April 2012 on the basis of the observable inputs into trading on the secondary

f this discount was applied over two valuation points to limit the impact upon the NAV calculation as there was no shareholder activity over the period.

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Policy update

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Dated 1 July 2011May 2012

E.I. STURDZA FUNDS PLC POLICY HANDBOOK JUNE 2011MAY 2012

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Introduction

This policy handbook is based on the current revised draft UCITS Notices issued by the Central

Bank (the “UCITS Notices”), draft Guidance Note 4/07 and Commission Directive 2010/43/EU (the

“Directive”). The following policies are expected to be the list of policies and procedures required under

UCITS IV for self managed investment companies, of which E.I. Sturdza Funds plc is classifiedes as

together with any additional policies adopted by the Company not specifically provided for under UCITS

IV.

and which must be in place by 1 July 2011.

The relevant provisions of the Directive and the UCITS Notices are as follows:

• Article 12 of Chapter II (Permanent Risk Management Function) of the Directive and paragraphs 51-54 of UCITS 2;

• Chapter III of the Directive (Conflicts) and paragraphs 59-71 of UCITS 2;

• Chapter IV of the Directive (Rules of Conduct) and UCITS 16;

• Chapter VI of the Directive (Risk Management) and paragraphs 72-81 of UCITS 2 and UCITS 10.

All of the policies have been drafted and are correct as at the date of June 2011May 2012. E.I. Sturdza Funds plc (the “Company”) HSBC Securities Services (Ireland) Limited (the “Administrator”) and E.I. Sturdza Strategic Management Limited (the “Investment Manager”) will review all of the policies on an annual basis as to the ongoing validity of the policies in addition to incorporating any required updates.

June 2011.May 2012

Formatted: Centered, Space After: 10 pt, Line spacing: Multiple 1.15 li, No bullets or numbering

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CONTENTS PAGE

1. Introduction 2

2. Risk Management Policy 4

3. Complaints Handling Policy 53

4. Accounting Procedures Policy 55

5. Valuation of Assets 62

6. Conflicts of Interest Policy 70

7. Voting Rights Policy 74

8. Order Handling Policy 76

9. Late trading and Market timing Policy 78

10. Best Execution Policy 81

11. Due Diligence Policy 85

12. Internal Control Policy 93

13. Related Party Policy 98

14. Handling of Subscription and Redemption Order Policy 100

15. Broker Selection Policy 102

16. Business Continuity Policy 105

17. Exceptional Trade Policy 109

18. Stale Price Policy 111

19. Inducement Policy 113

20. Appendix I 115

21. Appendix II 116

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Risk Management Policy

Background In accordance with its obligations under the UCITS IV Directive (“UCITS IV”) as transposed into Irish law by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as amended (the “Regulations”) E.I. Sturdza Funds plc (the “Company”) must establish, implement and maintain a Risk Management Policy. The list of policies and procedures to be adopted under UCITS IV includes the following wording in relation to the adoption of the Risk Management Policy:

Risk Management Policy – designed to identify the risks which the UCITS under management are exposed to e.g. market, liquidity and counterparty risks and the exposure of the UCITS to all other risks including operational risks which may be material for each UCITS under management. There is also an obligation to monitor and on a regular basis to assess the adequacy and effectiveness of the policy. When applying these requirements, the nature scale and complexity of the business and the nature and range of services and activities undertaken in the course of the business must be taken into account.

When implementing the risk management policy of the UCITS under management, a management company must, where appropriate after taking into account the nature of a proposed investment, formulate forecasts and perform analyses concerning the investment’s contribution to the UCITS portfolio composition, liquidity and risk and reward profile, before carrying out the investment. The analyses must only be carried out on the basis of reliable and up-to-date information, both in quantitative and qualitative terms.

Section 7(c)(ii) of GN 4-07 states these “requirements must be reflected in the business plan.” In addition to the RMP, details should also be provided in relation to more general risks that will be regularly monitored (for example static security prices, stock reconciliation, failed trades etc) and all operation risks. With regard to collateral management the Business Plan must if relevant provide for the systems, operation capabilities and needle expertise which will be employed to address risks attached to this activity.

Overview

The Directors of the Company and the Investment Manager believe that risk management is integral to the business. An important differentiator between the business of the Company and that of the competitors is the focus that is placed on risk management and control, the segregation of duties and responsibilities and the ongoing monitoring of both the service providers and the Funds. On a strategy level, management and control of risk is one of the core objectives to allow the Investment Manager to provide services to the Company to an appropriate standard, as well as a key consideration in developing initiatives for the future.

The Company and the Investment Manager believe that the most appropriate format to enable them to meet their obligations is not only to follow industry best practice but to actively develop and enhance existing procedures and controls on an ongoing basis to enable them to meet clients’ expectations of sound business practice. The Company and the Investment Manager believe that strong risk management practices, together with good corporate governance is essential to the operational effectiveness of the business and to enhance the corporate reputation. Commitment to best practice in these areas requires an active concern for and understanding of responsibilities and diligent discharge of those responsibilities in a prudent manner. Directors and senior management must fully understand the nature of the business being undertaken by the Company and understand the nature of the risks arising within the business and the systems and procedures established to identify, control and manage those risks. These individuals should be suitably qualified and competent to perform effective oversight and management of the Company, as well as to generate the understanding and participation from all of the individuals within the Investment Manager’s employ.

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The Board of Directors of the Company is responsible for setting strategic direction, corporate values and risk appetite and should define this to the Investment Manager. They should establish a risk management framework to ensure that effective policies, procedures and controls are in place to ensure the prudent management of risk. This framework should be reviewed to determine that it is appropriate for the nature and scale of the business and that there is effective delegation to the Investment Manager for ongoing monitoring. The Company believes that it is appropriate to have in place comprehensive risk management processes to identify, measure, monitor and control material risks adequate for the size and nature of the Company’s business, which should be periodically adjusted in light of the changing risk profile and external market developments. These processes should include appropriate board oversight as well as active monitoring and reporting provided by the Investment Manager.

General

To support this Risk Management Policy the following appendices are attached:

Appendix 1 - Risk management matrix for (i)the Company identifying and categorizing applicable risks by reference to eg low/medium high and the potential impact of the risk – ie minor/significant and (ii)for each fund identification and classification of relevant investment risks.

Appendix 2 - Annual compliance calendar/matrix for the Company identifying all filing requirements in each jurisdiction and Business Plan requirements, with quarterly compliance reporting.

Introduction

The Company considers it appropriate, as well as it being a regulatory requirement, to undertake an objective assessment of the performance of the Company from a compliance and risk management perspective. It also requires that the Investment Manager will monitor the performance of each of the Funds within the Company in line with the Risk Management Policy and ensure that all risks taken by the Funds are minimized in line with their stated objectives and documentation.

Risk Management – confirmation that the Investment Manager has analysed the controls over existing and prospective business, products and services to identify and measure the types and significances of the current and potential risks to be managed and controlled, both individually and in the aggregate. The Investment Manager, in conjunction with the Board of Directors of the Company, should develop and implement appropriate and prudent risk management policies and procedures for the Company and monitor their effectiveness through timely, accurate and complete information systems.

Internal Control Procedures – evidence that the Investment Manager has established internal control procedures which should remain current and appropriate and sufficient for the purposes of running operational risks and conducting the Investment Manager’s business in relation to the Company having regard to is size, nature and complexity. These should be reviewed on at least an annual basis and in advance of launching any new funds to ensure that these continue to apply.

Within the assessment of the policies in place, the Investment Manager seeks to determine that:

− the Company’s overall risk profile is sound and prudent and that risk is properly identified, measured and managed;

− new (or material changes to) significant policies and procedures are appropriately reviewed and approved;

− the Investment Manager’s internal controls provide reasonable assurance of the integrity and reliability of its records and to examine, verify and maintain accountability for its outsourced activities for the Company.

This paper therefore sets out the types of material risk that have been identified as prevalent within the business of the Company and the processes that are undertaken to manage and control these risks. Any

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significant changes to the risks that are faced by the Company as well as any deficiencies identified in the monitoring and control of risk will be reported to the Board of Directors as necessary.

Identification of Material Risks

The conduct of the business of the Company entails the management of portfolio, liquidity and process-level risks across each Fund on a consolidated basis. These risks may include:

− Credit Risk - The risk to earnings or capital arising from the potential that a borrower or counterparty will fail to perform on an obligation;

− Concentration risk, Country Risk and Transfer Risk - The risk to earnings or capital arising from potential that a concentration of exposure to individual clients, products or economic sectors fails to perform on an obligation. Country Risk is the risk to earnings and capital arising from the effects on business activities of trends and movements in the economic, social, and political conditions in a country. Transfer Risk focuses specifically on the availability of foreign exchange to service international obligations.

− Currency Risk - The risk to earnings or capital arising from the adverse movement of exchange rates on the assets and liabilities of the company denominated in non-base currency.

− Liquidity Risk - The risk to earnings or capital arising from the potential that the Company will be unable to meet its obligations as they fall due because of an inability to liquidate assets or obtain adequate funding, or that it cannot easily unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions.

− Interest-Rate Risk - The risk to earnings or capital resulting from adverse movements in interest rates.

− Market Risk - The risk to earnings or capital resulting from adverse movements in market rates or prices, assessed based on consideration of the interaction between market volatility and the business strategy.

− Strategic Risk - The current and prospective impact on earnings or capital arising from faulty business strategies and decisions, improper implementation of strategies and decisions, lack of response to industry changes or the impact of external factors on a previously sound rationale for a business line.

− Operational Risk - The risk to earnings or capital arising from inadequate or failed internal processes, people and systems and external risks.

− Reputation Risk - The risk to earnings or capital arising from the potential that negative publicity regarding the business or ethical practices will cause a decline in the client base, or revenue or costly litigation. Such risk often arises from the mismanagement of other risks.

− Settlement Risk - The risk to earnings or capital arising when the completion or settlement of a financial transaction fails to take place as expected. Settlement risk is often associated with credit risk, liquidity risk, operational risk and reputation risk.

− Technology Risk - The risk to earnings or capital arising from inadequate, obsolete, or mismanaged technology or from a failure or interruption in technology caused by events within or outside the Company.

− Outsourcing/Third Party Relationship Risk - The risk to earnings or capital arising from a decline in service quality, accuracy, security or response time on the part of a third party that provides products and services that the Company would otherwise provide internally.

− Compliance Risk - The risk to earnings or capital arising from breach, or noncompliance with, laws, regulations, guidelines, other regulatory directives, prescribed business practices or ethical standards.

− Legal Risk - The risk to earnings or capital arising from the potential that unenforceable contracts, incorrect or impractical documentation, lawsuits or adverse judgments may disrupt or otherwise negatively affect the operations or financial condition of the Company.

− Staff Risk - The risk to earnings or capital arising from the inadequacies in the competencies, capabilities or performance of the Company’s personnel, failure to provide for management succession or staff back-up, or human error, negligence or misconduct.

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− Other Risks - other risks that are identified as material to a particular part of the business or in the context of prevailing market conditions.

Credit Risk

Credit Risk is present in a number of forms within the individual funds forming part of the Company.

The Company considers it appropriate, where possible, to maintain counterparty relationships with the Custodian to the Company, HSBC Institutional Trust Services (Ireland) Limited. Not only are the responsibilities of the Custodian well regulated in a regarded jurisdiction, the associated documentation provides for the safekeeping of the assets to be prioritised and held in segregated client accounts.

However, the UCITS requirements limit the exposure that each Fund can maintain to one counterparty and it is therefore necessary for a number of funds to operate alternative cash accounts in addition to those maintained with the Custodian. The following funds operate cash accounts other than with the Custodian:

Strategic China Panda Fund J.P. Morgan and RBSI

Strategic Emerging Europe Fund Lloyds TSB International and RBSI

Within the Strategic China Panda Fund, the accounts operated by J.P. Morgan also have access to a cash diversification program whereby the cash balances are ultimately spread across a larger number of counterparties once a minimum value of USD 25 million is placed within the accounts held with J.P. Morgan. This diversification is subject to a variety of criteria established by the Investment Manager at the inception of the account, limiting the tenure at which deposits can be placed and also limiting the counterparties available to a select list of counterparties with a minimum credit rating equivalent to that held by J.P. Morgan. The aim of this program therefore is to diversify counterparty risk subject to minimum credit rating criteria, with enhanced yield of secondary priority.

The Investment Manager considers that the cash diversification program offered by J.P. Morgan meets the requirements of the Funds and the UCITS restrictions well as diversifies excess cash balances across well regarded institutions. However, this product is only offered by J.P. Morgan at a minimum size of USD 25 million, therefore is unsuitable for smaller funds or where the investment portfolio is near fully invested. While it is the Investment Manager’s intention to utilise the product on an ongoing basis to minimise the counterparty exposure maintained outside of the Custodian, this is not always possible for the Strategic China Panda Fund, and in the case where less than USD 25 million (approximately 1320% of NAV) is maintained at J.P. Morgan this cash balance is not diversified across more than one counterparty. To minimise exposure to J.P. Morgan the Investment Manager therefore limits the cash balances that are maintained with this counterparty, in favour of maintaining balances with the Custodian, or with RBSI if Custodian limits are neared, or looks to ensure that balances in excess of USD 25 million are maintained with J.P. Morgan at which point the cash diversification program is activated.

With regards to the Strategic Emerging Europe Fund, the Fund may be between 70% and 85% invested in assets within the investment portfolio, resulting in a larger proportion of the Fund maintained in cash than other funds. This higher proportion of NAV in cash therefore requires monitoring in line with the maximum counterparty exposure requirements as well as creates additional credit risk for the Fund. The Investment Manager would prefer to implement the use of the J.P. Morgan cash diversification program for this Fund also, but due to the small level of AUM (approx. USD 28 22 million) this program is not yet suitable for the Fund due to the minimum investment requirement. The Strategic Emerging Europe Fund has therefore been able to reduce counterparty exposure and therefore credit risk to the Custodian through the combination of the purchase of short term US government backed money market instruments, the holding of a money market collective investment scheme and through opening an additional cash accounts with Lloyds TSB and RBSI, both effectively a government backed UK

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organisations. The use of each of these avenues has proven to diversify the cash balances held and therefore limit counterparty exposure to the Custodian without actively taking additional credit risk.

For all funds operated by the Company, the cash balances and counterparty exposure are monitored on a daily basis by the Investment Manager and transactions to diversify the cash and limit counterparty exposure and therefore credit risk are placed on a daily basis as necessary.

The Investment Manager also maintains a ‘Broker Selection Policy’ which also lays out the policy for the selection of cash counterparties. While there is a case for diversification of credit or counterparty risk through use of multiple counterparties, which has been emphasised in the recent past, the Investment Manager considers that it is of long term business benefits to the funds to maintain significant relationships with the HSBC Group where possible and that the associated credit risk of doing so may possibly be reduced through avoidance of the use of counterparties of lower stature. That said, where additional cash counterparties are selected that give rise to credit risk, the Investment Manager ensures that each counterparty selected possesses a sound credit rating and solid financial standing, which is then subsequently actively monitored by the Investment Manager for any changes which might compromise the suitability of the counterparty in question.

In addition, within the Strategic Euro Bond Fund, and to a certain extent the Strategic Emerging Europe Fund in respect of fixed income investments, the credit risk of the investment portfolio for the Fund is actively monitored by the Investment Adviser and the Investment Manager in line with the construction and monitoring of the investment portfolio. In the Strategic Euro Bond Fund, Tthe Fund implements a rigorous risk management process that monitors the overall risk inherent in the Fund and places an absolute limit that this should not exceed the level of A-. Each transaction considered for the investment portfolio is assessed on the basis of how the overall credit risk of the portfolio will be impacted through inclusion of this position prior to the execution of the trade and actively monitored thereafter to ensure that the investment portfolio is diversified across a sufficient number of issues and issuers to minimise the any undue exposure to individual counterparty credit risk.

Concentration Risk, Country Risk and Transfer Risk

The Company operates a broad range of funds, many of which operate with a specific geographical or currency focus:

− Strategic China Panda Fund o Focuses on HKD denominated positions, linked to the equity performance of the

greater China region (Emerging Market focus)

− Strategic Euro Bond Fund o Focuses on EUR denominated positions, linked to the fixed income performance of

primarily Europe (Developed Market focus)

− Nippon Growth (UCITS) Fund o Focuses on JPY denominated positions, linked to the equity performance of Japan

(Developed Market focus)

− Strategic Europe Value Fund o Focuses on EUR denominated positions, linked to the equity performance of primarily

Europe (Developed Market focus)

− Strategic Emerging Europe Fund o Has a broad currency exposure hedged to USD, linked to the equity performance of

primarily Emerging European Countries (Emerging Market focus)

Each of the five Funds has a specific investment focus and strategy that differs from each of the other funds operated by the Company. There is therefore a diversification of currencies, geographical focus and investment strategies across the Funds operated by the Company.

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The Investment Manager also considers it prudent to monitor this risk within each Fund to ensure that this is appropriately diversified where possible. For a number of the Funds, the country risk is poorly diversified given that there is a geographical focus on one country or region. This will therefore likely leave each Fund exposed to negative (or positive) events that arise in each country from factors such as political instability, legal risk or natural disasters specific to these locations. The Investment Manager considers that these risks are the consequence of the desired investment strategy to focus on a particular geographical region and therefore that this form of country risk forms part of the market risk that has been adopted by the Fund and has been suitably disclosed to investors within the Fund documentation. Although it is possible to hedge some of the exposure to the market risk of individual countries through the use of equity index futures or other similar assets, the overall portfolio exposure is usually a net long position and the degree of the market exposure is largely driven by the portfolio decisions of the Investment Adviser, although these are subject to review by the Investment Manager. Although the concentration on one geographical location is often deliberately not diversified at the Fund level, the Investment Manager does actively monitor the concentration risk within the investment portfolio to ensure that the Fund is adequately diversified in terms of industry, sector and stock exposure. Each Fund has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in each individual Fund do not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. In addition, where the Investment Manager perceives there to be a higher risk, such as in emerging markets funds, there are often additional investment mandate restrictions put in place limiting exposure to industries, sectors, exchanges or economies as a response to mitigating concentration risk. For example, the Investment Manager has imposed the following restrictions on the Strategic China Panda Fund, the Strategic China Panda Fund is not permitted to invest more than 35% of NAV in any one industry, or the Strategic Emerging Europe Fund is not permitted to invest more than 30% in securities listed in Russia or more than 50% in any one sector or economy. Each trade placed on behalf of each Fund within the Company is monitored by the Investment Manager to ascertain the suitability of the transaction to the Fund and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for that particular Fund. On a political scale outside of the investment portfolio the Company has a concentration risk in respect of its domicile in Ireland as may be affected by changes in the legal infrastructure as well as changes in the political or taxation infrastructure within the country. Over the last few years Ireland has experienced a downturn in the economic cycle resulting in credit downgrades and institutional restructuring, to include changes within the regulatory body to become the Central Bank of Ireland in respect of the Company. Although some of these changes have been potentially unsettling, there have been few direct impacts upon the Company of a significant nature and no threats to the continuing of the UCITS status that the Company currently enjoys although a number of additional regulatory requirements are being implemented, from Corporate Governance aspects to UCITS IV regulations. The Investment Manager considers that their existing policies and practices in each of these areas enables the Company to adopt similar policies and practices and therefore to be well positioned to comply with both the existing and newer forms of regulatory requirements. In addition, the strong trends for industry consultation as well as the prompt adoption of EU based regulatory requirements contribute to Ireland being considered as well placed as a successful jurisdiction from which to operate the Company over the longer term.

The current UCITS guidelines that apply to the Company will bewere updated in Ireland in 2011 with the introduction of UCITS IV, which will requirehas required that a number of changes are implemented within the business structure for the Company. In addition, changes to the Corporate Governance code are also to be implemented in Ireland during 20121, which will increase the regulatory burden requirements of operating within this jurisdiction. However, the Investment Manager consider that

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changes to the UCITS regulations should have proved to simplify the array of documentation that should be produced and improve the speed and the process involved in cross-border registration for these products. Overall therefore these changes are viewed as positive, although it is important that the changes in the requirements are continue to be thoroughly reviewed and changes to processes and procedures updated accordingly to ensure ongoing compliance is maintained.

The Company also experiences concentration risk in the investor base that invests in each of the Funds. Aside from the Strategic China Panda Fund, the remaining funds each comprise a concentrated investor base of which 80%-90% of the assets are held by Banque Baring Brothers Sturdza SA. The commensurate risk of this concentrated shareholder register is realized if this investor looks to withdraw support for any or all of the Funds through redemption of their holdings within the Funds as this would result in a substantial decrease in assets under management in each Fund and the Company overall, reducing the overall ongoing financial viability of the Company. The Investment Manager would be concerned as to the level of concentration risk within the shareholder register if this concentration was maintained by an external group investor, however this investor is a related party to the Investment Manager and part of the same overall group structure and therefore unlikely to fully withdraw support from the Company or the Investment Manager.

With regards to transfer risk, the majority of funds maintain their currency exposure within actively traded global currencies, limiting their exposure to less well traded currencies. For those funds where currency exposure would ordinarily include less liquid currency exposure this is managed by accessing the restricted or less traded currency through OTC derivative products denominated in fund base currency to eliminate the transfer risk associated with the local currency, such as within the Strategic China Panda Fund exposure to the domestic Chinese market. In addition, for the majority of funds exposure to these instruments / markets is usually limited to a minimal exposure within the overall total investment portfolio, also decreasing the overall levels of risk to the Fund.

During 2010 the Company launched the Strategic Emerging Europe Fund the investment policy of which is to invest in emerging Eastern European economies. As a consequence therefore it is likely that this Fund will invest in emerging currencies that have a higher element of transfer risk. The Company actively monitors outstanding currency balances and pending cash movements on a daily basis to ensure that all transactions settle as appropriate, thereby mitigating transfer risk. In addition, currency exposures are hedged to the USD base currency, within tolerance bands, further looking to reduce any risk of emerging currency exposure.

Currency Risk

At the Company level, currency risk manifests itself in that the Company’s base accounting currency is EUR, but the Company has only two funds that have a base currency denominated in EUR, namely the Strategic Euro Bond Fund and the Strategic Europe Value Fund. Together these funds constitute only 3845% of the Total AUM of the Company; therefore the Company has a considerable translation currency risk both in reporting AUM and in the production of the financial statements of the Company to the base currencies of the other Funds i.e. USD and JPY. Although this does represent a considerable currency risk to the Company in terms of financial reporting, the Investment Manager considers that it is more appropriate to monitor the currency risk on a Fund specific basis in line with the prevailing investment strategy of each Fund as operated by each Investment Adviser.

The monitoring of each Fund’s cash balances, reconciliation and management of forecasting future cash flows is undertaken on a daily basis by the Investment Manager. This monitoring includes the assessment as to reasonable or required balances in each local currency, the requirement to adjust currency hedges in relation to the asset valuation of the investment portfolio and to place currency transactions to prevent currency overdrafts and settle any outstanding portfolio trades. The policy adopted by the Investment Manager at the individual Fund level in respect of non-base currency exposure is to minimize this wherever possible unless this is part of the investment strategy. This is also reconciled and monitored on a daily basis to ensure that accurate cash forecasting is produced to limit any unnecessary currency exposure. At the investor level, any currency hedging in place at the share class level is actively monitored

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in line with the valuation process to ensure that this is adjusted as necessary in line with shareholder activity and market movements.

Within the portfolio however, the investments held may also be subject to currency risk, particularly if these are denominated in a currency other than the base currency for the Fund. The Company does have the ability to hedge these currencies in addition to the investor hedging that is undertaken at the share class level and would be guided on the suitability of these activities by the Investment Adviser. Generally the Investment Adviser will provide the Investment Manager with standing recommendations as to how non-base currency exposure should be managed, which will be incorporated into the monitoring undertaken by the Investment Manager on a daily basis. In addition, each Investment Adviser is also able to alter the currency strategy on an ad-hoc basis through liaison with the Investment Manager.

For example, within the Strategic Emerging Europe Fund the Investment Adviser has requested that the Investment Manager actively hedge the currency exposure of portfolio assets within the Fund to the USD base currency through the use of currency forward transactions, monitored on a daily basis. In contrast, in the Strategic Europe Value Fund the Investment Adviser has a preference to maintain the currency exposure of the non-base currency assets with the exception of those assets denominated in USD, which are also actively hedged through the use of currency forwards, to a level determined by the Investment Adviser.

For the Nippon Growth (UCITS) Fund and the Strategic Euro Bond Fund there is little currency risk inherent within the Funds as all of the assets and large liabilities are denominated in the Fund base currency. In the Strategic China Panda Fund, there is limited currency risk as the majority of assets and liabilities are either denominated in the base currency of USD or in HKD, a currency pegged to the USD.

Liquidity Risk

The Company is required to consider its levels of liquidity both in terms of its investment portfolios, but also in relation to the regulatory obligations that the Company is required to meet in terms of financial resources and capital adequacy.

At the Fund level, the extent of liquidity within the investment portfolios is dependent on the strategy: for example, direct investment in larger cap listed equities in developed markets is likely to be more liquid than investment in smaller cap securities or those in emerging markets that are more thinly traded than developed markets. The liquidity risk with each strategy to the Fund is considered on an individual basis specific to the Fund in question and in line with the liquidity profile offered to investors in each Fund. In general however, portfolio holdings are monitored in relation to market liquidity over the short term, and to ensure that the any shareholder redemptions can be met through liquidation of suitable investments in the Fund, such monitoring taking place on a daily basis and actively monitored by the Investment Manager. Where any potential issues with respect to the liquidity of individual portfolios are identified this will be escalated within the Investment Manager and to the relevant investment adviser as necessary. In addition, the Company actively seeks to secure credit facilities where possible for funds, in order that any short term liquidity constraints can be absorbed with minimal impact to the respective fund. Further, in respect of large volumes of investor redemptions from the funds, all funds also have the ability to limit the proportion of investor redemptions processed on any one dealing day. The liquidity and cash flows associated with each Fund are actively monitored by the Investment Manager on a daily basis and each transaction assessed as to the impact that this will have on the overall liquidity of the investment portfolio

Interest Rate Risk

The Company does not have any exposure to cash or investment assets other than the exposures generated by the individual funds. The Investment Manager therefore considers that the assessment of interest rate risk should take place at the individual fund level, in line with the investment strategy pursued by each Fund.

The Investment Manager provides cash management services to the Company, which also extends to the management of and exposure to interest rate risk, although this is currently accepted to be low given the

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historic low levels of interest rates, and the fact that the Funds do not strategically operate any negative cash balances and incur any significant levels of overdraft interest. The value of the cash holdings across each Fund will be affected by the level of interest rates as this directly affects the yield that can be generated on these assets. In addition, the liquidity demands of each Fund on the assets determine the tenor on which cash amounts can be deposited.

At the Fund level, the Investment Manager considers that there is little exposure to interest rate risk given that the majority of funds focus on investment in equity securities that are not directly affected by changes in interest rates, and that positive cash balances are maintained by each Fund that are not currently sensitive to interest rate risk given the current low levels of interest rate applied to cash balances in most currencies. The notable exception however is the Strategic Euro Bond Fund, as this directly invests in fixed income securities that are susceptible to interest rate risk. The management of the interest rate risk within the Fund is actively managed by the portfolio manager in line with his prevailing market view and his cautious approach to portfolio construction through use of instruments such as bond futures to manage the duration of the portfolio, and thus the sensitivity to interest rates. In addition, the portfolio manager is also conscious of the management of duration and the sensitivity to interest rates within the assets held by the portfolio, and constructs the portfolio with a focus on weighted average maturity and overall portfolio sensitivity to interest rate movements as well as credit risk. The Investment Manager actively monitors the sensitivity to interest rate factors within the investment portfolio for the Strategic Euro Bond Fund on a daily basis and assesses the likely impact of any transactions on these measures.

Market Risk

The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company. The majority of revenues received by the Funds within the Company are linked to assets, which are directly affected by market movements as well as investor sentiment to maintain or increase / decrease the assets that they have invested in the Funds. In addition, the majority of the Funds are entitled to levy a performance fee related to the performance of the Funds which is also significantly linked to overall market performance. The Company accepts therefore that there is a significant risk to overall profitability that arises from market risk.

The Company currently has five funds, each of which focuses on a different element of equity or fixed income markets, as noted above under ‘Concentration Risk’. The strategy pursued by the Investment Manager since the inception of the Company has been to establish strong relationships with additional portfolio managers and investment advisory firms and to extend the product range to limit the concentration of the investment focus of the Company by launching additional funds operating in different markets and asset types.

The Investment Manager anticipates that this trend will continue over the next few years as they target the launch of additional products that will complement the existing product range within the E.I. Sturdza Funds plc umbrella.

At the Fund level, each Fund is directly exposed to market risk through the portfolio of assets in which it invests. For many funds this is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of market risk. The management of these areas is delegated to the respective Investment Adviser in line with their responsibilities towards providing portfolio construction and investment advisory services. However, this is actively managed and reviewed by the Investment Manager in the context of ongoing investment review of each portfolio undertaken on a daily basis, as well as the continuous assessment of the impact of any trading activity on the levels of risk and concentration within each Fund’s investment portfolio.

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Strategic Risk

The role of strategic risk now plays an increased role within the activities of the Company given the degrees of changes to regulations both in Ireland, Europe and elsewhere that are likely to affect the Company. The Company therefore endeavors to keep abreast of market developments and to ensure that the strategy implemented accurately considers and reflects the impacts on the business. The Company therefore periodically reviews both policies and directives being implemented by the EU as well as additional regulations and consultations affecting UCITS products, such as those promoted by CESR and the Irish Central Bank, in addition to the regulatory and market developments promoted globally that may also be expected to impact upon the activities of the Company.

For prospective new business or funds that are identified, an assessment is made by the Investment Manager and tabled for board discussion as to whether this is suitable, if this fits well within the current strategy for the Company, as well as the risks arising from the structure and the business. The development of these considerations should aim to mitigate the risk of inappropriate business decisions being implemented, as well as ensure that all stakeholders are aware of and have gained confidence in the Company’s abilities to manage the business that is being explored. External third party due diligence undertaken on behalf of the Investment Manager on new relationships also ensures that risks of entering contracts with new service providers are effectively scrutinized.

Operational Risk

Operational risk should also be considered as an area of high risk for the Company, particularly as the business depends largely on the services of outsourced service providers and on the individuals employed to have the appropriate level of skill, diligence and concentration to both develop and enhance but also follow existing processes and policies with the suitable level of care and attention to detail. Within the Investment Manager the increase of staff numbers based in the Guernsey office has made it possible to increase the number of checks that are placed on individual activities, as well as instill some additional controls and monitor the activities of the other outsourced service providers on a more pro-active basis.

Within the activities of all service providers it is imperative that the Company is able to rely on each service provider’s ability to recruit and maintain high quality individuals to maintain and enhance existing standards further as the business of the Company continues to grow if there is to be no deterioration in the degree and standard of coverage going forward. This is important both within the Investment Manager and the appointed Fund Administrator and Custodian, but also within the Investment Adviser, whose role may become broader as assets under management increase. All of these aspects should be actively monitored by the Investment Manager, but also by Bridge Consulting as part of their role to monitor the performance of outsourced service providers.

On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent in the business of the Company and have taken suitable steps to implement appropriate policies and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers. This degree of oversight includes the operational activities of other service providers to the Company, but also considers the impacts of these within the portfolio construction and risks of each fund’s investment portfolio as well as the custody arrangements and accounting valuation of each Fund.

The Investment Manager has adopted a detailed Compliance Handbook that outlines clearly to staff members the Investment Manager’s expectations of them with regards to their behavior and activities, and also a clear culture of accountability and ethics promoted within the team. The processes and policies in place are both assessed as to the ability to mitigate the risks inherent within the Investment Manager and to help the Investment Manager’s assessment of outsourced service providers in relation to the ongoing monitoring of each fund’s investment portfolio and operations activities. In addition, the Company requires that all service providers have documented policies and procedures in place to help

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mitigate the operational risks in place within each organization that might affect the activities of the Company as well as to ensure that the policies adopted by the Company are adhered to by each service provider. The Company also requires that each service provider maintains comprehensive logs and reports of all errors, breaches and other issues identified in relation to the Company, and that extracts of these are reported to the Directors on a regular basis.

Further, the Investment Manager and the Trustee regularly report on the activities of the Administrator to the Directors, and Bridge Consulting provide reports on the outsourced activities to the Directors at each quarterly board meeting.

Reputation Risk

The Investment Manager has relied heavily on its historic relationships and the development of new relationships to drive its own business forward, both in terms of building strong relationships with clients and with each of the specialist advisory firms with which they work. This extends to the activities of the Company also. The Investment Manager believes that it is the fostering of professional relationships designed to build trust and a sense of fairness with their clients and portfolio managers that is the cornerstone for the development of the business, both in terms of managing the existing business as well as attracting newer relationships to the Company. This focus on client services, people and relationships has been at the cornerstone of the business development of the Investment Manager historically and will continue to be in the future. Accordingly, it is vital to the ongoing strength of the business that these relationships continue in good order and that the Investment Manager and the Company are perceived as fair, transparent and professional, proficient in serving client interests as well as suitably skilled to operate. This assessment should be undertaken by regulators, the Board of the Company and other service providers as well as clients. There is a significant risk to the existing business of detrimental impact through negative developments, particularly given the small business world in which the Company and the Investment Manager operates. It is imperative therefore that the service providers to the Company operate in an appropriate and non-discriminatory manner which builds confidence in industry contacts and professional relationships. This requires ongoing training and development of individuals within the Investment Manager to ensure that they are suitably aware of the business situation as well as have the correct skill set for their specific role. This also requires that the Company’s service providers are monitored on an ongoing basis to ensure ongoing suitability and to reduce the risks that can arise through insufficient monitoring, inadequate processes and procedures and poor investor communications. To this end, the Investment Manager on behalf of the Company takes steps to ensure that appropriate standards are maintained at all times, that investor communications are accurate, consistent and distributed in a timely manner, that business counterparts are reviewed as necessary, and that all appropriate steps are taken to protect the goodwill associated with the funds within the Company through the portrayal of a professional entity seeking to add value to clients and business relationships.

The Company has instilled procedures to ensure that risk to reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk, both qualitatively and quantitatively, undertaken by the Investment Manager or on its behalf. The Company also takes steps to ensure that clients are provided with accurate and complete information and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of brokers, counterparties and service providers is also undertaken by the Investment Manager and designed to minimize reputation risk arising from specific failings in these areas. Overall, the consideration of the risk to reputation is present throughout the Company’s communications and those of its service providers, and although it may be difficult to control in isolation as a risk prevalent within the business, there is active consideration of the risk to reputation within the actions taken by the Company and the Investment Manager in respect of each of their activities and those of the Funds.

A further risk to reputation comes from the activities which are outsourced to other entities to represent the Company within their activities, for example representative correspondent banks and centralized agents utilized in each jurisdiction in which the Company is registered for distribution. While the legal agreements in place require these agents to be fully aware of the regulatory and legal implications of the

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regulatory requirements pertaining to the activities undertaken on behalf of the Company, the reputation risk to the Company of any wrongdoings in this area may still have a detrimental impact to the business of the Company. The Investment Manager will continue to actively monitor progress in this regard and to address any potential issues that arise.

Settlement Risk

The majority of the Company’s business is transacted at the individual Fund level and relates to trades placed on behalf of each Fund, as well as shareholder activity. From the Fund perspective, these also utilize the services of counterparties with strong financial standing for custodial and banking activities, such as the HSBC group. These counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the Funds transact with their counterparties on a ‘delivery vs payment’ basis, whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. Exceptions to this are in the Russian equity market utilized within the Strategic Emerging Europe Fund (limited to a maximum of 30% of NAV of that Fund) where standard settlement is for the cash transaction to settle after the securities have been exchanged. The Company has therefore ensured that the Fund has entered into additional legal documentation with those brokers with whom the Fund will trade securities in this way in efforts to protect the Fund from any additional settlement risk. Further, these transactions are given elevated importance within the Investment Manager and actively monitored on an ongoing basis to ascertain any risks posed to the Fund. In addition, the Investment Manager is also working with the Custodian to establish the appropriate facilities to allow these trades to settle on the standard ‘delivery vs payment’ basis.

There is also settlement risk apparent in a number of markets where there is a ‘forced buy in’, such as Hong Kong, as utilized by the Strategic China Panda Fund. In these markets, if for any reason the pending trade does not settle on the appropriate settlement date, the broker is forced by the exchange to close out the position on the next trading day. This poses additional risk to the funds that operate in these markets in that the Fund may not receive the positions for trades that have been placed which can create additional or undesired exposures within the investment portfolio that, aside from having a performance impact, can potentially result in a breach of the investment restrictions. The Investment Manager dedicates sufficient resources on an ongoing basis to actively monitor and follow up the matching and settlement of all outstanding trades and corresponds with the Custodian on a daily basis to ensure that all trades settle as appropriate in an effort to mitigate this settlement risk.

Despite this, the Company is still exposed to settlement risk in the form that its receipts may not settle, so it is imperative that the counterparties with whom the Company deals are of sound financial standing and operational capability to ensure that transactions are settled as instructed, actively monitored by the Investment Manager on at least an annual basis.

An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and the Investment Manager and any outstanding subscription amounts are followed up as appropriate.

Technology Risk

The Company relies on a large number of appointed service providers, most of which rely heavily on technology to ensure that their duties and responsibilities are performed adequately in line with their agreements. There is a distinct separation of roles performed by entities on behalf of the Company, many of which are unrelated to the systems operated by other service providers. For example, there is no link

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between systems between the Investment Manager and any other service provider, therefore the failure of technology within the Investment Manager should not unduly prevent any other service providers performing their responsibilities as appropriate. Similarly, there is no link between the systems of the Administrator and the Investment Adviser, so any failings of technology in one service provider will unlikely impact the activities of another.

In any event, the Company requires that each service provider have in place adequate policies and procedures to ensure that each can continue operations in the event that there is a technology failure, most of which revolve around the ability to work remotely or from an alternative office location. The Investment Manager and Bridge Consulting monitor the existence and periodic testing of these policies on an annual basis.

Within the day to day activities of each service provider undertaken on behalf of the Company there are a range of different systems and technology requirements in place. For example, the Administrator and Custodian rely heavily on internal customized systems both to provide fund administration and shareholder register activity, as well as settlement of trades and payment of cash transactions. Within the Investment Manager and the respective investment adviser technology requirements are likely less complex, often relying on Microsoft Office software linked to Bloomberg systems or other software / information accessed via the internet. Because the majority of this software is either customized in-house or sourced from a dedicated IT software provider to cover the needs of an entire business line this can reduce the risk that the technology capabilities do not understand or address the requirements of the business. Conversely, it is also possible that there are insufficient resources in-house or allocated to the specific operations of the Company to design and customize spreadsheets and systems to a satisfactory level, standard and degree of accuracy to meet the needs of the business and to enhance and develop existing processes.

The Company considers that the range of technology capabilities and requirements across the different service providers to the business, together with the systems and policies in place to enhance systems through development but also to ensure continuity in the event of a technology failure helps to mitigate the risks that inadequate technology pose to the business. Further, the ongoing review and monitoring of output across a number of service providers allows the requirement for technological improvement to be highlighted and monitored through to implementation.

Outsourcing / Third Party Service Provider Risk

Given that a large proportion of the activities undertaken by the Company are outsourced to specialist third party service providers including investment advisors, there is also a significant degree of operational risk arising out of these outsourced activities. The Investment Manager maintains a categorization of the service providers to the Company as to the degree of risk that each service provider poses to the activities of the Company, each of which is actively monitored for their activities both on an ongoing basis, but with a more detailed review in line with the following matrix:

Risk Classification Degree of Monitoring

High Risk Monthly review of activities in line with appropriate agreements and expectations. Semi-annual review of compliance requirements.

Medium Risk Semi-annual review of activities in line with appropriate agreements and expectations. Annual review of compliance requirements.

Low Risk Annual review of activities in line with appropriate agreements and expectations. Annual review of compliance requirements.

Although a service provider may be categorized at initiation of the relationship in one category, this is assessed on at least an annual basis to ensure ongoing suitability and can be re-categorised as necessary in line with perceived levels of risk and market conditions.

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The Investment Manager actively monitors the performance of each service provider and investment adviser in relation to their contractual responsibilities as well as specific operating procedures or service level documents (where appropriate) and reports any issues both to Bridge Consulting, who also undertake their own monitoring of service providers, and the Board of Directors of the Company. Monitoring takes the form of ongoing review of detailed services to identify the degree of risk of specific activities undertaken by each service provider, such as NAV calculation or recommending trades suitable for the relevant investment portfolio, as well as periodic review of contractual arrangements to identify any risks of non-compliance or of not adhering fully to the required standards. In addition, on at least an annual basis dependent on the risk classification of that service provider, or investment adviser, the Investment Manager undertakes a thorough review of the services undertaken by that service provider. This review allows the performance of each service provider, including investment advisers, to be examined and assessed and also seeks to fulfil the Investment Manager’s role to monitor its outsourcing to service providers. Any significant issues arising from these reviews will be reported to the Board of Directors of the Company for their consideration and discussion.

Compliance Risk

The Compliance Risk for the Company extends to multiple jurisdictions, not only Ireland or those jurisdictions in which the Funds are authorized for distribution, namely Switzerland, UK, France, Germany and the Netherlands. In addition, the Company is exposed to risk in those jurisdictions where appointed service providers operate in that these service providers may not comply with the requirements of the appropriate jurisdiction, as well as any other jurisdiction where marketing materials have been received (such as over the internet or email) where the provisions of the communication do not comply with the appropriate restrictions in that jurisdiction. Appendix 2 is the annual compliance calendar noting all filing requirements in all jurisdictions and BP requirements with updates.

The Company has appointed a designated individual to act as the Compliance Officer and Money Laundering Reporting Officer, a representative of Bridge Consulting in Ireland. This role largely focuses on the requirements under Irish regulations, as well as ensuring that appropriate KYC documentation and Anti-Money Laundering Procedures are followed by the investors and gathered by the Fund Administrator. In addition to this, there is active involvement of the Trustee, the Corporate Secretary and the Irish legal counsel within the activities of the Funds; the Company considers therefore that the compliance risk in Ireland is minimized as fully as possible.

The Investment Manager has a designated compliance function that works closely with each of the Irish legal counsel, the Fund Administrator, Trustee and Bridge Consulting on matters pertaining to compliance to ensure that the appropriate policies and procedures are adopted both by the Company and the Investment Manager. In addition, the Investment Manager actively reviews the requirements of the Company in each jurisdiction in which the Company is registered and looks to ensure that the appropriate guidelines are followed in each.

The Investment Manager monitors on an annual basis the compliance requirements for the appointed investment advisers and requests confirmation of their ongoing compliance and registration with appropriate regulatory bodies. In addition, the Investment Manager controls the dissemination of all fund information and documentation either via email or through the internet and ensures that this meets with the appropriate guidelines and disclaimers as to avoid information being circulated to prohibited or restricted investors.

The Company therefore considers that the steps taken in each of these areas, together with the ongoing monitoring in place, prove to further mitigate the risk of non-compliance.

Legal Risk

The Company and the Funds are exposed to legal risk arising from the documentation that they enter into, whether these are unenforceable or impractical, as well as from legal actions being taken against

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either the Company or a Fund from clients and investors or other counterparties and service providers with whom the entity transacts.

The Company has appointed specialist legal advisers in Ireland on an ongoing basis to provide advice to the Funds and the Company. In addition, where specialist agreements are entered into, such as for ISDA or CSA agreements for the use of financial derivative instruments, additional specialist legal counsel are appointed as to advise on these areas as necessary. The Company considers that to take these steps should help mitigate the risk of agreements being unenforceable. In addition, the Investment Manager reviews all agreements that the Company enters into to ensure that these are reasonable and suitable from an operational, manageable and reputational perspective. Each legal agreement to which the Funds and the Company are subject is reviewed on an annual basis by the Investment Manager to ensure that all aspects and undertakings are duly completed on behalf of the Company and the Funds.

In order to mitigate against legal actions undertaken by either clients and service providers, as well as to ensure compliance with capital adequacy rules and other regulatory guidelines, each of the Company and the Investment Manager each maintains comprehensive D&O insurance cover, with the Investment Manager also retaining Professional Indemnity Cover. The policies of the Investment Manager and the Company are held with separate insurers to eradicate potential conflicts of interest between the two. These policies are renewed on an annual basis with the contents of each being negotiated ahead of each renewal date to ensure that any appropriate updates and disclosures are made.

In addition, regulatory guidelines on capital requirements in place for self managed investment companies such as E.I. Sturdza Funds plc require that the Company have in place minimum capital of EUR 300,000 at all times. At the establishment of the Company the Investment Manager loaned this amount to the Company in order to meet this requirement. This amount was repaid by the Company to the Investment Manager upon the launch of the Strategic China Panda Fund as the subscriptions received into the Fund were sufficient to meet this requirement. On an ongoing basis the Company has sufficient capital to meet this requirement through the AUM held in each Fund. The Investment Manager would look to loan sufficient capital to the Company in the event that the Company was unable to meet these capital requirements.

Staff Error Risk

Although linked to operational risk for the Company and described briefly in this section, there is the potential for staff error risk within the ongoing operations for the Company from the activities of the outsourced service providers, including the Investment Manager and the Investment Adviser, but not from the Company itself given that it does not employ any staff.

While the Company seeks to be satisfied periodically that each service provider has in place the appropriate levels of checking, detailed processed and procedures to mitigate the risks of human error, lack of concentration or experience, there is however the risk that losses will be incurred through fraud, negligence and general lack of honesty amongst individuals. The Company requires that each service provider takes steps to mitigate this through the levels of accountability and oversight in place, particularly for high risk areas, such as the requirement for director signature authority on each legal agreement executed on behalf of the Company or Funds for example. However, that said, the risk that individual behaviour is fraudulent, negligent or generally dishonest can never be fully eradicated and each service provider, as well as the Directors, are required to actively consider these aspects within their operations and seek to eradicate any opportunities for individuals to behave in a dishonest manner.

Other Risks

There may be other risks inherent to the Company that arise from time to time, either from specific activities or market conditions. As these arise or are identified the Directors and / or the appropriate service providers take the appropriate steps to ensure accurate assessment and address of all necessary risks. These are then escalated to the Directors as necessary.

Approach to Risk Management

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Within the assessment and monitoring of Company risk, the Directors look to ensure that this is based upon:

− accurate and reliable management information;

− relevant and timely risk analysis and reporting;

− thorough control standards, processes and programs.

In addition, the operational functions and compliance functions are largely maintained separately within the service providers to the Company to prevent any unnecessary conflicts of interest arising, subject to controls appropriate to the nature and scale of the business.

The Company also appoints external auditors to annually audit the Company’s financial statements including a review of the control environment applicable to the Company, as well as seeking that detailed reporting of compliance and risk management aspects of each Fund and product under management is tabled at each scheduled quarterly board meeting. Senior representatives of a number of service providers are also available at scheduled quarterly board meetings to address any particular queries raised by the directors to satisfy them as to the adequacy of the risk management arrangements in place, that these are continuing, appropriate and effective, and that an effective control environment exists.

The approach to risk management also forms part of the wider review of business strategy and compliance monitoring and review, both in the context of the corporate governance aspects of the Company and the responsibilities of the Board of Directors to meet necessary requirements and to ensure that management is competent. In addition, risk management aspects are considered in the discussion and approval of Company strategy and objectives for new Fund launches, as well as within the monitoring of each service provider to ensure that there is an existence of effective policies and procedures and that operations are implemented with a strong degree of integrity.

The Board of Directors also reviews existing and prospective Funds and service providers periodically. The Investment Manager identifies and measures the types and significance of the current and potential risks to be managed and controlled, both individually and in the aggregate and reports to at scheduled board meetings.

Review and Update

The Directors will review the Risk Management Policy on at least an annual basis and seek confirmation from the Administrator and the Investment Manager as to the ongoing validity of the policy in addition to incorporating any required updates.

In addition, the Investment Manager will review the Risk Management Policy in advance of launching any additional Funds by the Company to ensure that all instruments likely to be trades by the Fund are suitably covered by the Risk Management Policy.

Any required updates or changes will be incorporated within the Risk Management Process and/or the Business Plan for the Company where necessary.

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Name of Fund Nature of the Risk Potential Impact

Risk Level

Strategic China Panda Fund (“SCPF”)

Credit Risk - UCITS regulations limit the exposure that each Fund can maintain to one counterparty and it is therefore necessary for the SCPF to operate alternative cash account in addition to those maintained with the Custodian. The SCPF operates a cash diversification account with J.P. Morgan whereby the cash balances are ultimately spread across a larger number of counterparties once a minimum value of USD 25 million is reached. In addition to this, an additional cash account with RBSI is operated for cash balances below USD 25 million but where counterparty limits with the Custodian would be exceeded.

The Investment Manager considers that the cash diversification program offered by J.P. Morgan meets the requirements of the Funds and the UCITS restrictions well as diversifies excess cash balances. However, this product is only offered by J.P. Morgan at a minimum size of USD 25 million. It is the Investment Manager’s intention to utilise the cash account on an ongoing basis to minimise the counterparty exposure maintained outside of the Custodian, but this is not always possible where less than USD 25 million (approximately 1320% of NAV) is maintained at J.P. Morgan and therefore the cash balance is not diversified across more than one counterparty. To minimise exposure to J.P. Morgan the Investment Manager therefore limits the cash balances that are maintained with this counterparty, in favour of maintaining balances with the Custodian or with RBSI, or looks to ensure that balances in excess of USD 25 million are maintained with J.P. Morgan at which point the cash diversification program is activated. Where cash balances are less than USD 25 million but diversification from the Custodian accounts is required these are held with RBSI where possible.

Medium. Potential impact is significant in the event of default but is mitigated due to controls in place at the Investment Manager to monitor credit risk.

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Concentration risk, Country Risk and Transfer Risk - The SCPF focuses on HKD denominated positions, linked to the equity performance of the greater China region (Emerging Market focus).

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the SCPF is adequately diversified in terms of industry, sector and stock exposure. The SCPF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the SCPF do not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. Each trade placed on behalf of the SCPF is monitored by the Investment Manager to ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund.

Medium. Potential impact is minor due to controls in place at the Investment Manager

Currency Risk - The policy adopted by the Investment Manager at the individual Fund level in respect of non-base currency exposure is to minimize this wherever possible unless this is part of the investment strategy.

The SCPF has a limited currency risk as the majority of assets and liabilities are either denominated in the base currency of USD or in HKD, a currency pegged to the USD.

Low. Potential impact is minor due to controls in place at the Investment Manager

Liquidity Risk - The risk that the SCPF cannot liquidate its investments at suitable market prices, or in quantities large enough to meet the cashflow requirements of the Fund.

The liquidity and cash flows associated with the SCPF are actively monitored by the Investment Manager on a daily basis and each transaction assessed as to the impact that this will have on the overall liquidity of the investment portfolio. The SCPF invests primarily in liquid listed large cap stocks that can be sold as necessary to meet liquidity requirements


Interest-Rate Risk – The Company does not have any exposure to cash or investment assets

The Investment Manager considers that there is little exposure to interest rate risk for the SCPF given that its focus is on investment in

Low.









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other than the exposures generated by the individual funds. The SCPF does not invest significantly in assets exposed to interest rate risk directly.

equity securities that are not directly affected by changes in interest rates, and that a positive cash balance is maintained by the fund.

Potential impact is minor due to controls in place at the Investment Manager

Market Risk - The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company. The SCPF is an actively managed equity fund exposed to market risk fully unless this is hedged as part of the investment strategy.

The SCPF is directly exposed to market risk through the portfolio of assets in which it invests. This is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of market risk.

High. Potential impact is significant.

Strategic Risk - The current and prospective impact on earnings or capital arising from faulty business strategies and decisions, improper implementation of strategies and decisions, lack of response to industry changes or the impact of external factors on a previously sound rationale for a business line. The role of strategic risk now plays an increased role within the activities of the Company given the degrees of changes to regulations both in Ireland, Europe and elsewhere that are likely to affect the Company.

The Company therefore periodically reviews both policies and directives being implemented by the EU as well as additional regulations and consultations affecting UCITS products, such as those promoted by CESR and the Irish Central Bank, in addition to the regulatory and market developments promoted globally that may also be expected to impact upon the activities of the Company.

Low. Potential impact is minor due to controls in place.

Operational Risk - The risk to earnings or capital arising from inadequate or failed internal processes, people and systems and external risks.

On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent to the SCPF and has taken suitable steps to implement appropriate policies and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers.

Medium Potential impact is significant in the event of pricing error or fraudulent activity but is mitigated through controls in place.







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Reputation Risk - The Investment Manager

believes that it is the fostering of professional relationships designed to build trust and a sense of fairness with their clients and portfolio managers that is the cornerstone for the development of the business, both in terms of managing the existing business as well as attracting newer relationships to the Company

The Company has instilled procedures to ensure that risk to reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk. The Company also takes steps to ensure that clients are provided with accurate and complete information pertaining to the SCPF and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of the brokers, counterparties and service providers to the SCPF are also undertaken by the Investment Manager and designed to minimize reputational risk arising from specific failings in these areas.


Settlement Risk - The risk to earnings or capital arising when the completion or settlement of a financial transaction fails to take place as expected. Settlement risk is often associated with credit risk, liquidity risk, operational risk and reputation risk.

Counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the fund can transact with their counterparties on a ‘delivery vs payment’ basis, whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. There is also settlement risk apparent in a number of markets where there is a ‘forced buy in’, such as Hong Kong, as utilized by the SCPF. In these markets, if for any reason the pending trade does not settle on the appropriate settlement date, the broker is forced by the exchange to close out the position on the next trading day. An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and

Medium. Potential impact is significant in the event of default but is mitigated by the level of controls in place.




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the Investment Manager and any outstanding subscription amounts are followed up as appropriate.

Technology Risk - The Company relies on a large number of appointed service providers, most of which rely heavily on technology to ensure that their duties and responsibilities are performed adequately in line with their agreements.

The Company considers that the range of technology capabilities and requirements across the different service providers to the business, together with the systems and policies in place to enhance systems through development but also to ensure continuity in the event of a technology failure helps to mitigate the risks that inadequate technology pose to the business.

Low. Potential impact is minor due to controls in place.

Outsourcing/Third Party Relationship Risk - The risk to earnings or capital arising from a decline in service quality, accuracy, security or response time on the part of a third party that provides products and services that the Company would otherwise provide internally.

The Investment Manager actively monitors the performance of each service provider in relation to their contractual responsibilities as well as specific operating procedures or service level documents. Monitoring takes the form of ongoing review of detailed services to identify the degree of risk of specific activities undertaken by each service provider, such as NAV calculation or recommending trades suitable for the relevant investment portfolio, as well as periodic review of contractual arrangements to identify any risks of non-compliance or of not adhering fully to the required standards.


Compliance Risk - The risk to earnings or capital arising from breach, or noncompliance with, laws, regulations, guidelines, other regulatory directives, prescribed business practices or ethical standards.


Low. Potential impact is minor due to controls in place

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Legal Risk - The risk to earnings or capital arising from the potential that unenforceable contracts, incorrect or impractical documentation, lawsuits or adverse judgments may disrupt or otherwise negatively affect the operations or financial condition of the Company.

The Company has appointed specialist legal advisers in Ireland on an ongoing basis to provide advice to the Funds and the Company. In addition, where specialist agreements are entered into, such as for ISDA or CSA agreements for the use of financial derivative instruments, additional specialist legal counsel are appointed as to advise on these areas as necessary.


Strategic Euro Bond Fund (“SEBF”)

Credit Risk - UCITS regulations limit the exposure that each Fund can maintain to one counterparty. The SEBF is predominantly invested in fixed income products offered by corporate issuers and therefore directly impacted by the credit rating of those issuers

The credit risk of the Strategic Euro Bond Fund is actively monitored by the Investment Adviser and the Investment Manager in line with the construction and monitoring of the investment portfolio. The fund implements a rigorous risk management process that monitors the overall risk inherent in the Fund and places an absolute limit that this should not exceed the level of A-. Each transaction considered for the investment portfolio is assessed on the basis of how the overall credit risk of the portfolio will be impacted through inclusion of this position prior to the execution of the trade and actively monitored thereafter to ensure that the investment portfolio is diversified across a sufficient number of issues and issuers to minimise the any undue exposure to individual counterparty credit risk.

High Potential impact is significant in the event of default but is mitigated due to controls in place at the Investment Manager / Adviser to monitor credit risk.

Concentration risk, Country Risk and Transfer Risk - The SEBF focuses on EUR denominated positions, linked to the fixed income performance of primarily Europe (Developed Market focus)

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the SEBF is adequately diversified in terms of industry, sector and stock exposure. The SEBF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the SEBF do not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. Each trade placed on behalf of the SEBF is monitored by the Investment Manager to ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk,

Medium Potential impact is minor due to controls in place at the Investment Manager





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concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund.

Currency Risk - The SEBF has minimal exposure to any currency other than EUR, which is also the base currency of the Company.

The SEBF has a limited currency risk, its base currency is denominated in EUR

Low. Potential impact is minor due to controls in place at the Investment Manager.

Liquidity Risk - The risk that the SEBF cannot liquidate its investments at suitable market prices, or in quantities large enough to meet the cashflow requirements of the Fund.

The portfolio holdings are monitored in relation to market liquidity over the short term, and to ensure that the any shareholder redemptions can be met through liquidation of suitable investments in the fund, such monitoring taking place on a daily basis and actively monitored by the Investment Manager. Where any potential issues with respect to the liquidity of individual portfolios are identified this will be escalated within the Investment Manager and to the Investment dviser as necessary. The SEBF intends to invest primarily in the more popular or liquid issues offered in the market place is sufficient size as not to compromise the liquidity of the positions.


Interest-Rate Risk – The Company does not have any exposure to cash or investment assets other than the exposures generated by the individual funds. The SEBF has significant exposure to interest rate risk due to the nature of the portfolio investments

The Strategic Euro Bond Fund invests directly in fixed income securities that are susceptible to interest rate risk. The management of the interest rate risk within the fund is actively managed by the portfolio manager in line with his prevailing market view and his cautious approach to portfolio construction through use of instruments such as bond futures to manage the duration of the portfolio, and thus the sensitivity to interest rates. In addition, the portfolio manager is also conscious of the management of duration and the sensitivity to interest rates within the assets held by the portfolio, and constructs the portfolio with a focus on weighted average maturity and overall portfolio sensitivity to interest rate movements as well as credit risk. The Investment Manager actively monitors the sensitivity to interest rate factors within the investment

High Potential impact is significant due to the nature of the assets in which the Fund invests.







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portfolio for the Strategic Euro Bond Fund on a daily basis and assesses the likely impact of any transactions on these measures.

Market Risk - The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company.

The SEBF is directly exposed to market risk through the portfolio of assets in which it invests. This is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of interest rate risk, as well as the active monitoring of interest rates and credit ratings.

High Potential impact is significant





On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent to the SEBF and has taken suitable steps to implement appropriate policies and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers.

Medium Potential impact is significant in the event of pricing error or fraudulent activity but is mitigated through controls in place.

Reputation Risk - The Investment Manager The Company has instilled procedures to ensure that risk to Low.






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believes that it is the fostering of professional relationships designed to build trust and a sense of fairness with their clients and portfolio managers that is the cornerstone for the development of the business, both in terms of managing the existing business as well as attracting newer relationships to the Company

reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk. The Company also takes steps to ensure that clients are provided with accurate and complete information pertaining to the SEBF and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of the brokers, counterparties and service providers to the SEBF are also undertaken by the Investment Manager and designed to minimize reputational risk arising from specific failings in these areas.

Potential impact is minor due to controls in place at the Investment Manager


Counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the fund can transact with their counterparties on a ‘delivery vs payment’ basis, whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and the Investment Manager and any outstanding subscription amounts are followed up as appropriate.

Medium Potential impact is significant in the event of default but is mitigated by the level of controls in place.

Technology Risk - The Company relies on a large number of appointed service providers, most of which rely heavily on technology to ensure that their duties and responsibilities are

The Company considers that the range of technology capabilities and requirements across the different service providers to the business, together with the systems and policies in place to enhance systems through development but also to ensure continuity in the event of a

Low. Potential impact is minor due to controls


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performed adequately in line with their agreements.

technology failure helps to mitigate the risks that inadequate technology pose to the business.

in place










Nippon Growth (UCITS) Fund (“NGUF”)

Credit Risk - UCITS regulations limit the exposure that each Fund can maintain to one counterparty

The Investment Manager actively monitors the exposure of the Nippon Growth (UCITS) Fund with regards to credit risk on a daily basis. The credit risk inherent within the NGUF is limited to the cash balances maintained within the Fund as each position within the

Low. Potential impact is significant in the









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investment portfolio is listed on exchange and the fund only holds equities that are not directly affected by credit risk. In addition, the NGUF is usually near fully invested, reducing the active credit risk to less than 3% of NAV. This exposure is limited to one counterparty, the Custodian, whose strong financial standing and credit rating mitigate this risk further as any changes would be reviewed by the Investment Manager .

event of default, but mitigated through the financial standing of the Custodian.

Concentration risk, Country Risk and Transfer Risk - The Nippon UCITS focuses on JPY denominated positions, linked to the equity performance of Japan (Developed Market focus)

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the NGUF is adequately diversified in terms of industry, sector and stock exposure. The NGUF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the NGUF does not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. Each trade placed on behalf of the NGUF is monitored by the Investment Manager to ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund.


Currency Risk - The NGUF has minimal currency exposure as all assets, cash and shareholder activity is processed in JPY. .

The monitoring of the NGUF cash balances, reconciliation and management of forecasting future cash flows is undertaken on a daily basis by the Investment Manager. This monitoring includes the assessment as to reasonable or required balances in each local currency, the requirement to adjust currency hedges in relation to the asset valuation of the investment portfolio and to place currency transactions to prevent currency overdrafts and settle any outstanding portfolio trades. The policy adopted by the Investment Manager at the individual Fund level in respect of non-base currency exposure is to









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minimize this wherever possible unless this is part of the investment strategy. This is also reconciled and monitored on a daily basis to ensure that accurate cash forecasting is produced to limit any unnecessary currency exposure. The NGUF has very little currency risk inherent within the funds as all of the assets and large liabilities are denominated in the fund base currency.

Liquidity Risk - The risk that the NGUF cannot liquidate its investments at suitable market prices, or in quantities large enough to meet the cashflow requirements of the Fund.

The portfolio holdings are monitored in relation to market liquidity over the short term, and to ensure that the any shareholder redemptions can be met through liquidation of suitable investments in the fund, such monitoring taking place on a daily basis and actively monitored by the Investment Manager. Where any potential issues with respect to the liquidity of individual portfolios are identified this will be escalated within the Investment Manager and to the investment adviser as necessary. The NGUF invests primarily in liquid listed large cap stocks that can be sold as necessary to meet liquidity requirements.


Interest-Rate Risk – The Company does not have any exposure to cash or investment assets other than the exposures generated by the individual funds. The NGUF does not invest significantly in assets exposed to interest rate risk directly.

The Investment Manager provides cash management services to the Company, which also extends to the management of and exposure to interest rate risk, although this is currently accepted to be low given the historic low levels of interest rates, and the fact that the fund does not strategically operate any negative cash balances and incur any significant levels of overdraft interest. The Investment Manager considers that there is little exposure to interest rate risk for the NGUF given that its focus is on investment in equity securities that are not directly affected by changes in interest rates, and that a positive cash balance is maintained by the fund


Market Risk - The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly

The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company and the NGUF. The revenues received

High. Potential impact is







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influence the profitability of the Company. The NGUF is an actively managed equity fund fully exposed to market risk unless this is hedged as part of the investment strategy.

are directly linked to assets and the performance of the Fund, is directly affected by market movements as well as investor sentiment to maintain or increase / decrease the assets that they have invested in the Funds. In addition, the NGUF is entitled to levy a performance fee related to the performance of the Funds which is also significantly linked to overall market performance. The Company accepts therefore that there is a significant risk to overall profitability that arises from market risk. The NGUF is directly exposed to market risk through the portfolio of assets in which it invests. This is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of market risk.

significant




Operational Risk - The risk to earnings or capital arising from inadequate or failed internal processes, people and systems and

On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent to the NGUF and has taken suitable steps to implement appropriate policies

Medium Potential impact is


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external risks.

and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers.

significant in the event of pricing error or fraudulent activity but is mitigated through controls in place.

Reputation Risk - The Investment Manager believes that it is the fostering of professional relationships designed to build trust and a sense of fairness with their clients and portfolio managers that is the cornerstone for the development of the business, both in terms of managing the existing business as well as attracting newer relationships to the Company

The Company has instilled procedures to ensure that risk to reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk. The Company also takes steps to ensure that clients are provided with accurate and complete information pertaining to the NGUF and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of the brokers, counterparties and service providers to the NGUF are also undertaken by the Investment Manager and designed to minimize reputational risk arising from specific failings in these areas.

Low Potential impact is minor due to controls in place at the Investment Manager


Counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the fund can transact with their counterparties on a ‘delivery vs payment’ basis, whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and

Medium Potential impact is significant in the event of default but is mitigated by the level of controls in place.




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the Investment Manager and any outstanding subscription amounts are followed up as appropriate.










Legal Risk - The risk to earnings or capital arising from the potential that unenforceable contracts, incorrect or impractical documentation, lawsuits or adverse judgments

The Company has appointed specialist legal advisers in Ireland on an ongoing basis to provide advice to the Funds and the Company. In addition, where specialist agreements are entered into, such as for ISDA or CSA agreements for the use of financial derivative

Low. Potential impact is minor due to controls


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may disrupt or otherwise negatively affect the operations or financial condition of the Company.

instruments, additional specialist legal counsel are appointed as to advise on these areas as necessary.

in place

Strategic Emerging Europe Fund (“SEEF”)


UCITS requirements limit the exposure that each Fund can maintain to one

counterparty and it is therefore necessary for a number of funds to operate

alternative cash accounts in addition to those maintained with the Custodian.

The SEEF operates a cash accounts with Lloyds TSB International and

RBSI for the purposes of diversification of credit risk from the

Custodian. The Strategic Emerging Europe Fund, tends t to be between

70% and 85% invested in assets within the investment portfolio, resulting in

a larger proportion of the fund maintained in cash than other funds. This

higher proportion of NAV in cash therefore requires monitoring in line with

the maximum counterparty exposure requirements as well as creates

additional credit risk for the fund.

The Investment Manager would prefer to implement the use of the J.P. Morgan cash diversification program for this Fund also, but due to the small

level of AUM (approx. USD 282 million) this program is not yet suitable for the Fund due to the minimum investment requirement. The Strategic Emerging Europe Fund has therefore been able to reduce counterparty exposure and therefore credit risk to the Custodian through the combination of the purchase of short term US government backed money market instruments, the holding of a money market collective investment scheme

and through opening an additional cash account with Lloyds TSB and RBSI, effectively a government backed UK organisations. The use of each of these avenues has proven to diversify the cash balances held and therefore limit counterparty exposure to the Custodian without actively taking additional credit risk.

Medium. Potential impact is significant in the event of default but is mitigated due to controls in place at the Investment Manager to monitor credit risk.

Concentration risk, Country Risk and Transfer Risk - Has a broad currency

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the SEEF is adequately

Medium.



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exposure hedged to USD, linked to the equity performance of primarily Emerging European Countries (Emerging Market focus)

diversified in terms of industry, sector and stock exposure. SEEF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the SEEF does not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. Each trade placed on behalf of the SEEF is monitored by the Investment Manager to ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund. The investment policy of SEEF which is to invest in emerging Eastern European economies. As a consequence therefore it is likely that this Fund will invest in emerging currencies that have a higher element of transfer risk. The Company actively monitors outstanding currency balances and pending cash movements on a daily basis to ensure that all transactions settle as appropriate, thereby mitigating transfer risk. In addition, currency exposures are hedged to the USD base currency, within tolerance bands, further looking to reduce any risk of emerging currency exposure

Potential impact is minor due to controls in place at the Investment Manager minor due to controls in place at the Investment Manager

Currency Risk - The SEEF has minimal exposure to any currency other than USD, as this is hedged by the Investment Manager within set tolerance parameters

The monitoring of the SEEF cash balances, reconciliation and management of forecasting future cash flows is undertaken on a daily basis by the Investment Manager. This monitoring includes the assessment as to reasonable or required balances in each local currency, the requirement to adjust currency hedges in relation to the asset valuation of the investment portfolio and to place currency transactions to prevent currency overdrafts and settle any outstanding portfolio trades. The policy adopted by the Investment Manager at the individual Fund level in respect of non-base currency exposure is to minimize this wherever possible unless this is part of the investment

Medium. Potential impact is minor due to controls in place at the Investment Manager




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strategy. This is also reconciled and monitored on a daily basis to ensure that accurate cash forecasting is produced to limit any unnecessary currency exposure.

Liquidity Risk - The risk that the SEEF cannot liquidate its investments at suitable market prices, or in quantities large enough to meet the cashflow requirements of the Fund.

The portfolio holdings are monitored in relation to market liquidity over the short term, and to ensure that the any shareholder redemptions can be met through liquidation of suitable investments in the fund, such monitoring taking place on a daily basis and actively monitored by the Investment Manager. Where any potential issues with respect to the liquidity of individual portfolios are identified this will be escalated within the Investment Manager and to the Investment Adviser as necessary. The SEEF invests primarily in liquid listed large cap stocks that can be sold as necessary to meet liquidity requirements.


Interest-Rate Risk – The Company does not have any exposure to cash or investment assets other than the exposures generated by the individual funds. The SEEF does not invest significantly in assets exposed to interest rate risk directly.

The Investment Manager provides cash management services to the Company, which also extends to the management of and exposure to interest rate risk, although this is currently accepted to be low given the historic low levels of interest rates, and the fact that the fund does not strategically operate any negative cash balances and incur any significant levels of overdraft interest. The Investment Manager considers that there is little exposure to interest rate risk for the SEEF given that its focus is on investment in equity securities that are not directly affected by changes in interest rates, and that a positive cash balance is maintained by the fund.


Market Risk - The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company. The SEEF is an actively managed equity fund fully exposed to market risk unless this is

The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company and the SEEF. The revenues received are directly linked to assets and the performance of the Fund is directly affected by market movements as well as investor sentiment to maintain or increase / decrease the assets that they have invested in



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hedged as part of the investment strategy. the Funds. In addition, the SEEF is entitled to levy a performance fee related to the performance of the Fund which is also significantly linked to overall market performance. The Company accepts therefore that there is a significant risk to overall profitability that arises from market risk. The SEEF is directly exposed to market risk through the portfolio of assets in which it invests. This is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of market risk.





On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent to SEEF and has taken suitable steps to implement appropriate policies and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers.

Medium Potential impact is significant in the event of pricing error or fraudulent activity but is mitigated through controls in




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place.


The Company has instilled procedures to ensure that risk to reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk. The Company also takes steps to ensure that clients are provided with accurate and complete information pertaining to SEEF and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of the brokers, counterparties and service providers to SEEF are also undertaken by the Investment Manager and designed to minimize reputational risk arising from specific failings in these areas.



Counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the fund can transact with their counterparties on a ‘delivery vs payment’ basis, whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. However in exception to this is the Russian equity market utilized within SEEF (limited to a maximum of 30% of NAV of that Fund) where standard settlement is for the cash transaction to settle after the securities have been exchanged. The Company has therefore ensured that the Fund has entered into additional legal documentation with those brokers with whom the Fund will trade securities in this way in efforts to protect the Fund from any additional settlement risk. Further, these transactions are given elevated importance within the Investment Manager and actively monitored on an ongoing basis to ascertain any risks posed to the Fund. In addition, the Investment Manager is also working with the Custodian to establish the appropriate facilities to allow these trades to settle on the standard

Medium. Potential impact is significant in the event of default but is mitigated by the level of controls in place





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‘delivery vs payment’ basis. An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and the Investment Manager and any outstanding subscription amounts are followed up as appropriate.





The Investment Manager actively monitors the performance of each service provider in relation to their contractual responsibilities as well as specific operating procedures or service level documents. Monitoring takes the form of ongoing review of detailed services to identify the degree of risk of specific activities undertaken by each service provider, such as NAV calculation or recommending trades suitable for the relevant investment portfolio, as well as periodic review of contractual arrangements to identify any risks of non-compliance or of not adhering fully to the required standards. There are no medium or high risk service providers associated with SEEF


Compliance Risk - The risk to earnings or capital arising from breach, or noncompliance with, laws, regulations, guidelines, other

The Investment Manager has a designated compliance function that works closely with each of the Irish legal counsel, the Fund Administrator, Trustee and Bridge Consulting on matters pertaining to

Low. Potential impact is


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regulatory directives, prescribed business practices or ethical standards.

compliance to ensure that the appropriate policies and procedures are adopted both by the Company and the Investment Manager. In addition, the Investment Manager actively reviews the requirements of the Company in each jurisdiction in which the Company is registered and looks to ensure that the appropriate guidelines are followed in each.

minor due to controls in place




Strategic Europe Value Fund (“SEEVF”)


The Investment Manager actively monitors the exposure of the SEVF with regards to credit risk on a daily basis. The credit risk inherent within the SEVF is limited to the cash balances maintained within the Fund as each position within the investment portfolio is listed on exchange and the fund only holds equities that are not directly affected by credit risk. In addition, the SEVF is usually near fully invested, reducing the active credit risk to less than 10% of NAV. This exposure is limited to one counterparty, the Custodian, whose strong financial standing and credit rating mitigate this risk further as any changes would be reviewed by the Investment Manager

Medium Potential impact is significant in the event of default but is mitigated due to controls in place at the Investment Manager to monitor credit risk.

Concentration risk, Country Risk and Transfer Risk - Focuses on EUR denominated positions, linked to the equity performance of primarily Europe (Developed Market focus)

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the SEVF is adequately diversified in terms of industry, sector and stock exposure. SEVF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the SEVF does not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient





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diversification to mitigate concentration risk. Each trade placed on behalf of the SEVF is monitored by the Investment Manager to ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund.

Currency Risk - . The SEVF has minimal exposure to any currency other than EUR, which is also the base currency of the Company

The monitoring of the SEVF cash balances, reconciliation and management of forecasting future cash flows is undertaken on a daily basis by the Investment Manager. This monitoring includes the assessment as to reasonable or required balances in each local currency, the requirement to adjust currency hedges in relation to the asset valuation of the investment portfolio and to place currency transactions to prevent currency overdrafts and settle any outstanding portfolio trades. The policy adopted by the Investment Manager at the individual fund level in respect of non-base currency exposure is to minimize this wherever possible unless this is part of the investment strategy. This is also reconciled and monitored on a daily basis to ensure that accurate cash forecasting is produced to limit any unnecessary currency exposure.

Low Potential impact is minor due to controls in place

Concentration risk, Country Risk and Transfer Risk - Focuses on EUR denominated positions, linked to the equity performance of primarily Europe (Developed Market focus)

The Investment Manager actively monitors the concentration risk within the investment portfolio to ensure that the SEVF is adequately diversified in terms of industry, sector and stock exposure. SEVF has a maximum allocation within any one investment security limited to 10% of NAV, although it is unusual that an individual investment position would reach this level. In practice, the largest holdings in the SEVF does not exceed 6% of NAV on an ongoing basis, thus ensuring that a minimum of 20 positions (usually 30 positions) are maintained within the investment portfolio and providing sufficient diversification to mitigate concentration risk. Each trade placed on behalf of the SEVF is monitored by the Investment Manager to







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ascertain the suitability of the transaction and the impact that the size of the trade or position will have on the investment portfolio’s overall risk, concentration and liquidity in addition to ensuring continuing compliance with the applicable investment restrictions for the fund.

Currency Risk - The SEVF maintains a currency exposure to a number of different currencies within the investment portfolio

The monitoring of the SEVF cash balances, reconciliation and management of forecasting future cash flows is undertaken on a daily basis by the Investment Manager. This monitoring includes the assessment as to reasonable or required balances in each local currency, the requirement to adjust currency hedges in relation to the asset valuation of the investment portfolio and to place currency transactions to prevent currency overdrafts and settle any outstanding portfolio trades. The policy adopted by the Investment Manager at the individual fund level in respect of non-base cash currency exposure is to minimize this wherever possible. However, as part of the investment strategy the majority of the currency exposure within the investment portfolio is unhedged, although the proportion that is actively hedged varies from time to time dependent on the investment strategy and the currency views of the Investment Adviser .

Medium Potential impact is significant due to the investment strategy.

Liquidity Risk - The risk that the SEEF cannot liquidate its investments at suitable market prices, or in quantities large enough to meet the cashflow requirements of the Fund.

The portfolio holdings are monitored in relation to market liquidity over the short term, and to ensure that the any shareholder redemptions can be met through liquidation of suitable investments in the fund, such monitoring taking place on a daily basis and actively monitored by the Investment Manager. Where any potential issues with respect to the liquidity of individual portfolios are identified this will be escalated within the Investment Manager and to the investment adviser as necessary.


Interest-Rate Risk – The Company does not have any exposure to cash or investment assets other than the exposures generated by the

The Investment Manager provides cash management services to the Company, which also extends to the management of and exposure to interest rate risk, although this is currently accepted to be low given

Low. Potential impact is


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individual funds. The SEVF does not invest significantly in assets exposed to interest rate risk directly.

the historic low levels of interest rates, and the fact that the fund does not strategically operate any negative cash balances and incur any significant levels of overdraft interest. The Investment Manager considers that there is little exposure to interest rate risk given that the majority of funds focus on investment in equity securities that are not directly affected by changes in interest rates, and that positive cash balances are maintained by the fund.

minor due to controls in place at the Investment Manager

Market Risk - The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company. The SEVF is an actively managed equity fund fully exposed to market risk unless this is hedged as part of the investment strategy.

The Investment Manager considers that market risk is the most prevalent risk that has the ability to significantly influence the profitability of the Company and the SEVF. The revenues received are directly linked to assets and the performance of the Fund is directly affected by market movements as well as investor sentiment to maintain or increase / decrease the assets that they have invested in the Funds. In addition, the SEVF is entitled to levy a performance fee related to the performance of the Fund which is also significantly linked to overall market performance. The Company accepts therefore that there is a significant risk to overall profitability that arises from market risk. The SEVF is directly exposed to market risk through the portfolio of assets in which it invests. This is actively managed through a combination of trading strategies and instruments which include sector rotation to more defensive industries and overall portfolio diversification, active allocation to cash to reduce market risk, and the use of derivative instruments for distinct hedging of market risk.


Strategic Risk - The current and prospective impact on earnings or capital arising from faulty business strategies and decisions, improper implementation of strategies and decisions, lack of response to industry changes or the impact of external factors on a







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previously sound rationale for a business line. The role of strategic risk now plays an increased role within the activities of the Company given the degrees of changes to regulations both in Ireland, Europe and elsewhere that are likely to affect the Company.


On a day-to-day basis, the Investment Manager is aware of and has documented the ongoing operational risks that are inherent to SEVF and has taken suitable steps to implement appropriate policies and procedures as well as levels of oversight proportionate to the tasks that are undertaken, both internally and by other service providers.

Medium Potential impact is significant in the event of pricing error or fraudulent activity but is mitigated through controls in place


The Company has instilled procedures to ensure that risk to reputation is mitigated in a number of areas. For example, new business relationships with portfolio managers and investment advisory firms are subject to background checks and analysis of risk. The Company also takes steps to ensure that clients are provided with accurate and complete information pertaining to SEVF and that any complaints are dealt with quickly and to a mutually acceptable outcome. Regular monitoring of the brokers, counterparties and service providers to SEVF are also undertaken by the Investment Manager and designed to minimize reputational risk arising from specific failings in these areas.


Settlement Risk - The risk to earnings or capital arising when the completion or settlement of a financial transaction fails to take place as expected. Settlement risk is often associated with credit risk, liquidity risk,

Counterparties are monitored on an ongoing basis by the Investment Manager as to any perceived changes in their financial standing and reputation that can lead to settlement risk. For the majority of brokerage relationships outside of the Custodian, the fund can transact with their counterparties on a ‘delivery vs payment’ basis,

Medium Potential impact is significant in the event of default but is




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operational risk and reputation risk.

whereby securities are exchanged for cash instruments at the same time, usually through exchange, thus minimizing the settlement risk that can arise. An alternative form of settlement risk that can arise is in the settlement of Fund subscription proceeds that may not be received. To facilitate investor dealing through electronic trade platforms, as all Funds within the Company have the facility to operate, requires a delayed settlement period after the valuation point and the point at which subscription monies have been invested and exposure provided in the Fund. This situation is actively monitored by the Company and the Investment Manager and any outstanding subscription amounts are followed up as appropriate.

mitigated by the level of controls in place





The Investment Manager actively monitors the performance of each service provider in relation to their contractual responsibilities as well as specific operating procedures or service level documents. Monitoring takes the form of ongoing review of detailed services to identify the degree of risk of specific activities undertaken by each service provider, such as NAV calculation or recommending trades suitable for the relevant investment portfolio, as well as periodic review of contractual arrangements to identify any risks of non-compliance or of not adhering fully to the required standards. There are no medium or high risk service providers associated with SEVF.






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Annual Compliance Calendar 20121/20132 Registered for distribution in:

- France - Germany

- Switzerland - United Kingdom

- Netherlands - Italy

Month Requirement Requirement deadline

January In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


The UCITS rules require a meeting of the Board of Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business.


Registrar of Company fees are due to be paid for the Strategic India Acumen Limited.

Payment for ROC fees should be made on an annual basis by 20 January.

February In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.

Monthly report submitted to Bridge Consulting within 10 business days from the end of the month.

March In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.

Monthly report submitted to Bridge Consulting within 10 business days from the end of the month.

Initial Due Diligence completed for each PCF

This was completed prior to the 31st March 2012

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cm

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April The UCITS rules require a meeting of the Board of Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business.


Annual financial statements and annual FDI report are required to be filed with the Central Bank

The Central Bank requires annual financial statements to be filed by the 30 April

The Irish Stock Exchange rules requires that the Annual financial statements are required to be filed with the Irish Stock Exchange.

The Irish Stock Exchanges requires annual financial statements to be filed by the 30 June.

Annual financial statements are to be required to be sent to shareholders by

The annual accounts are required to be filed with the French regulator.

There is no deadline for the accounts to be filed with the French Regulator however these will be filed as soon as they are translated into French.

The annual accounts are required to be filed with the Swiss regulator.

The deadline for filing the accounts with the Swiss regulator is 30 April.

The annual accounts are required to be filed with the Financial Services Commission.

There is no deadline for the accounts to be filed with the FSA however, these will be filed at the same time they are filed with the Central Bank of Ireland.

Tax Residency Certificate renewal for the Strategic India Acumen Limited

Application for the renewal of the TRC should be made at least 15 days prior to expiry of the existing TRC. The Company holds a TRC under the double taxation agreement between Mauritius and India and the TRC will expire on 4 April 2012.

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May In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


KPMG as auditors prepare on an annual basis an audit report which is submitted to the Central Bbank of Ireland.

The Audit Report needs to be filed with the Central Bank of Ireland with the Investment Managers response by 30 May

June In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


The audited financial statements of the Strategic India Acumen limited needs to be filed with the Mauritian Regulator within six months following the balance sheet date.

Accordingly, the audited financial statements should be filed by 30 June

Submission of Annual tax return for the Strategic India Acumen Limited should be made within six months following year end.

For year ending 31 December, filling should be made by 30 June

Filing of quarterly returns under the Advance Payment System (APS) and paying tax thereof

Submission of APS should be made within three months following the quarter end.

• APS for quarter ended 31 March has to be filed by 30 June

• APS for quarter ended 30 June has to be filed by 30 September • APS for quarter ended 30 September has to be filed by 31

December.

The Strategic India Acumen Fund is required to pay FSC licence fees.

Fees are paid on a financial year basis. FSC fees for the period from 1 July to 30 June (the following year) has to be paid by 30 June. Funds should be received in the account of Multiconsult 15 clear days before deadline to ensure timely settlement of fees.

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July In accordance with the Business Plan a monthly

report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


On an annual basis the Investment Manager will table for the Board to review and comment the policies adopted by the board, this review will also include the use of Financial Derivative Instruments (“FDI”)

This annual review will take place in June/July each year.

The Business Plan of the Company requires that each delegated service provider must have an annual service provider review

Annual Service provider reviews are undertaken during July of each year, and will include that each delegate has appropriate arrangements for suitable electronic systems so as to permit the timely and proper recording of each portfolio transaction or subscription or redemption order.

August The UCITS rules require a meeting of the Board of Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business.




Interim financial statements are required to be filed with the Central Bank

The Central Bank requires interim financial statements to be filed by the 31 August.

Irish law and the Company’s memorandum and Articles of Association must: (1) The AGM must be held within 9 months of the financial year end;

The Company must hold its next AGM by August 2012

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(2) The Company must hold an AGM in each calendar year; and (3) Not more than fifteen months shall elapse between the date of one AGM of the Company and the next.

September In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


Filing of quarterly returns under the Advance Payment System (APS) and paying tax thereof

Submission of APS should be made within three months following the quarter end.



December.

October The Irish Stock Exchange rules requires that the interim financial statements are required to be filed with the Irish Stock Exchange.

The Irish Stock Exchanges requires interim financial statements to be filed by the 31 October.



The Business Continuity Policy requires the Investment Manager to seek confirmation on an annual basis the existence and ongoing testing of a business continuity policy in respect of each of its appointed service providers.

The Investment Advisor will seek confirmation on an annual basis the existence and ongoing testing of a business continuity policy and test findings in each of the appointed service providers to the Company as part of their periodic review and monitoring of outsourced service providers and prepare a report to the board to be tabled at the Board meeting.

November The UCITS rules require a meeting of the Board of A board meeting of the Directors shall be held on a quarterly basis.

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Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business.



In accordance with the Business Continuity Policy the Investment Manager will review and update the Business Continuity Policy on at least an annual basis and report to the board on the adequacy and test findings of its and its delegates business continuity arrangements.

The Investment Manager will table on an annual basis the adequacy and test findings of its and its delegates business continuity arrangements.

December In accordance with the Business Plan a monthly report needs to be submitted to Bridge Consulting from each of the delegates/service providers.


In accordance with the Fitness and Probity Policy a self certification etter is to be obtained from each CF individual Filing of quarterly returns under the Advance Payment System (APS) and paying tax thereof

The self-certification letter is to be tabled at the following board meeting for the Board to note and approve.. Submission of APS should be made within three months following the quarter end.



December.

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COMPLAINTS HANDLING POLICY

Background In accordance with its obligations under the UCITS IV Directive as transposed into Irish law by the Regulations the Company must establish, implement and maintain an Complaints Handling Policy. The Complaints Handling Policy is designed to ensure complaints from shareunitholders are addressed promptly and

effectively;1

Section 7(c)(viii) of GN 4-07 states the business plan must include details of the procedures in place to ensure that all complaints are escalated to the board of the applicant firm.

Notification

Any complaint received from any party in respect the Company must be notified to the Compliance Officer of the Investment Manager (the “Compliance Officer”) immediately after it has been identified. The Compliance Officer retains responsibility for ensuring that all officers and directors of the Company are aware of the appropriate procedure to be followed in the event that a complaint is received, in whatever form.

Where the Compliance Officer is directly concerned, the complaint should therefore be handled by an appropriate alternative individual within senior management. All information received shall be kept confidential and a register of complaints should be kept as a record. In addition, a complaints form (Appendix 1) should be completed on behalf of each complaint.

The Compliance Officer will advise the Board of the Company accordingly in the event of a significant complaint and a course of action to respond and satisfy the complaint will be decided.

Investigation and Address

The Compliance Officer must investigate and respond promptly to a complaint. The complainant should be advised as soon as possible, but within five business days of the complaint being received, that their complaint has been received and has been referred to the Compliance Officer to handle (or suitable alternate where applicable). The response should also include the next steps and the timeline in which the complaint will be addressed, which should be within ten business days.

The Compliance Officer will be responsible for the update to the complaints file upon receipt of the complaint and during the process of resolution and upon satisfactory closure of the course of action determined by the Board or accepted by the client. In addition, a complaints form (Appendix 1) should be completed on behalf of each complaint.

If the complaint cannot be remedied within ten business days, the Compliance Officer should notify the complainant, together with appropriate reasoning and a revised timeline in which the complaint will be addressed, which should be within a further ten business days.

An attempt must be made to resolve the complaint within 40 business days and failing to resolve within this timeframe, the complainant must be immediately notified of an expected timeframe for resolution and their right to refer the matter to the Central Bank Ombudsman, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2, ph: 1890 88 20 90/ +353 1 6620899.

1 Paragraphs 10(ix) and 41 - 45 of UCITS Notice 16 and Section 7(c)(viii) of GN4/07.

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The Compliance Officer must ensure compliance by the Company with any local legal and/or regulatory requirements at all times

Where the Compliance Officer has provided a substantive response in relation to a complaint, unless and until the complainant indicates that the response is unsatisfactory the complaint will be treated as settled and resolved after the expiry of four weeks from the date of the Compliance Officer’s response.

Review

Reporting concerning all complaints received is tabled at the scheduled board meeting of the Company on an ongoing basis as an agenda item.

The Compliance Officer will periodically request details of any significant complaints from the Designated Manager and will periodically request updates from the Designated Manager in respect of their processes and policies surrounding their internal controls for the purposes of management and reporting of complaints.

All files and details of complaints must be kept for at least 7 years.

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Accounting Policies and Procedures.

Background

In accordance with its obligations under the UCITS IV Directive as transposed into Irish law by the Regulations the Company must establish, implement and maintain an Accounting policy. The list of policies and procedures to be adopted under UCITS IV includes the following wording in relation to the adoption of the policy and procedures for Accounting:

Accounting Policy & Procedures must be put in place for each UCITS under management so as to ensure the protection of unitholders – designed to ensure the calculation of the NAV of each UCITS is accurately effected and that the subs and reds are properly executed at the NAV. Such Accounting Policy & Procedures must be in accordance with the accounting rules of the UCITS home Member States.

Accounting policies and procedures must also be put in place to enable the management company to deliver in a timely manner to the Central Bank financial reports which reflect a true and fair view of its financial position and which comply with all applicable accounting standards and rules.

Director Responsibilities

The Directors of the Company must prepare an annual report and a half-yearly report for each accounting period of the Company. Where the Company’s first annual accounting period is less than 12 months, a half-yearly report need not be prepared for any part of that period. The Company will not have an accounting period longer than 18 months.

The annual report of the Company must contain the accounts of the Company and the auditor’s report in respect of the accounts. The Directors of the Company must also lay copies of the annual report before the Company in general meeting where general meetings are held.

The Directors of the Company are also responsible for the filing of the annual and interim accounts as necessary which, as at the time of writing, are to be lodged with Ireland, Germany, Switzerland, UK, France and Guernsey.

Accounting Policy

The Company has financial statements prepared on an annual and semi-annual basis based on International Financial Reporting Standards as adopted by the European Union.

The Company is subject to compliance with the requirements of the Irish Companies Acts, 1963 to 2009, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003, as amended and the Central Bank of Ireland UCITS notices and guidance notes, as applicable to the Company. The Central Bank of Ireland UCITS notices relevant to the Company can be found in Appendix 1.

The Company will include sections in the annual report that include, but are not limited to:

a) Company Information b) Investment Manager’s Reports c) Directors’ Report d) Custodian’s Report e) Independent Auditor’s Report f) Statement of Financial Position g) Statement of Comprehensive Income h) Statement of Changes in Net Assets attributable to Holders of Redeemable Participating Shares i) Statement of Cash Flows j) Notes to the Financial Statements k) Schedule of Investments

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l) Schedule of Changes in Investments m) Reconciliation of Net Asset Value n) Supplementary Information (including ratio’s and publication information)

Company Information

The annual report will include the names and addresses of the Directors, Registered Office, Promoter, Investment Manager and Global Distributor, Investment Advisers, Administrator and Secretary, Custodian, Auditor, Listing Sponsor, Legal and Tax Advisers (Ireland), Governance Services, Swiss Representative and Paying Agent, UK Facilities Agent, French Centralising Correspondent and German Paying Agent.

Investment Manager’s Reports

The Company will include a report per fund detailing the performance of each of the fund and then commentary split between the topics of Market Overview, Market Outlook and Portfolio Strategy.

Directors’ Report

The annual report will include a Directors Report which primarily will contain details of the Directors’ Responsibilities. The report will also include the assurance that the Directors have directed the affairs of the Company in accordance with the Irish Companies Acts 1963 to 2009.

The European Communities (Directive 2006/46/EC) Regulations (S.I 450 of 2009 and S.I 83 of 2010) requires the inclusion of a corporate governance statement in the Directors’ Report. The corporate governance statement will detail the Company’s compliance to the requirements and practices imposed by (there is currently no specific statutory corporate governance code applicable to an Irish investment fund);

a) The Memorandum and Articles of Association of the Company b) The Companies Acts, 1963 to 2009 c) The European Communities (Directive 2006/46/EC) Regulations (S.I 450 of 2009 and S.I 83 of 2010) d) Central Bank of Ireland UCITS notices and guidance notes, as applicable to the Company; and e) The Irish Stock Exchange ISE Code of Listing requirements and Procedures.

A final statutory corporate governance code is expected to be released during 2011 and the Board of Directors intend to consider the adoption of that code when published.

Custodian’s Report

The Custodian report will include the opinion on the conduct of affairs of the Company which is prepared for, and solely for, the shareholders in the Company, in accordance with the Central Bank of Ireland’s UCITS Notice 4.

The Trustee will enquire into the conduct of the Company in each annual accounting period and report thereon to the unit holders.

The Trustee will ensure that the sale, issue, repurchase, redemption and cancellation of units effected by or on behalf of the Company are carried out in accordance with the Regulations and in accordance with the trust deed, the deed of constitution or memorandum and articles of association.

Independent Auditor’s Report

In accordance with the Central Bank of Ireland’s UCITS Notice 8 the auditor’s report, including any qualifications, shall be reproduced in full in the annual report.

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Statement of Financial Position/Balance Sheet

Valuation – the Company performs regular valuations of net assets, the methodology for which is laid down in the prospectus and the Valuation of Assets Policy. In accordance with IFRS 13, for the purposes of the financial statements all investments will be valued at their fair value as at the balance sheet date. In an active market the fair value of long positions is the quoted bid price and the fair value of short positions is the quoted offer price. Where, in view of exceptional circumstances, for example the suspension of the market, the last quoted price is not used, the notes will describe clearly the basis of valuation and the reasoning behind it.

For derivatives, fair value is the price that would be required to close out the contract at the balance sheet date.

Fair value is normally determined by reference to quoted prices from reputable sources; that is usually the market price. If the Investment Manager believes that the quoted price is unreliable, or if no recent price exists, fair value is the Investment Manager’s best estimate in accordance with the Valuation Policy and Stale Pricing Policy for the Company.

Recognition - transactions will be recognised when a legally binding and unconditional right to obtain, or an obligation to deliver, an asset or liability arises at the total amount of the consideration payable or receivable, including transaction costs.

Foreign currency assets and liabilities will be translated using the exchange rate prevailing on the balance sheet date.

The balance sheet will show transferable securities, money market instruments, Collective Investment Schemes (“CIS”) held, deposits with credit institutions, financial derivative instruments, other assets, total assets, liabilities and net asset value.

Statement of Comprehensive Income

Comprehensive income for the accounting period includes profit or loss for that period plus other comprehensive income recognised in that period. All items of income and expense recognised in a period will be included in profit or loss unless a Standard or an Interpretation requires otherwise.

Transactions denominated in a foreign currency will be translated using the exchange rate prevailing on the date of the transaction.

Revenue and expenses will be recognised when earned or incurred. Transaction costs are recognised as part of the consideration for a transaction.

In accordance with IFRS 2 all intergroup balances, transactions, income, expenses will be eliminated in full.

The statement of comprehensive income will show income from investments, other income, management charges, trustee's charges, other charges and taxes, net income, distributions and income reinvested, changes in capital account, appreciation or depreciation of investments and any other changes affecting the assets and liabilities of the UCITS. If the Company invests more than 20% of its assets in other CIS’s managed by the Investment Manager, the Company will disclose the management fees charged to the underlying CIS’s.

Statement of Changes in Net Assets attributable to Holders of redeemable Participating Shares

In accordance with IAS 1, the Company will provide a numerical representation of changes in assets for each Fund and the comparative for the previous period. IAS 1 requires the Company to present a statement of changes in equity as a separate component of the financial statements. The statement will show:

a) total comprehensive income for the period, showing separately amounts attributable to owners of the parent and to non-controlling interests

b) the effects of retrospective application, when applicable, for each component

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c) reconciliations between the carrying amounts at the beginning and the end of the period for each component of equity, separately disclosing:

(i) profit or loss (ii) each item of other comprehensive income (iii) transactions with owners, showing separately contributions by and distributions to owners and changes

in ownership interests in subsidiaries that do not result in a loss of control

The following amounts will also be presented on the face of the statement of changes in equity, or they may be presented in the notes:

a) amount of dividends recognised as distributions, and b) the related amount per share

Statement of Cash Flows

In accordance with IAS 7 the Company will include a statement of cash flows. This cash flow will be analysed between operating, investing and financing activities.

The statement of cash flows analyses changes in cash and cash equivalents during the accounting period. Cash and cash equivalents comprise cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash and that are subject to an insignificant risk of changes in value.

The exchange rate used for translation of transactions denominated in a foreign currency will be the rate in effect at the date of the cash flows.

Notes to the Financial Statements

In the notes to the financial statements a description of each of the accounting policies that are material in the context of the financial statements will be given, together with a description of significant estimation techniques. Details of any changes from the previous period will also be disclosed. These include but are not limited to:

Note Title Description

General Information Include a note detailing the Company structure and applicable laws governing the Funds, along with registration dates and numbers.

Basis of preparation Include a note detailing the basis of preparation usually divided into the following headings: a) Statement of compliance b) Basis of measurement c) Functional and presentation currency d) Use of estimates and judgments

Significant Accounting Policies

Details of the significant accounting policies adopted by the Company. These include but are not limited to:

a) Financial Instruments (i) Classification (ii) Recognition (iii) Derecognition (iv) Initial measurement (v) Subsequent measurement (vi) Derivative financial instruments (vii) Offsetting financial instruments

b) Cash and cash equivalents c) Taxation

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d) Foreign currency translation e) Amounts due from and to brokers f) Dividend income g) Interest income and expense h) Expenses i) Redeemable participating shares j) New standards and interpretations not adopted

Financial Assets and Liabilities at Fair Value through Profit or Loss

Numerical representation of the financial assets split by Fund showing the total for the period for the Company. Split of the financial assets shown through the different levels per Fund in accordance with IFRS 7.

Fees and Expenses Details from the prospectus/relevant supplements of the fees and expenses being charged for each Fund. These include, but are not limited to:

a) Investment Manager’s Fees b) Investment Adviser’s Fees c) Administrator’s Fees d) Custodian’s Fees e) Director’s Fees and f) Consulting Fees

Share Capital Numerical representation of the movements in share capital during the relevant accounting

period and details of authorised share capital of the Company.

Risks associated with Financial Instruments

Include details of the Company’s risk profile and reiterate details are in the prospectus. The Company deals with many forms of risk and the limitations of sensitivity analyses. Notes are included in the financial statements for the following risks (details of Fund specific risks can be found in Appendix 1 of the Risk Management Policy):

a) Market Risk i. Equity Price Risk ii. Currency Risk iii. Interest Rate Risk

b) Credit Risk c) Liquidity Risk d) Derivatives

Fair value information

Note included in the financial statements confirming the valuations of all assets are at fair value, and details of any exceptions if noted.

Overdraft facility Note detailing the overdraft facilities each Fund has and the associated fees.

Related Parties Note detailing the related parties to the Company, their details and Directors holdings as per IAS 24.

Distributions Details of the distributions that have been made during the accounting period at Fund level.

Comparative figures Confirmation of the date of the comparative figures used throughout the financial statements.

Auditors’ Remuneration

Details of fees and expenses paid to KPMG Dublin in respect of their services to the Company as Auditor.

Significant matters This note gives the Directors the opportunity to draw readers’ attention to any events of

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arising during the period

importance that occurred during the accounting period. These can include, but are not limited to:

a) Changes in documentation b) Change to benchmark index c) Approval of resolutions d) Updated supplements issued e) Change of Director

Subsequent Events This note is broadly the same as the above except only for events that have occurred between the end of the accounting period and the date of approval of the financial statements. This note is included in accordance with IAS 10.

Approval of the Financial Statements

Confirmation of the date the financial statements we approved by the Board of Directors.

For each type of risk that arises the disclosures will include:

a) an explanation of the risk, how it arises and its significance in the context of the Company; b) a description of the objectives, policies and procedures used to manage that risk; and c) if any of these disclosures reflect a significant change from the explanations provided for the previous period

the reasons for that change will be explained.

In accordance with Section 10 of the UCITS Guidance note on management companies as the Company is a self-managed investment company, the Company must maintain minimum capital of EUR 300,000.

Schedule of Investments and Schedule of Changes in Investments

UCITS schemes are required to show changes in the composition of the portfolio during the accounting period.

The requirement is satisfied by the inclusion of the following:

(i) Portfolio statement comparatives (ii) Total purchases and sales (iii) Description of the material changes in portfolio composition as part of the review of investment activities

Comparative percentages for each category will be given for the end of the preceding financial year in order to indicate changes in the composition of the portfolio.

With regard to the Schedule of Changes in Investments as per UCITS notice 8 in appendix A only the top 20 purchases and sales per Fund are to be disclosed.

Effect of the Accounting Policy on Investors

In accordance with the provisions of the Company’s prospectus the published Net Asset Value at the end of the accounting period values quoted investments at the closing midmarket prices at the valuation point. The Directors consider this policy to be appropriate for the purpose of determining the Net Asset Value per share for share subscriptions and redemptions. However, in the financial statements the quoted investments at the end of the accounting period have been valued using bid prices in accordance with International Financial Reporting Standards.

The Company will reconcile, and show workings, between the net asset value of the dealing valuation and the value in the financial statements which have been prepared in accordance with International Financial Reporting Standards on a per Fund basis.

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This reconciliation provides Investors with comfort in regards to the calculation of the dealing price used for subscription and redemption purposes.

Accounting Procedures

The Company has delegated the responsibility for the accounting preparation to HSBC Securities Services (Ireland) Limited (the “Administrator”) which is required by the Company to adopt written procedures to ensure that the process of preparing the accounts of the Company are in line with the above policy adopted by the Company.

The Administrator will prepare financial statements and prepare the records, books and other information relating to the accounts of the Company and submit them to Directors for their approval. The Administrator is also responsible for the preparation of the following:-

i. each monthly return is to be submitted to the Central Bank, the information is also required to be included in the monthly return;

ii. in relation to a fiscal year end, a full financial statement for the immediately preceding fiscal year of the Company and a statement of the investments then held by the Company and containing such information as is required by the Central Bank, the Irish Stock Exchange and otherwise in accordance with the requirements of the international accounting standards adopted by the Company;

iii. in relation to the first six months of each financial year, an unaudited report in a form approved by the Central Bank and containing such information as is required by the Central Bank and containing such information as is required by the Central Bank, the Irish Stock Exchange and the international accounting standards adopted by the Company.

The Investment Manager will review the accounts prepared by the Administrator and make necessary comments where needed before being sent to the Directors for the final review.

In partnership with the Investment Advisors the Investment Manager also collates and prepares the Reports to be included within the ‘Investment Manager’s Reports’ section.

The Company is currently registered for distribution in France, Germany, Switzerland, the UK and the Netherlands and the Investment Manager, ensures that the filing deadlines in all the above countries are met. This process also includes arranging the translation of the financial statements into French and German.

Review and Update

The Directors will review the Accounting Policy on an annual basis and seek confirmation from the Administrator and the Investment Manager as to the ongoing validity of the policy in addition to incorporating any required updates.

In addition, the Directors will review the Accounting Policy in advance of launching any additional Funds by the Company to ensure that the new Fund is suitably covered by the above Policy.

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Valuation of Assets Policy

Background In accordance with its obligations under UCITS IV the Company must establish, implement and maintain a Valuation of Assets policy. The list of policies and procedures to be adopted under UCITS IV includes the following wording in relation to the adoption of the policy for the Valuation of Assets:

Valuation Policy – designed to ensure the accurate valuation of the assets and liabilities of CIS under management in accordance with the valuation rules of the UCITS home Member States;

Paragraph 4 of Notice UCITS 16 requires a management company to ensure that fair, correct and transparent pricing models and valuations systems are used for CIS under management.

According to Section 12 of GN 4-07, valuation procedures should, in particular, address issues relating to the valuation of instruments valued using amortised cost, OTC derivatives and unlisted securities. In addition valuation procedures must be reviewed before a management company takes on the management of new CIS or new sub-funds of umbrella funds to ensure it complies with the regulatory requirements.

Existing Policies

The Company has previously adopted policies that allow for the valuation of assets to be clearly disclosed in the Prospectus for the Company so that all Shareholders are aware of the pricing methodology and valuation process that will be applied to the valuation of the assets of each fund of the Company. In addition, this disclosure as to the valuation of assets has been supplemented by a ‘Stale Pricing Policy’ (Appendix 1) adopted by the Company to ensure that any assets on which prices are not readily available are valued at appropriate prices. The Prospectus for the Company suggests that the valuation of assets of each fund will be computed on the following basis:

“Net Asset Value and Valuation of Assets

The Directors have delegated the calculation of the Net Asset Value to the Administrator.

The Net Asset Value of each Fund or, if there are different Classes within a fund, each Class will be calculated by the Administrator as at the Valuation Point on or with respect to each Dealing Day in accordance with the Articles of Association. The Net Asset Value of a fund shall be determined as at the Valuation Point for the relevant Dealing Day by valuing the assets of the relevant fund (including income accrued but not collected) and deducting the liabilities of the relevant fund (including a provision for duties and charges, accrued expenses and fees, including those to be incurred in the event of a subsequent termination of a fund or liquidation of the Company and all other liabilities). The Net Asset Value attributable to a Class shall be determined as at the Valuation Point for the relevant Dealing Day by calculating that portion of the Net Asset Value of the relevant fund attributable to the relevant Class as at the Valuation Point subject to adjustment to take account of assets and/or liabilities attributable to the Class. The Net Asset Value of a fund will be expressed in the Base Currency of the fund, or in such other currency as the Directors may determine either generally or in relation to a particular Class or in a specific case.

The Net Asset Value per Share shall be calculated as at the Valuation Point on or with respect to each Dealing Day by dividing the Net Asset Value of the relevant Fund or attributable to a by the total number of Shares in issue, or deemed to be in issue, in the Fund or Class at the relevant Valuation Point and rounding the resulting total to 2 decimal places.

In determining the Net Asset Value of the Company and each fund:-

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(a) Securities which are quoted, listed or traded on a Recognised Exchange save as hereinafter provided at (d), (e), (f), (g) and (h) will be valued at the closing mid-market price. Where a security is listed or dealt in on more than one Recognised Exchange the relevant exchange or market shall be the principal stock exchange or market on which the security is listed or dealt on or the exchange or market which the Directors determine provides the fairest criteria in determining a value for the relevant investment. Securities listed or traded on a Recognised Exchange, but acquired or traded at a premium or at a discount outside or off the relevant exchange or market may be valued by a competent person, firm or corporation (including the Investment Manager) selected by the Directors and approved for the purpose by the Custodian, taking into account the level of premium or discount at the Valuation Point provided that the Custodian shall be satisfied that the adoption of such a procedure is justifiable in the context of establishing the probable realisation value of the security.

(b) The value of any security which is not quoted, listed or dealt in on a Recognised Exchange or which is

so quoted, listed or dealt but for which no such quotation or value is available or the available quotation or value is not representative of the fair market value shall be the probable realisation value as estimated with care and good faith by (i) the Directors or (ii) a competent person, firm or corporation (including the Investment Manager) selected by the Directors and approved for the purpose by the Custodian. Where reliable market quotations are not available for fixed income securities the value of such securities may be determined using matrix methodology compiled by the Directors whereby such securities are valued by reference to the valuation of other securities which are comparable in rating, yield, due date and other characteristics.

(c) Cash in hand or on deposit will be valued at its nominal/face value plus accrued interest, where

applicable, to the end of the relevant day on which the Valuation Point occurs.

(d) Derivative contracts traded on a regulated market including without limitation futures and options contracts and index futures shall be valued at the settlement price as determined by the market. If the settlement price is not available, the value shall be the probable realisation value estimated with care and in good faith by (i) the Directors or (ii) a competent person firm or corporation (including the Investment Manager) selected by the Directors and approved for the purpose by the Custodian. OTC derivative contracts will be valued daily either (i) on the basis of a quotation provided by the relevant counterparty and such valuation shall be approved or verified at least weekly by a party who is selected by the Directors and approved for the purpose by the Custodian and who is independent of the counterparty (the “Counterparty Valuation”); or (ii)using an alternative valuation provided by a competent person appointed by the Directors and approved for the purpose by the Custodian. Where such Alternative Valuation method is used the Company will follow international best practise and adhere to the principles on valuation of OTC instruments established by bodies such as IOSCO and AIMA and will be reconciled to the Counterparty valuation on a monthly basis. Where significant differences arise these will be promptly investigated and explained.

(e) Forward foreign exchange and interest rate swap contracts shall be valued in the same manner as OTC

derivatives contracts or by reference to freely available market quotations. (f) Notwithstanding paragraph (a) above units in collective investment schemes shall be valued at the latest

available net asset value per unit or bid price as published by the relevant collective investment scheme or, if listed or traded on a Recognised Exchange, in accordance with (a) above. Where a final net asset value per share is not available an estimated net asset value per share received from the administrator or investment manager of the relevant collective investment scheme may be used. Where estimated values are used, these shall be final and conclusive notwithstanding any subsequent variation in the net asset value of the collective investment scheme.

(g) In the case of a fund which is a money market fund the Directors may value any security which (i) has

a maturity at issuance of up to and including 397 days; or (ii) has a residual maturity of up to and including 397 days; (iii) undergoes regular yield adjustments in line with money market conditions at least every 397 days; and/or (iv) the risk profile, including credit and interest rate risks corresponds to

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that of financial instruments which have a maturity of up to and including 397 days or are subject to a yield adjustment at least every 397 days and which in the case of (iii) and (iv) also meet with the final maturity requirements of the relevant rating agency, using the amortised cost method of valuation whereby the security is valued at its acquisition cost, adjusted for amortisation of premium or accretion of discount on the securities. The weighted average maturity of a portfolio must not exceed 60 days. The Directors or their delegates shall review or cause a review to be carried out weekly of discrepancies between the market value and the amortised value of the money market instruments and such review will be carried out in accordance with the guidelines of the Financial Regulator.

(h) The Directors may value money market instruments having a residual maturity not exceeding three months using the amortised cost method of valuation. Such securities will have no specific sensitivity to market parameters, including credit risk.

(i) The Directors may, with the approval of the Custodian, adjust the value of any investment if having regard to its currency, marketability, applicable interest rates, anticipated rates of dividend, maturity, liquidity or any other relevant considerations, they consider that such adjustment is required to reflect the fair value thereof.

(j) Any value expressed otherwise than in the Base Currency of the relevant fund shall be converted into the Base Currency of the relevant Fund at the prevailing exchange rate which is available to the Administrator and which is normally obtained from Reuters or such other data provider.

(k) Where the value of any security is not ascertainable as described above, the value shall be the probable realisation value estimated by the Directors with care and in good faith or by a competent person appointed by the Directors and approved for the purpose by the Custodian.

(l) If the Directors deem it necessary a specific security may be valued under an alternative method of valuation approved by the Custodian.

In calculating the value of assets of the Company and each fund the following principles will apply:

(a) in determining the value of investments of a Fund (a) the Directors may value the securities of a fund (i) at lowest market dealing bid prices where on any Dealing Day the value of all redemption requests received exceeds the value of all applications for Shares received for that Dealing Day or at highest market dealing offer prices where on any Dealing Day the value of all applications for Shares received for that Dealing Day exceeds the value of all redemption requests received for that Dealing Day, in each case in order to preserve the value of the Shares held by existing Shareholders; (ii) at bid and offer prices, in accordance with the requirements of the Financial Regulator where a bid and offer value is used to determine the price at which Shares are issued and redeemed ; or (iii) at mid prices; provided in each case that the valuation policy selected by the Directors shall be applied consistently with respect to the Company and, as appropriate, individual Funds for so long as the Company or Funds, as the case may be, are operated on a going concern basis . Every Share agreed to be issued by the Directors with respect to each Dealing Day shall be deemed to be in issue at the subsequent Valuation Point to the relevant Dealing Day and the assets of the relevant Fund shall be deemed to include not only cash and property in the hands of the Custodian but also the amount of any cash or other property to be received in respect of Shares, issued on the prior Dealing Day after deducting therefrom (in the case of Shares agreed to be issued for cash) or providing for preliminary charges;

(b) where securities have been agreed to be purchased or sold but such purchase or sale has not been completed, such securities shall be included or excluded and the gross purchase or net sale consideration excluded or included as the case may require as if such purchase or sale had been duly completed unless the Directors have reason to believe such purchase or sale will not be completed;

(c) there shall be added to the assets of the relevant Fund any actual or estimated amount of any taxation of a capital nature which may be recoverable by the Company which is attributable to that Fund;

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(d) there shall be added to the assets of each relevant fund a sum representing any interest, dividends or other income accrued but not received and a sum representing unamortised expenses unless the Directors are of the opinion that such interest, dividends or other income are unlikely to be paid or received in full in which case the value thereof shall be arrived at after making such discount as the Directors or their delegate (with the approval of the Custodian) may consider appropriate in such case to reflect the true value thereof;

(e) there shall be added to the assets of each relevant Fund the total amount (on a receipts or accruals basis, at the discretion of the Directors) of any claims for repayment of any taxation levied on income or capital gains including claims in respect of double taxation relief; and

(f) there shall be deducted from the assets of the relevant fund:

(i) the total amount of any actual liabilities properly payable out of the assets of the relevant Fund including any and all outstanding borrowings of the Company in respect of the relevant Fund, interest, fees and expenses payable on such borrowings and any liability for tax and such amount in respect of contingent or projected expenses as the Directors consider fair and reasonable as of the relevant Valuation Point;

(ii) such sum in respect of tax (if any) on income or capital gains realised on the investments of the relevant Fund as will become payable;

(iii) the amount (if any) of any distribution declared but not distributed in respect thereof;

(iv) the remuneration, fees and expenses of the Administrator, the Custodian, the Investment Manager, any Distributor and any other providers of services to the Company accrued but remaining unpaid together with a sum equal to the value added tax chargeable thereon (if any);

(v) the total amount (whether actual or estimated by the Directors) of any other liabilities properly payable out of the assets of the relevant Fund (including all establishment, operational and ongoing administrative fees, costs and expenses) as of the relevant Valuation Point;

(vi) an amount as of the relevant Valuation Point representing the projected liability of the relevant fund in respect of costs and expenses to be incurred by the relevant Fund in the event of a subsequent liquidation;

(vii) an amount as of the relevant Valuation Point representing the projected liability of the relevant calls on Shares in respect of any warrants issued and/or options written by the relevant fund or Class of Shares; and

(viii) any other liability which may properly be deducted.

In the absence of negligence, fraud or wilful default, every decision taken by the Directors or any committee of the Directors or any duly authorised person on behalf of the Company in determining the value of any investment or calculating the Net Asset Value of a fund or Class or where relevant Series or the Net Asset Value per Share shall be final and binding on the Company and on present, past or future Shareholders.”

The Company considers that this valuation policy is well publicised to investors and will ensure that the Prospectus for the Company is updated ahead of any changes to this policy being implemented.

Valuation Procedures

The Company has delegated the responsibility for the valuation of assets to the Administrator, HSBC Securities Services (Ireland) Limited, which is required by the Company to adopt written procedures to ensure that the process of valuing the assets of the Company are in line with the above policy on the valuation of assets disclosed in the Prospectus for the Company and the Stale Pricing Policy adopted by the Company.

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To this end, HSBC have adopted a Pricing Methodology in relation to the Company, which includes a pricing tolerance matrix for the securities held by the Company (Appendix 2).

In addition, the Directors of the Company, after consultation with the Investment Manager, have adopted the following aspects in relation to the valuation of specific instruments held by the Company. The Trustee and the Administrator have been invited to comment on these specifics prior to adoption by the Company:

Listed Equity / Fixed Income Securities: Available Closing Price

Valued at closing mid-market price level using agreed pricing sources: Primary source: Thomson / Reuters Secondary source: Bloomberg

− Strategic China Panda Fund

− Strategic Euro Bond Fund

− Nippon Growth (UCITS) Fund

− Strategic Europe Value Fund Primary source: Bloomberg Secondary source: Thomson / Reuters

− Strategic Emerging Europe Fund Any new funds launched by the Company should value their assets using Bloomberg as the primary pricing source. In the event that the closing price is not available on the Valuation Day, the Investment Manager will, in conjunction with the Investment Adviser and following the approval of the Trustee, recommend to the Administrator an appropriate pricing methodology for the calculation of the security’s value and/or a list of brokers that should be contacted to obtain an estimate of the valuation of the asset in order to ascertain fair value on this occasion or on an ongoing basis.

Listed Equity / Fixed Income Securities: Asset held on non-primary exchange or currency

If a Fund has traded the instrument on an exchange or denominated in a currency other than the primary listed exchange or currency and availability of asset prices is less frequent in the secondary asset than in the primary exchange or currency the Fund may, subject to the recommendation by the Investment Manager, value the assets with reference to the primary exchange listing and/or currency and calculate the necessary adjustments to the secondary asset valuation to provide more accurate and up to date valuation of the asset. A list of those assets where such valuation methodology is applied will be maintained by the Investment Manager and the Administrator.

Listed Equity / Fixed Income Securities: Asset not quoted or prices not available or reasonable

If a Fund has traded an unlisted security the Investment Manager will ascertain the timeline in which the security is likely to become listed – usually in the short term as the mandates are to list primarily in listed securities. If the security is likely to become listed / quoted in the short term the security will be valued at cost price until such time when a quoted price becomes available. If a Fund has traded a security that is not likely to become listed or quoted in the short term the Investment Manager will, in conjunction with the Investment Adviser and following the approval of the Trustee, recommend to the Administrator an appropriate pricing methodology for the calculation of the security’s value and/or a list of brokers that should be contacted to obtain an estimate of the valuation of the asset in order to ascertain fair value on this occasion on an ongoing basis. If a Fund has traded a security that has displayed asset prices in the past but for some reason these cannot be sourced at the appropriate valuation point, then the asset will be valued in accordance with the ‘Stale Pricing Policy’ in Appendix A.

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Cash Assets: Cash and near cash assets will be valued at face value, plus any suitable accruals for interest receivable or payable on cash balances held.

Derivative Contracts: Will be valued in accordance with the Prospectus and the Risk Management Process. The following derivative contracts are regularly held by the Company: Swaps, pass through notes and instruments designed to provide an exposure similar to holding a specific security without directly holding the underlying security: Valued on a look through basis to reflect the price movement and value of the underlying security as if holding the security directly. Options and futures on underlying indices or securities Options and futures are usually traded on-exchange and therefore can be valued at the latest closing mid-market price as with any other listed security. Any options traded OTC would be valued in accordance to an appropriate option pricing model as determined by the Investment Manager in conjunction with the appropriate broker Forward foreign exchange contracts Although these are often traded on an OTC basis with HSBC as broker, it is possible to value these positions with reference to the latest mid-market close prices quoted in the foreign exchange markets. In the event that the closing price is not available on the Valuation Day or it is not possible to source valuation quotes from published sources, the Investment Manager will, in conjunction with the Investment Adviser and following the approval of the Trustee, recommend to the Administrator an appropriate pricing methodology for the calculation of the security’s value and/or a list of brokers that should be contacted to obtain an estimate of the valuation of the asset in order to ascertain fair value on this occasion or on an ongoing basis.

Collective Investment Schemes:

The Company regularly holds a number of ETFs and money market funds on behalf of the Funds. ETFs are listed on exchange and therefore valued with reference to the latest available closing mid-market price, as with any other equity or fixed income security Money market funds are valued at the latest available NAV per share provided by the underlying fund administrator or provided to Bloomberg. Most money market funds are listed with pricing providers so the latest valuation can be obtained in a similar manner to other equity or fixed income securities. An investment in a UCITS ETF should be treated as an investment in a UCITS collective investment scheme and subject to the normal limits for investing in other UCITS; An investment in a non-UCITS ETF could be treated as an investment in a non-UCITS collective investment scheme (benefiting from the 20% limit and the aggregate 30% limit) where the particular non-UCITS is actually a true collective investment scheme and meets the other requirements of Guidance Note 2/03. This would primarily be determined by the regulatory status of the particular investment but other factors (i.e. “in all material respects” criteria) would be relevant also;

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A non-UCITS ETF could also be considered to be a transferable security, and not only under the closed-ended collective investment scheme category. The Financial Regulator indicated that it would fall to the Investment Manager of the UCITS to exercise its own discretion to determine whether the investment should be treated as a transferable security or not and that, provided it has sufficient basis to justify its decision, that should be acceptable. The key point is that the Investment Manager considers the point and has reasonable justification for taking the approach of treating the ETF as a transferable security. In light of the above, it is possible that the ETF’s in which the Fund may invest may include UCITS ETFs and non-UCITS ETF’s, be they open-ended or closed-ended, which non-UCITS ETF’s are deemed to be transferable securities. In the event that the closing price is not available on the Valuation Day or it is not possible to source valuation quotes from published sources, the Investment Manager will, in conjunction with the Investment Adviser and following the approval of the Trustee, recommend to the Administrator an appropriate pricing methodology for the calculation of the security’s value and/or a list of brokers that should be contacted to obtain an estimate of the valuation of the asset in order to ascertain fair value on this occasion or on an ongoing basis.

Outstanding Cashflows:

All outstanding or pending cash transactions due to unsettled trades, shareholder activity or dividends payable or receivable are valued on the basis of face value.

Dividends / Coupons receivable

These are included within the valuation at the applicable rate of dividend / coupon less withholding tax following the ex-date of the dividend / coupon until the payment date of the dividend / coupon (provided that the cash amount is received on the payment date) multiplied by the shareholding in that asset maintained by the Fund on the ex-date.

Fee Accruals / Prepayments:

Fees are calculated on the basis that these should be accrued proportionally over the entire period in which these are payable based on the total amount to be paid. Where the fee is prepaid in advance of the period to which it relates a prepaid asset based upon the total amount paid from the Fund will be included within the valuation which will reduce proportionally over the entire period covered by the payment.

Formation Expenses: These are written off over a period of one year since launch of each Fund. The maximum amount payable under formation expenses is stated within the supplement for each Fund and will be accrued within the Fund Valuation from inception, reducing for any amounts that are paid by the Fund. At the end of the year, if there are any amounts still accrued that have not been invoiced for or the Investment Manager is not due to recover. Additional formation expenses for the legal and regulatory fees of multiple jurisdiction registrations for the Nippon Growth (UCITS) Fund, Strategic China Panda Fund and Strategic Euro Bond Fund were incurred at the inception of the Company. The Directors have elected that these Funds should bear the additional costs that were incurred, to be accrued over a 5 year period once the funds had increased over a minimum threshold. This additional accrual should be terminated and the cash payments made to the Investment Manager in June 2014.

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Currency: Regardless of the currency of investment in which the asset is denominated, each Fund will derive its net asset value calculation in the base currency of that Fund. This requires that non-base currency assets and liabilities are converted into the base currency of the Fund. This conversion is undertaken on the basis of the latest available spot exchange rates prevailing at the valuation point of the Fund.

If there are any unusual assets or circumstances that do not permit the asset to be valued in accordance with the above or the ‘Stale Pricing Policy’ or where the Prospectus for the Company is not conclusive in awarding the discretion to the Directors, the Administrator will advise the Directors accordingly and submit a proposal to the Directors as to how the asset should be valued in line with the Administrator’s internal guidelines, subject to the approval of the Trustee.

Review and Update

The Directors will review the Valuation of Assets Policy on at least an annual basis and seek confirmation from the Administrator and the Investment Manager as to the ongoing validity of the policy in addition to incorporating any required updates.

In addition, the Directors will review the Valuation of Assets Policy in advance of launching any additional Funds by the Company to ensure that all instruments likely to be trades by the Fund are suitably covered by the Valuation of Assets Policy.

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Conflicts of Interest Policy

Background

In accordance with its obligations under UCITS IV the Company must establish, implement and maintain an effective Conflicts of Interests Policy.

Conflicts of Interest Policy – identifying circumstances (with reference to the collective portfolio management activities of the management company) which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of the UCITS under management or one or more other clients;2 The policy must include procedures to be followed and measures to be adopted to manage the conflicts. The policy must be appropriate to the size and organisation of the management company and the nature scale and complexity of its business. If member of a group, the management company must also take into account conflicts arising from the structure and business activities of the group.

According to Section 13 of GN 4-07, a conflicts of interest policy which provides for the requirement in UCITS must be included in the business plan, including the criteria for identifying the types of conflicts of interest which may arise.

Every effort will be made by the Company to avoid conflicts of interest in the conduct of its business but this Conflicts of Interest Policy (the “ Conflicts Policy”) has been put in place by the Company to comply with its regulatory obligations and to demonstrate how the Company will deal with conflicts of interest should they arise from time to time.

In particular this Conflicts Policy will;

(i) Identify the situations in which a conflict may, or is likely to arise; and

(ii) Outline the procedures which will be followed and the measures which will be adopted in order to manage such conflicts.

In addition, the Company will maintain and regularly update a record of the types of collective portfolio management activities undertaken by or on its behalf in which a conflict of interest involving a material risk of damage to the interests of one or more UCITS funds which it manages or other clients has arisen or, in the case of an ongoing collective portfolio management activity, may arise.

1. Situations in which a conflict may arise

For the purposes of identifying the types of conflict of interest which may arise the Company will consider whether it or a person directly or indirectly linked by way of control to the management company, is in any of the following situations, whether as a result of providing collective portfolio management activities or otherwise:

• is likely to make a financial gain, or avoid a financial loss, at the expense of the Company or its investors;

• has an interest in the outcome of a service or an activity provided to the Company or another client or of a transaction carried out on behalf of the Company or another client, which is distinct from the Company’s interest in that outcome;

• has a financial or other incentive to favour the interest of another client or group of clients over the interests of the Company;

• carries on the same activities for the Company and for another client or clients;

2 Conflicts of Interest - paragraph 59-68 of UCITS Notice 2 and Section 13 of GN4/07.

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• receives or will receive from a person other than Company an inducement in relation to collective portfolio management activities provided to the Company, in the form of monies, goods or services, other than the standard commission or fee for that service.

2. Procedures which will be followed and Measures to be adopted in order to manage such conflicts

In the event that any such conflict should arise the procedures to be followed and measures to be adopted which are set out below are designed to ensure that the relevant persons engaged in different business activities involving a conflict of interest carry on those activities at a level of independence appropriate to the size and activities of the Company and of the group to which it belongs and to the materiality of the risk of damage to the interests of clients.

The procedures to be followed and measures to be adopted shall include the following where necessary and appropriate for the Company to ensure the requisite degree of independence. If the client’s interests could be damaged as a result of a conflict of interest despite any measures adopted by the Company to address the conflict, then such a situation must be disclosed to the client before beginning work for the client:

(a) effective procedures to prevent or control the exchange of information between relevant persons engaged in collective portfolio management activities involving a risk of a conflict of interest where the exchange of information may harm the interests of one or more clients;

(b) the separate supervision of relevant persons whose principal functions involve carrying out collective portfolio management activities on behalf of, or providing services to, clients or to investors whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the management company;

(c) the removal of any direct link between the remuneration of relevant persons principally engaged in one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities;

(d) measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out collective portfolio management activities;

(e) measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate collective portfolio management activities where such involvement may impair the proper management of conflicts of interest.

Where the adoption or the practice of one or more of these measures and procedures does not ensure the requisite degree of independence, the Company will adopt such alternative or additional measures and procedures as are necessary and appropriate for those purposes on a case by case basis.

In the event that any of the procedures and/or measures applied by the Company to manage any actual or potential conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the Company or its investors will be prevented, the compliance officer of the Investment Manager (the “Compliance Officer”) will be promptly informed in order for them to take any necessary decision, including referring the matter to the Board of the Company if it deems it necessary to do so, to ensure that the Company acts in the best interests of the relevant Company and of its investors. Where it deems it necessary to do so, the Company shall report those situations referred to above to investors and clients by an appropriate durable medium and give reasons for its decision.

The Company acknowledges its responsibility to establish, implement and maintain an effective written conflict of interest policy and the Company ensures that this conflict of interest policy is reviewed at least on an annual basis. The Company will use its reasonable endeavours to ensure that the Policy remains current and applicable to any new business as well as the existing business of the Company. The Company will also use its reasonable endeavours to ensure that the Policy remains appropriate to the structure and size of the Company and the nature, scale and complexity of the Company’s collective portfolio management business.

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In addition the Compliance Officer should ensure that she is fully aware of any amendments to the Central Bank’s requirements, any development in relation to best practice or guidance issued by the Central Bank or industry bodies in respect of conflicts of interest.

This Policy should be provided to all staff members who are involved in the provision of collective portfolio management services on a day to day basis and they should confirm that they have read, understood and agree to the policy. Any member of staff who believes there is a potential conflict of interest which has not already been considered should immediately inform the Compliance Officer.

3. What Constitutes a Conflict of Interest?

A conflict of interest can be summarised as a situation whereby the Company or employee or client of the Company has a competing interest with a client, whether professional or personal, arising out of the provision of services to that client.

If there is a potential conflict of interest, the existence of which may damage the interests of a client, then the Company must take steps to ensure, with reasonable confidence, that any risk will be prevented, or disclose the risk to the client in advance of entering into the relationship.

4. Managing Conflicts of Interest

The Company under the oversight of the Compliance Officer and compliance personnel will conduct a regular review of each of the Company’s business activities to ensure compliance with the Regulations and the Conflict of Interest Policy;

5. Practical Measures

Formalisation of relationship

In the event that contractual arrangements are not sufficient to identify any potential conflict of interest, the Compliance Officer will identify and recommend an approved course of action e.g. amendment of contractual conditions, seek clarification of existing procedures, terminate the agreement etc.

Reporting Lines

Relevant persons in each business unit whose principal functions involve providing collective portfolio management or ancillary services to clients and whose interests may conflict have their own reporting lines within their business unit. There are no direct/indirect reporting lines to another business unit.

Remuneration Policy

It is prohibited to base the remuneration of relevant persons engaged in certain activities on the results of such activities (such as sales figures or profit growth) if such results are generated by conflicting activities.

All identified conflicts must be notified to the Compliance Officer. In such instances, the Compliance Officer must ensure the remuneration of the staff member associated with the conflict must not be based on the results (i.e. sales figures or profit growth) generated by the conflicting interest.

Influence

It is prohibited to permit any person, whether or not linked with the Company, to exercise inappropriate influence over the way in which an employee carries out collective portfolio management activities or ancillary services. This is done by implementing appropriate segregation of duties, authorisation levels, etc.

External review of potential conflict of interest

If there is uncertainty over a particular situation or relationship the Compliance Officer can recommend that a third party legal or other service provider’s advice be sought to facilitate the review of that situation.

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The advice/review sought should be clear and precise. If necessary a clearly defined scope of work should be agreed prior to the commencement of the work.

6. Procedures for New Business Activity

When entering into new business activities the new activity should first be considered against the analysis of any existing or potential conflicts of interest within or affecting the Company’s existing business above to see if it falls into an existing category or if there are new or different features to be considered. If not already falling within an existing category of business, the procedures detailed below must be adhered to and this conflict of interest policy updated to reflect the new business activity.

• When entering into agreements with new funds, the Company must review the nature of the relationship and consider the provisions of this Policy to assess whether or not a conflict of interest exists;

• Refer to this Policy when taking on a new fund or providing new services for an existing Client for assistance in identifying whether any existing or potential conflicts of interest create the potential for damage to a the interests of any fund or its investors;

• The outcome of the review and any specific remedial action required will be reported to the Designated Individual who will determine the appropriate action to take in light of the recommendation;

When considering whether a particular circumstance is considered a conflict of interest reference should always be made to the wording in the UCITS IV Directive and any applicable Central Bank Regulations and/or guidance.

It should be noted that the standard terms and conditions should be applied to all contractual relationships.

7. Summary - Conflict of Interest Principles

The principles detailed below should be adhered to by all staff in their day to day activities and by the management of the Company to avoid the risk of a conflict of interest. These principles may be added to from time to time and are subject to regular review on the basis described above, and should not be taken as exhaustive.

• Ensure there is no direct link between the remuneration of an individual within the Company and investment decisions made on behalf of the client;

• Ensure that in providing services for more than one client, the Company has no incentive to treat one client more favourably than another;

• Ensure that the particular circumstance of an event or relationship should be considered in assessing whether there is a conflict of interest;

• Ensure that all new business arrangements (relationships and activities) are reviewed in accordance with this policy.

Review

The Conflicts of Interest Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Voting Rights Policy

Background:

In accordance with its obligations under UCITS IV the Company must establish, implement and maintain a Voting Rights Policy.

Exercise of Voting Rights Policy – designed for determining when and how voting rights attached to instruments held in a managed portfolio are to be exercised to the exclusive benefit of the UCITS concerned;3

According to Section 14 of GN 4-07, the business plan must include the policy in relation to voting rights.

Voting Rights Policy:

The voting rights policy adopted by the Company is outlined below.

Responsibility for the actioning of voting rights associated with any security held by any of the sub funds of the fund is the responsibility of the appointed individuals within the operations team at the Investment Manager in accordance with the policy detailed below, under the supervision of senior team members. These individuals are also responsible for all of the monitoring activities associated with the exercising of such voting rights.

On a daily basis the Investment Manager will review all outstanding corporate actions to ensure that these are actioned appropriately and that the actions that are taken are in the best interests of the Fund and ultimately the shareholders. On receipt of corporate actions the Investment Advisor to the applicable sub-fund will be consulted who will then review the corporate action taking into account the associated risks posed by the proposed actions, such as the risk of change to the majority shareholder, of a merger, a change of senior management or restructuring. The Investment Advisor will provide their analysis of the potential impact and recommendation to the Investment Manager. Consideration will be given during this evaluation process to the weight that the security in question represents to the Fund and the holding level that the Fund has in the Company. On receipt of the recommendation the Investment Manager will review the proposed actions to ensure that it is consistent with what is perceived to be in the best interests of the Fund, with the Investment Manager retaining ultimate responsible in this respect.

The Investment Manager will then instruct the Custodian of the action that should be taken in respect of each specific corporate action, with the Custodian responsible for actionning the instruction..

The voting rights policy adopted by the Investment Manager aims to ensure that the interests of the investors of any of the sub-funds of the Fund are protected and promoted. Given this proposition, the Investment Team will support actions that help to promote within the underlying companies good corporate governance, fair treatment of shareholders, Board of Directors responsibilities and transparency and vote against or abstain from votes that are deemed not to support these aims. Areas of specific interest for the Investment Manager will be those corporate actions that relate to the appointment and removal of Directors or Auditors and corporate restructuring. When Directors and Auditors are appointed the Investment Manager will support those propositions that we believe will lead to increased independence of the Board of Directors and corporate governance oversight. By contrast high turnover of either Directors or Auditors compared to the industry standard will be seen as a negative attribute of the underlying and as such the Investment Manager will be inclined to vote against or abstain from the vote depending on the level of concern generated. Further

3 Exercise of Voting Rights – paragraphs 69-71 of UCITS Notice 2 and Section 14 of GN4/07.

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adjustments to a securities structure will be a another area that the Investment Manager will pay particular attention, supporting actions that will improve terms and protection for investors and rejecting those that are considered to be unfavourable for the Fund and ultimately our shareholders.

In accordance with the UCITS IV provisions the Investment Manager will be responsible for the maintenance of the voting rights policy and provision to shareholders upon request. In addition the Investment Manager will maintain a record of every voting right actioned or otherwise in order that it may respond to specific information requests from investors in relation to specified issues.

The Voting Rights Policy adopted by the Company will be reviewed on an annual basis to ensure that the provisions are suitable and reflect accepted best practice. This policy will also be provided to the Board of Directors of the Company for their review and approval on this basis. .......................................................................................................

Review

The Voting Rights Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Order Handling policy

Background

In accordance with UCITS IV client order handling rules, the Company is required to have procedures and arrangements in place that provide for the prompt, fair and expeditious execution of orders.

Order Handling Policy designed to ensure the prompt, fair and expeditious execution of portfolio transactions on behalf of UCITS under management;4

The Policy must:

(i) ensure that orders executed on behalf of UCITS under management are promptly and accurately recorded and allocated; and

(ii) comparable orders for UCITS under management are executed sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable or the interests of the UCITS require otherwise.

The Company has established the following order handling procedures for the purposes of complying with its obligations under the Regulations.

1. The Company intends that all portfolio transactions are executed promptly, fairly and expeditiously on behalf of funds to which it provides collective portfolio management services (the “Fund(s)”).

2. The Company will execute otherwise comparable orders for Funds sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of a particular Fund require otherwise;

3. Orders executed on behalf of Fund(s) are promptly and accurately recorded and allocated within the financial records of the Fund and the Company held by the Administrator and the Custodian as well as those records maintained by the Investment Manager;

4. Financial instruments or sums of money, received in settlement of the executed orders must be promptly and correctly delivered to the account of the appropriate Fund under management by the Company. This is achieved through the opening of individual named accounts for each fund under management and ensuring that all trades are settled directly to this named account.

5. The Company will not misuse information relating to pending orders for Funds under management and will

take all reasonable steps to prevent the misuse of such information by any of its relevant persons or delegates as the case may be. This involves confirmation from each service provider of the existence of personal account trading policies and appropriate declarations as to any conflicts of interest that may arise.

6. The Company will not aggregate an order for a Fund with an order for another Fund under management by it

or with an order for its own account, unless the following conditions are met:

(i) it must be unlikely that the aggregation of orders will operate overall to the disadvantage of any of the Funds or investors involved;

4 Order handling - Paragraphs 32-40 of UCITS Notice 16.

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(ii) an order allocation policy must be established and implemented, providing in sufficiently precise terms for the fair allocation of aggregated orders, including how the volume and price of orders determines allocations and the treatment of partial executions.

Where the Company aggregates an order for a Fund with one or more orders of other such Funds or investors and the aggregated order is partially executed, it must allocate the related trades in accordance with its order allocation policy.

The Company which has aggregated transactions for own account with one or more Funds under management by it must not allocate the related trades in a way that is detrimental to such Fund or any investor.

Where the Company aggregates an order for a Fund with a transaction for own account and the aggregated order is partially executed, it must allocate the related trades to such Fund in priority over those for own account.

If the Company is able to demonstrate to a Fund on reasonable grounds that it would not have been able to carry out the order on such advantageous terms without aggregation, or at all, it may allocate the transaction for own account proportionally, in accordance with the Company’s order allocation policy.

In practise, the Company does not aggregate any orders amongst Funds under management.

In addition, the Company has adopted a ‘Best Execution Policy’ that outlines the further considerations given to the selection of brokers and price achieved for each order placed on behalf of the Funds operated by the Company Review

The Order Handling Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Late Trading and Market Timing Policy

Background

The Company is required by paragraph 7 of UCITS Notice 16 to establish and implement a Late Trading and Market Timing Policy which is set out below.

Despite the Company’s best efforts there can be no assurances that abusive trading practices can be mitigated or eliminated. For example nominee accounts in which purchases and sales of shares/units by multiple investors in a fund to which the Company provides collective portfolio management services (a “Fund”) may be aggregated for dealing on a net basis and conceal the identity of underlying investors in a Fund which makes it more difficult for the Company and its delegates to identify abusive trading practices. Notwithstanding these difficulties the following Policy has been adopted by the Company and has been applied to address the issues surrounding Late Trading and Market Timing.

1.1 Market timing

Outline of Market Timing

Market timing is an investment activity involving short term “in and out” trading of funds shares which may have a detrimental effect on the medium and long-term shareholders for whom the Funds are designed. The activity is designed to exploit market inefficiencies when the NAV of the Fund’s shares which is determined at a specific time of the day does not reflect the current or expected market value of the securities held by the Fund.

A pure “market timer” buys the Fund shares at the stale NAV and realises a profit when it sells these shares the following day. The profit realised dilutes the value of the shares held by the remaining shareholders in the Fund. This activity is most successful where the Fund involved is a daily dealing fund, where there is a material time lag between the relevant market close and the determination of the NAV and where the Fund does not impose prohibitive upfront fees or deferred sales charges.

Controls over Market Timing

Within the drafting of documentation and operational planning of any new funds, the Company actively considers the timings surrounding the subscription and redemption process as well as the frequency of valuation points in an effort to structure the fund in such a manner that investors are not able to time their investment activity in order to take advantage of any stale prices or timing issues in the valuation process. Within the supplement for each Fund the directors maintain the flexibility to accept investor subscriptions and redemptions after the published cut-off time for these to be received by the Administrator, however the Company has adopted an ‘Exceptional Trade Policy’, contained within Appendix 1, which outlines parameters permitting the acceptance of trades received after published cut-off times but does not permit the acceptance of any trades after the valuation point of the Fund in question as to prevent the scope for market timing. Further, the Company and the Investment Manager are mindful that accepting late trades can offer those investors an advantage over the other investors in the Fund and therefore only accepts late trades in exceptional circumstances where there is no material disadvantage to other investors or the Fund.

Given the way in which the subscription process into the funds operates, we believe that it would be difficult for an investor to purchase shares one day and sell these shares the following day to take advantage of the delays in calculating the net asset value. This is because the investor must submit their order to subscribe or redeem from the Fund on at least the business day prior to the valuation point. Therefore, all orders are received before the opening of business in the applicable markets in which the Fund operates on each valuation day which does not allow investors to take advantage of potential moves in these markets on that valuation day as these are largely

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unknown. In addition, each net asset value calculation is prepared using the close prices in the applicable market and there is no opportunity to time orders to take advantage of price movements throughout that business day.

Further, even though it is possible that the shares may be registered in an omnibus name and are sold to another party using the same omnibus account the following day, the Company considers that this should not provide opportunity for market timing given that the trades will usually be processed on the basis of the prevailing NAV per share prepared at the latest valuation point.

1.2 Short Term Trading Policy

It is the policy of the Company to discourage shareholders from trading that could be detrimental to the long term interests of the shareholders of its Funds. In order to implement this policy, shareholder activity within a Fund is monitored by the Investment Manager in an attempt to identify investors who may be short term trading or who they believe may be seeking to arbitrage the Fund. This can be difficult to assess given that the majority of investors subscribe into the Fund via a global custodian or nominee and therefore it is not uncommon for a number of subscription and redemptions orders to be received from the same registered shareholder on one day or over a number of trading days. However, the activity of these registered shareholders is understood by the Company and does not regularly arouse suspicion. The Company is more likely to suspect these form of activities from individual or private shareholders or those that do not actively trade in the shares of the Fund on a frequent basis.

The Company has discretion to make enquiries as to the intentions of the clients and/or their custodian and the board of directors maintain the discretion to reject any application received by the Company, without notice, which in its opinion may lead to short term trading or where they believe that the investor is attempting to participate in an arbitrage involving the Fund.

The Company requires that the Investment Manager reviews the shareholder activity received in respect of each valuation point to seek to identify any investors who may be short term trading. This can involve reviewing the overall trading activity for each registered shareholder or seeking to identify trends, as well as contacting the shareholder or client relationship individual within the sales team to ascertain the rationale for the transactions.

Whilst it may not be possible to identify all instances of market timing due to the extensive use of global custodians and nominees within the share register, these checks help the Company to identify investors who may be seeking to trade over the short term, as well as large transactions that may have a significant impact on the Fund. When the Company is alerted to such examples, the matter is escalated to the Board of Directors who will identify the most appropriate course of action on a case by case basis.

The monitoring undertaken above is more effective for shareholders who have a direct relationship with a Fund. There are practical difficulties in monitoring possible instances of market timers who trade “in and out” of a fund using omnibus shareholder accounts and most of the investors within the funds use these omnibus accounts. Omnibus accounts are often used by custodians to record their own advisory business together with execution only business they may transact. Typically, an investor who is trying to market time our fund would be an execution only client of the custodian bank.

Summary

The Company does not have specific guidelines for or a precise definition of “market timing” or “excessive trading”. However, the Company requires that shareholder activity is actively monitored with any unusual or suspicious activity within any of the funds reported to the Board of Directors. The Directors also reserve the right to refuse future subscriptions from investors who are suspected of market timing or excessively trading the funds. We believe that the vast majority of clients invest in our funds for the medium to long term and that the Company should protect the interests of all shareholders in the fund by adhering to these policies which are reasonably designed to detect and deter investors who attempt to market time or excessively trade our funds.

The Company understands that certain clients need to use our funds for tactical asset allocation or for structured products which may require periodic asset re-allocations between funds. As such, these types of transactions would not normally be classed as excessive unless it is believed that the pattern of trading becomes excessive or follows a pattern which may result in the funds being attempted to be market timed.

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The Company believes that it is in the interests of all parties to remain as flexible as possible – by providing specific guidelines or an exact definition of “market timing” or “excessive trading” it may result in the ability for certain clients to be encouraged to trade to the edge of the definition or to the limits per the guidelines.

The Company also recognises that clients, particularly where these clients are asset allocators or a fund of funds, may wish to take a profit on an investment where the markets have rallied strongly irrespective of the period of ownership of the Fund.

The Company looks for patterns of behaviourbehavior and not isolated incidents and we will discuss any trading patterns

Review

The Late Trading and Market Timing Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

Formatted: Indent: Left: 1 cm, Firstline: 0 cm

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Background

This Best Execution Policy sets out all reasonable steps which the management company will take in order to obtain the best possible result for the UCITS under management taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.

The relative importance of such factors will be determined by reference to the following criteria:

(i) the objectives, investment policy and risks specific to the UCITS under management, as indicated in the prospectus or as the case may be in the trust deed, deed of constitution or articles of association of those UCITS;

(ii) the characteristics of the order;

(iii) the characteristics of the financial instruments that are the subject of that order;

(iv) the characteristics of the execution venues to which that order can be directed;5

The Order Execution Policy must identify, in respect of each class of instruments, the entities with which the orders may be placed.

In addition a management company must monitor on a regular basis the effectiveness of its arrangements and policy for the execution of orders (and in the case of an Order Execution Policy, the execution quality of the entities identified in that policy) in order to identify and, where appropriate, correct any deficiencies.

Trading Procedure

There is a distinct separation of roles and responsibilities between the portfolio management, which is undertaken by a specific appointed Investment Adviser, and the risk management and monitoring (and in some cases trading) function that is undertaken by the Investment Manager. For some portfolios there is also a secondary risk management and trading function appointed, which is often undertaken by Banque Baring Brothers Sturdza SA. For some portfolios however, additional risk management functionality as well as the trading functionality is situated within the specific appointed Investment Adviser. We feel that this clear division of responsibilities, together with the continual review by individuals at E.I. Sturdza Strategic Management Limited, ensures that the opportunity for error is minimised.

All client and portfolio trades placed by Banque Baring Brothers Sturdza SA or the Investment Manger are placed individually and there are no block trades to allocate or cross trades undertaken. In addition, the portfolios will not participate in IPOs, reducing the liquidity, settlement and valuation risk associated with these opportunities.

Trading costs are negotiated with each individual broker on a standardised basis and then subsequently reviewed on a trade by trade basis as per the confirmations received, both by the trading function (whether included within the specific Investment Adviser or at an appointed trading services provider) and E.I. Sturdza Strategic Management Limited. In addition, execution prices are reviewed against daily VWAPs for the individual stocks to ensure reasonableness.

5 Best Execution – paragraphs 18-31 of UCITS Notice 16.

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Use of Brokers

Brokers are evaluated on size and reputational standing, trading capacity, accuracy of execution, and quality of research, network contacts and in accordance with the Company’s Broker selection policy. The majority of brokers on the Approved Broker List are major investment banks. While research capability and the network of brokers and extensive contacts play an important role in the Investment Adviser’s investment process, there will never be a compromise of quality of the broker with regard to counterparty risk or best execution.

The Approved Broker List was agreed at the inception of each portfolio, and is based on existing relationships with preferred brokers. This can however be updated from time to time subject to Director approval. Our preferred brokers are professional organisations in good standing backed by significant capital resources. The Approved Broker List is strategy specific, as we feel that brokers have particular expertise in markets or sectors, which is preferable to a generic broker list across the range of products offered by the Investment Manager.

It is not the intention to implement changes to the Approved Broker List on a regular basis. However, should the Investment Adviser or the Investment Manager feel it necessary to include or remove a broker from the list, the selection of broker will be reviewed by the Investment Manager and any other appointed risk management function as well as seeking Director approval for the relevant portfolio.

Consideration of Best Execution

When orders are executed on behalf of all portfolios, we consider that the portfolio should obtain best execution and look to ensure that the brokers that are selected reflect this in the services that they provide to the trading function. This means that all reasonable steps are taken to obtain the best possible result for the portfolio when executing orders. However, this does not mean that the best price is achieved for every order, but rather the best possible result that can reasonably be expected is achieved with the resources available. Not only does each trading function appointed to place trades on behalf of products managed by the Investment Manager have in place procedures which provide for the prompt, fair and expeditious execution of client orders in relation to other client orders or their own trading interests, this is also expected of the underlying brokers with whom the trades are placed, many of which are governed by MiFID regulations as well as industry best practice.

The Investment Manager would consider that it is best practice to pursue the requirement for best execution in respect of any order in respect of a financial instrument and where:

− we are executing orders on behalf of clients, either dealing as principal or as agent; or

− we are arranging transactions (for example, placing an order through a broker, known as “receiving and transmitting orders”).

Client Express Instructions

However, where the client (for segregated portfolios) may provide us with specific instructions or directed brokerage this may prevent us from taking the necessary steps to obtain the best possible result for the execution of the order in respect of the elements covered by those instructions. We consider that to execute an order in accordance with client instructions satisfies the obligation to take reasonable steps to obtain the best possible result for the execution of the order.

The Obligation for Best Execution

We consider it appropriate to take all reasonable steps to obtain the best possible results for each of our portfolios. In practical terms, this means selecting execution venues which consistently deliver best execution taking into account the execution factors listed below:

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• price; • transaction cost ; • speed of execution; • market impact of the transaction • the current liquidity for the relevant instrument; • quality and efficiency of the settlement process; • size and nature of the order; • any other relevant considerations • whether we have been given any other client specific instructions (as execution according to

those instructions will satisfy the best execution obligation)

The importance of these factors has been weighted according to product, but generally results in the use of the primary exchange on which the equity security is listed which is a regulated market, and transaction through a broker contained within the Approved Broker List.

Generally, the order transactions that are placed are ‘at best’ orders to the broker, but we are aware that for any limit order that is given which cannot be immediately executed, the broker may be required to publish to a regulated market or Multilateral Trading Facility. We have therefore agreed with a number of the underlying brokers as part of standard terms and conditions that when we pass a limit order to them that is not immediately executable, they may exercise their discretion not to publish such an order to a regulated market or MTF.

Order Handling

• We endeavour to execute orders promptly and execute comparable portfolio or client orders promptly and sequentially unless the characteristics of the order or prevailing market conditions make this impossible, or the interests of the client or portfolio require otherwise.

• While we strive to treat portfolio or client orders sequentially even if the orders are received by different media in some cases it would not be practicable to do so.

• Any order placed is not generally aggregated with other client or portfolio orders when instructed by the Investment Manager or placed by the designated trading function and/or with our own orders, but may be aggregated at the underlying broker level provided that the effect of aggregation may not work to the disadvantage of the portfolio and / or the client in relation to a particular order.

Fair Allocation

• We will allocate all orders fairly and will not give preference to one client or portfolio over another, as evidenced by the placing of individual client or portfolio orders to the underlying brokers by the designated trading function, which is the standard practice in the majority of portfolios managed by the Investment Manager.

• Where bulk orders are placed on behalf of a number of portfolios within a given strategy or where placed by an Investment Adviser to a number of different portfolios of which one is managed by the Company, each Trade Ticket should be properly completed with the intended amount of securities to be purchased or sold, and the basis of allocation (the “intended allocation”) before the trade is placed. The Trade Ticket should also be time-stamped, evidencing the placing time and execution time for each trade. Where a need to respond quickly to market conditions requires a trade to be placed before documentation is completed, the documentation should be completed as soon as practical subsequent to placement.

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In the event of a partial fill, allocation will be transacted on a pro-rata basis. In an extreme case where the shares are impossible (i.e. the amount is small) to be allocated on a pro-rata basis, the Investment Adviser will be required by the Company to allocate all the shares to one account, the reasoning for which should be documented on the Trade Ticket. In deciding the allocation ratio, Investment Adviser appointed by the Company should consider the following factors:

o The existing exposure of the account; o The investment objectives; and/ or o The risk tolerance of the portfolio; etc.

Cherry picking is strictly prohibited. Review

The Best Execution Policy will be reviewed regularly and whenever a material change occurs that affects our ability to obtain the best possible result for our portfolios when executing orders.

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Due Diligence Policy

Background The Company is required under the UCITS Regulations to establish written policies and procedures on due diligence and implement effective arrangements for ensuring that investment decisions on behalf of the assets under management are carried out in compliance with the objectives, investment strategy and risk limits of the Funds.

Due Diligence Policy – designed to ensure investment decisions on behalf of the UCITS are carried in compliance with the objectives, investment strategy and risk limits of the UCITS.6

Due Diligence carried out on Prospective delegates (a) The Company will exercise care and diligence in choosing and appointing delegates, to ensure that

the delegates have the expertise, competence and standing appropriate to the responsibilities given to them.

(b) The Company will ensure that all functions delegated to a third party are fully disclosed in the

prospectus of the Company.

(c) The Company must be satisfied that there are effective information flows with the delegate which will ensure all relevant information is received in a timely manner to enable the Company to carry out the management of the portfolio effectively.

(d) The Company will review the internal processes of delegates and must be satisfied that the

procedures in place are consistent with the Company’s own internal policies and procedures.

The Company has appointed the Investment Manager as investment manager of the Company. The Investment Manager is responsible for managing the assets and investments of the Company in accordance with their investment objectives, policies and regulations. Supervision of Delegates All appointed delegates are subject to the overall supervision and control of the Company. This includes the following: Investment Management Agreement

An Investment Management Agreement entered into between the Company and its appointed Investment Manager. This sets out the various duties and responsibilities of the Investment Manager.

Board Reporting

The Board will receive quarterly reports from the Investment Manager which will enable the Board to determine (i) identification of the risk profile of and the Company’s risk measurement and management

arrangements;

6 Paragraph 10 of UCITS 16

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(ii) the risks arising from potential changes in market conditions that could adversely impact the Company (based on stress testing and scenario analysis carried out by the Investment Manager);

(iii) the level of due diligence by the Investment Manager in the selection and ongoing monitoring of investments including inter alia the analysis carried out by the Investment Manager before carrying out any investment in order to determine the contribution of that investment to the relevant Fund’s portfolio composition, liquidity and risk and reward profile;

(iv) arrangements in place by the Investment Manager for ensuring that investment decisions are carried out in compliance with the investment objectives, investment strategy and risk limits of the relevant Fund;

(v) the consistency between the current levels of risk incurred by the relevant Fund and the risk profile agreed for the relevant Fund;

(vi) the adequacy and effectiveness of the risk management process, indicating in particular whether appropriate remedial measures have been taken in the event of any deficiencies; and

(vii) the adequacy and effectiveness of the Investment Manager’s best execution policy and indicating whether appropriate remedial measures have been taken in the event of any deficiencies.

The Investment Manager will provide advice to the Board of Directors of the Company as regards the risk profile of the relevant Fund and will provide quarterly reports to the Board outlining the current level of risk incurred by the relevant Fund by reference to the risk profile of the Fund and any excess exposure to the relevant risk limits, so as to ensure that prompt and appropriate action can be taken. The Investment Manager’s quarterly report will also cover details of any complaints received, any material business continuity events and other material operational issues, the net asset value and performance of each Fund, information on portfolio composition, categorised by appropriate criteria such as by sector and country and appropriate performance comparisons. The report will also include appropriate commentary on each Fund’s performance and developments in the market during the period and on the future outlook. This quarterly report will also confirm compliance by the Investment Manager with investment and borrowing restrictions of each Fund during the relevant period, noting any exceptions and outlining corrective action. In the event of a breach, the Investment Manager will promptly (or as soon as it becomes aware) notify the Designated Individuals upon identification of the breach with details of the breach and any appropriate recommendations for its remedy. The report will also confirm whether the breach has been notified to the Custodian. Information on all investment breaches will be included in the quarterly report provided to the Board. During each Board meeting, representatives of the Investment Manager’s staff with direct responsibility for the investment management of the Company and its Funds will be available either in person or by phone/video conference to provide an up to date commentary on the Investment Manager’s report, and to answer any questions the Directors may have. Where requested, the Investment Manager will provide information to the Directors so that they have an adequate knowledge and understanding of the assets in which the Funds are invested. Compliance monitoring

The Company will monitor the compliance of the fund(s) in relation to investment restrictions and limits as set by the Central Bank of Ireland, as well as within the prospectus of the Company. Checks are run daily, with any breaches of limits reported to the Compliance Officer of the Investment Manager, as well as to the Trustee on a monthly basis.

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Fund Performance

The Company will periodically review the performance of its appointed delegates, identifying unsatisfactory long term performance, or short term performance that involves risk exposure higher than allowable in a Fund’s objectives. The Business Plan sets out how the Company will review the performance of its appointed delegates and the actions it will take if performance is unsatisfactory. Business Risk Assessment The Company has adopted a risk-based approach to taking on New Business and this risk based approach starts with the identification and assessment of the risk that will need to be managed and requires the Company to assess the risks of how it might be involved in money laundering and financing terrorist activities, taking into account its service providers, products and the ways in which it provides those services. This Due Diligence Policy is designed to provide the Company with a framework to work within, and the issues to consider when accepting New Business. It is not designed to be prescriptive on how the Company takes on business. Factors for consideration when taking on New Business Factors which should be taken into account by the Company when taking on New Business in light of money laundering and financing terrorist activities and what risks are posed/mitigated by its service providers are as follows: i) their geographical origin (e.g. are service providers locally resident or are they based in a

jurisdiction where drug trafficking, bribery and corruption are widely considered to be prevalent); ii) the complexity of their legal and transaction structures; iii) the way they were introduced to the financial services/prescribed business; and iv) the unwillingness of service providers who are not individuals to give the names of their

underlying owners and principals. When assessing the business risk of establishing a new fund and new service providers the Company must take into consideration the following when putting together the New Fund proposal for the Directors consideration:

• ensure they are aware of concerns about weaknesses in the AML/CFT systems of other countries or territories;

• identify transactions which (in the context of business relationships) have no apparent economic or visible lawful purpose and examine the background and purpose of such transactions; and

• record in writing the findings of such examinations in order to assist the Commission, the FIS and other domestic competent authorities.

• Identify key individuals who will be instrumental in the establishment of the new fund and verify their identity.

Service Provider Identification The minimum identification information must be gathered on individuals who will be key in the relationship of setting up the New Business, includes:

• legal name, any former names (such as maiden name) and any other names used;

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• principal residential address;

• date and place of birth;

• nationality;

• any occupation, public position held and, where appropriate, the name of the employer; and

• an official personal identification number or other unique identifier contained in an unexpired official document (for example, passport, identification card, residence permit, social security records, driving licence) that bears a photograph of the customer.

Verification of key individuals and CDD In order for the Company to build a business case to accept the New Business the identity of the key individuals must be verified. Solid CDD procedures are vital because they: i) provide the basis for identifying, assessing, mitigating and managing risk; ii) help to protect the Company by reducing the likelihood of it becoming a vehicle for, or a victim

of, financial crime and terrorist financing; iii) help the Company to take comfort that the clients and other parties included in a business

relationship are who they say they are, and that it is appropriate to provide them with the product; and

iv) help the Company to understand the purpose and intended nature of the relationship and

therefore to identify, during the course of a relationship, factors which are unusual and which may lead to knowing or suspecting or having reasonable grounds for knowing or suspecting that customers/clients or other parties may be carrying out AML/CFT

Knowing your client and understanding their intentions in respect of the proposed relationship will allow the Company to assess the level of CDD documentation and information required to adequately manage and mitigate any AML/CFT risks. Where, during the CDD process, you know or suspects that someone is engaged in money laundering or terrorist financing a disclosure must be made to the FIS via your MLRO. Verification The legal name, address, date and place of birth, nationality and official personal identification number of the individual must be verified.

In order to verify the legal name, address, date and place of birth, nationality and official personal identification number of the individual, the following documents are considered to be the best possible, in descending order of acceptability:

• current passport (providing photographic evidence of identity);

• current national identity card (providing photographic evidence of identity);

• armed forces identity card.

Verification of address

The following are considered to be suitable to verify the residential address of individuals:

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• a bank/credit card statement or utility bill;

• correspondence from an independent source such as a central or local government department or agency;

• commercial or electronic databases;

• a letter of introduction from an Appendix C business (see the definition in Appendix C to the Handbook) with which the individual has an existing business relationship and which confirms residential address;

• written communication from an Appendix C business (see the definition in Appendix C to the Handbook) in connection with a product or service purchased by the individual;

• lawyer’s confirmation of property purchase, or legal document recognising title to property (low risk relationships only);

• a personal visit to the residential address; and

• an electoral roll. Identification and verification of service providers who are not Individuals Where a legal body which is not i) a collective investment scheme regulated by the Commission; or ii) a legal body registered or quoted on a regulated market is the customer, beneficial owner or underlying principal, the Company must:

• identify and verify the identity of the legal body. The identity includes name, any official identification number, date and country or territory of incorporation if applicable;

• identify and verify any registered office address and principal place of business (where different from registered office) where the risk presented by the legal body is other than low;

• identify and verify the individuals ultimately holding a 25% or more interest in the capital or net assets of the legal body;

• identify and verify the individuals, including beneficial owners, underlying principals, directors, authorised signatories or equivalent, with ultimate effective control over the capital or assets of the legal body; and

• verify the legal status of the legal body. Verification of the legal body

One or more of the following examples are considered suitable to verify the legal status of the legal body:

• a copy of the Certificate of Incorporation (or equivalent) if applicable;

• a company registry search, if applicable, including confirmation that the legal body has not been, and is not in the process of being, dissolved, struck off, wound up or terminated;

• a copy of the latest audited financial statements;

• a copy of the Memorandum and Articles of Association;

• a copy of the Directors’ Register;

• a copy of the Shareholders’ Register;

• independent information sources, including electronic sources, for example, business information services;

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• a copy of the Board Resolution authorising the opening of the account and recording account signatories; and

• a personal visit to the principal place of business. Politically Exposed Persons Additionally, and more importantly, appropriate and effective CDD procedures will ensure that any clients who may be politically exposed persons (“PEPs”)7 will be identified and the risks of establishing relationships with such persons can be managed and mitigated. In order to determine whether a customer, beneficial owner or underlying principal is PEP, a financial services business must consider:

• assessing countries which pose the highest risk of corruption – one source of information is the Transparency International Corruption Perception Index;

• establishing who are the current and former holders of prominent public functions within those high risk countries and determining, as far as is reasonably practicable,

• whether or not customers, beneficial owners or underlying principals have any connections with such individuals – the UN, the European Parliament, the UK Foreign and Commonwealth Office, the Group of States Against Corruption may be useful information sources; and

• using commercially available databases. As required by Regulation 4 of the GFSC Handbook when carrying out CDD a determination must be made by the Company as to whether the key individuals and any underlying principal is a PEP. Where the Company has determined that the business relationship or underlying principal is a PEP, we must ensure that it has appropriate and effective policies, procedures and controls in place to ensure compliance with the enhanced due diligence requirements of Regulation 5 of the GFSC Handbook. Enhanced due diligence of High Risk cases and PEPs If during the collation of the service provider due diligence it is identified that there is a PEP or the risk to the business then it will be necessary to undertake enhanced due diligence on the individual. This consists of the following:

• taking reasonable measures to establish the source of any funds and of the wealth of the customer and beneficial owner and underlying principal;

• carrying out more frequent and more extensive ongoing monitoring;

• taking one or more of the following steps as would be appropriate to the particular business relationship or occasional transaction-

i) obtaining additional identification data;

ii) verifying additional aspects of the customer’s identity; and iii) obtaining additional information to understand the purpose and intended nature of each

business relationship.

7 "politically exposed person" means - (i) a person who has, or has had at any time, a prominent public function or who has been elected or appointed to such a function in a country or territory other than the Bailiwick including, without limitation - (A) heads of state or heads of government, (B) senior politicians and other important officials of political parties, (C) senior government officials,

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If the risk to the Company is high because of the jurisdiction the service provider is based in. It will need to be investigated as to what AML / CFT procedures are in place to mitigate these risks. Submission to the Board of Directors for Consideration Once the business case has been drafted and the key service providers identified and verified, the business case can then be submitted by the Head of Marketing in Switzerland or the Managing Director of the Investment Manager to the Board of Directors for consideration. The business case should not only contain information on the fund strategy and objectives but must also contain the risks associated with the service providers and whether these risks are low of high risks and the contain procedures and controls required to mitigate these risks and whether enhance due diligence is required. Ongoing Monitoring and Scrutiny of Transactions Once the Board of Directors have approved the establishment of the new fund the ongoing monitoring of business relationships and the application of scrutiny of unusual, complex or high risk transactions or activity so that AML/CFT may be identified and prevented. For low risk relationships, monitoring should take on an annual basis. For high risk cases monitoring should take place every six months and should include the following areas:

• Business continuity arrangements

• Compliance;

• Individual authorisations;

• Personal account dealing;

• What procedures are in place for information flows;

• Distributions;

• Visiting program.

Record Keeping

The keeping of the New Business establishment records will be required to be kept in a readily retrievable form so as to be available on a timely basis and will include: i) identification and verification of identity documents and information which have been collected

under the CDD procedures; ii) customer/client files, account files, business correspondence and information relating to the

business relationship; iii) all suspicion reports; and CDD information and suspicion reports should be kept for a period of 5 years after the business relationship has ceased or from the completion date of a transaction where no relationship has been established (e.g. when a property has been purchased or sold). Transaction documents should be retained for 5 years from the date the transaction was completed. All CDD documentation will be filed electronically on the system under the name of the fund titled Due Diligence and any hard copy documentation will be filed.

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Procedures and Controls An effective framework for countering AML/CFT requires the Company to have procedures and controls in place relating the establishment of new funds and they are as follows: i) initial business case for the establishment of the new fund providing for an initial risk assessment

and mitigation of the new fund. Will be drafted by the Head of Marketing in Switzerland in conjunction with the Managing Director of the Company.

ii) The Compliance Officer or a person designated by her will identify the key individuals and will

undertake client due diligence (“CDD”); iii) The Compliance Officer will submit a compliance report to accompany the business case to the

Board of Directors so they can consider the new fund. iv) The Compliance Officer will monitor customer activity and ongoing CDD for high and low

business cases; v) The Compliance Officer will report suspected money laundering and terrorist financing

activity to FIS in Guernsey and Ireland; Review

The Due Diligence Policy will be reviewed regularly or at least on an annual basis or whenever a material change in legislation occurs.

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Internal Controls Policy Background In line with the Central Bank of Ireland (the “Central Bank”) requirements set out in the Regulations that a management company must ensure when allocating functions internally, senior management and, where appropriate, the supervisory function, are responsible for the management company’s compliance with its obligations under the Regulations the Company has put the following internal controls in place.

Internal Control Mechanisms – designed to secure compliance with decisions and procedures at all levels of the management company.8

A management company must monitor and, on a regular basis, evaluate the adequacy and effectiveness of its systems, internal control mechanisms and arrangements established in accordance with UCITS 2 and to take appropriate measures to address any deficiencies.9

Composition of the Board.

The Board of Directors of the Company has overall responsibility for the management of the Company and supervision of its affairs. A meeting of the Board of Directors shall be convened in Dublin at least four times a year, to oversee the general management and conduct of all aspects of the Company's business. Additional meetings may be arranged if needed, or the Board may form committees of Directors to meet separately to deal with specific issues outside of normal Board meetings. Any Director may request the holding of a Board meeting to discuss a specific issue.

The quorum for board and committee meetings is a minimum of two Directors, and meetings are chaired by the Chairperson, or in her absence, by one of the other Directors elected from amongst those present at the meeting. The agenda for each meeting is prepared by HSBC Securities Services (Ireland) Limited, which acts as secretary of the Company, and is circulated in advance of the meeting for comment and approval by all Directors.

At its meetings, the Board reviews and sets policy for the general management and operation of the Company’s funds and oversees its delegates in the areas of administration, investment management, distribution and custody.

As a collective body, the Board of Directors has significant expertise and experience in the management, administration and distribution of collective investment schemes and is therefore in a position to effectively conduct the business of the Company in the interests of its investors. The Board is also organised and its procedures are such that no one person can decide on the direction of the Company without the endorsement of the majority of the Directors. The Company has delegated all functions to third party service providers and does not have any direct employees. The day to day management functions are performed by experienced individuals employed by the relevant service providers, all of whom are subject to the ongoing monitoring by the appointed designated individuals (“Designated Individuals”) who will monitor the activities of the Company using reports submitted by the relevant service providers. Bridge Consulting, based in Dublin, have been appointed to provide designated Individuals to undertake these monitoring functions on behalf of the Board of Directors and have assigned two senior individuals to this role.

8 Paragraph 15 of UCITS 2 9 Paragraph 21 of UCITS 2

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Organisational Requirements The Company ensures that its Board of Directors is responsible for the oversight of the policies and procedures implemented in respect of the Company. In addition, the Board of Directors requires that the designated Individuals and the relevant service providers actively monitor the following aspects and provide the necessary associated reporting to the Board to enable it to actively control these aspects. i) The Investment Manager is responsible for the implementation of the general investment policy for

each fund to which it provides collective portfolio management services (the “Fund”), as defined, where relevant, in the prospectus, the trust deed, deed of constitution or the instruments of incorporation of an investment company. This is also actively monitored by the Trustee and the Designated Individuals.

ii) The Investment Manager contributes to the formulation of and the Board of Directors oversees the approval of investment strategies for each Fund;

iii) The Board of Directors is responsible for ensuring that Company has a permanent and effective compliance function, such function currently performed by Tara Gordon in her capacity as a Designated Individual;

iv) The Board of Directors ensures and verifies on a periodic basis at each quarterly board meeting that the general investment policy, the investment strategies and the risk limits of each Fund are properly and effectively implemented and complied with, even though the risk management function is performed by the Investment Manager on behalf of the Company;

v) The Board of Directors approves and reviews on a periodic basis the adequacy of the internal procedures adopted by the Company and the Investment Manager for undertaking investment decisions for each Fund, so as to ensure that such decisions are consistent with the approved investment strategies;

vi) The Board of Directors approves and reviews on a periodic basis the risk management policy and arrangements, processes and techniques for implementing that policy including the risk limit system for each Fund.

The Company shall ensure that the Board and/or Investment Manager as the case may be and, where appropriate, the Designated Individuals shall:

i) assess and periodically review the effectiveness of the policies, arrangements and procedures put in place to comply with the Company’s obligations contained in the Regulations; and

ii) take appropriate measures to address any deficiencies. The Company will take reasonable steps to ensure that the Board and/or Designated Individuals receives reports on a monthly basis from its delegates on the implementation of investment strategies and of the internal procedures for taking investment decisions to enable it to ensure that the Internal Controls put in place by it continue to be effective and enable the Company to address any deficiencies which may be identified. In this regard the Company shall ensure that the Designated Individuals receive on a monthly basis written reports on matters of compliance, internal audit and risk management indicating in particular

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whether appropriate remedial measures have been taken in the event of any deficiencies. In addition, similar reporting is provided to the Board of Directors on a quarterly basis. Decision Making Procedures

The Board also has designated responsibility for the following management functions, save for decision taking, to the Designated Individuals detailed below:

• Monitoring compliance

• Risk management

• Monitoring of investment policy, investment strategies and performance

• Financial control

• Monitoring of capital

• Internal audit

• Supervision of delegates

The principal responsibility for these functions is the collective responsibility of the Board but is subject to the ongoing monitoring and review by the Designated Individuals, who will escalate any areas of potential concern to the Board of Directors. In addition the business affairs of the Company are to be managed under the direction of its Board of Directors with involvement from the Investment Manager. Consistent with these oversight responsibilities the Directors have put in place appropriate procedures and entrusted the various delegates described in this business plan with primary responsibility for the day to day operations of the Company. The Designated Individuals will rely on information, opinions and reports provided by the delegates whom the Designated Individuals reasonably believe to be competent in the matters presented. Accordingly, the Board of Directors collectively oversees the conduct of the business of the Company and delegates all the management functions specified below to duly qualified delegates.

The monitoring of each function has been allocated as follows.

Designated Individuals Management Function

The Board collectively through the Chairperson Decision Taking Patrick Robinson and Tara Gordon Monitoring Compliance Patrick Robinson and Tara Gordon Risk Management Patrick Robinson and Tara Gordon Monitoring Investment Policy, Investment

Strategies and Performance Patrick Robinson and Tara Gordon Financial control

Patrick Robinson and Tara Gordon Monitoring of capital

Patrick Robinson and Tara Gordon Internal audit Patrick Robinson and Tara Gordon Supervision of delegates Reports

Detailed reporting procedures in relation to each of the functions have been put in place for this purpose. Details of the periodic reports to be received by the Designated Individuals on a monthly basis and the service reviews to be carried out by the Designated Individuals for each function are set out in Appendix 1 to this Business Plan which sets out the procedures for the discharge of the management functions. The Board of Directors shall, in advance of the quarterly board meeting receive reports from each of the service providers as detailed in Section 10.1 of the Business Plan. In addition to any reporting provided between Board meetings, the following specific reports will be made available to each member of the Board of Directors in advance of and tabled at the quarterly Board meetings:

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Investment Manager’s Report The Board will receive quarterly reports from the Investment Manager which will enable the Board to determine

(i) the validity of the Company’s risk measurement arrangements; (ii) the risks arising from potential changes in market conditions that could adversely impact the

Company (based on stress testing and scenario analysis carried out by the Investment Manager); (iii) the level of due diligence by the Investment Manager in the selection and ongoing monitoring of

investments including inter alia the analysis carried out by the Investment Manager before carrying out any investment in order to determine the contribution of that investment to the relevant Fund’s portfolio composition, liquidity and risk and reward profile;

(iv) arrangements in place by the Investment Manager for ensuring that investment decisions are

carried out in compliance with the investment objectives, investment strategy and risk limits of the relevant Fund;

(v) the consistency between the current levels of risk incurred by the relevant Fund and the risk

profile agreed for the relevant Fund; (vi) the adequacy and effectiveness of the risk management process, indicating in particular whether

appropriate remedial measures have been taken in the event of any deficiencies; and

(vii) the adequacy and effectiveness of the Investment Manager’s best execution policy and in

particular the execution quality of the entities identified in that policy and indicating whether appropriate remedial measures have been taken in the event of any deficiencies.

The Investment Manager will provide advice to the Board as regards the identification of the risk profile of the relevant Fund and will provide quarterly reports to the Board outlining the current level of risk incurred by the relevant Fund and any actual or foreseeable breaches to their limits, so as to ensure that prompt and appropriate action can be taken.

The Investment Manager’s quarterly report will also cover details of any complaints received, any material business continuity events and other material operational issues, the net asset value and performance of each Fund, information on portfolio composition, categorised by appropriate criteria such as by sector and country and appropriate performance comparisons. The report will also include appropriate commentary on each Fund’s performance and developments in the market during the period and on the future outlook. The report will be accompanied by a copy each Fund’s valuation including a portfolio of assets provided by the Administrator. This quarterly report will also confirm compliance by the Investment Manager with investment and borrowing restrictions of each Fund during the relevant period, noting any exceptions and outlining corrective action. In the event of a breach, the Investment Manager will promptly (or as soon as it becomes aware) notify the Designated Individuals upon identification of the breach with details of the breach and any appropriate recommendations for its remedy. The report will also confirm whether the breach has been notified to the Custodian. Information on all investment breaches will be included in the quarterly report provided to the Board. During each Board meeting, representatives of the Investment Manager’s staff with direct responsibility for the investment management of the Company and its Funds will be available either in person or by phone/video conference to provide an up- to- date commentary on the Investment Manager’s report, and

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to answer any questions the Directors may have. Where requested, the Investment Manager will provide information to the Directors so that they have an adequate knowledge and understanding of the assets in which the Funds are invested. In addition, the Investment Manager will provide on at least an annual basis a report to the Board on the adequacy of its best execution procedures. The Company is required to prepare a risk management process in relation to the use of financial derivative instruments (“FDI”) by each Fund, which is filed with the Central Bank. The Company’s risk management process is based on the Investment Manager’s risk management process, which the Investment Manager operates on the Company’s behalf. Any changes proposed by the Investment Manager to its risk management process which would result in a material amendment to the risk management process will be made in consultation with the relevant Designated Individuals, approved by the Board as a whole and provided to the Central Bank in advance. The Investment Manager will provide an annual report to the Board on the FDI positions held in each Fund which will include information on how FDI have been used in the context of the policies of each Fund.

Communications

The Company will take reasonable steps to ensure that all relevant persons including the Board, the

Designated Individual and each of its delegates are aware of the procedures which they are required to

follow for the proper discharge of their responsibilities.

The Company will take reasonable steps to maintain effective internal reporting and communication of

information at all levels of the Company including the Designated Individual and the Board, as well as

effective information flows with any relevant delegate.

Review

The Internal Controls Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Related Party Policy

Background

The Company will accept transactions from related parties providing that they fall within the scope of UCITS Notice 14.

All related party transactions will be logged in the related party log and reported to the board of the Company on a monthly and quarterly basis.

Definition of a Related Party /Connected Person

Irish Company Law

Connected persons

For the purposes of disclosures required by the Companies Act 1990 concerning transactions between a company and its directors and persons connected to them, a natural person is connected with a director of a company if, but only if, he or she is:

• that director’s spouse, parent, brother, sister or child;

• a person acting in their capacity as the trustee of any trust, the principal beneficiaries of which are the director, their spouse or any of their children or any body corporate which he controls; or

• a partner of that director unless that person is also a director of the company. A body corporate is deemed to be connected with a director of a company if it is controlled by that director or by any combination of that director and other directors of the company.

For these purposes, a director of a company is deemed to control a body corporate if, but only if, he or she is (either alone or together with any other director or directors of the company or any person connected with the directors or such other director or directors) interested in more than one half of the equity share capital of that body or entitled to exercise or control the exercise of more than one half of the voting power at any general meeting of that body. Central Bank of Ireland

Pursuant to UCITS Note 14.2:

“Any transaction carried out with a UCITS by a promoter, manager, trustee, investment advisor and/or associated or group companies of these must be carried out as if effected on normal commercial terms negotiated at arm’s length. Transactions must be in the best interests of the unit holder”

Associated Company: This term has the same meaning as is given to “associated undertaking” in the European Communities (Companies: Group Accounts) Regulations, 1992 (S.I. No. 201 of 1992). In general, this states that companies are associated where a significant influence may be exercised by one company over the operating and financial policy of another. This is deemed to be the case where 20 per cent or more of the voting rights in one company are owned directly or indirectly by another.

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Group companies: Companies which are included in the same group for the purposes of consolidated accounts, as defined in accordance with Directive 83/349/EEC1 or in accordance with recognised international accounting rules.

The Irish Stock Exchange

The Irish Stock Exchange also defines a related part as:

i). a person who is (or was within the 12 months before the date of the transaction or arrangement) a substantial shareholder;

ii). a person who is (or was within the 12 months before the date of the transaction or arrangement) a director or shadow director of the listed company or of any other company which is (and, if he has ceased to be such, was while he was a director or shadow director of such other company) its subsidiary undertaking or parent undertaking or a fellow subsidiary undertaking of its parent undertaking;

iii). a person exercising significant influence; or

iv). an associate of a related party referred to in paragraph (1), (2) or (3).

Related Parties/Connected Persons as they relate to E.I. Sturdza Funds plc

Entities, which therefore fall within the definition of a Related Party, are as follows:

• All of the directors and alternate directors of E.I. Sturdza Funds plc;

• Each of the Investment Advisors to E.I. Sturdza Funds plc or sub Investment advisors;

• All of the Directors of E.I. Sturdza Strategic Management Limited;

• Any shareholder who’s shareholding exceeds 30% of the sub-funds of E.I. Sturdza Funds plc;

• Banque Baring Brothers Sturdza SA as an Associated Company with a direct holding of more than 20% of E.I. Sturdza Strategic Management Limited.

Review

The Related Party Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

1 Seventh Council Directive of 13 June 1983 based on article 54(3)(g) of the Treaty on consolidated accounts

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Handling of Subscription and Redemption Order Policy

Background In accordance with its obligations under the UCITS IV Directive as transposed into Irish law by the European Communities Regulations the Company must establish, implement and maintain a Handling of Subscription and Redemption Order Policy. The list of policies and procedures to be adopted under UCITS IV includes the following wording in relation to the adoption of the policy for the handling of subscription and redemption orders:

Handling of Subscription and Redemption Orders Policy – designed to ensure that unitholders are informed about the execution of transactions no later than 1 business day following execution.

Outline of Policy

The Company requires that when the Administrator processes a subscription or redemption order on behalf of a registered shareholder that the Administrator confirms to that registered shareholder the full details of each subscription or redemption transaction placed within the Fund applicable to that registered shareholder. This confirmation is required in either electronic or facsimile format and should be transmitted to the registered shareholder no later than one Business Day following the relevant Dealing Day.

The Administrator has adopted a policy to ensure that all confirmations of subscription and redemption orders processed on each Dealing Day are transmitted to the registered shareholder via automated facsimile transmission on the relevant Dealing Day on which the transaction was processed. The adoption of this policy by the Administrator therefore ensures that the Company is able to comply with the regulatory requirements surrounding the transmission of this information to registered shareholders.

This confirmation notice outlining details of the subscription or redemption order processed contains the following information:

• the name of the Company and the Fund;

• the name or other designation of the investor;

• the Dealing Day;

• the nature of the order (subscription or redemption);

• the number of shares involved;

• the net asset value per share at which the shares were subscribed or redeemed;

• the value date for payment of subscription monies or receipt of redemption monies;

• the gross value of the order including placement fees or net amount after charges for redemptions;

• the total sum of the commissions and expenses charged and, where the investor so requests, an itemised breakdown.

The Company also requires that the Administrator will supply an investor upon request with information about the status of his order, a policy adopted by the Administrator.

Formatted: Line spacing: single



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In the event that the Administrator is unable to provide the necessary confirmation notice in accordance with their adopted policy to provide this on the Dealing Day this is reported to the Company and the Investment Manager as necessary.

Review

The Handling of Subscription and Redemption Order Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.


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Broker Selection Policy

Non-discretionary Investment Advisers: Broker Selection Process

The Investment Advisers appointed by the Investment Manager to the following sub-funds have been appointed on a non-discretionary basis and therefore the following process will be utilised and documented by the Investment Adviser and/Investment Manager.

• Strategic China Panda Fund;

• Nippon Growth (UCITS) Fund;

The Investment Adviser will provide a list of suggested brokers to the Investment Manager for consideration ahead of the launch. This list of brokers will be researched by the Investment Manager to establish if they might qualify as an appropriate counterparty with whom to place transactions through the collation of information and documentation in order to ascertain their financial status, as well as to establish their record of regulatory conduct/client complaints/disciplinary action. Their applicable credit rating will also be sourced, if one is available, from a recognised credit rating provider.

This, together with a review of the necessary account opening documentation and the terms and conditions surrounding any account for the fund, are used as a basis for the selection process. In addition, the Investment Adviser is required to confirm that they have a proven track record and relationship with each broker. The following factors will be considered by the Investment Adviser prior to recommending selection by the Investment Manager:

− Value of research provided

− Ability to provide access to company management and/or industry analysts

− Track record for previous transactions with the Investment Adviser

− Execution capability/level of trading expertise

− Commission rates offered

− Responsiveness to trading issues

− Ability to execute and settle difficult trades

In addition, the Investment Adviser should, in conjunction with the Investment Manager, make enquiries about the broker’s disaster recovery plans, financial condition, disciplinary history and back-office capabilities and be reasonably satisfied with the adequacy of these matters.

Broker Selection for Trade Execution:

The appointed Investment Adviser is responsible for the recommendation of suitable brokers from the list of Approved Brokers for each individual trade recommendation. The following factors will be considered when entering trades with brokers:

− Price (including commission rates or spreads);

− Size of the order;

− Execution speed relative to other markets;

− Trading characteristics of the security involved;

− Availability of accurate information to assess execution quality vis-à-vis other market centres;

− Ability to access other markets; and the cost and difficulty associated with achieving such access;

− Level of anonymity available through a particular broker;

− Broker’s reputation, integrity, and execution quality;

− Liquidity of the market for security in question;

− Ability to limit market impact;

− Broker’s track record for errors and its willingness to correct errors for which it was at fault;

− Overall responsiveness to the Investment Adviser’s/Fund’s needs and requests;

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− Particular expertise in security or type of securities, such as market maker or underwriter;

− Extent to which the broker has previously been approved by the Directors and included within the Approved List; and

− Ability to trade electronically through the broker-dealer, or via telephone in person for particularly difficult or unusual transactions.

The Investment Manager will review the list of Approved Brokers on an annual basis to ensure that the initial terms for selection continue to prevail, advising the Board of any alterations made to the selection policy or brokers selected as appropriate.

Recommendations to add to the Approved Broker List will usually emanate from the Investment Adviser based on their existing relationship for other products, industry contacts or stock research process. Any recommendation to include such broker within the Approved Broker List will be considered by the Investment Manager along similar lines to the initial selection process and submitted to the Board for further consideration if considered appropriate.

Discretionary Investment Advisers: Broker Selection Process

The appointed Investment Advisers have discretionary authority on the following sub funds;

• Strategic Euro Bond Fund;

• Strategic Emerging Europe Fund; and

• Strategic Europe Value Fund;.

•

The Investment Adviser will have discretion to select the brokers that form the Approved Broker List, subject to compliance with the broker approval process outlined above and selection process and review by the Investment Manager.

Any updates or changes to the Approved Broker List should first be submitted to the Investment Manager for further review and approval.

Cash Counterparties:

The Investment Manager considers it appropriate, where possible, to maintain counterparty relationships with the Custodian, in this case HSBC Institutional Trust Services (Ireland) Limited. Not only are the responsibilities of the Custodian well regulated in a regarded jurisdiction, the associated documentation provides for the safekeeping of the assets to be prioritised. Further, the HSBC Group maintains a sound credit rating and appears not to have been overly affected by current credit conditions.

Further, in terms of the wider relationship with the HSBC Group, the Investment Manager has been assured that the relationship is regarded as significant to HSBC, and thus the Investment Manager receives preferential rates and spreads on transactions placed with HSBC, such as FX.

To allocate such transactions between a number of counterparties might therefore prove to increase costs to the Fund, in terms of losing favourable rates and increasing additional banking transaction charges between counterparties, with associated increases in operational risk, regulatory risk or credit risk.

While there is a contrary case for diversification of credit or counterparty risk through use of multiple counterparties, emphasised in the current environment, the Investment Manager considers that it is of long term business benefits to the Fund to maintain significant relationships with the HSBC Group and that the associated credit risk of doing so may possibly be reduced through avoidance of the use of counterparties of lower stature.

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Additional Cash Counterparties for the Strategic China Panda Fund and Strategic Emerging Europe Fund:

Despite the Investment Manager’s preference to maintain cash balances and banking relationships with the Custodian, there may be occasion when it is necessary to utilise services provided by alternative counterparties. For example, the Strategic China Panda Fund intends to open cash and full brokerage accounts under ISDA Agreement with a select number of well regarded counterparties, as part of the requirement to do so to provide sufficient margin and collateral for investment instruments such as total return swaps. Although the intended use of such accounts will be limited to such purpose, the presence of such accounts with unrelated counterparties will provide the flexibility to increase the volume of assets maintained outside of the HSBC Group should this be considered necessary.

As part of the UCITS investment restrictions to restrict deposits made with the same credit institution to 20% of NAV, or 10% where the counterparty is not deemed a credit institution within the meaning of the UCITS regulations), additional cash accounts have also been opened with J.P. Morgan on behalf of the Strategic China Panda Fund and Lloyds TSB Bank on behalf of the Strategic Emerging Europe Fund. The intended use of these accounts is limited, in line with the preference to utilise the services provided by the HSBC Group of which the Custodian is part. However, the existence of these accounts will provide the Fund with additional flexibility during periods when the Investment Adviser considers it appropriate to increase the allocation to cash for defensive purposes. The purpose of monies placed into these accounts therefore, is not to gain a high yield but rather to diversify risk. In addition, J.P. Morgan are familiar with the investment restrictions in place for the diversification of cash across counterparties applicable to UCITS qualifying funds, and offer a cash diversification program across multiple counterparties should this be required.

Review

The Broker Selection Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Business Continuity Policy

Background

Business Continuity Policy (“BCP”) – designed to ensure the preservation of essential data and functions and the maintenance of services and activities in the case of an interruption to the management company’s systems and procedures or where preservation and maintenance are not possible, the timely recovery of such data and functions and the timely resumption of services and activities;

Section 10 of GN 4-07 states that the business plan should set out the BCP procedures which apply. In addition where functions are delegated, the agreement with the delegate must include certain provisions.

Overview

The Company relies on a large number of appointed service providers, most of which rely heavily on technology to ensure that their duties and responsibilities are performed adequately in line with their agreements. There is a distinct separation of roles performed by entities on behalf of the Company, many of which are unrelated to the systems operated by other service providers. For example, there is no link between systems between the Investment Manager and any other service provider, therefore the failure of technology within the Investment Manager should not unduly prevent any other service providers performing their responsibilities as appropriate. Similarly, there is no link between the systems of the Administrator and the Investment Adviser, so any failings of technology in one service provider will unlikely impact the activities of another.

In any event, the Company requires that each service provider have in place adequate policies and procedures to ensure that each can continue operations in the event that there is a technology failure, most of which revolve around the ability to work remotely or from an alternative office location. The Investment Manager and Bridge Consulting monitor the existence and periodic testing of these policies on an annual basis and report to the Board on their findings.

Within the day to day activities of each service provider undertaken on behalf of the Company there are a range of different systems and technology requirements in place. For example, the Administrator and Custodian rely heavily on internal customized systems both to provide fund administration and shareholder register activity, as well as settlement of trades and payment of cash transactions. Within the Investment Manager and the respective investment adviser technology requirements are likely less complex, often relying on Microsoft Office software linked to Bloomberg systems or other software / information accessed via the internet. Because the majority of this software is either customized in-house or sourced from a dedicated IT software provider to cover the needs of an entire business line this can reduce the risk that the technology capabilities do not understand or address the requirements of the business. Conversely, it is also possible that there are insufficient resources in-house or allocated to the specific operations of the Company to design and customize spreadsheets and systems to a satisfactory level, standard and degree of accuracy to meet the needs of the business and to enhance and develop existing processes.

The Investment Manager believes that the most appropriate format to enable them to meet their obligations is not only to follow industry best practice but to actively develop and enhance existing procedures and controls on an ongoing basis to enable them to meet clients’ expectations of sound business practice. Commitment to best practice in these areas requires an active concern for and understanding of responsibilities and diligent discharge of those responsibilities in a prudent manner.

The Company considers that the range of technology capabilities and requirements across the different service providers to the business, together with the systems and policies in place to enhance systems

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through development but also to ensure continuity in the event of a technology failure helps to mitigate the risks that inadequate technology pose to the business. Further, the ongoing review and monitoring of output across a number of service providers allows the requirement for technological improvement to be highlighted and monitored through to implementation.

Key Provisions of the BCP for the Investment Manager

The Investment Manager bases the BCP upon the following areas:

1. Offsite storage and access to data in the event that the designated office space is unusable; 2. Ability to access network systems from alternative locations outside of the designated office

space; 3. Cross training of individual roles to ensure that key man dependency is mitigated as far a possible; 4. Identifiable chain of key staff and reporting lines to ensure adequate coverage as well as a defined

process during unplanned events; 5. Regular review of responsibilities and activities to ensure adequate coverage during unplanned

events.

Addressing each of these in turn:

1. Offsite storage and access to data in the event that the designated office space is unusable;

The Investment Manager maintains a suite of network servers at the onsite office location that provide functionality for each individual employed by the Investment Manager to access the records of the business on an ongoing basis. This suite of servers retains all information stored on the office network, and is backed up on a daily basis using a tape drive to maintain a physical copy. Tapes are rotated on a monthly basis as to the date, with month end tapes rotated annually. Year end tapes are retained indefinitely. Tapes are transferred to a secure offsite location on a daily basis where these are maintained in secure fireproof storage, maintained by a dedicated security company, Securicor.

In addition to the storage of data via tapes, the successful backup of data and monitoring of backup performance is undertaken on a daily basis by an outsourced IT service provider to the Investment Manager, namely Alternative Solutions Limited (“ASL”). ASL are a dedicated provider offering customized IT solutions to a range of businesses across the Channel Islands and mainland Europe, based in Guernsey. They maintain a complex suite of data servers that allow data to be transferred to them from their clients, isolated from each other across firewalls. They monitor the back up that has been performed and retain the data from each client for a short period should this be required before it can be overwritten. There is a full IT service agreement in place that protects all data transmitted to ASL for confidentiality and data security.

Both forms of daily back up, through tape drive and data transmission to the service provider, are part of an automated process each day that is actively monitored by the Investment Manager and the service provider.

In the event that the primary office space is unusable, ASL will provide a designated business continuity facility to the Investment Manager in the event that this is required, which can be operating within 2 hours. In addition, this facility is available to the Investment Manager once a year for testing of the BCP.

The ongoing IT monitoring services provided by ASL also ensure that the suite of servers within the network operated by the Investment Manager are monitored for functionality on an automated basis on an ongoing basis, with dedicated personnel support available where required during office hours. This ensures that the network is functioning for the required office hours of the Investment Manager, although out of hours services are also available where these are required, albeit at additional cost.

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2. Ability to access network systems from alternative locations outside of the designated office space;

Each individual employed by the Investment Manager is provided with a laptop computer with access to the office network enabled from a remote location. This ensures that all individuals are able to work remotely from an alternative location on an ongoing basis, not least when the primary office location is unusable. This functionality is tested on a regular basis as many individuals utilize this access to work from home or while travelling.

In the event that the network servers within the office space are damaged or unusable, the IT service provider will assume the role played by these servers through the use of its own servers intended for this purpose on the basis of the last back up data that was taken. This functionality can be restored within 2 hours.

3. Cross training of individual roles to ensure that key man dependency is mitigated as far a possible;

Historically there has been an element of key man dependency within the operations of the Investment Manager as the number of individuals employed by the Investment Manager was relatively small. Over time this dependency has reduced as the number of individuals employed by the Investment Manager has increased. Currently, there are six individuals employed within the operations area each with responsibility towards a small number of relationships and investment portfolios. These individuals are also cross trained on a number of other investment portfolios to ensure that there is adequate cover during periods of staff absence and reduce any dependency on one or two individuals. Within the rest of the business activities of the Investment Manager, there is sufficient crossover of roles and responsibilities to ensure that suitable cover is in place in the event of any staff absences.

The Investment Manager is also aware of its obligations towards the responsibility of the activities of outsourced service providers such as investment advisers and fund administrators and monitors the performance of each on an ongoing basis. The Investment Manager would consider that there is sufficient capability within the organization to enable the Investment Manager to take on a more active role in each of the areas currently outsourced on a short term basis in the event that the relevant service provider is incapacitated.

4. Identifiable chain of key staff and reporting lines to ensure adequate coverage as well as a defined process during unplanned events;

The Investment Manager has identified 4 key individuals within the organization that are crucial to the ongoing operations of the business in the event that the BCP is implemented. These individuals are aware of their additional responsibilities under this plan, both towards the other members of staff as well as the requirements of the business.

Adam

Turberville

Responsibilities: Operational support & checking, Trading support Any other

Responsibilities: Trading Managed Accounts Japan Funds SCPF Company accounts

Will inform: Markus Gray-Krall Kwan Queripel Richard Taylor

Jessica Lund

Will inform: Wayne Coutanche Michelle Green Richard Phibbs

Laura Boot

Will inform: Parent Company Georges

GutmansTrading

Counterparties

Will inform: Service providers Investment Advisers Key Clients

Responsibilities: Client liaison Website Price publication

Responsibilities: SEBF SEEF SEVF SBSR SGIF Operations for all funds

Jody Welsh [Emma Hutchinson]Rich

Marco Ferreira


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Although these 4 key staff are able to cover the key elements of the business on a day to day basis, all other individuals will be required to continue to operate remotely in the event that the BCP is implemented. Within the 4 key staff, at least one other key staff individual is able to cover the responsibilities of the other key staff.

5. Regular review of responsibilities and activities to ensure adequate coverage during unplanned events.

The Investment Manager has in place a policy whereby all individuals within the organization are required to copy at least one of the key staff on each email that they send. In addition, there are weekly operations meetings and bi-weekly office meetings in which individuals are briefed as to the ongoing activities of the Company so that there is adequate coverage to progress as well as in the event that the BCP is implemented. In addition, there is a program of checking and cross training in place that ensures that all key business aspects can be completed by a number of individuals, with key staff involved on an ongoing basis for checking and coverage. On at least an annual basis the objectives and responsibilities of each individual are reviewed to ensure that there is a development of knowledge base from an individual perspective, which also proves to ensure that there is adequate coverage during unplanned events

Review and Update

The Investment Manager reviews and updates the Business Continuity Policy on at least an annual basis and reports at least annually to the board on the adequacy and test findings of its and its delegates business continuity arrangements. In addition to this, the Investment Manager will also seek confirmation at least annually as to the existence and ongoing testing of a business continuity policy and test findings in each of the appointed service providers to the Company as part of their periodic review and monitoring of outsourced service providers and report to the Board accordingly .

Any required updates or changes identified by the Investment Manager in relation to their provisions towards business continuity will be incorporated within the Business Continuity Plan for the Investment Manager as well as this Business Continuity Plan. Any updates will be advised to the Directors of the Company as they arise.

The Business Continuity Plan for HSBC Securities Services (Ireland) Limited as Administrator and HSBC Custody Services (Ireland) Limited as Custodian was last tested on the 15 November 201014 November 2011 and are tested 2 or three times a year. In addition, HSBC Securities Services (Ireland) Limited have been required to activate to provide business continuity for offices to which some administration aspects are off shored, namely Kuala Lumpur and Kolkata, during April 2012.The business recovery planning statement for Dublin the Dublin entity is attached as Appendix 2.

Formatted: Highlight

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Exceptional Trades Policy

Background

In accordance with its obligations under the UCITS IV Directive the company must establish, implement and maintain an Exceptional Trades Policy.

The Supplements for each sub-fund of E.I. Sturdza Funds plc are worded to retain the flexibility for the Directors to accept, in exceptional circumstances only, applications received after the stated dealing deadline but prior to the stated valuation point.

To avoid any ongoing circumstances whereby the Directors are required to provide adhoc approval of exceptional trades through resolution and the associated problems surrounding availability that this might create, the Board have considered it appropriate to delegate this function to approve or reject some forms of exceptional trades to the Investment Manager. However, the Board does retain the discretion to approve or reject any other forms of late or exceptional trades on a case by case basis as the occasion demands.

Late Trades

The Investment Manager would consider it appropriate to accept late trades in situations that will include the following circumstances only:

• Facsimile transmission errors;

• Incomplete instructions received;

• Erroneous instructions received that require amendment; and

• Instructions sent to a party other than the Fund Administrator originally but within the appropriate timeframes, such as the Investment Manager, the Swiss Representative or the French Centralising Correspondent.

It is the general policy of the Investment Manager that they do not discriminate when considering the acceptance of exceptional trades. For example, if a late subscription order is recommended for acceptance, the Investment Manager will recommend that all orders received up until the point at which that subscription order was received be accepted, regardless of whether these might be subscription or redemption orders.

In further consideration of the equitable treatment of shareholders, the Investment Manager may refuse to accept any exceptional trades that might offer any investor the opportunity to benefit from substantially different terms than other investors, such as the ability to determine market values following market close in the assets in which the fund is invested. For this reason, the Investment Manager will not accept any trades that are received on the Valuation Day itself, regardless of the valuation point for the purposes of NAV calculation. The Investment Manager may under exceptional circumstances accept any trades received after the close of business on the business day prior to the Valuation Day.

In practise, the Investment Manager is conscious that all other operational aspects for the fund are met as not to give those investors placing late trades any additional benefit over those complying with the terms of the fund, such as the requirement to credit subscription monies on the Valuation Day, and will refuse to accept any late subscription orders after the cut-off date for notification if these are unlikely to be met, such as in the case of JPY denominated funds.

Exceptional Trades

Upon occasion, other forms of exceptional trades are accepted that may not be received late, such as applications for subscription and/ or redemption that are below the minimum transaction size as laid out in the relevant Supplement to the Prospectus.

To date, the Investment Manager has recommended to the Directors that these orders are accepted on the basis that (a) subscriptions below the minimum transaction size are acceptable provided that the investor

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is a shareholder, nominee shareholder or global custodian who already has sufficient investment in the Fund to meet the minimum holding requirements, or (b) redemptions below the minimum transaction size are acceptable provided that the investor is a nominee shareholder or global custodian and will retain sufficient investment in the Fund to meet the minimum holding requirements.

The Investment Manager considers that these types of exceptional trades should be accepted if the volume of said trades does not reach significant levels and are placed by nominee shareholders acting on client instructions. The Investment Manager would consider it more appropriate to refuse such trade orders in the event that they emanate from individual or private investors.

At the board meeting held on 16th December 2009, the Board resolved that trades accepted by the Investment Manager that were below the minimum transaction size and were from existing investors outlined under parts (a) and (b) above need not be reported as an exceptional trade within the reporting prepared by the Investment Manager for submission to the Board going forward.

Other forms of exceptional trades include those transactions where the application to subscribe is submitted on time, but where for some reason the subscription amounts are not received in line with the timelines as laid out in the prospectus. The Investment Manager therefore considers it appropriate to accept those transactions where the cash amounts may be received later than the agreed timelines as there is no impact to the relevant sub-fund until the dealing day, provided that the cash is transferred by the settlement date as outlined in the relevant supplement and there is no impact on the relevant sub-fund arising from the delay of receipt of the subscription monies into the client monies account.

Reporting

The Board have considered it appropriate to delegate the responsibility for the review and acceptance/ refusal of late and exceptional trades outlined above to the Investment

Manager with the implementation of the following procedure:

• The Administrator reports all exceptional or late trades received to the Investment Manager, preferably by the cut-off point for receipt of trades where possible in the case of exceptional trades, and as soon as possible thereafter for late trades.

• The Investment Manager reviews these trades in line with the above policies, but also in line with operational constraints such as, for example, the ability of cash balances to fund late redemption orders, or the percentage of the Fund that will be traded as at that valuation point.

• The Investment Manager provides the Administrator with confirmation as to whether the exceptional trades should be refused or accepted as soon as possible after the notification is received, stating the reasons for the decision to refuse or accept in line with the policies outlined above.

• The Administrator and the Investment Manager logs all exceptional trades received and the reasoning as to why, and provides a schedule as to which were refused or accepted as appropriate within the reporting provided to the Board on a quarterly basis.

• In consideration of this, the Investment Manager maintains a list of designated individuals that provide the Administrator with such confirmation to accept or refuse exceptional trades as follows:

• Adam Turberville

• Jody Welsh

• Markus Gray-Krall

Review

The Exceptional Trades Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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Stale Pricing Policy

Background

The prospectus for the Company contains provisions as to the valuation and pricing methodology to be used for the calculation of Net Asset Value (the “NAV”) of the Company, including provisions for those occasions where an up to date market value cannot be sourced.

Specifically, these provisions read as follows:

“The value of any security which is not quoted, listed or dealt in on a Recognised Exchange or which is so quoted, listed or dealt but for which no such quotation or value is available or the available quotation or value is not representative of the fair market value shall be the probable realisation value as estimated with care and good faith by (i) the Directors or (ii) a competent person, firm or corporation (including the Investment Manager) selected by the Directors and approved for the purpose by the Custodian. Where reliable market quotations are not available for fixed income securities the value of such securities may be determined using matrix methodology compiled by the Directors whereby such securities are valued by reference to the valuation of other securities which are comparable in rating, yield, due date and other characteristics.”

Because the prospectus allows some flexibility as to how market values are determined, the Directors have in the past been requested to offer clarification on the appropriate policy to be followed in such circumstances. This approval was sought via resolution from all directors for all assets which current market prices cannot be obtained and on a case by case basis as and when these occur. As this approval was not always practical the Investment Manager proposed that the Directors look to delegate this responsibility and appoint a competent person, as outlined in the prospectus, to provide such advice as to the appropriate price or value to be utilised, in this case being the Investment Manager.

Adopted process

The Directors have previously resolved that in such circumstances where current market prices cannot be readily obtained at the necessary valuation point, the latest available market price is utilised by the Fund Administrator in liaison with the Investment Manager, or such other appropriate price that can be determined.

The following process was therefore implemented:

1. The Fund Administrator would advise the Investment Manager at the earliest opportunity within the valuation preparation process that a current market price cannot be sourced.

2. The Investment Manager would confirm to the Fund Administrator that, where possible, the latest available market price or value or current yield be utilised as applicable, in writing via email. Where for any reason an alternative price is recommended other than the latest available market price, value or current yield, the calculation methodology and justification for the recommendation of such price, value or yield, will also be included within such confirmation to the Fund Administrator.

3. The Fund Administrator will utilise this latest available market price, value or yield or such other price, value or yield as provided by the Investment Manager within the process of NAV calculation, subject to acceptance of the pricing methodology by the Fund Administrator.

4. In addition, the Investment Manager proposes that the following policies are implemented as part of this process:

5. Where the Investment Manager is requested by the Fund Administrator to confirm that the latest available market price, value or yield be utilised or otherwise to provide suitable pricing information for the security, this will require confirmation in writing from the Investment Manager.

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6. In considering the appropriate price, value or yield to be used within the NAV calculation and prior to confirmation of such to the Fund Administrator, the Investment Manager will determine the appropriate pricing sources and/ or methodology for the particular security as at the prevalent valuation point, liaising with the Investment Adviser to confirm such, or request any additional information.

The primary contacts for each of the Investment Advisers are as follows:

Fund Name

Portfolio Manager Secondary Contact

Strategic Euro Bond Fund Eric Vanraes - Strategic China Panda Fund Lilian Co Benjamin Chang Nippon Growth (UCITS) Fund Yutaka Uda Maiko Uda Strategic Emerging Europe Fund Michel Danechi Elliot Flynn Strategic Europe Value Fund Willem Vinke Peter Urry Strategic Global Bond Fund Eric Vanraes -

7. Amid discussions of the suggested market price, value or yield between the Investment Adviser and the Investment Manager, all aspects of the methodology and calculation will be verified by two individuals within the Investment Manager other than the preparer.

8. Following the completion of such review, the Investment Manager will provide details of the market price, value or yield agreed between the Investment Manager and the Investment Adviser to the Fund Administrator, together with any necessary supporting methodology, calculation or pricing source for review.

9. Subject to acceptance of the market price, value or yield provided to the Fund Administrator by the Investment Manager, this pricing information should be utilised within the NAV calculation for the fund.

However, the Investment Manager has also implemented the following policies where there are significant price deviations or long periods of stale pricing:

1. Where the latest available market price, value or yield of the asset used to value the position for the fund is more than 1 month old, the further approval of the Directors is required for the Fund Administrator to utilise such information as advised by the Investment Manager to value the asset.

2. Where the latest available market price, value or yield of the asset used to value the position for the

fund relates to prior periods other than the valuation day and to utilise such a market price, value or yield of the asset would result in a price deviation of more than 5% away from the market valuation provided in the previous NAV calculation for the fund, the further approval of the Directors is required for the Administrator to utilise such information to value the asset.

Further, the Fund Administrator and the Investment Manager will maintain a log of all occasions where it has been necessary to implement such a process and to report all incidences of such to the Directors at each scheduled quarterly board meeting along with an analysis of portfolio impact.

Review

The Exceptional Trades Policy will be reviewed regularly or at least on an annual basis or whenever a material change occurs.

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INDUCEMENTS POLICY

In accordance with its obligations under the Commission Directive 2010/43/EU as transposed into Irish law by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, and paragraphs 46-48 of UCITS Notice 16, the Company must, in light of the overarching principle of investor protection, establish procedures to ensure that any inducements received or provided by the Company comply with certain specific conditions.

Requirements relating to Inducements

1. The Company will not be regarded as acting honestly, fairly and professionally in accordance with

the best interests of its sub-funds (each a “Fund” and together the “Funds”) if, in relation to the

activities of investment management and administration to any Fund, it pays or is paid any fee or

commission, or provides or is provided with any non-monetary benefit, other than the following:

(i) a fee, commission or non-monetary benefit paid or provided to or by the relevant Fund under management or a person on behalf of such Fund;

(ii) a fee, commission or non-monetary benefit paid or provided to or by a third party or a person acting on behalf of a third party, where the following conditions are satisfied:

(a) the existence, nature and amount of the fee, commission or benefit, or, where the amount cannot be ascertained, the method of calculating that amount, must be clearly disclosed to the relevant Fund under management in a manner that is comprehensive, accurate and understandable, prior to the provision of the related service;

(b) the payment of the fee or commission, or the provision of the non-monetary benefit must be

designed to enhance the quality of the relevant service and not impair compliance with the Company’s duty to act in the best interests of the relevant Fund.

(iii) proper fees which enable or are necessary for the provision of the relevant service, including custody costs, settlement and exchange fees, regulatory levies or legal fees, and which, by their nature, cannot give rise to conflicts with the Company’s duties to act honestly, fairly and professionally in accordance with the best interests of the Funds.

2. Where in a particular instance the Company discloses the essential terms only of the arrangements relating to the fee, commission or non-monetary benefit in summary form, the Company undertakes to disclose further details at the request of the Fund and/or its investors and will honour that undertaking on request by the relevant party.

If any payments or non-monetary benefits provided or received by the Company do not fall within the categories outlined above, the Company shall be prohibited from providing or receiving any such payments or non-monetary benefits.

The Designated Person responsible for compliance shall ensure that payments and benefits that the Company provides or receives adhere to the inducement rules as set out herein. In addition, the Designated Person responsible for compliance shall assess on a regular basis the adequacy and effectiveness of the measures and procedures put in place in accordance with this policy.

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Company’s Policy as regards Inducements The Company’s policy is that none of its directors are permitted to accept inducements which might be expected to influence how they might exercise their responsibilities in relation to the Company. The individual members of staff of the Company’s delegates are subject to similar requirements either as part of their employment or as a regulatory obligation in their home country, or both, and the Designated Person appointed by the Company to oversee compliance reviews the operation of these policies as part of its initial and ongoing due diligence as set out in this business plan. Recordkeeping obligations In order to discharge its obligations pursuant to the Regulations to maintain adequate and orderly records of its business and internal organization, the Company shall ensure that specific arrangements and procedures are put in place, where required, in order to record and track every action by the Company for the purposes of complying with the rules related to inducements set down herein. All information which demonstrates the Company’s compliance with the inducement rules shall be maintained. In addition, such records shall include all information disclosed to clients relating to inducements.

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REDEMPTION GATE ACTIVATION

General

The Board of Directors of the Company have adopted a policy whereby it will implement a Redemption Gate for any of the funds of the Company, when redemptions received for any valuation point exceed the established 10% threshold level as provided for by the Prospectus.

1. Introduction

The Prospectus for the Company currently states:

“If the number of Shares to be redeemed on any Dealing Day equals one tenth or more of the total number of Shares of a Fund in issue on that day the Directors or their delegate may at their discretion refuse to redeem any Shares in excess of one tenth of the total number of Shares in issue as aforesaid and, if they so refuse, the requests for redemption on such Dealing Day shall be reduced pro rata and Shares which are not redeemed by reason of such refusal shall be treated as if a request for redemption had been made in respect of each subsequent Dealing Day until all Shares to which the original request related have been redeemed. Redemption requests which have been carried forward from an earlier Dealing Day shall (subject always to the foregoing limits) be complied with in priority to later requests.”

This current policy means that when the threshold limit is exceeded there is a delay in the activation of the gate due to the following steps needing to be undertaken:

• HSBC will prepare the estimate dealing report reflecting total trades received

• EISSML then needs to gain approval from the Directors to activate the gate in consultation with the relevant investment advisor

• HSBC then need to recalculate the shares to be redeemed at any specific valuation point and those shares to be rolled

• This then need to be approved by EISSML before the valuation can proceed

While this process may be feasible for the weekly valuing funds, it may be inappropriate and cause delays in the calculations of the valuations for daily funds.

The Board has adopted a procedure whereby the gate is implemented unless the Investment Adviser for the relevant fund consider the gate is unnecessary having regard to market circumstances, whenever redemptions received for any single valuation point exceed the 10% threshold limit. The new procedure would operate as follows:

• HSBC will prepare the estimate dealing reflecting the gate provision, stating the shares to be redeemed at the specified valuation point and the number to be rolled

• EISSML on receipt would contact the relevant Investment Advisor providing them with the relevant details and requesting confirmation of whether they feel that they will be able to raise sufficient assets to make the gate unnecessary, without impacting unduly on the investment portfolio

• Should the Investment Adviser recommend the gate would be in the best interest of the Fund, EISSML would advise the Directors

• At all subsequent valuation points a similar process will be adopted should the 10% threshold be exceed to ensure that the gate is removed as soon as possible without detrimental effect on the investment portfolio and the remaining investors of the Fund

Whilst the Directors maintain ultimate discretion in relation to the policy with respect to the implementation of the redemption gate, from an operational perspective this policy will lead to more

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efficient processing of large redemptions and allow for the production of valuations to be completed without delay.

3 Liquidity

For clarification purposes it should be noted that the utilisation of the gate in no way reflects illiquidity in the underlying portfolio’s of the funds, more that we seek to protect the investment portfolio and remaining investors interests when high levels of redemptions are received. By implementing the gate it allows the investment advisers an extended period in which to rebalance the portfolio while maintaining the current strategic positioning, something that would not necessarily be possible should the gate not be utilised.

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POLICY OF COMPLIANCE WITH THE CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) ACT 2010

Background

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the “Act”) which is in force from 15 July 2010, transposes the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) into domestic law, bringing Ireland into line with EU requirements and the recommendations of the Financial Action Task Force. Designated persons under the Act, including all credit and financial institutions (as defined in the Act) are required to comply with their obligations under the Act with immediate effect. The Company falls within the definition of a financial institution within the Act.

The Act contains specific and detailed regulatory requirements which are more extensive than the previous money laundering and terrorist financing provisions contained within the Criminal Justice Act 1994. Therefore, the level of dependence on supplementary Guidance Notes to support implementation (as was the case with the 1994 Act) should be significantly lower under the 2010 Act. Credit and financial institutions must refer to the provisions of the Act to ascertain their statutory obligations.

The Central Bank of Ireland (the “Central Bank”) is specified in the Act as the State competent authority for credit and financial institutions. The Central Bank, pursuant to section 63 of the Act, is responsible for effectively monitoring credit and financial institutions’ compliance with their obligations.

The Company has been informed that:

i. it must achieve compliance with their obligations under the Act.

ii. the Central Bank will conduct a range of on-site inspections across the financial sector to ‘effectively monitor’ compliance and effective implementation by credit and financial institutions with regard to their obligations under the Act.

iii. as part of the inspection process, emphasis will be placed on compliance with section 54(2)(a) of the Act with regard to the adoption and implementation of policies and procedures for the assessment and management of risks of money laundering and terrorist financing. The Central Bank expects that policies and procedures will be up-to-date and available for inspection, and that senior management (including boards of directors) can demonstrate full awareness of their responsibilities.

iv. the Central Bank will, as provided in section 63 of the Act, ‘take measures that are reasonably necessary for the purpose of securing compliance.’ Administrative sanctions are available to the Central Bank to achieve this statutory objective.

Policy

The Company appoints third party services providers to undertake core duties. HSBC Security Services

(Ireland) Limited, (“HSSI”), are the appointed administrator, HSBC Custody Services (Ireland) Limited

(“HCSI”) are the appointed Custodian and Tudor Trust Limited (“Tudor Trust”) provide company

secretarial services to the Company.

Both HSSI, and Tudor Trust have confirmed that they are able to provide the information required for

the purposes of a Central Bank inspection, should it arise.

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An annual confirmation from each appointed service provider will be sought and they will be required to

confirm that they are able to comply with the CJA 2010 requirements.

Review

The CJA 2010 requirements and policy will be reviewed regularly or at least on an annual basis or

whenever a material change occurs.

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POLICY OF COMPLIANCE WITH FITNESS AND PROBITY STANDARDS

Background Part 3 of the Central Bank Reform Act 2010 (the “Act”) provides that a person performing a controlled function (“CF”) must have a level of fitness and probity appropriate to the performance of that particular function. The Central Bank of Ireland (the “Central Bank”) also has the power to prescribe a subset of CFs as functions for which the prior approval of the Central Bank is required before a person can be appointed (PCFs). The Central Bank published SI No 437 of 2011 on 1 September 2011 prescribing particular functions as CFs and PCFs1. Section 50 of the Act permits the Central Bank to issue a code setting out standards of fitness and probity for the purposes of Part 3 of the Act. In September 2011, the Central Bank published a code setting out fitness and probity standards (“the F & P Standards”) pursuant to Section 50 of the Act. Identification of PCFs and CF’s The Act identifies 42 senior positions as PCFs for a regulated financial service provider. These include persons who hold the following positions:

• Office of Executive and Non-Executive Director

• Office of Chairman of the Board or Sub-Committee

• Office of Chief Executive

• Office of Secretary ( non corporate)

• Head of Finance

• Head of Risk

• Head of Compliance with responsibility for Anti money Laundering and Counter Terrorist Financing Legislation

While certain guidance has been provided as to which positions are to be considered a PCF function the Act gives a more generic definition in respect of eleven categories of CF’s, which include a function relating to the provision of financial services, which are for instance:

• likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the regulated financial services providers affairs

• related to ensuring, controlling or monitoring compliance with the funds obligations (for example, MLRO)

• likely to involve the person responsible for its performance in, for example, giving advice or assistance to a customer of the firm regarding the provision of a financial service, arranging a financial service for them, dealing in or having control over property of a firms customer or providing instructions or directions in relation to dealing, or dealing in/with property on the firms behalf.

The key difference between a PCF and a CF is that the Central Bank’s prior approval is not required for persons to be appointed to a CF position, but the Central Bank will be able to investigate, suspend, remove and/or prohibit a person from carrying out a CF in a regulated financial service provider in the future. The fund must be satisfied on reasonable grounds that persons appointed to CFs or PCFs comply with the standards. This as such imposes initial and on-going due diligence to include certain minimum competency requirements with respect to the PCFs, CFs and the fund. Due Diligence

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Regulated financial service providers must satisfy themselves on reasonable grounds that persons appointed to CF’s or PCF’s comply with the standards. Fitness The due diligence considered suitable to determine a person’s fitness to perform a CF or PCF includes the following measures: 1. Professional qualifications –obtain a copy of appropriate documentation evidencing the person’s

professional qualification or registration with a professional body if so required in respect of the relevant function and in particular compliance with the Code if applicable. They must also be required to self-certify compliance with continuing professional development (“CPD”) if required to maintain a relevant qualification.

2. Application and Interview –retain applications and written notes of the interview process if used

to assess competence and capability, including for instance by documenting how previous experience equips the person with the expertise and experience to perform the relevant function.

3. References –obtain references from former employers etc of the individual and verification from

third party referees as to their truth and accuracy. 4. Concurrent Responsibilities – ensure the person does not have other employment which

interferes or creates conflicts of interest with the relevant function and require the person to provide written self-certification that they are capable of and have sufficient time to perform the relevant function having regard to other responsibilities. If persons performing functions designated as CF1, CF2 or PCFs hold directorships, they must be required to disclose them, written confirmation should also be sought as to the time to be allocated to the directorships(s) and if this will affect their performance of the relevant function.

Probity The due diligence to be undertaken to determine a person’s fitness to perform a CF or PCF should include the following measures:- 1. Obtain signed written confirmation from the individual as to whether the matters specified in the

standards regarding their probity and financial soundness apply to them. If they do, the person must be able to show this has not adversely affected his/her ability to perform the function to a material degree. In addition, check against publicly available sources to determine if persons conducting functions designated as CF1, CF2 or PCFs have, for instance, been the subject of regulatory action or if a judgment debt has been registered against them.

2. Assess and document whether the matter is material to the relevant function based on the evidence received (e.g. underlying documentation which the person should be required to furnish such as reports/decisions). Materiality may be determined in conjunction with other matters such as the seriousness and surrounding circumstances of the facts, their relevance to the person’s duties, the duration of behaviour, the length of time since the matter occurred and evidence of rehabilitation.

3. If the matter is deemed material, make reasonable enquiries, for instance contacting third parties

such as former employers or regulatory authorities for further information. Any information received may be considered in conjunction with other relevant matters and their cumulative effect may determine whether a person is fit and proper to perform the relevant function.

4. Consider the impact of criminal convictions (involving dishonesty, fraud, financial service,

insolvency, consumer, insurance, market manipulation, insider dealing or revenue law for example) on a person’s ability to perform a relevant function having regard, for instance, to the











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circumstances of the conviction and its relevance to the performance of the function, the length of time since the conviction, the explanation offered by the convicted person and evidence of their rehabilitation.

Document the due diligence carried out to ensure adherence to the Standards and make such records available to the Central Bank upon request. All Fitness and Probity applications will be dealt with by the Central Bank’s Regulatory transactions department which will be the centre for standardised application processing and decisions making. Key Time Lines

• 1st December 2011, the Standards will apply to existing and new PCFs

• Compiling a list of PCFs as at the 1st December and submitting to the Central Bank on or before the 31st December 2011

• 1st March 2012, the Standards will apply to existing and new CFs

• 31st March 2012, completion of PCF’s due diligence

• 1st December 2012 , the standards will apply to all staff Policy As at the 1st December 2011 a review of PCFs was undertaken, in accordance with the guidance issued by the Central Bank. This review resulted in the following individuals being identified as PCFs and subsequently reported to the Central Bank prior to the 31st December 2011: L. George Gutmans – Director PCF-2 Marcel Kramer – Director PCF-2 Johannes Yntema – Director PCF-2 Denise Kinsella – Director PCF-2 Brian Dillon – Director PCF-3 and PCF-2 Gavin Farrell – Director PCF-2 Patrick Robinson – Designated Individual PCF-39 Tara Gordon – Designated Individual PCF-39 Pursuant to the submission of the letter outlining the list of PCF’s as at 1 December, 2011 further consultation took place between the Central Bank and the financial industry to establish what was considered to be best practice and adequate to satisfy the due diligence requirements in order to comply with the Standards. In February 2012 the Company tabled a matrix of due diligence requirements based on best practice. At this meeting the initial and ongoing requirements were discussed. Initial Due Diligence to be provided by or completed for each PCF prior to the 31st March 2012

1. Self Certification letter, copy attached, together with Appendices A & B, to be completed and signed.

2. Latest CV not older that 12 months old to be provided 3. References to be obtained for PCFs should their appointment be within the last 12 months 4. Garda Checks or police checks for PCFs country of residence are to be obtained 5. Judgement searches to be undertaken in PCFs country of residence 6. Company Registration Office Search to be undertaken in PCFs country of residence. 7. Central Bank Search (or equivalent) to be undertaken in PCFs country of residence.

Appointment of new PCFs Should a new appointee or an existing employee be asked to undertaken a function whereby it is classified as a PCF all items detailed in 1 to 6 above will be obtained and the necessary consent received from the









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Central Bank prior to the individual being able to act in the PCFs capacity. For example should an additional Director be appointed the appointment should only be valid upon collation of the necessary due diligence and Central Bank’s prior approval. Changes to existing PCFs Where a change to a PCF occurs for example by way of an additional appointment or the retirement of a PCF a revised list of all PCF’s should be circulated to the Board for review, approved and provided to the Central Bank for their records. PCFs annual review and ongoing due diligence requirements As at the 1st December each year a review of PCFs will be undertaken and the list will be agreed by the Board of Directors at the next Board meeting. Subsequent to the list being approved E.I. Sturdza Strategic Management Limited will undertake to complete an annual due diligence review and obtain the following information:

1. Up to date Self Certification letter, together with Appendices A & B. 2. Latest CV not older that 12 months old to be provided

Review of CF’s and due diligence requirements As at the 20th February 2012 a review of CFs was conducted with the following CFs being indentified: Natalie Courtney – Money Laundering Reporting Officer Appointment of new CFs, changes to CFs and CFs annual review and ongoing due diligence requirements are not as stringent as for PCFs and as such a CFs does not require prior consent from the Central Bank before to acting in that capacity. Initial Due Diligence to be provided by or completed for each CFs prior to the 31st March 2012

1. Self Certification letter to be completed and signed. 2. Provision of all transcripts / qualification which are relevant to the CF undertaken.

CFs annual review and ongoing due diligence requirements As at the 1st December each year a review of CFs will be undertaken and the list be agreed by the Board at the next Board meeting. Subsequent to the list being approved E.I. Sturdza Strategic Management Limited will undertake to complete an annual due diligence review and obtain the following information:

1. Up to date self Certification letter. Review The Fitness and Probity Standards will be reviewed regularly or at least on an annual basis or whenever a material change occurs.





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APPENDIX 1

COMPLAINT FORM

Client Name :

Fund Name :

Name of person raising complaint :

Organisation of person raising the complaint:

Method of communication :

Date complaint raised :

Was a two day holding letter sent?:

Date of Reply :

Date resolved :

Nature of Complaint :

Potential cost – please provide breakdown:

Action taken/proposed :

Prepared by Date

Approved by Date

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APPENDIX 2

HSBC Business Planning Statement

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abc Business Recovery Planning Statement : Dublin

As to 14th November 2011 In conjunction with industry best practice, as well as HSBC Group practice, HSBC Dublin have documented a Business Recovery (BR) Plan in place. All business areas in the Dublin operation are catered for in the HSBC Dublin BRP plan. All business recovery and disaster recovery processes are managed by HSBC Dublin, in conjunction with the Specialist Group Business Recovery Team located in London. HSBC Dublin strictly adheres to HSBC Group policy which requires that every Manager ensures their department has a business recovery plan in place for all services provided and that it is reviewed, updated and tested annually. HSBC Dublin retain the services of Hewlett Packard Ireland Limited to provide an offsite recovery facility in Santry, Dublin 9. This facility is located approximately 6 miles outside of Dublin city centre. HSBC Dublin currently retain 220 seats at this facility. The connectivity to the off site facility is tested 2-3 times per annum. The most recent test of all systems was carried out at the Santry facility in November 2011 and this was successful. No major issues were reported. The HSBC Group provides all HSBC Dublin information technology services from geographically dispersed data center locations. All HSBC Group data centers, supporting HSBC Dublin have backup generators and documented business continuity and disaster recovery plans for Information Technology. The HSBC Dublin plan covers loss of buildings, systems and staff, as well as defined critical business functions with recovery priorities of 24-48 hrs, incorporating internal and external business interdependencies. The plans aim to provide up to 75% of “business as usual” servicing capabilities within the first 48hrs and up to 99% within the first week of an event in which the business recovery plan is invoked. It is possible for HSBC Dublin to function from its alternate recovery site for an extended period. HSBC Dublin and the HSBC Group have documented crisis management processes, covering internal and external communications during an event. This is held in a document known as the Major Incident Manual (MIM). Clients and vendors are notified of an outage and the plans to rectify service, via the HSBC Dublin client relationship management team, either by phone, fax or email. A clear Communication Plan put in place, notifies staff in the sequence shown below :- incident declared emergency management team (Major Incident Group) convened instructions given to department heads (Primary Emergency Contacts) via Major Incident Group to

notify recovery teams of the need to invoke plans staff informed by call cascade Local employee hotline updated with latest information and instructions for staff communication is either face to face or via phone. In addition to the above, the Dublin MIM provides clear details on the various roles, teams etc. which are convened in the event of a disaster to effectively “manage” the event. The MIM extends to include a specific plan detailing how the Dublin office would react to an issue such as a Flu Pandemic. Through the various team roles, staff issues are dealt with, communication with GHQ in London and the media (if required) are maintained. Communication with Group Security and Group Business Recovery Team are also all opened up and maintained. HSBC Securities Services (Ireland) Limited November 15th 2011

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Directors fees-verbal update

Legal Update

1

Funds Quarterly Legal and Regulatory

Update

Period covered: 1 January 2012 to 31 March 2012

2

Funds Quarterly Legal and Regulatory Update

Contents

UCITS, Non-UCITS and Hedge Funds Page 3 Finance Bill 2012 Page 11 AIFMD Page 16 MiFID II Page 18 European Commission proposal for Data Protection Reform Page 19 EU Regulation on Short Selling and certain aspects Page 21 of Credit Default Swaps The Meaning of Gross Negligence in Commercial Contracts Page 22 Central Bank of Ireland Page 23

- Payment of Dividends out of Capital - Fitness and Probity - Enforcement Priorities - Inspection Priorities - Safeguarding Client Assets - End of Market Abuse

Delegation Arrangement with the Irish Stock Exchange

Anti-Money Laundering/Counter-Terrorism Financing Page 28 Contact Us Page 32

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FUNDS QUARTERLY LEGAL AND REGULATORY UPDATE

UCITS, Non-UCITS & Hedge Funds

(i) UCITS Self Managed Investment Companies

The Central Bank of Ireland (the “Central Bank”) has recently clarified that the UCITS IV

requirements will apply to UCITS self-managed investment companies (SMICs) from 1 July

2013. The business plan of each SMIC must reflect these requirements by 1 July 2013.

Accordingly, each UCITS SMIC is required to submit a business plan to the Central Bank so

that the Central Bank can assess if the UCITS SMIC is UCITS IV compliant by 1 July 2013.

The business plans can be submitted and agreed but (at the SMIC’s discretion) may not

become effective until 1 July 2013. The Central Bank has set out a staggered timeline for

submission of the business plans in order to evenly distribute the review process. For

currently authorised UCITS SMICs the Central Bank has notified the relevant legal advisors

of the scheduled submission dates.

(ii) ESMA Consultation on guidelines on ETFs and other UCITS issues

On 30 January 2012 the European Securities and Markets Authority (“ESMA”) published a

consultation paper on guidelines on ETFs and other UCITS related issues, (the

“Consultation Paper”). This paper follows on from the Discussion Paper on UCITS ETFs and

Structured UCITS last year and covers the following areas:

UCITS Exchange-Traded Funds

The Consultation Paper defines a UCITS ETF as “a UCITS fund with at least one unit or

share class which is continuously tradable on at least one regulated market or multilateral

trading facility with at least one market maker which takes action to ensure the stock

exchange of its units or shares does not significantly vary from its net asset value.”

The Consultation Paper highlights that UCITS funds meeting this definition would be obliged

to use the identifier “ETF” in its name and, conversely, UCITS funds which do not meet this

definition will not be entitled to use the “ETF” identifier in its name or in its fund rules,

prospectus, KIID or other relevant fund documentation.

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The Consultation Paper sets out additional disclosure requirements for actively-managed

UCITS ETFs focusing in particular on the fact that they are not index trackers.

Efficient portfolio management techniques

This area of the Consultation Paper has the potential to impact all UCITS funds and not just

ETFs. It calls for much more restrictive rules as regards collateral and the diversification of

collateral received by a UCITS fund (not just ETFs) which engages in stocklending, repos or

other similar transactions.

Transitional provisions

The Consultation Paper also proposes certain transitional provisions which will ease the

immediate impact that the new rules will have.

Strategy indices

ESMA tried to restrict the use of such indices by calling for significantly enhanced disclosure

including disclosure of the full calculation methodology, the constituents of the index, and

their respective weighting. Another point made by ESMA is that strategy indices which

involve proprietary information that the index providers are unwilling to disclose, would not

be considered as an eligible financial index in the future. This would have an important

bearing on certain index providers and managers although greater clarity will have to be

secured prior to finalising these guidelines as to when an index is actually attempting to

replicate a quantitative strategy or a trading strategy and when they will come within the new

requirements.

Index-tracking UCITS

The Consultation Paper sets out proposals for additional disclosures that would have to be

made in the prospectus of an index-tracking UCITS including details of its underlying

components (e.g. could be done by means of reference to a website), how the index will be

tracked and the risk implications arising from this (e.g. counterparty exposure). The

prospectus will also need to include the fund’s policy regarding tracking error, a description

of factors that are likely to affect the fund’s ability to track the performance of the index and

details of whether the fund will have a full-replication or sampling methodology.

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Index-tracking leveraged UCITS

The Consultation Paper calls for more disclosure as regards leverage policy and the impact

of it on risks and costs in the prospectus and in the KIID.

Total Return Swaps (“TRS’s)

The proposals contained in the Consultation Paper could potentially apply to any UCITS

fund that uses TRS’s. The Consultation Paper proposes to apply the UCITS diversification

rules to collateral received from a counterparty, this means that a UCITS fund would need to

ensure that the UCITS diversification rules were not breached when collateral was added to

existing investments held by the UCITS fund. The Consultation Paper also proposes to

introduce significant disclosures for the prospectus and annual report of any fund which

engages in TRS’s.

Any managers managing a UCITS platform should be aware of the consultation paper,

which may be found at the following address: http://www.esma.europa.eu/system/files/2012-

44_0.pdf

Another point which managers should note is that these regulatory amendments are not

confined to the EU. The International Organisation of Securities Commissions (“IOSCO”) has

also issued its own consultation paper on “Principles for the regulation of Exchange Traded

Funds”.

IOSCO’s Consultation Paper may be obtained from the following address: http://www.iosco.org/library/pubdocs/pdf/IOSCOPD376.pdf

(iii) Updated ESMA Q&A on Money Market Funds

On 20 February, 2012 ESMA published an updated version of its Q&A on the practical

application of the requirements of CESR’s guidelines on a common definition of European

Money Market Funds (“MMFs”). The guidelines are relevant to UCITS and Non UCITS funds

which label or market themselves as MMFs and they set out how management companies

should assess the credit quality of instruments that are rated by credit rating agencies and

also deal with the corrective actions a management company should take when an

instrument no longer complies with the criteria outlined in the guidelines.

The updated Q&A document may be obtained from the following address:

http://www.esma.europa.eu/system/files/2012-113.pdf

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(iv) ESMA Guidelines on Automated Trading

On the 22 December, 2011 ESMA published its final “Guidelines on systems and controls in

an automated trading environment for trading platforms, investment firms and competent

authorities”. The initiative is being undertaken as part of the review of the Markets of

Financial Instruments Directive (“MiFID”), which is dealt with later under the heading “MiFID

II”. The guidelines may need to be adapted to the revised version of MiFID once adopted

and/or transformed into technical standards where appropriate. The guidelines are to

become effective on 1 May, 2012.

The guidelines cover trading of any financial instrument as defined in MiFID in an automated

environment.

ESMA states that maintaining the orderly functioning of the markets is one of the aims in

defining rules for algorithmic trading. The guidelines prescribe that regulated markets and

Multilateral Trading Facilities should put procedures in place to that end. These procedures

should include:

- pre-trade controls, such as the possibility to limit the number of orders which each

member/participant or user can send to the trading platform;

- conformance tests to ensure that members/participants’ or users’ IT systems are

compatible with the trading platforms’ electronic trading systems;

- automatic and discretionary mechanisms to constrain trading or to halt trading in

response to significant variations in price to prevent trading becoming disorderly;

- adequate due diligence of the member/participant or user before accepting their

market access and the ability to check their respective controls and arrangements

afterwards;

- clear organisational requirements for members who are not regulated entities; and

- rules and procedures designed to prevent, identify and report instances of possible

market abuse and market manipulation that are proportionate to the nature, size and

scale of the business done through the trading platform.

The organisational requirements in respect of automated trading regimes also extend to

investment firms. Investment firms using algorithms, according to the ESMA guidelines must

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also have organisational arrangements to maintain fair and orderly trading. This includes

amongst other things:

- an appropriate governance process for developing or buying algorithms, using the

algorithm in a cautious fashion and ensuring staff have adequate skills and expertise

to run and monitor the algorithm; and

- pre-trade controls which address erroneous order entry and maintain pre-set risk

management thresholds, including thresholds on maximum exposure to individual

clients.

In addition, regulated markets, MTFs and investment firms must keep adequate records of

their systems and controls covered by the guidelines to enable competent authorities to

assess their compliance with MiFID and other relevant regulatory obligations

(v) Collective Investment Scheme Valuation

On 12 February, 2012 the Technical Committee of IOSCO published a consultation paper

regarding the principles for valuation of a collective investment scheme (“CIS”).

The aim of the consultation paper is to outline principles against which both industry and

regulators can assess the quality of regulation and industry practices concerning CIS

valuation. The consultation paper also highlights the importance of the implementation of

comprehensive policies and procedures for the valuation of CIS assets. The paper goes on

to recommend general principles that should apply to the development and implementation

of such policies and procedures and that these should be consistently applied.

A copy of the abovementioned paper can be obtained from www.iosco.org

(vi) Change in the Approval Process for Investment Managers to Irish authorised

Funds

If an investment manager wishes to act as a discretionary investment manager to an Irish

UCITS or Non-UCITS fund an approval to act as such must first be obtained from the

Central Bank.

An investment manager seeking approval must complete an application form and provide

ancillary documentation in support of the application to enable the Central Bank to satisfy

itself as to the regulatory status, expertise, integrity and adequacy of financial resources of

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the applicant investment manager. This information usually includes, inter alia, details of

shareholders, background details and experience, assets under management, latest audited

financial statements and details of overseas regulatory status.

In most, but not all cases, the Central Bank requires that an investment manager be an

authorised entity, subject to prudential regulation. Where the investment manager is located

outside of Ireland, the Central Bank must be satisfied that the investment manager is and

continues to be appropriately regulated in its home state.

Up until recently the Central Bank imposed a requirement whereby a non-Irish investment

manager to an Irish UCITS or a Non-UCITS fund would need to maintain a minimum of

€125,000 in net shareholders funds when managing such a fund. Dillon Eustace recently

obtained clarification from the Central Bank that the requirement to maintain €125,000 will no

longer apply where the investment manager is located outside of Ireland and is managing

either an Irish UCITS or Non-UCITS fund. This means that a non-Irish investment manager

need only comply with its home prudential requirements (if any).

(vii) IFIA publishes Technical Paper on Annual Financial Reporting requirements

around the disclosure of Transaction Costs

In February 2012, the Irish Funds Industry Association (“IFIA”) published a paper addressing

the amendments in relation to the disclosure of transaction costs in the annual report of a

UCITS. This disclosure requirement in the annual report of an Irish domiciled UCITS fund is

effective for financial years commencing on or after 1 July, 2011.

The objective of the disclosure requirement under UCITS IV is to enhance investor

information in relation to the costs incurred by the UCITS and to provide the investor with

meaningful information.

Transaction costs are defined in the UCITS Regulations as ‘costs incurred by a fund in

connection with the transactions on its portfolio’.

IFRS 13 defines transaction costs as:

‘The costs to sell an asset or transfer a liability in the principal (or most advantageous)

market for the asset or liability that are directly attributable to the disposal of the asset or the

transfer of the liability and meet both of the following criteria:

(a) They result directly from and are essential to that transaction.

9

(b) They would not have been incurred by the entity had the decision to sell the

asset or transfer the liability not been made (similar to costs to sell, as defined in

IFRS 5).’

Under IAS 39 transactions costs are defined as ‘Transaction costs are incremental costs that

are directly attributable to the acquisition, issue or disposal of a financial asset or financial

liability. An incremental cost is one that would not have been incurred if the entity had not

acquired, issued or disposed of the financial instrument.’

The definition of transaction costs in the UCITS Regulations is not explicit in terms of the

types of costs which are to be included. In terms of guidance, the Central Bank has stated

that it is up to the UCITS and their auditors to determine what should be included. The IFIA

have proposed using the definition of costs from IAS 39 in order to make the reporting of

transaction costs more transparent in a fund’s financial reports. In addition they have

proposed the inclusion of transaction costs under a separate accounting policy which clearly

and concisely defines the costs.

The Paper is available on the IFIA’s website at: www.irishfunds.ie.

(viii) Irish Funds Industry welcomes new corporate structure for funds (SICAV)

The Minister for Finance has approved, in principle, the development of legislative proposals

for a new corporate structure for the funds industry which will meet US requirements and

reduce administrative costs on funds. It is hoped that the establishment of a new form of

incorporation more suited to the funds industry will remove the need for compliance with

various requirements under Irish company law which have no real purpose for investment

vehicles. It is hoped that investment funds who avail of the new structure will benefit from a

reduced administrative burden and reduced costs. It is expected that the legislation which

will allow the new corporate structure will be enacted by the end of 2012.

(ix) Disclosure of related party transactions - UCITS 14 and Non UCITS 2

On the 7 March, 2012, the Central Bank issued guidance in respect of UCITS Notice 14

(para 4) and Non UCITS Notice 2 (para 4) which gives more detail on the types of parties

and the types of transactions which should be disclosed under these provisions which state

that:

“A report of the transactions entered into during the reporting period must be provided in the

annual and half yearly reports. This report must include a list of all transactions, by type, the

10

name of the related party and where relevant, fees paid to that party in connection with the

transaction” (the “Report”).

In terms of the types of parties to be disclosed, UCITS Notice 14 and Non UCITS Notice 2

apply to dealings by a UCITS or non-UCITS with a promoter, manager, trustee, investment

adviser and/or associated group companies of these. As such, transactions with these

parties will need to be included in the Report. In contrast to the 'related party disclosures'

required under FRS 8, the exercise of control is not a feature of Notice UCITS 14 or Notice

Non UCITS 2.

In addition, a list of all transactions must be included in the Report. According to Central

Bank guidance, it is anticipated that these will include, for example, fee payments, dealings

in units, foreign exchange transactions, deposits and OTC transactions including financial

derivatives, securities lending and repos. Again, this can be differentiated from the FRS 8

disclosures which tend to focus primarily on fee payments and dealings in units.

The Central Bank has not prescribed any rules concerning the format of the Report, which

must be included in annual and half-yearly reports for financial years commencing 1 July

2011 onwards and their guidance is not intended to be binding. The format is open to

change and the Central Bank welcomes input from the IFIA on ways to make disclosures as

clear and comprehensive as possible without being overly burdensome.

(x) European Commission to propose a Regulation on securities settlement

On 7 March, 2012, the European Commission proposed a set of rules targeting central

securities depositories (CSDs). The provisions of the proposal will ensure that the

transactions between buyers and sellers of securities (primarily those that are being carried

out cross border) will be settled in a safe and timely manner. To achieve this, common

standards will be introduced across the EU for securities settlement and the institutions that

are responsible for these transactions, i.e. the CSDs.

The key objectives of the legislative proposal are to:

improve the safety of settlements, especially for cross-border transactions, by

ensuring that buyers and sellers receive their securities and money on time and with

reduced risk;

enhance the efficiency of settlements, in particular for cross-border transactions, by

introducing a true internal market for the operations of national CSDs; and

increase the safety of CSDs by applying high prudential requirements in line with

international standards.

11

The proposals will bring increased safety and efficiency to securities settlement in Europe. It

also seeks to shorten the time it takes for securities settlement and to minimise settlement

failures.

Finance Bill 2012

Introduction

As an international fund domicile, Ireland ranks amongst the most flexible and advantageous

in the onshore world. Despite the difficult current economic climate the Irish Funds Industry

continues to go from strength to strength with the assets under management in Ireland of

Irish domiciled investment funds having surpassed the Euro €1 trillion mark in 2011 and total

assets under administration in Ireland of Euro €1.875 trillion.

The reaffirmed commitment of the new Government to the industry, with particular emphasis

on future employment creation in the industry, is extremely significant for both the continued

growth and further success of the industry. The Minister for Finance made reference in his

Budget speech in December 2011 to the importance of the financial services industry stating

it was “one of the great export success stories of the last 20 years” and his intention to

introduce changes to enhance the competitive position of the Financial Services industry

including the investment management industry. Consequently, it was no surprise that the

Finance Bill 2012 (the “Bill”) when published on 8 February 2012 contained a number of

specific and general measures to support and enhance Ireland’s reputation as a leading

location for investment management.

The Bill has passed through both Houses of the Irish Parliament and once signed by the

President will be enacted into Irish law.

Investment Management

One of the objectives of the UCITS IV Directive, which came into effect on 1 July 2011, is to

enhance the ability of fund managers to rationalise their products and make them more cost

effective. To this end, the Directive provides for the cross-border merger of investment funds

and for new ‘master-feeder’ structures. Ireland was one of the first countries to adopt this

new Directive and changes were introduced in Finance Act 2010 in order to give the Irish

industry a ‘first-mover’ advantage.

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Outbound Migration

In addition the Bill contains new measures which provide that mergers (both inbound and

outbound) involving Irish investment undertakings (“Irish funds”)

and foreign funds (located in an EU Member State, EEA or OECD country with which Ireland

has entered into a double tax agreement) (“offshore funds”) will not give rise to a charge to

tax in respect of Irish resident investors. Instead the tax is deferred until such time as the

disposal of the replacement units. On the subsequent disposal of the replacement units, the

replacement units will be treated as acquired at the same time and cost as the original

holding.

Master/Feeder Structures

The Bill also includes measures to accommodate master/feeder structures. Currently, a

reorganisation relief only applies where the assets of the foreign fund are transferred to the

Irish fund in exchange for the issue of units by the Irish fund to the investors in the foreign

fund. The new measures provide that the relief will also apply where the Irish fund issues the

units directly to the foreign fund. This provision should prove useful in enhancing Ireland’s

reputation as a location of choice for master funds.

Exchange of Units in Offshore Funds

The Bill also introduces relief for Irish investors in relation to the exchange of material

interests within the same offshore fund or between two offshore funds. This is to remove the

disparity that existed between the treatment of an investment in an Irish fund and similar

investments in an offshore fund as legislation currently exists which provides relief for

reorganisations of two Irish funds.

Funds Re-domiciling to Ireland

The Bill puts on a legislative footing the practice whereby the equivalent measures (as

introduced by the Finance Act 2010) apply in the case of investments made through

intermediaries (this being an un-intended exclusion from the original legislation).

Furthermore the Bill puts on a legislative footing the practice whereby a fund which has been

redomiciled to Ireland from certain offshore centres, can provide a single declaration stating

that the unit holders are non-Irish resident to ensure that no Irish tax arises in respect of

those investors, or if there are Irish resident investors then these need to be identified in the

declaration and tax accounted for where appropriate on future payments. It also provides

13

that where an existing non-resident unit holder becomes resident in Ireland, tax on

chargeable events will arise for the fund.

Stamp Duty

The Bill introduces a number of reliefs in relation to stamp duty in the context of funds

(including exempt unit trusts).

Cross Border Mergers

In line with the amendments referred to above under “Outbound Migration” the Bill now

introduces:

- an exemption from stamp duty on the transfer of assets on a merger of an Irish fund into

an foreign fund (a mirror exemption currently applies in the context of inbound mergers);

and

- an exemption from Irish stamp duty where Irish assets transfer on a reorganization or

merger of two offshore funds.

Foreign Immovable Property

Removal of a charge to Irish stamp duty arising on the en-specie transfer of foreign

immovable property into an Irish fund in return for the issue of units in that fund.

Exempt Unit Trusts

Introduction of exemptions from Irish stamp duty on any conveyance or transfer of units in an

exempt unit trust and also the transfer of assets between an exempt unit trust and an Irish

fund. An exempt unit trust is essentially a unit trust which is neither authorised nor deemed

to be authorised by the Central Bank of Ireland and one where all the issued units are

typically held by Irish approved pension and charities.

Pension Business

Because of the range of products offered by institutions, transfers of pension funds/charities

assets may happen in a number of different ways such as;

- Transfer of investment assets from one institution to another institution;

14

- Transfer of assets from a unit trust in one institution to either a segregated fund or a

similar unit trust in the same or another institution;

- Transfer of assets from a corporate fund in one institution to either a similar corporate

fund in the same or another institution;

- Transfer of assets from a life company to a related or unrelated financial institution,

which may hold the assets either as a segregated asset or as an asset in a unit trust or

in a life company.

However, under these arrangements there is no change in substance, in the ownership in

the assets of the pension funds/charities, although there may in certain circumstances be a

change of legal or beneficial ownership. As such, in recognition of same, the Bill provides

that the transactions outlined above will be exempt from stamp duty going forward.

Other Items

Other items of note include:-

ETF Shareholders - Technical Charge

Currently where non-resident investors hold shares/units in an Irish fund they should not

suffer exit tax on distributions or gains on disposal of their shares/units. An amendment has

been introduced in the Bill to clarify that this exemption also applies where the non-resident

disposes of their shares/units to a person other than the ETF.

Chargeable Events - Tax Rates

The Bill confirms the increase in the rates as set out in the budget effective from 1 January

2012 (e.g. rate of exit tax goes from 27% to 30% on regular distributions and from 30% to

33% on other chargeable events).

A Committee Stage amendment to the Bill provides for a 25% tax rate to apply in place of

the above mentioned 30% or 33% rates in the case of certain corporate shareholders.

Periodic Reporting by Funds

The current Revenue reporting requirements for Irish funds in respect of payments to unit

holders are based on the reporting requirements for banks. However in recognition of the

undue administrative burden (and associated costs) which could be placed on Irish funds

and following on from extensive discussions between the Industry and the Revenue

15

Commissioners, the Bill provides for a separate approach specific to Irish funds. The new

reporting measures allow the Revenue Commissioners to require the periodic reporting of

certain Irish funds with effect from 1 January 2012 and the focus of the reporting will be in

relation to the value of units which is more readily available to Irish funds.

Furthermore, a specific exclusion has being included for information already provided or to

be provided under the provisions of the European Union Savings Directive - so as to ensure

that there is no duplication of reporting.

EU Savings Directive

Finally, the Bill removes the grandfathering of certain domestic and international bonds and

other negotiable debt securities for the EU Savings Directive.

Looking Forward

Extension of Equivalent Measures Regime

While it was hoped that the equivalent measures regime, which essentially permits Irish

regulated funds to make payments to non-Irish resident investors free of exit tax without the

requirement for a non-resident declaration to be in place, would be extended in the Bill, the

Industry is nevertheless in discussion with the Revenue Commissioners on an ongoing basis

in this regard.

Future Product Offerings

The Industry continues to explore new products & fund structures with the Department of

Finance which will enhance Ireland’s competiveness and further cement Ireland’s place as a

leading location for investment management. Current discussions include the introduction of

a new corporate structure (as detailed earlier under sub-section (viii) of “UCITS, Non-UCITS

and Hedge Funds) and an enhanced regime governing Ireland’s investment limited

partnerships.

16

AIFMD

ESMA Discussion paper on key concepts of the Alternative Investment Fund

Managers Directive and types of AIFM

ESMA issued a discussion paper on 23 February, 2012 (the “Discussion Paper”) on key

concepts of the Alternative Investment Fund Managers Directive (“AIFM”). The Discussion

Paper deals with the following four sections:

Definition of AIFM:

ESMA deals with the issue of what types of managers qualify as AIFMs within this

Discussion Paper; however they do not specifically list those types of managers which will

constitute an AIFM.

ESMA considers that an entity performing either portfolio management functions or risk

management functions is to be considered as managing an AIF pursuant to Article 4(1)(w) of

the AIFMD. Such an entity must therefore seek authorisation as an AIFM. Article 6(5)(d)

should be interpreted as requiring an AIFM to be capable of providing both functions in order

to obtain an AIFM authorisation.

No commentary is provided on what constitutes a ‘letter box entity’. However, the Discussion

Paper sets out that an AIFM may delegate both functions, either in whole or in part, on the

understanding that an AIFM may not delegate both functions in whole at the same time.

Definition of AIF:

In respect of the definition of an AIF, ESMA attempts to develop the key criteria by which an

AIF may be identified. The Discussion Paper elaborates on the key terms used in the

definition of AIF which is conceived in the AIFM. These include raising capital, collective

investment, number of investors and a defined investment policy. ESMA also includes some

criteria which are not expressly included in the AIFM definition, for example nature of

ownership and control of underlying assets.

ESMA has indicated that capital raising activities and the collective investment itself should

be primarily for commercial purposes and have the objective of achieving a return for

investors. ESMA goes on to discuss the distinction which can be drawn between funds

which are intended to deliver a return for investors by buying or selling investments and

typical commercial ventures which normally involve entities acting for their own account by

17

managing underlying assets “with a view to generating value during the life of the

undertaking”. If this is the actual interpretation which is carried forward and used in practice,

then the relatively narrow holding company exception, wherein holding companies are

omitted from the AIFMD, may not be as important as previously thought.

The ESMA guidance goes on to say that holding companies shall not be allowed to be used

as a means of circumventing the AIFMD, therefore possibly displaying a desire to tighten the

exemption even more. It is hoped that this does not mean that it is intended to bring holding

companies within the definition of an AIF.

Treatment of UCITS management companies:

The fact that the AIFMD provides that it is possible for a single entity to hold both a UCITS

authorisation and an AIFM authorisation is addressed by the Discussion Paper. According to

ESMA's analysis, it is possible for a UCITS management company to provide services,

including investment management services, to an AIF but still not be its appointed AIFM. In

situations such as this, the UCITS management company’s activities will remain under the

umbrella of its authorisation under the UCITS Directive and it will not need to seek

authorisation under the AIFMD. Only in circumstances where the UCITS management

company wishes to become the AIFM, then it will need to be granted authorisation under the

AIFMD.

Treatment of MiFID firms and Credit Institutions:

ESMA clarifies that MiFID firms and credit institutions can provide investment services, such

as portfolio management, to an AIF without falling within the scope of AIFMD. This

clarification is in line with the wording in the Directive whereby such firms will be able to

continue to provide services to an AIF under delegation arrangements.

Responses to this discussion paper were due by 23 March 2012 and will be used to help

ESMA in finalising its policy approach. ESMA is due to issue a consultation in Quarter 2

2012 setting out formal proposals for draft regulatory technical standards on Article 4(4) of

the AIFMD. ESMA will then finalise the draft standards and submit them to the European

Commission for approval.

The Discussion Paper can be viewed at the following address:

http://www.esma.europa.eu/system/files/2012-117.pdf

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MiFID II

In our Legislative Update for Quarter 1 of 2012, we referred to the publishing of legislative

proposals by the European Commission in October 2011 to amend the Markets in Financial

Instruments Directive (2004/39/EC) and its implementing legislation (MiFID). The proposals

(MIFID II) consist of a Directive and a Regulation.

The MiFID II proposals aim to:

Establish more robust and efficient market structures;

Take account of technological innovations;

Increase transparency and oversight;

Reinforce supervisory powers and introduce a stricter framework for commodity

derivative markets; and

Enhance investor protection.

ESMA has been asked to draft accompanying technical standards, (the “Technical

Standards”) which as yet have not been published, therefore it is not be possible to assess

the full extent of the proposed changes.

MiFID II will have implications for existing investment firms which are authorised under MiFID

and for firms that will be brought within the scope of the regulatory regime as a result of the

proposed changes contained in MiFID II. The proposals are as follows:

At Firm level – a larger number of investment firms will now fall within the scope of the

new legislation for the first time; e.g. a broader range of commodities firms, certain data

providers and third country firms;

At Product level – a larger number of products will be covered; e.g. structured deposits

and emission allowances;

At Service level – Custody services (safekeeping and administration of financial

instruments for the account of clients), which is currently classified as an ancillary

service, will now become a core investment service, thus bringing standalone

custodians in Ireland within scope of the MiFID Regulations. Currently such custodians

are regulated under the Investment Intermediaries Act 1995.

A key focus in the MiFID II proposals is to increase the intervention and enforcement powers

of the new European regulator, ESMA and the various national regulators across Europe. If

19

the proposals are adopted in their current form, ESMA and the various national regulators

will be given broad powers to intervene and, temporarily, prohibit or restrict types of financial

instruments or practices which they consider damaging to investors or the market more

generally. This could include limiting the ability of any person or class of persons from

entering into commodity derivatives transactions and intervening early in a product lifecycle

to prevent products from being launched to the market generally, or to a particular class of

investors.

The amendments also seek to harmonise the range of disciplinary tools that national

regulators can use against those who breach the requirements of MIFID.

Of particular note from an investment funds perspective, is the MiFID II proposal to classify

structured UCITS as ‘complex instruments’ for the purpose of the appropriateness test (i.e.

the requirement to seek information from retail clients to determine whether the client has

the knowledge and experience to understand the risks involved in the transaction or service

being offered). Currently, all UCITS funds are classified as ‘non-complex’ for the purpose of

this test. The MiFID II proposal to classify structured UCITS as ‘complex instruments’ would

require investment firms to apply the appropriateness test when selling structured UCITS to

retail investors but not when selling other UCITS products.

The MiFID II proposals are currently at European Commission proposal stage and will be

subject to further amendment by the European Parliament and European Council. At

present, the implementation timeline is unclear.

The legislative proposals can be viewed at: http://ec.europa.eu.

European Commission proposal for Data Protection Reform

On the 25 January, 2012 the European Commission published a proposal for a Data

Protection Reform Package which includes a proposal for the new Data Protection

Regulation for the Police and Criminal Justice Data Protection Directive (the “Data Protection

Regulation”). This Data Protection Regulation, when implemented, will replace the current

Data Protection Directive 95/46/EC. It should be noted that an EU regulation does not

require any implementing measures at local member state level and therefore becomes

immediately enforceable as law in all member states simultaneously.

The implementation of the proposed new Data Protection Regulation will lead to a uniform

and coherent data protection legal system across all Member States, whereby companies

will only have to deal with the national data protection authority of the Member State in which

20

they have their main establishment. However, the Data Protection Regulation will introduce

stricter rules and procedures, which will involve many significant changes and costs for both

EU and non-EU companies. As the Data Protection Regulation will be directly effective,

preparations should be made as soon as possible to ensure compliance.

The following issues arise under the proposed Data Protection Regulation:

The current definitions ‘data processor’ and ‘data controller’ which are contained in

the Data Protection Directive 95/46/EC will not change under the Data Protection

Regulation, therefore neglecting the opportunity to update the definitions to take

account of the prevalence of online and digital mediums in use today.

Where a business is based outside of the EU but it offers goods or services for sale

to, or monitors the behaviour, of consumers in the EU, then that business must have

a nominated representative based in the EU. In other words, they must set up a

company established in the EU which may be addressed by any supervisory

authority instead of the controller. A business that fails to appoint an EU-based

representative could face fines of up to 2% of its global turnover.

The Data Protection Regulation will modify the current system of export of personal

data outside of the EU. Pursuant to the Data Protection Regulation, the export of

personal data outside the EU will be possible only if the European Commission has

issued a specific decision that the third country in question ensures an adequate

level of protection. Alternatively, the third country is required to adopt binding

corporate rules and such agreement must contain standard data protection clauses

adopted by the European Commission or authorised by a Member State and

validated by the European Commission. In the absence of these measures, transfer

is only possible if the data subject has consented to the proposed transfer.

The Data Protection Regulation sets out that any processing of personal data within

the EU must be carried out on the basis of the consent of the data subject. The

difference introduced by the Data Protection Regulation is that ‘consent’ is defined

as ‘specific, informed and explicit indication of wishes either by a statement or by a

clear affirmative action by which the data subject signifies agreement to personal

data relating to them being processed.’ The concept of ‘explicit and informed’

concept has been used so far in Data Protection Directive 95/46/EC only for

sensitive data. Thus, the Data Protection Regulation makes “explicit” consent a

general requirement, and thereby removes an important distinction between

“personal data” and “sensitive data” under the current Data Protection Directive

21

95/46/EC. It also means that passive consent will no longer be sufficient in any

given set of circumstances. This places a greater burden upon the individual

processing the data.

The Data Protection Regulation proposes to introduce substantial fines for breach of

obligations set out therein. For example, fines up to €1,000,000 (or, in the case of a

company, up to 2% of its annual worldwide turnover), will be imposed on anyone

who does not adopt data protection policies or implement appropriate measures,

who processes personal data without prior authorisation or prior consultation of the

supervisory authority, who does not designate a representative, or who does not

alert or notify a personal data breach in a timely manner.

EU Regulation on short selling and certain aspects of Credit

Default Swaps

Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March

2012 on short selling and certain aspects of credit default swaps (“CDS”) was published in

the Official Journal on 24 March 2012 (the “Regulation”). The Regulation is due to enter into

force on 1 November 2012 and will then be binding and directly applicable in all Member

States. Uncovered sovereign CDS transactions which were concluded before 25 March

2012 are grandfathered and may be held until the maturity date of the contract.

The European Commission will be publishing certain “Level 2” implementing measures later

this year to address certain details arising from the “Level 1” text of the Regulation. ESMA is

advising the European Commission on the contents of these Level 2 measures and has

undertaken two consultations addressing certain aspects of the Regulation. These

consultation papers give an indication of ESMA’s approach to the Regulation.

The intention is that the Regulation will create a harmonized framework for coordinated

action at European level. It sets out notification requirements and restrictions relating to short

positions in shares and sovereign debt and, separately, a prohibition on uncovered

sovereign CDS. The Regulation also proposes to grant powers to Member State regulators

and ESMA to restrict or prohibit short selling activities and CDS transactions in certain

situations.

Article 2(1)(r) of the Regulation defines short selling as “any sale of a share or debt

instrument which the seller does not own at the time of entering into the agreement to sell,

including such a sale where at the time of entering into the agreement to sell the seller has

22

borrowed or agreed to borrow the share or debt instrument for delivery at settlement.” The

definition does not, however, include sales under repurchase agreements, transfers of

securities under securities lending agreements, or futures contracts relating to the relevant

share or debt instrument.

The Meaning of Gross Negligence in Commercial Contracts

In the recent case of ICDL GC Foundation FZ-LLC & Anor v European Computer Driving

Licence Foundation Ltd which came before the High Court (the “Court”), the meaning of a

“limitation of damages clause” was considered.

In this particular case the clause provided that a limit on liability would not apply where

damage was “caused by a wilful act or gross negligence”.

The plaintiff in the case made the argument that there is no distinction in Irish law between

negligence and gross negligence and as such gross negligence may be established where

there is a failure to exercise reasonable care, skill and diligence.

The defendant argued that this was not the case and that it is possible to make a distinction

between negligence and gross negligence. The argument was made that gross negligence

represents a more fundamental degree of negligence than regular negligence i.e. a failure to

exercise proper skill and/or care constituting negligence.

The Court had to decide whether the concept of negligence, which ordinarily applies to torts

and is founded on breach of a duty of care, could be reconciled with a claim based on

breach of contract. They found that in these particular circumstances gross negligence

meant “a degree of negligence where whatever duty of care may be involved has not been

met by a significant margin”. The Court then introduced the well established contractual

principle of business efficacy to their considerations. On that basis the Court concluded that

on the assumption that the parties must have intended the contract to be effective, the

clause could be interpreted to mean that the limit on liability did not apply where the

defendant’s breach of contract resulted from “a significant degree of carelessness”.

On the facts of the case the Court found that the defendant acted with such significant

degree of carelessness so as to amount to gross negligence and thus the limitation of

liability would not apply. This decision has been appealed to the Supreme Court and a

decision is pending.

23

Central Bank of Ireland

(i) Payment of Dividends out of Capital

Following a submission from both Dillon Eustace and subsequently the IFIA, the Central

Bank has issued a policy update revising its position in respect of the payment by retail

collective investment schemes (including UCITS) of dividends out of capital. All Irish

authorised retail collective investment schemes including UCITS are now permitted to pay

dividends out of capital subject to complying with a number of disclosure requirements which

are outlined below.

The Central Bank’s previous policy of not permitting retail funds (including UCITS) to pay

dividends out of capital was borne out of a desire to protect retail investors. This prohibition

was in place because of concerns for investor protection based on two key factors, namely:

1. a retail investor may not be aware of the potential for capital erosion over the life of his

or her investment; and

2. there is a danger that returns which include distributions out of capital are potentially

misleading.

There has been a recent increase in investor demand globally (and in particular in Asian

markets) for investment products that can provide a consistent income with a certain

tolerance for a stable or declining net asset value. These products are often referred to as

“target dividend income funds”. In response to these trends, many fund promoters are likely

to explore launching such funds.

The Central Bank is now satisfied that the concerns highlighted at (1) and (2) above can be

addressed by means of enhanced disclosure rather than an outright prohibition. This change

in the Central Bank’s policy will facilitate promoters of Irish retail funds (including UCITS) to

establish such investment products. As outlined above, the demand for target dividend

income funds is particularly significant in Asian markets which are key growth markets for

the Irish funds industry. There are currently 61 promoters from Asia with funds either

domiciled or serviced from Ireland and a total of 1143 Irish domiciled funds are currently

registered for sale in the Asia Pacific region.

The Central Bank’s revised requirements are as follows:

24

(a) Constitutional Document: Appropriate provision to allow distributions out of capital

must be contained in the relevant constitutional document.

(b) Prospectus: The rationale for distributions out of the capital of the fund must be

clearly outlined. The prospectus must include a prominent risk warning, at the front

of the document, which describes the effects of making distributions from capital

namely that:

- capital will be eroded;

- the distribution is achieved by forgoing the potential for future capital growth;

and

- this cycle may continue until all capital is depleted.

A similar risk warning must be contained in any subscription form or marketing

material. The prospectus must highlight that distributions out of capital may have

different tax implications to distributions of income and recommend investors to seek

advice in this regard.

(c) Income Statements / Distribution Vouchers: Documentation issued to unit holders in

conjunction with a distribution should indicate if the distribution has been paid out of

capital.

As investor appetite for new types of product continues to grow, Ireland, with its favourable

regulatory approach, range of fund structures and relevant experience and expertise,

continues to be an attractive jurisdiction for the establishment of funds. In particular, UCITS

products have proved appealing to promoters seeking to take advantage of the strong

distribution opportunities and globally recognised brand name that authorisation under the

UCITS regime provides.

This policy update indicates the Central Bank’s willingness to adopt a pragmatic and

evolving approach to regulation in seeking a balance between investor demands with

investor protection. Existing promoters wishing to avail of this change in policy should

review the associated fund documentation (prospectus, constitutional documents,

subscription application forms and dividend policies) to assess the impact of this policy

change and determine what steps are necessary to implement such changes.

25

(ii) Fitness and Probity

On 1 September 2011 the Central Bank introduced a new regime to regulate the ‘fitness and

probity’ of persons in Pre-Approval Controlled Functions (“PCF”) and Controlled Functions

(“CF”) in regulated financial service providers (each a “Regulated Firm”). The new regime

applies to both new and existing PCFs from 1 December 2011 and to new CFs from 1 March

2012. Persons currently occupying a CF function have until 1 December 2012 to comply.

In respect of PCFs in situ as at 1 December, 2011, Regulated Firms had to confirm to the

Central Bank that the necessary due diligence has been undertaken on/before 31 March

2012. The Central Bank prepared a guidance note setting out a template declaration and

PCF information file, which were required to be filed via the Online Reporting System. The

link to the guidance note is set out below:

http://www.centralbank.ie/regulation/processes/fandp/Pages/InSituPCFsConfirmationofDueD

iligence.aspx

In line with the new regime, the Central Bank has also issued a revised form of the Individual

Questionnaire (“IQ”) with effect from 1 December 2011. Since 1 December 2011, the IQ is

an online application and the Central Bank will no longer accept the old paper based IQ.

Persons proposed for appointment to a PCF will be required to complete the online IQ which

must be endorsed by the Regulated Firm and submitted for approval to the Central Bank

electronically using the Online Reporting System (“ONR”). Guidance on the use and

navigation of the new IQ and the ONR system can be found on the Central Banks website

at: www.centralbank.ie.

On the 27 March, 2012, the Central Bank published a Frequently Asked Questions

document which can be viewed at the following address:

http://www.centralbank.ie/regulation/processes/fandp/Documents/FAQ%20on%20Fitness%2

0and%20Probity.pdf

(iii) Enforcement Priorities

In outlining its enforcement priority areas for 2012, the Central Bank noted that its

Enforcement effort is being directed towards the areas of greatest concern to its Supervisory

Divisions. The priority areas have been aligned to the areas identified in the Central Bank’s

‘Programme for Themed Reviews and Inspections for 2012’.

26

The pre-defined enforcement priorities for 2012 are:

Anti-Money Laundering and Countering Terrorist Financing

Client Asset Requirements

Prudential Requirements

Retail Intermediaries

Mortgage Arrears

Transaction Reporting (MiFID Firms)

Systems and Controls

Payment Protection Insurance

Dissemination of inaccurate/incorrect information in the market (Transparency and

Prospectus Directives)

Timeliness and Accuracy of Information submitted to the Central Bank

These pre-defined enforcement priorities are not the only areas which will receive attention

from the Central Bank. Allocation of its resources for 2012 have been calculated to allow for

a proportion of its work to relate to 'reactive' enforcement in respect of issues identified

through day-to-day supervisory work and from other information sources.

(iv) Inspection Priorities

The main themes include an examination of the following areas:

Mortgage Arrears – Ensuring lenders are delivering appropriate solutions to

customers in mortgage arrears;

Consumer Protection Code – How is the new code being implemented in banks and

insurance companies;

Payment Protection Insurance – Suitability of sales by banks and other lenders;

Best Execution of Investment Transactions – How are investment firms meeting the

minimum standards;

Retail Intermediaries (insurance agents and brokers) – Review of firms where

compliance concerns have arisen;

Anti-Money Laundering and Counter Terrorist Financing – Inspections of firms in

sectors where risks exist;

Corporate Governance – Review of investment firms corporate governance standards;

Outsourcing – Examination of outsourcing arrangements in fund administration firms;

Client Asset Requirements – inspections of investment firms to assess compliance.

Themed reviews are to play a much larger part of the Central Bank's regulatory toolkit

following the introduction of the PRISM risk assessment regime. The stated aim of

27

publishing the plan for Themed Inspections is "to bring greater transparency and to signal

our themed priorities for the year. This should allow the relevant sectors to prepare and

should also help raise standards across the firms in each sector."

(v) Safeguarding Client Assets

On 23 March, 2012, the Central Bank published its “Review of the Regulatory Regime for the

Safeguarding of Client Assets” (the “Review”). As we have outlined above the protection of

client assets is one of the Central Bank’s key priorities in 2012.

The Review sets out the results of comprised evaluations of the legislative framework and

the regulatory structure and also an assessment of the current supervisory approach. In

carrying out the Review, meetings were held between the Central Bank, its employees,

external stakeholders and other regulators. The reviewers also looked closely at the report

issued in relation to Custom House Capital and the information relating to its supervision.

The Review states that it is clearly the responsibility of the firm and its senior management to

ensure that client assets are protected and also makes recommendations aimed at

producing a more effective regulatory regime, including the following:

- The Central Bank is given the power to apply to court for the appointment of an

administrator to take charge of the affairs of an authorised firm where the Central Bank

has reasonable grounds to suspect that there are serious problems of a financial nature

and/or the interests of investors and clients of the firm are at risk;

- Client Asset Requirements (“CAR”) be amended to provide a clear and consistent

definition of client assets and that a wider definition be adopted to the effect that the

presumption in the requirements is that all client funds received or held by an

authorised intermediary shall be subject to the CAR regardless of the intended

investment;

- Authorisation to hold client assets should trigger consideration of additional corporate

governance and internal control requirements such as an internal audit function, risk

function and additional independent non-executive directors;

- A Client Assets PCF be introduced for all firms which hold or intend to hold client

assets;

- All firms holding client assets should prepare a Client Assets Management Plan which

would assist the Client Assets PCF and enable appropriate risk-based monitoring of

individual firms; and

28

- Establishment of Client Asset Specialist Team (“CAST”) with cross-sectoral ownership

of client asset risk which will operate with pre-determined triggers for intervention in

respect of client assets.

The Review is available for viewing from the following address:

http://www.centralbank.ie/press-area/press-

releases/Documents/Review%20of%20the%20Regulatory%20Regime%20for%20the%20Sa

feguarding%20of%20Client%20Assets.pdf

(vi) End of Market Abuse Delegation Arrangement with the Irish Stock Exchange

The Central Bank has announced that its Market Abuse delegation arrangement with the

Irish Stock Exchange (the “ISE”) pursuant to the Market Abuse (Directive 2003/6/EC)

Regulations 2005, in place since 2005, has been unwound.

As a result, the monitoring and investigation functions previously conducted by the ISE are

now being conducted by the Markets Supervision Directorate of the Central Bank.

The Central Bank has updated its Market Abuse Rules, effective as of 1 February 2012.

These updated rules may be found on the Central Bank’s website www.centralbank.ie.

Anti-Money Laundering/Counter-Terrorism Financing

(i) Publication of Criminal Justice (Money Laundering and Terrorist Financing)

Act 2010 Guidelines

On 10 February, 2012 the Department of Finance published guidelines in respect of the

Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the “Guidelines”).

The Central Bank has stated that they “will have regard to these guidelines in assessing

compliance by designated persons with the Act.”

The Guidelines are available for viewing from the following address:

http://www.centralbank.ie/regulation/processes/anti-money-laundering/Pages/requirements-

guidance.aspx

29

(ii) Third Anti-Money Laundering Directive

On 16 February, 2012 the Financial Action Task Force (FATF) revised its 40

Recommendations (the “Recommendations”) relating to anti-money laundering. The

European Commission, which was involved in the revision process, has already launched a

process to review the 3rd AML Directive to determine what amendments will be necessitated

as a result of the changes to the Recommendations.

It is likely that FATF will start to check that the Recommendations are being implemented

from the end of 2013 and in this regard the European Commission has stated that the EU

will rapidly implement the new standards into its legislation ahead of the new round of FATF

evaluations. The intention was to commence work on an impact assessment and the

accompanying legislation by the end of March 2012. The ultimate intention is to adopt an

amendment to the 3rd AML Directive by end 2012.

Key Changes introduced by the new Recommendations:

Introducing a risk-based approach: For the first time, the new FATF standards

introduce a risk based approach, however the 3rd AML Directive already adopts this

approach.

Improving transparency measures: FATF contends there is little transparency at

the moment around some of the parties involved in various transfers, in particular

electronic transfers making them vulnerable to misuse by criminals and terrorists. The

Recommendations require reliable information available about the ownership and

control of companies, trusts, and other legal persons or legal arrangements. It also

means more rigorous requirements on the information which must accompany

electronic funds transfers. The 3rd AML Directive already requires designated

person(s) to identify the beneficial owner(s) on a risk sensitive basis.

More effective International Cooperation: A call for enhanced international

cooperation between government agencies and between financial groups (e.g.

simplified extradition mechanisms). The Recommendations seek more effective

exchanges of information, tracing of, freezing of, confiscation of and repatriation of

illegal assets.

New threats & new priorities: FATF to respond more actively to priorities set out by

the international community, particularly the G20.

Financing of WMD Proliferation: FATF has issued a new Recommendation which

aims to ensure consistent and effective implementation of targeted financial sanctions

against the proliferation of weapons of mass destruction when these are called for by

the UN Security Council.

30

Corruption & Politically Exposed Persons: The definition of "politically exposed

persons" is expanded to cover domestic persons, not just foreigners.

Tax Crimes: The list of predicate offences for money laundering has been expanded

to specifically include tax crimes.

Terrorist Financing: Remains an area of major focus for FATF.

(iii) UK FSA fines Coutts £8.75 million for AML failings

The FSA recently imposed a fine on Coutts& Co (“Coutts”) for a failing to comply with AML

requirements in the United Kingdom.

The following deficiencies and failures in compliance by Coutts were identified by the FSA:

1. Failure to gather sufficient information about prospective PEP’s and other high risk

customers;

2. Failure to establish the source of funds received from high risk customers;

3. Failure to gather sufficient information about prospective high risk corporate

customers, such as information concerning business activities, ownership and control

structures and the intended purpose of the business relationship;

4. Failure to identify and/or assess adverse intelligence about prospective and existing

high risk customers properly and take appropriate steps in relation to such intelligence;

5. Failure to keep information held on existing PEP’s and other high risk customers up-to-

date; and

6. Failure to scrutinise transactions made by PEP’s and other high risk customer

accounts appropriately.

In deciding on the level of fine to be imposed, the FSA pointed to the standing and important

position which Coutts holds in the private banking sector.

This case shows that domestic regulatory bodies are imposing sizable fines on designated

persons who fail to comply with obligations imposed by the Third Anti-Money Laundering

Directive.

Dillon Eustace

This Funds Quarterly Legal and Regulatory Update is for information purposes only

and does not constitute, or purport to represent, legal advice. It has been prepared in

respect of the current quarter and, accordingly, may not reflect changes that have

occurred subsequent to the start of such period. If you have any queries or would like

31

further information regarding any of the above matters, please refer to your usual

contact in Dillon Eustace.

32

CONTACT US

Our Offices

Dublin 33 Sir John Rogerson’s Quay,

Dublin 2,

Ireland.

Tel: +353 1 667 0022

Fax.: +353 1 667 0042

Hong Kong Room 604, 6/F Printing House,

6 Duddell Street, Central

Hong Kong

Tel: + 852 3521- 0352

New York 245 Park Avenue,

39th Floor,

New York, NY 10167,

United States of America.

Tel: +1 212 792 4166

Fax: +1 212 792 4167

Tokyo 12th Floor,

Yurakucho Itocia Building

2-7-1 Yurakucho, Chiyoda-ku

Tokyo 100-0006, Japan

Tel: +813 6860 4885

Fax: +813 6860 4501

e-mail: [email protected]

website: www.dilloneustace.ie

Contact Points

Author: Breeda Cunningham / Michele Barker

For more details on how we can help

you, to request copies of most recent

newsletters, briefings or articles, or

simply to be included on our mailing

list going forward, please contact any

of the team members below.

Breeda Cunningham

Regulatory and Compliance


Tel : + 353 1 6731846

Fax: + 353 1 6670042

Michele Barker

Regulatory and Compliance


Tel : + 353 1 6731886

Fax: + 353 1 6670042

Matthew Ryan Regulatory and Compliance e-mail: [email protected] Tel : + 353 1 6731716 Fax: + 353 1 6670042

DISCLAIMER:

This document is for information purposes only and

does not purport to represent legal advice. If you

have any queries or would like further information

relating to any of the above matters, please refer to

the contacts above or your usual contact in Dillon

Eustace.

Copyright Notice:

© 2012 Dillon Eustace. All rights reserved.

Corporate Governance Code

Code of Corporate Governance for Irish Funds 2012

No. Heading Corporate Governance Requirement Response Rating

4 Composition of the Board

4.5 Each member of the Board shall have sufficient time to devote to the role of director and associated responsibilities. Each Collective Investment Scheme should specify and document at the outset and, on a periodic basis, as appropriate (particularly where umbrella funds establish additional sub-funds), the time commitment it expects from each director. In specifying the time commitment, the Collective Investment Scheme should have regard to the possibility that meetings in excess of the recommended four meetings of the Board may be required from time to time to deal with items at short notice, and should ensure that a sufficient buffer is included in the designated time commitment to allow for this. The Board shall indicate the time commitment expected from directors in letters of appointment.

ACTION: Propose that this item be tabled at the May Board meeting for the Directors to discuss.

4.6

Directors are required to disclose to the Board their other time commitments, including time devoted to the role of directors of collective investment schemes domiciled in foreign jurisdictions (“Foreign CIS”) . The Board must satisfy itself that the directors have sufficient time to fully discharge their duties and in proposing to appoint directors who otherwise have fulltime jobs, the Collective Investment Scheme should be required to take fully into account the time constraints associated with the full time job (and also from other directorships held).


4.7 In the event that exceptional or extraordinary items arise during the term of a directors appointment which require directors to dedicate significant unexpected additional time to the affairs of the relevant Collective Investment Scheme, each board member shall have a duty to re-evaluate his or her aggregate time commitments and make any adjustments thereto as are necessary to ensure that the affairs of the Collective Investment Scheme receive adequate attention.


4.8 Where directorships are held outside Collective Investment Scheme there shall be a rebuttable presumption that a maximum of eight non-fund directorships may be held without impacting the Director’s time available to fulfil his or her role and functions as a director of Collective Investment Scheme Any non-fund directorships in excess of eight will be explained in the comply or explain statement as detailed in section 13.1 of the Code. For the purposes of this requirement, non-fund directorships shall not include:

i) Other directorships of entities with which the director is deemed to be affiliated i.e. group directorships;

ii) Directorships of any company, subsidiary or other non-fund entity established or promoted by a promoter of Irish and Foreign CIS, or any affiliated company of a promoter of Irish and Foreign CIS or any affiliated company of a promoter of Irish and/or Foreign CIS

iii) Directorships held in a body engaged in public interest, community or charitable purposes;

iv) Directorships to facilitate the incorporation of companies.

v) Directorships in companies not actively trading


4.11 Collective Investment Scheme shall formally review Board membership at least once every three years.

Currently the Board of Directors does not undertake a formal review each three years. ACTION: Propose that this topic is tabled at the May board meeting for discussion

5.4 The Chairman of the Board should be reviewed at least once every 3 years.

There is currently no review process in place to evaluate the Chairman. ACTION: Propose that this topic is tabled at the board meeting for discussion.

6. Independent Directors

8.2

The Board shall review the overall Board’s performance and that of individual directors annually with a formal documented review taking place at least once every three years.

The Board currently does not review the overall performance of the Board and that of individual directors annually with a formal documented review taking place at least once every three years. ACTION: Propose that this topic is tabled at the May board meeting for discussion.

13.1 Compliance

13. Where a Board adopts the Code but decides not to apply any provision of the code, it should set out its reasons why in The Directors’ Report accompanying the annual audited accounts, or alternatively publish the information through a publicly available medium (e.g. website) detailed in the annual report.

ACTION: Propose that this topic is tabled at the board meeting for discussion.

Revised Fund documentation – verbal update

Strategic US Momentum and Value Fund and Strategic USEquity Hedge Fund update

E.I STURDZA FUNDSPUBLIC LIMITED COMPANY

Directors: L. Georges Gutmans (Swiss), Marcel Kramer (Swiss),Johannes Yntema (Dutch), Gavin Farrell (British) Brian Dillon, Denise Kinsella

Registered Office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.Registered No: 461518

Country of Registration: IrelandE.I. Sturdza Funds plc is an umbrella type investment company with variable capital and segregated liability between funds

[ ], 2012

The Manager

Funds Authorisation & Supervision Division

Central Bank of Ireland

Block D, Iveagh Court

Harcourt Road

Dublin 2

Re: E.I. Sturdza Funds plc (the “Company”)

Application for Approval of Strategic US Momentum and Value Fund (the “Fund”)

Dear Sir,

We hereby apply for approval of the Fund as an additional fund of the Company which was authorised

by the Central Bank 26th

September, 2008 as an open-ended umbrella investment company pursuant

to the European Communities (Undertakings for Collective Investment in Transferable Securities)

Regulations 2011 (S.I. No. 352 of 2011), (the “Regulations”).

Pursuant to Regulation 76 of the Regulations, we apply for derogations from Regulations 70, 72 and

73 for a period of six months from the date of approval of the Fund. We confirm that the Fund will

comply with the principle of risk spreading during this period.

We hereby confirm that any investment by the Fund in non-UCITS collective investment schemes will

fall under the categories outlined in Guidance Note 2/03- Undertakings for Collective Investment in

Transferable Securities (UCITS)-Acceptable Investment in other Collective Investment Undertakings.

We further confirm that the risk management process for the Company on file with the Central Bank

applies without amendment in respect of the Fund.

The documents constituting the Fund shall be submitted to you by Messrs. Dillon Eustace.

Yours faithfully,

_______________________________

For and on behalf of

E.I. Sturdza Funds plc

Q:\Commer\NOTEPAPE.R\E\E.I. Sturdza Funds plc\Sturdza Funds plc\Application for Approval - Strategic US Momentum and

Value Fund.doc

1

SUPPLEMENT 7 DATED [ ] , 2012

to the Prospectus issued for E.I. Sturdza Funds plc dated [ ] 2012

Strategic US Momentum and Value Fund

This Supplement contains information relating specifically to the Strategic US Momentum and Value

Fund (the “Fund”), a fund of E.I. Sturdza Funds plc (the “Company”), an open-ended umbrella

investment company with segregated liability between funds authorised by the Central Bank of Ireland

(the “Central Bank”) on 26th September, 2008 as a UCITS pursuant to the UCITS Regulations. As at the

date of this Supplement the Company has six other funds, the Strategic China Panda Fund, the Strategic

Euro Bond Fund, the Nippon Growth (UCITS) Fund, the Strategic Emerging Europe Fund, the Strategic

Europe Value Fund and the Strategic Global Bond Fund, details of which are set out in the relevant

Supplements to the Prospectus.

This Supplement forms part of and should be read in the context of and in conjunction with the

Prospectus for the Company dated [ ] 2012 (the “Prospectus”).

The Directors of the Company whose names appear in the Prospectus under the heading “Management

and Administration” accept responsibility for the information contained in this Supplement and the

Prospectus. To the best of the knowledge and belief of the Directors (who have taken all reasonable care

to ensure that such is the case) the information contained in this Supplement and in the Prospectus is in

accordance with the facts and does not omit anything likely to affect the import of such information. The

Directors accept responsibility accordingly.

The Fund has no loan capital (including term loans) outstanding or created but unissued nor any

mortgages, charges, debentures or other borrowings or indebtedness in the nature of borrowings,

including bank overdrafts, liabilities under acceptances (other than normal trade bills), acceptance credits,

finance leases, hire purchase commitments, guarantees, other commitments or contingent liabilities.

Application has been made to the Irish Stock Exchange for the USD Class Shares in the Fund to be

admitted to the Official List and to trading on the Main Securities Market of the Irish Stock Exchange.

The Directors do not expect that an active secondary market will develop in the USD Class Shares. This

document, together with the Prospectus will constitute listing particulars (“Listing Particulars”) for the

purpose of listing the USD Class Shares in the Fund on the Irish Stock Exchange. It is expected that the

the USD Class Shares in the Fund will be admitted to the Official List and to trading on the Main

Securities Market of the Irish Stock Exchange on or about [ ], 2012.

Neither the admission of the USD Class Shares in the Fund to the Official List and to trading on the

Main Securities Market of the Irish Stock Exchange nor the approval of the Listing Particulars pursuant to

the listing requirements of the Irish Stock Exchange shall constitute a warranty or representation by the

Irish Stock Exchange as to the competence of the service providers to or any other party connected with

2

the Company, the adequacy of information contained in the Listing Particulars or the suitability of the

Fund for investment purposes.

The launch and listing of various classes within the Fund may take place at different times and therefore

at the time of the launch of given class(es), the pool of assets to which a given class relates may have

commenced to trade. Financial information in respect of the Fund will be published from time to time,

and the most recently published audited and unaudited financial information will be available to potential

investors upon request following publication.

Save as disclosed in this Supplement, there has been no significant change and no significant new matter

has arisen since publication of the previous full Listing Particulars.

An investment in the Fund should not constitute a substantial proportion of an investment

portfolio and may not be appropriate for all investors. Investors should read and consider the

section entitled “Risk Factors” before investing in the Fund.

The Fund may, at any one time, be significantly invested in financial derivative instruments.

UK taxpayers should read the section of the Prospectus entitled “5. Taxation”, sub-heading “UK

Taxation.”

Profile of a Typical Investor: Investment in the Fund is suitable only for those persons and institutions

for whom such investment does not represent a complete investment programme, who understand the

degree of risk involved (as detailed under the section headed “Risk Factors” in the Prospectus and

Supplement), can tolerate a medium level of volatility and believe that the investment is suitable based

upon investment objectives and financial needs. An investment in the Fund should be viewed as medium

to long term.

1. Interpretation

The expressions below shall have the following meanings:

All other defined terms used in this Supplement shall have the same meaning as in the Prospectus.

“Business Day” means any day except Saturday or Sunday or any day which is a public holiday in

Ireland, Guernsey and Switzerland or such other day or days as may be

determined by the Directors and notified in advance to Shareholders.

“Dealing Day” means each Business Day following the Valuation Point.

“Dealing Deadline” means 5.00p.m. Irish time on the Business Day preceding the relevant

Valuation Point or such other time as the Directors may determine and notify to

3

Shareholders in advance provided always that the Dealing Deadline is no later

than 4:50 p.m. (Irish time) on the Business Day of the Valuation Point.

“Initial Price” means the initial price at which Participating Shares in the USD Class will be

issued, and will be the Net Asset Value of the Strategic US Growth Fund

Limited as at 29th June 2012.

“Investment Advisor” means Banque Baring Brothers Sturdza S.A.

“Investment Advisory

Agreement” means the Investment Advisory Agreement made between the Company, the

Investment Manager and the Investment Advisor dated 8th April 2009 as

supplemented by a Side-Letter dated [ ], 2012.

“Strategic US Growth

Fund Limited” means the Strategic US Growth Fund Limited, an open ended investment

company with limited liability incorporated in Guernsey, Channel Islands with

registered number 54180 and authorised by the Guernsey Financial Services

Commission as a Class B Collective Investment Scheme pursuant to the

Protection of Investors (Bailiwick of Guernsey) Law, 1987.

“Valuation Point” means 5.00pm (Irish Time) on each Business Day.

2. Classes of Units

Class Currency of Denomination

USD Class USD

3. Base Currency

The Base Currency shall be USD.

4. Investment Objective

The investment objective of the Fund is to achieve long-term capital appreciation in the value of assets.

5. Investment Policy

In order to achieve its investment objective the Fund will invest primarily in equities and equity related

instruments (including but not limited to common stock and other securities with equity characteristics,

such as preferred stocks) all of which shall be listed or traded on a Recognised Exchange. While the

primary focus of the Fund shall be in relation to such equities or equity related instruments which relate to

4

companies incorporated or whose principal operations are based in the United States of America,

depending upon prevailing market factors the Fund may also invest in the instruments described above

on a global basis to a maximum of 20% of Net Asset Value of the Fund.

It is not intended that the Fund will invest more than 10% of its Net Asset Value in emerging markets.

There are no sectoral restrictions on the Fund’s investments.

The portfolio investments shall be selected from a "bottom-up" stock selection process of companies that

the Investment Advisor believes to be fundamentally undervalued. The investment approach utilised by

the Investment Advisor will be highly selective, focusing on identifying companies with historical value

characteristics identified through fundamental analysis combined with a focus on momentum relative to

its peers and the S&P 500 Index. The Investment Advisor expects that the portfolio exposure will

normally be concentrated in around 25-35 positions.

The Fund may invest in exchange traded derivatives such as futures, options, warrants, equity and interest

rate swaps as detailed under the section headed ‘“Efficient Portfolio Management” and “Financial

Derivative Instruments” for investment purposes, efficient portfolio management purposes, to indirectly

gain exposure to underlying equity securities where the Investment Advisor feels it is more efficient to do

so, or hedging purposes in accordance with the requirements of the Central Bank. Forward foreign

exchange contracts may be used to hedge the value of the portfolio investments in the Fund against

changes in the exchange rate between the currency of denomination of the portfolio investments and the

Base Currency of the Fund. The Fund will not be leveraged through the use of financial derivative

instruments.

The Fund may invest in ETFs for the purpose of gaining indirect exposure to the equity securities

comprised in the indices tracked by the ETFs in which the Fund may invest. It is intended that the ETFs

in which the Fund may invest will be listed on a Recognised Exchange, and will be denominated in US

Dollars or have exposure to, US Dollar denominated equity securities. The Fund may invest up to 10%

of its net assets in ETFs.

Whilst it is the intention that the Fund be fully invested as described above, the Investment Advisor

retains the flexibility to invest substantially in cash and/or money market or short-dated instruments, to

include but not limited to, fixed and/or floating rate short-term government/supranational bonds with

strong credit ratings of A+ or better and issued or backed by one or more EU member states, the United

States or Switzerland, in circumstances where the Investment Advisor considers it to be in the best

interest of the Fund to do so.

The Fund’s portfolio will be balanced according to the Investment Advisor’s assessment of investment

prospects based on analysis of the relative and historical value characteristics and the relative momentum

of price performance but may, depending upon underlying investment conditions, emphasise investment

in securities that operate in one industry or sector of the economy that, in the Investment Advisor’s

opinion, provide the determinants or opportunities to meet the investment objective. It is not the

5

intention of the Investment Advisor to manage the industry or sector allocation of the Fund’s portfolio to

replicate the construction of the benchmark index.

6. Risk Management Process

The Company will employ a risk management process based on the commitment approach which will

enable it to accurately monitor, measure and manage the risks attached to financial derivative positions

and details of this process have been provided to the Central Bank. The Company will not utilise

financial derivatives which have not been included in the risk management process until such time as a

revised risk management process has been submitted to and cleared by the Central Bank. The Company

will provide on request to Shareholders supplementary information relating to the risk management

methods employed by the Company including the quantitative limits that are applied and any recent

developments in the risk and yield characteristics of the main categories of investments.

7. Offer

Shares in the Fund will initially be issued to holders of shares in Strategic US Growth Fund Limited at the

Initial Price, in exchange for an in specie transfer of assets from Strategic US Growth Fund Limited to the

Fund, scheduled to take place on [29th June] , 2012 subject to the approval of shareholders in the Strategic

US Growth Fund Limited (hereinafter, the “in-specie transfer”).

In accordance with the provisions of Article 9.03 of the Memorandum and Articles of Association of the

Company, the Company may accept in specie applications for Shares provided that the nature of the

assets to be transferred into the Fund qualify as investments of the Fund in accordance with its

investment objectives, policies and restrictions. Assets so transferred shall be vested with the Custodian or

arrangements shall be made to vest the assets with the Custodian. The number of Shares to be issued shall

not exceed the amount that would be issued for the cash equivalent. The Custodian shall be satisfied that

the terms of any exchange will not be such as are likely to result in any prejudice to the existing

shareholders of the Fund.

Subject to the in specie transfer of assets having taken place, Shares will be available to investors at the

Net Asset Value per Share on the relevant Dealing Day immediately following the date of the in-specie

transfer.

Shares in the Fund will be valued in accordance with the valuation provisions set out in the Prospectus

under the section headed “Net Asset Value and Valuation of Assets”.

8. Minimum Subscription, Minimum Holding and Minimum Transaction Size

Each investor in the USD Class must subscribe a minimum of USD 5,000 and must retain Shares having

a Net Asset Value of USD 5,000. A Shareholder may make subsequent subscriptions, conversions and

redemptions in the USD Class, each subject to a Minimum Transaction Size of USD 5,000.

6

The Directors reserve the right to waive or reduce the Minimum Subscription, Minimum Holding and

Minimum Transaction Size for a Class at their discretion.

9. Application, Redemption and Conversion via an Electronic Dealing Provider

Where an electronic dealing provider is used by an investor to invest in the Shares of any Class, or such

investor holds interests in Shares of any Class through accounts with an electronic dealing provider, such

investor will only receive payments in respect of redemption and / or any dividends attributable to the

Shares on the basis of the arrangements entered into by the investor with the electronic dealing provider.

Furthermore, any such investor will not appear on the register of Shareholders, will have no direct right of

recourse against the Fund and must look exclusively to the electronic dealing provider for all payments

attributable to the relevant Shares. The Company will recognise as Shareholders only those persons who

are at any time shown on the register of Shareholders for the purposes of: (i) the payment of dividends

and other payments due to be made to Shareholders (as applicable); (ii) the circulation of documents to

Shareholders; (iii) the attendance and voting by Shareholders at any meetings of Shareholders; and (iv) all

other rights of Shareholders attributable to the Shares. None of the Company, the Investment Manager,

the Investment Advisor, the Administrator, the Custodian or any other person will be responsible for the

acts or omissions of the electronic dealing provider, nor make any representation or warranty, express or

implied, as to the services provided by the electronic dealing provider.

10. Application for Shares

Applications for Shares may be made through the Administrator (whose details are set out in the

Application Form). Applications accepted and received by the Administrator prior to the Dealing

Deadline for any Dealing Day will be processed on that Dealing Day. Any applications received after the

Dealing Deadline for a particular Dealing Day will be processed on the following Dealing Day unless the

Directors in their absolute discretion otherwise determine to accept one or more applications received

after the Dealing Deadline for processing on that Dealing Day provided that such application(s) have

been received prior to the Valuation Point for the particular Dealing Day. Applications received after the

Dealing Deadline but prior to the Valuation Point will only be accepted in exceptional circumstances, as

determined and agreed by the Directors, and having regard to the equitable treatment of Shareholders.

Initial applications should be made using an Application Form obtained from the Administrator or the

Distributor but may, if the Company so determines, be made by telefax subject to prompt transmission to

the Administrator of the original signed Application Form and such other papers (such as documentation

relating to money laundering prevention checks) as may be required by the Administrator. No

redemptions will be paid until the original Application Form and such other papers as may be required by

the Administrator have been received and all anti-money laundering procedures have been completed.

Subsequent applications to purchase Shares following the initial subscription may be made to the

Administrator by telefax or electronically (in such format or method as shall be agreed in writing in

advance with the Administrator and subject to and in accordance with the requirements of the

7

Administrator and the Central Bank) or such other means as may be permitted by the Directors and

agreed with the Administrator in accordance with the requirements of the Central Bank, without a

requirement to submit original documentation and such applications should contain such information as

may be specified from time to time by the Administrator. Amendments to a Shareholder’s registration

details and payment instructions will only be made following receipt of original written instructions from

the relevant Shareholder.

Shareholders will be subject to a maximum sales commission of up to 2% of the subscription amount.

Such commission will be charged as a preliminary once off charge, payable to the Distributor upon

subscription. The Distributor may, in its sole discretion, waive or reduce, in whole or in part, any such

sales commission.

Fractions

Subscription monies representing less than the subscription price for a Share will not be returned to the

investor. Fractions of Shares will be issued where any part of the subscription monies for Shares

represents less than the subscription price for one Share, provided however, that fractions shall not be

less than 0.001 of a Share.

Subscription monies, representing less than 0.001 of a Share will not be returned to the investor but will

be retained by the Company in order to defray administration costs.

Method of Payment

Save in respect of the in-specie transfer, Subscription payments net of all bank charges should be paid by

CHAPS, SWIFT or telegraphic or electronic transfer to the bank account specified in the Application

Form enclosed with this Prospectus. No interest will be paid in respect of payments received in

circumstances where the application is held over until a subsequent Dealing Day.

Currency of Payment

Subscription monies are payable in US Dollars. The Company will not accept applications for Shares in

currencies other than US Dollars.

Timing of Payment

Subscriptions must be received in cleared funds by the Administrator no later than three Business Days

following the relevant Dealing Day. The Company reserves the right to defer the issue of Shares until

receipt of cleared subscription monies by the Fund. If Shares are issued and if payment in cleared funds

in respect of a subscription has not been received by the relevant time, the Company or its delegate may

defer the acceptance of the application until the subsequent Dealing Day provided that cleared funds are

8

received no later than three Business Days following the subsequent Dealing Day or cancel the allotment

and the cost of cancellation shall be borne by the relevant investor.

11. Confirmation of Ownership

Confirmation of each purchase of Shares will normally be sent to Shareholders within two Business Days

of the relevant Dealing Day. Title to Shares will be evidenced by the entering of the investor’s name on

the Company’s register of Shareholders and no certificates will be issued.

12. Redemption of Shares

Requests for the redemption of Shares should be made to the Administrator whose details are set out in

the Application Form by facsimile, written communication, electronically (in such format or method as

shall be agreed in writing in advance with the Administrator and subject to and in accordance with the

requirements of the Administrator and the Central Bank) or such other means as may be permitted by the

Directors, and agreed with the Administrator in accordance with the requirements of the Central Bank,

and should include such information as may be specified from time to time by the Directors or their

delegate. Requests for redemption received prior to the Dealing Deadline for any Dealing Day will be

processed on that Dealing Day. Any requests for redemption received after the Dealing Deadline for a

Dealing Day will be processed on the next Dealing Day unless the Directors in their absolute discretion

determine otherwise, provided that such request has been received prior to the Valuation Point for the

relevant Dealing Day. Redemption requests received after the Dealing Deadline but prior to the

Valuation Point will only be accepted in exceptional circumstances, as determined and agreed by the

Directors, and having regard to the equitable treatment of Shareholders.

No redemption payment will be made from an investor holding until the original subscription Application

Form and all documentation required by or on behalf of the Administrator (including any documents in

connection with anti-money laundering procedures) has been received from the investor and the anti-

money laundering procedures have been completed. Subject to satisfaction of all of the requirements of

the Administrator (including but not limited to receipt of the original Application Form and all

documentation required by the Administrator for anti-money laundering purposes) the original

redemption request may not be required prior to payment of redemption proceeds.

The minimum value of Shares which a Shareholder may redeem in any one redemption transaction is the

Minimum Transaction Size specified above. In the event of a Shareholder requesting a redemption which

would, if carried out, leave the Shareholder holding Shares having a Net Asset Value less than the

Minimum Holding, the Company may, if it thinks fit, redeem the whole of the Shareholder's holding.

The redemption price per Share shall be the Net Asset Value per Share. It is not the current intention of

the Directors to charge a redemption fee. However, the Directors are empowered to charge a redemption

fee of up to 3% of the Net Asset Value per Share. The Directors will give not less than one month's

notice to Shareholders of their intention to introduce a redemption fee generally. In the event of a

9

redemption fee being charged, Shareholders should view their investment as medium to long

term.

Method of Payment

Redemption payments will be made to the bank account detailed on the Application Form or as

subsequently notified to the Administrator in writing. Redemption payments following processing of

instructions received by telefax will only be made to the account of record of a Shareholder.

Currency of Payment

Shareholders will normally be repaid in US Dollars. If however, a Shareholder requests to be repaid in any

other freely convertible currency, the necessary foreign exchange transaction may be arranged by the

Administrator (at its discretion) on behalf of and for the account, risk and expense of the Shareholder.

Timing of Payment

Redemption proceeds in respect of Shares will normally be paid within four Business Days of the relevant

Dealing Day (and in any event should not exceed ten Business Days from the relevant Dealing Deadline)

provided that all the required documentation has been furnished to and received by the Administrator.

Withdrawal of Redemption Requests

Requests for redemption may not be withdrawn save with the written consent of the Company or its

authorised agent or in the event of suspension of calculation of the Net Asset Value of the Fund.

Compulsory/Total Redemption

Shares of the Fund may be compulsorily redeemed and all the Shares may be redeemed in the

circumstances described in the Prospectus under the sub-headings “Compulsory Redemption of Shares”

and “Total Redemption of Shares”.

13. Conversion of Shares

10

Subject to the Minimum Subscription, Minimum Holding and minimum transaction requirements of the

relevant Fund or Classes, Shareholders may request conversion of some or all of their Shares in one Fund

or Class to Shares in another Fund or Class or another Class in the same Fund in accordance with the

procedures specified in the Prospectus under the heading “Conversion of Shares”. Requests for

conversion of Shares should be made to the Administrator by facsimile, written communication,

electronically (in such format or method as shall be agreed in writing in advance with the Administrator

and subject to and in accordance with the requirements of the Administrator and the Central Bank) or

such other means as may be permitted by the Directors and should include such information as may be

specified from time to time by the Administrator.

14. Dividend Policy

It is not the current intention of the Directors that dividends be recommended for payment to

Shareholders in the Fund.

15. Suspension of Dealing

Shares may not be issued, redeemed or converted during any period when the calculation of the Net Asset

Value of the relevant Fund is suspended in the manner described in the Prospectus under the heading

“Suspension of Valuation of Assets”. Applicants for Shares and Shareholders requesting redemption

and/or conversion of Shares will be notified of such suspension and, unless withdrawn, applications for

Shares will be considered and requests for redemption and/or conversion will be processed as at the next

Dealing Day following the ending of such suspension.

16. Investment Advisor

The Investment Manager has elected, and the Company has consented, to the appointment of Banque

Baring Brothers Sturdza S.A., with registered address at 112 Rue du Rhone, C.P. 3024, 1211 Geneva 3,

Switzerland, as an investment advisor to the Fund to provide investment advice and discretionary

investment management services pursuant to the Investment Advisory Agreement.

Each of the Investment Manager and the Investment Advisor shall be entitled to terminate the

Investment Advisory Agreement (a) by giving to the other not less than 3 months’ notice in writing

expiring at any time and (b) forthwith, by notice in writing given by either of them to the other, if the

other party shall commit any breach of the provisions of this agreement and shall not have remedied such

breach within 30 days after being required to do so by notice in writing given by the first party. The

Investment Advisory Agreement shall be automatically terminated if (a) the Investment Manager shall

resign its appointment under the Investment Management Agreement; or (b) the appointment of the

Investment Manager shall otherwise be terminated in accordance with the provisions of the Investment

Management Agreement.

In the absence of negligence, fraud, bad faith or wilful default on the part of the Investment Advisor, the

11

Investment Advisor shall not be liable to the Investment Manager for any loss suffered as a result of any

act or omission in the course of, or connected with, rendering services under the Investment Advisory

Agreement and shall not be liable in any circumstances for indirect, special or consequential loss or

damage. The Investment Advisor shall hold harmless the Investment Manager, its employees, delegates or

agents from and against all actions, proceedings, claims, damages, costs, demands and expenses including

without limitation, legal and professional expenses on a full indemnity basis which arise due to the

negligence, fraud or willful default on the part of Investment Advisor, its employees, delegates or agents

in the performance of its obligations under the Investment Advisory Agreement.

17. Fees and Expenses

The fees and operating expenses of the Company are set out in detail under the heading “Fees and

Expenses” in the Prospectus.

Establishment Costs

The establishment costs of the Fund which are not expected to exceed Euro 25,000 will be amortised

over the first calendar year after the close of the Initial Offer Period for the Fund or such other period as

the Directors may determine and in such manner as the Directors in their absolute discretion deem fair.

Administrator’s Fees

The Company shall pay to the Administrator out of the assets of the Fund an annual fee, accrued at each

Valuation Point and payable monthly in arrears at the following rates:

a maximum of 0.125% per annum of the Net Asset of the Fund on the portion of the Net Asset

Value up to Euro 350 million.

a maximum of 0.075% per annum of the Net Asset of the Fund on the portion of the Net Asset

Value in excess of Euro 350 million.

subject to a minimum annual fee of Euro 48,000 borne by the Fund (plus VAT, if any thereon).

In respect of its financial accounting services the Administrator is entitled to a minimum fee of Euro

5,000 per set of financial statements prepared for the Company, such expense is apportioned across the

sub-funds of the Company. The actual expenses payable will be disclosed in the annual report of the

Company and will be at normal commercial rates.

In respect of UCITS reporting the Administrator is also entitled to a flat fee of Euro 3,000 per annum for

the Fund.

12

The Administrator is also entitled to transaction fees in respect of shareholder, dealing and registration

services at a rate of Euro 50 per transaction including subscription, redemption, transfer and conversions.

The Administrator shall also be entitled to be repaid out of the assets of the Fund all of its reasonable out-

of-pocket expenses incurred on behalf of the Fund which shall include legal fees, couriers’ fees and

telecommunication costs and expenses together with VAT, if any, thereon, subject to a minimum of Euro

300 per month.

In addition, the Administrator is entitled to receive a flat fee of Euro 7,000 in the event of termination of

the Fund as well as an additional fee up to a maximum of Euro 5,000 in the event of a reorganisation of

the Fund.

Custodian’s Fees

The Custodian shall be entitled to receive out of the assets of the Fund an annual fee, accrued at each

Valuation Point and payable monthly in arrears, which shall not exceed 0.05% per annum of the Net

Asset Value of each Fund subject to a minimum annual fee of Euro 24,000 (plus VAT, if any) thereon.

The Custodian shall also be entitled to be repaid all of its disbursements out of the assets of the relevant

Fund, including legal fees, couriers’ fees, transaction charges and telecommunication costs and expenses

and the fees, transaction charges and expenses of any sub-custodian appointed by it which shall be at

normal commercial rates together with VAT, if any, thereon.

Investment Manager Fees

The Company shall pay the Investment Manager out of the assets of the Fund an annual fee accrued at

each Valuation Point and payable monthly in arrears at a rate not exceeding 1.5% per annum of the Net

Asset Value (before deduction of fees) of the Fund.

In addition, the Investment Manager shall be entitled to a performance related fee (“Performance Fee”) ,

which will be taken into account at each Valuation Point in the calculation of the Net Asset Value of the

Fund and which will be paid out of the assets of the Fund semi-annually in arrears on each of 30 June and

31 December (each a "Crystallisation Date") commencing on 31 December 2012, equal to 15 per cent of

the relative outperformance, if any, of the Net Asset Value per Share (before deducting the amount of any

accrued liability for a Performance Fee) over the S&P500 Index (the “Benchmark”). Appropriate

adjustments will be made to account for subscriptions and redemptions during each Accounting Period.

The Performance Fee is equal to 15 per cent of any relative outperformance in the Net Asset Value of

each Share over the Benchmark, provided that the Performance Fee will only become payable if the

relative outperformance of the Fund over the Benchmark at the end of the relevant six monthly

accounting period (before any accrual in Performance Fee) is greater than the relative outperformance of

the Fund over the Benchmark as at the start of any previous six monthly accounting period in relation to

13

those Shares in issue at the immediately preceding Crystallisation Date.

The Performance Fee will be calculated using the relative “high water mark” methodology which means

that no further fee will be accrued until the relative outperformance of the Fund over the Benchmark has

exceeded the relative outperformance of the Fund over the Benchmark as at the immediately preceding

Crystallisation Date for those Shares already in issue at the immediately preceding Crystallisation Date.

For those Shares issued subsequent to the last Crystallisation Date, the performance fee will be calculated

with reference to the relative outperformance of the Fund over the Benchmark for the period subsequent

to the issue of the Share and not in relation to the previous accounting periods.

In the event that the Fund produces a return that represents a relative underperformance in relation to the

Benchmark, no Performance Fee will be accrued in respect of those Shares that have realised this relative

underperformance. Further, no additional Performance Fee will be accrued in respect of these Shares

until these Shares have fully recovered both the relative underperformance of the Fund in relation to the

Benchmark and also reached the level of relative outperformance (if any) at the Crystallisation Date at

which the Performance Fee was previously paid out of the Fund. It is the intention therefore that each

Share will only accrue a Performance Fee in respect of any relative outperformance of the Fund over the

Benchmark in relation to that Share on one occasion, and that where Fund performance improves the

relative outperformance over the Benchmark to recover a previously attained relative outperformance,

such performance will not be subject to the accrual of the Performance Fee until the relative high

watermark has been exceeded in respect of that Share. Once any relative underperformance of the Fund

in relation to the Benchmark has been recovered, together with any additional performance required to

reach the highest level of outperformance recorded at any Crystallisation Date, the Share will be subject to

the accrual of a Performance Fee provided that the performance of the Share continues to outperform the

Benchmark on a relative basis.

The Performance Fee shall be calculated at each Valuation Point and shall crystallise and be payable six

monthly in arrears. The Performance Fee will be calculated on a Share by Share basis with reference to the

Crystallisation Date at which the Performance Fee was last paid out of the Fund in respect of that Share,

or the date of issue of the Share if subsequent to any Crystallisation Date.

For the avoidance of doubt, the total Performance Fee shall be paid from the Fund upon the

Crystallisation Date in the event of negative performance by the Fund, provided that the Fund has

outperformed the Benchmark and increased the relative outperformance of the Fund over the Benchmark

in relation to the previous Crystallisation Date based on the above high watermark methodology.

The Initial Price at the date of launch shall be taken as the starting price for the first Performance Fee

payable.

The performance fee will be calculated by the Administrator and verified by the Custodian.

Where a performance fee is payable out of the Fund it shall be calculated upon the Net Asset Value per

14

Share during an Accounting Period. Net realised and unrealised capital gains and net realised and

unrealised capital losses will be included in the Performance Fee calculation as at the end of the Period.

As a result a Performance Fee may be paid on unrealised gains which may subsequently never be realised.

Investment Advisor Fees

All fees payable to any appointed Investment Advisor (to include reasonable out-of-pocket expenses)

shall be paid by the Investment Manager out of the remuneration it receives pursuant to the terms of the

Investment Management Agreement.

Distributor

Shareholders will be subject to a maximum sales commission of up to 3% of the subscription amount.

Such commission will be charged as a preliminary once off charge, payable to the Distributor upon

subscription. The Distributor may, in its sole discretion, waive or reduce, in whole or in part, any such

sales commission.

18. Risk Factors

The attention of investors is drawn to the “Risk Factors” section in the Section of the Prospectus entitled

(the “Company”). In addition, the following Risk Factors are specific to the Fund:

Investment in Equity and Equity-Related Securities

The Fund may invest in equity and equity-related securities traded on recognised stock exchanges. Equity

securities will be subject to risks associated with such investments, including fluctuations in market prices,

adverse issuer or market information and the fact that equity and equity-related interests are subordinate

in the right of payment to other corporate securities, including debt securities. The value of these

securities varies with the performance of the respective issuers and movements in the equity markets

generally. As a result, the Fund may suffer losses if it invests in equity securities of issuers where

performance falls below market expectations or if equity markets in general decline or the Fund has not

hedged against such a general decline. Futures and options on futures on equity securities and indices are

subject to all the foregoing risks, in addition to the risks particularly associated with futures and derivative

contracts.

Investors in the Fund must recognize that, due to the inherent characteristics of equity markets, the value

of their investment can go down as well as up, and that they may not receive back the monies originally

invested. The Fund intends to invest primarily in US markets and, therefore, there is a risk to investors by

reason that the Company is exposed to one particular economic region. In addition, the liquidity in

markets can vary and it may not always be possible for the Fund to disinvest or invest in any particular

market. A proportion of the Fund’s assets may from time to time be held in foreign currencies and

therefore at times may be affected by fluctuations of currency markets.

15

Concentration of Investments

If the Fund invests up to the maximum permitted under the investment restrictions described in

Appendix I of the Prospectus in the securities of single issuers and / or in economic sectors this

concentration and lack of diversification relative to the capital of the Fund could mean that a loss in any

one such position or a downturn in a sector in which the Fund is invested could materially reduce the

Fund’s performance. Thus, any substantial investment by the Fund relative to overall assets in the

securities of a single issuer or the concentration of the Fund’s investments in a particular industry may

increase the level of risk associated with an investment in the Fund.

Investment in Cash and Money Market Instruments

The Fund may invest substantially in deposits with credit institutions and/or in money market

instruments. An investment in the Fund is neither insured nor guaranteed by any government,

government agencies or instrumentalities or any bank guarantee fund. Shares of the Fund are not deposits

or obligations of, or guaranteed or endorsed by, any bank and the amount invested in Shares may

fluctuate up and/or down.

19. Additional Investment Restrictions

Notwithstanding Point 3.1 of Appendix I – Investment Restrictions in the Prospectus, the Fund may not

invest more than 10% of its net assets in aggregate in other collective investment schemes, as outlined in

the section entitled ‘Investment Policy’

20. General

Copies of the following document, which is available for information only and does not form part of this

document, may be inspected at the registered office of the Company in Ireland during normal business

hours on any Business Day or at the offices of the Listing Sponsor for a period of at least 14 days from

the date of this Supplement:-

i) A list of the directorships and partnerships which the Directors of the Company have held in the

last 5 years together with an indication as to whether they are still directors or partners.

Q:\Commer\Supplem.nts\E\Strategic US Momentum and Value Fund\Strategic US Momentum andValue Fund Supplement D4.docx

Strategic US Growth Fund

2012 Q1 Update

Notable refinements to the original process (see Process - Version May 2012 attached)

Momentum and Value, which was always the underlying theme is now a keydefinition of the process.

Less reliance on the USD 1 billion market cap filter. While we continue to monitorthe liquidity, we like to see the overall portfolio liquidity instead of focus on eachposition, so exceptionally we will invest in stocks that fall below that marketcapitalization.

As the Fund grows we have been adding more names that meet our criteria, which hasincreased the list to upto 30 names. This specific limitation has been relaxed, andturned into a range of between 25 and 35 stocks.

We continue to target Equal weighting, but have introduced a two tier system. Afull weighting or a half weighting depending on a “target-return-vs-risk” definedagainst the same key filters. For instance, factors such as proximity to earnings season,liquidity, valuation levels, proximity to all-time highs etc may cause us to add thestock but as a half weighting. This not only adds diversification, but also gives us achance to cost-average as we take on a full weighting.

We have also started using options to participate in stocks where we believe theexpectations may be high, but also believe that the potential could be higher. AroundEarnings season, these situations fall into a “win or lose” pattern, which we try tomitigate by our use of options – preferably by selling our positions in stocks where wehave made substantial gains and re-investing a fraction of those gains to buy out-of-the-money calls.

An additional use of options is to sell a call instead of placing a limit order at ourtarget price, to effectively reduce our cost price. Used regularly, this can add a smallbut consistent stream of returns.

S&P 500 Futures/ETF’s were added to our list of securities to enable us to takeovernight/temporary market exposure specially to deal with large subscriptions.

For the four months ended April 30th 2012

During the first three months of the year the portfolio performed rationally – atleast as seen byus! The markets differentiated somewhat between quality stable businesses – secular anddefensive names with a strong growth profile – and the cyclically oriented businesses withvolatile/sensitive underlying fundamentals. However the currently ongoing earnings seasonwhiplash has seen significant positive earnings surprises coming from economically sensitivestocks – which has shaved off a significant chunk of the Fund’s YTD out-performance.While the Fund still leads its benchmark, this month’s review provides us with a chance to re-iterate crucial parts of our process.

For the current portfolio, the last quarter delivered a 8% growth in earnings per sharecompared to 7% for the S&P500 (on a TTM basis). This metric 12 months ago for the samequarter (for the current Portfolio) was 7% vs. 4% for the S&P500. When we look at thelonger term 10 year trend we see that the underlying earnings growth differential is even morestark, with a 22% p.a EPS growth for the current portfolio which compared to 9% p.a for theS&P 500 companies in aggregate.

Clearly, as the US Economy recovers, the businesses sensitive to that would also recover, butthe goal of our portfolio is rather to catch the longer term secular trend of consistentgrowth outperformance. As such, the myopia of the current markets suits our long termvision quite well.

Portfolio Key Characteristics

Portfolio Overview

Detailed Investment Process – Version May 2012

Stock Selection

The aim is to find good (top line growth) sustainable businesses, with a unique selling point which translatesinto pricing power (margin expansion). Over a business cycle, these companies will deliver more growth on thebottom line compared to the average S&P 500 business. Over a full market cycle these stocks in aggregate willoutperform the S&P 500 Index.

Trends and Relative Performance analyzed Long Term Revenue and EPS Trend for strong growth several years in a row. Long Term Relative Performance against S&P to pick stocks that consistently outperform the index. Price responsiveness to EPS (also see PE trend) as an indicator of other extraneous discounting factors

that the market may have priced in.

Objective Fundamental factors analyzed Compare current P/E to general market, historical trend and peer group Is the stock cheap relative to growth?

PEG Ratio: Ratio of Price to Earnings Divided by the Long Term Growth forecast (3-5 years),When this ratio is below 1 (depending on how the formula is setup) the stock can be considered cheapand above 2 it is considered expensive. Several variations for PE and long term growth (historical vs.forward looking) can be used for this purpose and will have differing efficient ranges

How healthy is the company? If a company has too much debt it would effect future growth. Onthe other hand a high cash balance could mean an inefficient use of balance sheetEV/EBITDA Ratio, Net Debt/Equity and Net Debt/Market

Compare Price to Book Ratio to general market, historical range and peer groupPrice/Book Ratio 5 year Trend: Ratio of Price at end of Year to Book Value (also called ShareholdersEquity)

Efficiency of the companyROIC, RoA and RoE metrics

Barriers to entry, ability to pass costs to customers, sensitive to supply shocks?o Margins at the operating and EBITDA levels

Expectation of Earnings growth to continue?Compare Average Analyst Estimated EPS growth rate vs historical trend and peer group

Avoid Stocks that have too many buy ratingso Sell Side Analyst Buy recommendations provide a signal as a reverse indicator when it

operates out of a certain defined rangeThe higher this ratio the more the “news” is priced in

Portfolio Construction Weighted on a full position or half position basis as explained above No more than 10% in same stock Screened for diversification by exposure to same industry and cyclicailty (secular high growth vs

defensive stable growth vs counter cyclical) Cash upto 10%, used more as an opportunistic tool to pick up new names

Ongoing Monitoring, Rebalancing and Sell PoliciesEarnings Season ReviewAt regular intervals (generally coinciding with quarterly earnings season)

Switch out of stocks that significantly under-deliver on EPS, EBITDA and/or Revenue GrowthWhen compared to, peer group and own historical trend.

A list of potential replacements will be available which follow the original stock selection methodology – whichcan be refreshed and used in these instances.

RebalancingStocks that have already moved up significantly

compared to the rest of the portfolio as well as when measured against its fundamental data trend,

will be cut to it’s a fully or half weighted position as the case may be, with the proceeds from this invested in stocks with an underperforming share price when measured

against its fundamental data trend.This rebalancing would normally follow at the time of a full portfolio earnings review.

Ad-HocNews alerts for the portfolio will be monitored closely, and will be acted upon (usually replaced if there is adoubt) if there is significant challenge to the sustainability of the business. For example from regulatory policychanges, natural phenomenon, and other exogenous events.

Portfolio ConstraintsMaintain UCITS IV restrictions to enable a smooth transition in the future, when the time is right.

Detailed Investment Process – Version May 2012

Stock Selection

The aim is to find good (top line growth) sustainable businesses, with a unique selling pointwhich translates into pricing power (margin expansion). Over a business cycle, thesecompanies will deliver more growth on the bottom line compared to the average S&P 500business. Over a full market cycle these stocks in aggregate will outperform the S&P 500Index.

Trends and Relative Performance analyzed Long Term Revenue and EPS Trend for strong growth several years in a row. Long Term Relative Performance against S&P to pick stocks that consistently

outperform the index. Price responsiveness to EPS (also see PE trend) as an indicator of other extraneous

discounting factors that the market may have priced in.

Objective Fundamental factors analyzed Compare current P/E to general market, historical trend and peer group Is the stock cheap relative to growth?

PEG Ratio: Ratio of Price to Earnings Divided by the Long Term Growth forecast (3-5 years),When this ratio is below 1 (depending on how the formula is setup) the stock can beconsidered cheap and above 2 it is considered expensive. Several variations for PEand long term growth (historical vs. forward looking) can be used for this purpose andwill have differing efficient ranges

How healthy is the company? If a company has too much debt it would effectfuture growth. On the other hand a high cash balance could mean an inefficientuse of balance sheetEV/EBITDA Ratio, Net Debt/Equity and Net Debt/Market

Compare Price to Book Ratio to general market, historical range and peer groupPrice/Book Ratio 5 year Trend: Ratio of Price at end of Year to Book Value (alsocalled Shareholders Equity)

Efficiency of the companyROIC, RoA and RoE metrics

Barriers to entry, ability to pass costs to customers, sensitive to supply shocks?o Margins at the operating and EBITDA levels

Expectation of Earnings growth to continue?Compare Average Analyst Estimated EPS growth rate vs historical trend and peergroup

Avoid Stocks that have too many buy ratingso Sell Side Analyst Buy recommendations provide a signal as a reverse indicator

when it operates out of a certain defined rangeThe higher this ratio the more the “news” is priced in

Portfolio Construction Weighted on a full position or half position basis as explained above

No more than 10% in same stock Screened for diversification by exposure to same industry and cyclicailty (secular high

growth vs defensive stable growth vs counter cyclical) Cash upto 10%, used more as an opportunistic tool to pick up new names

Ongoing Monitoring, Rebalancing and Sell PoliciesEarnings Season ReviewAt regular intervals (generally coinciding with quarterly earnings season)

Switch out of stocks that significantly under-deliver on EPS, EBITDA and/or Revenue GrowthWhen compared to, peer group and own historical trend.

A list of potential replacements will be available which follow the original stock selectionmethodology – which can be refreshed and used in these instances.

RebalancingStocks that have already moved up significantly

compared to the rest of the portfolio as well as when measured against its fundamental data trend,

will be cut to it’s a fully or half weighted position as the case may be, with the proceeds from this invested in stocks with an underperforming share price

when measured against its fundamental data trend.This rebalancing would normally follow at the time of a full portfolio earnings review.

Ad-HocNews alerts for the portfolio will be monitored closely, and will be acted upon (usuallyreplaced if there is a doubt) if there is significant challenge to the sustainability of thebusiness. For example from regulatory policy changes, natural phenomenon, and otherexogenous events.

Portfolio ConstraintsMaintain UCITS IV restrictions to enable a smooth transition in the future, when the time isright.

Central Bank of Ireland Correspondence

From: Abi ADELAJA/AMIE/HSBC To: [email protected] Date: 30/04/2012 11:52 Subject: Financial Sanctions Alerts Response - In accordance with regulations. No funds or economic resources

with said parties. [7D05A40C] Dear Sir/Madam, HSBC Securities Services (Ireland) Limited ("HSSI") acts as administrator to E.I. Sturdza Funds plc (C50636) (the "Fund"). On the behalf of the Fund, HSSI have undertaken an examination of the share register of the Fund and confirm that: 1. there are no funds or economic resources in the name of any natural or legal person, group or entity

currently the subject of EU restrictive measures following the examination of the Fund's share register; 2. there are no funds and economic resources belonging to, or owned or held by such persons frozen by

HSSI; 3. there are no names to report; 4. HSSI will continue to exercise continuous vigilance over any account activity with Iranian and North Korean

credit or financial institutions. I trust the above is satisfactory however if you require additional information, please do not hesitate to contact me. Kind Regards, Abi ADELAJA Compliance | HSBC Securities Services (Ireland) Limited 1 Grand Canal Square Grand Canal Harbour, Dublin 2, Ireland. ____________________________________________________

Phone 00353 1 635 6292 / Midnet: 71 353 6292 Email [email protected] ____________________________________________________ Protect our environment - please only print this if you really have to!

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Related Party Transactions

Account Name Fund - Transaction Type Valuation

Point Currency

Sub/Red amount

No. of shares

Banque Baring Brothers Sturdza S.A. NGUF - Red JPY Class A 04/01/2012 JPY 1,391,769.00 27.000









Banque Baring Brothers Sturdza S.A. NGUF - Red JPY Class B 04/01/2012 JPY 5,364,492.00 123.438




Banque Baring Brothers Sturdza S.A. NGUF - Red JPY Class B 13/03/2012 JPY 311,297.00 6.166

Banque Baring Brothers Sturdza S.A. NGUF - Red JPY Class B 03/04/2012 JPY 917,838.00 18.000



Banque Baring Brothers Sturdza S.A. NGUF - Sub JPY Class B 24/01/2012 JPY 691,500.00 14.947

Banque Baring Brothers Sturdza S.A. NGUF - Sub JPY Class B 21/02/2012 JPY 151,421,177.00 3,095.091

Banque Baring Brothers Sturdza S.A. NGUF - Sub JPY Class B 27/03/2012 JPY 10,550,000.00 199.617



Banque Baring Brothers Sturdza S.A. NGUF - Tfr Out JPY Class A 24/04/2012 JPY 2,051,893.90 36.109

Banque Baring Brothers Sturdza S.A. NGUF - Tfr Out JPY Class A 25/04/2012 JPY 436,416.00 7.680

Banque Baring Brothers Sturdza S.A. SCPF - Red EUR Class 04/01/2012 EUR 16,738.40 10.000

Banque Baring Brothers Sturdza S.A. SCPF - Red EUR Class 05/01/2012 USD 10,022.04 6.000

















Banque Baring Brothers Sturdza S.A. SCPF - Red USD Class 20/01/2012 USD 867,322.68 516.691





Banque Baring Brothers Sturdza S.A. SCPF - Red USD Class 13/03/2012 UD 141,930.51 80.554









Banque Baring Brothers Sturdza S.A. SCPF - Sub EUR Class 12/01/2012 EUR 22,000.00 13.131















Banque Baring Brothers Sturdza S.A. SCPF - Sub GBP Class 03/05/2012 GBP 30,000.00 17.482

Banque Baring Brothers Sturdza S.A. SCPF - Sub USD Class 12/01/2012 USD 10,000.00 5.877






Banque Baring Brothers Sturdza S.A. SEBF - Red EUR Acc Class 18/01/2012 EUR 38,000.00 34.967
























Banque Baring Brothers Sturdza S.A. SEBF - Red EUR Acc Class 25/04/2012 EUR 1,933,754.90 1,762.638

Banque Baring Brothers Sturdza S.A. SEBF - Red EUR Dist Class 04/01/2012 EUR 82,396.80 80.000


Banque Baring Brothers Sturdza S.A. SEBF - Red EUR Dist Class 13/01/2012 EUR 10,802.41 10,802.410


















Banque Baring Brothers Sturdza S.A. SEBF - Sub EUR Acc Class 16/01/2012 EUR 350,000.00 321.869
















Banque Baring Brothers Sturdza S.A. SEBF - Sub EUR Dist Class 11/01/2012 EUR 40,000.00 38.548


























Banque Baring Brothers Sturdza S.A. SEBF - Transfer Out EUR Dist Class 11/04/2012 EUR 42,231.26 40.297

Banque Baring Brothers Sturdza S.A. SEEF - Red EUR Class 12/01/2012 EUR 31,098.86 35.531












Banque Baring Brothers Sturdza S.A. SEEF - Red USD Class 25/01/2012 USD 677,581.57 725.431




Banque Baring Brothers Sturdza S.A. SEEF - Sub EUR Class 25/01/2012 EUR 7,000.00 7.408








Banque Baring Brothers Sturdza S.A. SEEF - Sub USD Class 15/02/2012 USD 10,000.00 9.929

Banque Baring Brothers Sturdza S.A. SEEF - Sub USD Class 22/02/2012 USD 40,000.00 39.469

Banque Baring Brothers Sturdza S.A. SEEF - Tfr Out EUR Class 07/03/2012 EUR 4,562.85 4.527

Banque Baring Brothers Sturdza S.A. SEVF - Red EUR Class 03/01/2012 EUR 7,027.62 70.192













Banque Baring Brothers Sturdza S.A. SEVF - Red EUR Class 22/02/2012 EUR 260,617.50 2,475.000
















Banque Baring Brothers Sturdza S.A. SEVF - Red EUR Class 25/04/2012 EU 52,820.00 500.000




Banque Baring Brothers Sturdza S.A. SEVF - Sub EUR Class 20/01/2012 EUR 53,500.00 518.472

Banque Baring Brothers Sturdza S.A. SEVF - Sub EUR Class 26/01/2012 EUR 575,000.00 5,541.829






















Banque Baring Brothers Sturdza S.A. SEVF - Sub EUR Class 02/04/2012 EUR 1,500,000.00 13,860.654

Banque Baring Brothers Sturdza S.A. SEVF - Sub EUR Class 02/04/2012 EUR 2,539,000.00 23,461.467




Banque Baring Brothers Sturdza S.A. SEVF - Tfr in EUR Class 07/03/2012 EUR 5,237.00 50.000

Banque Baring Brothers Sturdza S.A. SEVF - Tfr out EUR Class 11/04/2012 EUR 7,722.94 74.081

Banque Pâris Bertrand Sturdza SCPF - Red EUR Class 12/01/2012 EUR 21,064.05 12.764


Banque Pâris Bertrand Sturdza SCPF - Red EUR Class 15/02/2012 EUR 1,228,967.97 721.988






Banque Pâris Bertrand Sturdza SCPF - Red USD Class 18/01/2012 USD 21,262.14 12.764


Banque Pâris Bertrand Sturdza SCPF - Red USD Class 02/02/2012 USD 85.13 0.050



Banque Pâris Bertrand Sturdza SCPF - Sub EUR Class 10/01/2012 EUR 47,000.00 28.331

Banque Pâris Bertrand Sturdza SCPF - Sub EUR Class 18/01/2012 EUR 20,931.68 12.764

TRADE REPORT - RELATED PARTIES Copyright (c) 2000-2012 salesforce.com, inc. All rights reserved. Confidential Information - Do Not Distribute Generated By: Adam Turberville 08/05/2012 12:43 Banque Baring Brothers Sturdza

Minutes of the Board Meeting held on the 23 March 2012

1

MINUTES OF A MEETING OF THE BOARD OF DIRECTORS (“the BOARD”) OFE.I. STURDZA FUNDS PLC (“the COMPANY”)

HELD AT 33 SIR JOHN ROGERSON’S QUAY, DUBLIN 2ON THE 23 MARCH 2012 AT 9A.M. (IRISH TIME)

PRESENTDenise Kinsella In the ChairBrian DillonMarcel Kramer via telephone from The NetherlandsJohannes Yntema via telephone from SwitzerlandGeorges Gutmans via telephone from GuernseyGavin Farrell via telephone from Guernsey

IN ATTENDANCEKwan Queripel E.I. Sturdza Strategic Management Limited (“E.I. Sturdza”) via telephone from

GuernseyHoward Jordan E.I. Sturdza via telephone from GuernseyRichard Taylor E.I. Sturdza via telephone from GuernseyAisling O’Malley Dillon EustaceEmma McDonnell Dillon Eustace*Wayne Burlington HSBC via telephone from EnglandVivienne Feaheny Tudor Trust Limited*Eric Vanreas Banque Baring Brothers Sturdza S.A. via telephone from Guernsey

*Part of the Meeting onlyACTION BY

1. Chairperson

Ms. Kinsella was appointed Chairperson of the Board Meeting.

2. Apologies for absence

It was noted that no apologies for absence had been received prior to the Board Meeting.

3. Constitution of the Board Meeting

It was noted that a quorum was present and that the Board Meeting was duly convened inaccordance with the Articles ofAssociation.

4. Proposed Strategic Europe Value Fund stock lending program

The Chairperson presented to the Meeting a proposal in respect of a stock lendingprogramme (the “Proposal”) to be entered into in respect of the Strategic Europe ValueFund (the “Fund”), as prepared by Mr. Jordan of E.I. Sturdza.

It was agreed that the Proposal would be taken as read and the Chairperson invited Mr.Burlington as Global Head of Securities Lending in HSBC to give the Board an overviewof the stock lending programme and to highlight any points of note for the Board’sattention.

Mr. Burlington outlined that the stock lending program was a core product of HSBC’s andadvised that the stock lending programme was considered to be a “safe” programme forclients insofar as HSBC, acting in its capacity as agent lender would provide full borrowerindemnification to the lender which allows the funds to be protected from counterpartyrisk. Mr. Burlington confirmed that HSBC legally accepts all responsibilities in the event of

2

the borrower default and was contractually obliged to restore clients to their pre-defaultposition and would also be responsible for all unpaid fees/manufactured dividendsoutstanding.

In response to a query from the Chairperson regarding past HSBC real live experienceswith regard to borrower default, Mr. Burlington referred to the Lehman Brothers collapseand advised that the system had worked successfully for HSBC’s clients after thecollapse of Lehman Brothers in September, 2008. Mr. Burlington confirmed that HSBChad restored all of their clients to the pre-default position by the end of the week (with thecollapse of Lehman Brothers having taken place on the Monday morning) without anynecessity of restricting trading.

In response to a query by Mr. Farrell in respect of HSBC’s indemnity to give a like for likereturn or merely a monetary return, Mr. Burlington outlined that HSBC would restore theclient to its pre-default position. If for some reason (for example liquidity of assets) HSBCwere unable to immediately restore their client to their pre-default position, HSBC wouldcontinue to try to restore their client to their pre-default position for a period of sevendays. If at this point HSBC could not restore their client to their pre-default position stockwise, HSBC would provide the client with the cash market value of their stock as at thetime of default. This system ensured the client did not suffer a loss.

Mr. Farrell queried whether it was permissible for the Company to engage in stocklending under the Company’s constitutive documents. The Chairperson outlined thatUCITS such as the Company were permitted to engage in stock lending and Mr. Dillonstated that the supplement for the Strategic Europe Value Fund had been updated inNovember 2011 to include appropriate language relating to stock lending.

In response to a question by Mr. Farrell, Ms. O’Malley advised that Shareholder approvalwas not required, rather, the proposed amendment to the investment policy to provide forstock lending was required to be prior notified to Shareholders, giving them the option toredeem prior to the proposed amendments taking effect. Ms. O’Malley confirmed that twoweeks prior notification had been issued to Shareholders in this respect. Mr. Dillonreiterated that Shareholders were free to redeem their shares at any time should they notwish to invest in a fund engaging in stock lending.

Mr. Dillon queried if it was the intention of the Board to exclude any borrowers currentlylisted as participating in HSBC’s securities lending programme and he also queried thetimeframe in respect of removal of counterparty. Mr. Burlington advised that a clientcould remove a borrower from the list at any stage and that the longest recall periodwould be T+3.

The Chairperson requested further information as to how the collateral would bemanaged. Mr. Burlington advised that collateral would be managed by HSBC and that allcollateral would be held by the Custodian in a segregated account in the name of theclient, and that the custodian would have control over the account. Full collateralisationwould be evidenced by a daily exposure report with collateral margining being a minimumof 5% and typically between 5-10%. If there were concerns over a counterparty, Mr.Burlington advised that margining requirements could be increased to 10-15%. TheChairperson queried the process for loan recalls and any issues encountered in practice.Mr Burlington noted that sales instructions should be promptly provided although certainlines of stock would be held back to facilitate trade settlement. Mr. Burlington noted theoverall trade fail rate in the programme was three to four a month.

Mr. Burlington left the meeting.

The Chairperson tabled the proposal that the Strategic Europe Value Fund stock lendingprogram report would be approved subject to review of the securities lending

3

documentation by Dillon Eustace to ensure the Central Bank of Ireland’s (“Central Bank”)requirements were reflected therein. The Chairperson asked Mr. Jordan and Ms. Queripelto progress with the implementation of this. Mr. Farrell queried costs on this and Ms.Queripel and Mr. Jordan agreed to provide costs to the Board as soon as possible.

After due and careful consideration and discussion, IT WAS RESOLVED, that subject toreview of the securities lending documentation by Dillon Eustace the Strategic EuropeValue stock lending program report as presented to the Meeting was APPROVED by theBoard.

Kwan Queripel/Howard Jordan

5. Review of Directors remuneration and PAYE obligations

The Chairperson presented to the Board the ‘Directors Remuneration & PAYEObligations’ report requested by the Board and prepared by the tax department at DillonEustace (“Directors Remuneration & PAYE Obligations report”) which formed part of theBoard pack, circulated in advance of the Meeting.

After due and careful consideration and discussion, the Directors Remuneration & PAYEObligations report as presented to the Meeting was NOTED by the Board and MsQueripel was requested to progress any necessary registrations with the Irish RevenueCommissioners.

Kwan Queripel

6. Redemption gate activation policy

Ms. Queripel presented to the Board a report on the redemption gate activation policy(“Redemption Gate Activation Policy Report”) prepared by E.I. Sturdza which formed partof the Board pack circulated in advance of the Meeting.

Ms. Queripel outlined that E.I. Sturdza would like the Board to adopt a policy whereby itwas the standard practice of the Company to implement the Redemption Gate for anyfunds of the Company when redemptions received for any valuation point exceeded theestablished 10% threshold level as provided for in the Prospectus, unless the InvestmentAdvisor for the relevant fund considered the gate was unnecessary having regard tomarket circumstances.

The Board NOTED that it was normal practice to have the power to impose a redemptiongate and further outlined that in any event requiring exercise of this discretion, the Boardwould be guided by the Investment Manager who in turn would see the views of theInvestment Advisor.

Ms. Queripel NOTED that the policy for the redemption gate clarified and sets theboundaries of when a redemption gate may be imposed and the Chairperson NOTEDthat the policy could be revised in future if necessary.

After due and careful consideration and discussion, IT WAS RESOLVED, that theredemption gate activation policy report as presented to the Meeting was APPROVED bythe Board.

7. Fitness and probity standards

Mr. Jordan presented to the Board the Fitness and probity standards report whichincluded a fitness and probity matrix prepared by E.I. Sturdza, which formed part of theboard pack, circulated in advance of the Meeting.

IT WAS NOTED that the Company had filed a letter dated 15th

December, 2011 with theCentral Bank before 31

stDecember, 2011 which identified those persons within the

Company which hold a Pre-Approval Controlled Function (“PCF”) and the function which

4

they held.

IT WAS NOTED THAT the following persons were identified in the letter as holding aparticular PCF function;

PCF Ref First Name SurnamePCF-2 Georges GutmansPCF-2 Marcel KramerPCF-2 Johannes YntemaPCF-2 Gavin FarrellPCF-2 Brian DillonPCF-2 and PCF-3 Denise KinsellaPCF-39 Patrick RobinsonPCF-39 Tara Gordon

IT WAS FURTHER NOTED that pursuant to the Guidance on Fitness and ProbityStandards (the “Standards”) issued by the Central Bank the Company had an obligationto carry out due-diligence on each of the individuals identified as PCF’s of the Companybefore 31

stMarch, 2012 and to issue a letter of confirmation to the Central Bank in

relation to the due diligence.

A due-diligence pack which had been collated in accordance with best practice in relationto each PCF identified which included the following had been circulated to the board:

(a) A self-certification letter which confirmed that he/she was familiar with theStandards, would comply with them and would notify the Company immediately ifthey no longer complied with the Standards and that he/she – (i) had no regulatorysanctions against his/her name, (ii) was in compliance with Company law and hadno restrictions or disqualifications against his/her name and (iii) he/she had nocriminal convictions against his/her name;

(b) An updated CV;(c) A list of directorships; and(d) Appendix completed in relation to reputation and character taken from the newCentral Bank Questionnaire required for new PCF’s.

In addition, Dillon Eustace in conjunction with Mr. Jordan had undertaken:

a) Garda checks or Police checks in the relevant country of residence where permissibleb) Judgment searchesc) Irish Companies Registration Office searchesd) Central Bank searches

After due consideration of the due diligence relating to each PCF, the Board weresatisfied of each PCF’s fitness to carry out the relevant function.

There was also produced to the Meeting a draft letter of confirmation addressed to theCentral Bank. IT WAS NOTED that the letter confirmed the following:

the Company had performed the necessary due diligence on these persons inaccordance with the Standards and the Guidance on same;

the Company was satisfied on reasonable grounds that these persons were incompliance with the Standards; and

that for each person listed above the Company had obtained his/her writtenagreement to abide by the Standards.

Formatted: Bullets andNumbering

5

IT WAS NOTED that there were equivalent searches in respect of Mr. Kramer and Mr.Yntena outstanding. IT WAS FURTHER NOTED that there were Garda/Police checks inrespect of the Chairperson and Mr. Dillon outstanding.

Ms. O’Malley outlined that Garda/Police checks would not impact on the due diligenceconfirmation to be provided to the Central Bank as self-certification in respect ofGarda/Police checks was permitted in any event and both the Chairperson and Mr. Dillonhad provided self-certification letters in this respect.

After due and careful consideration, IT WAS RESOLVED that subject to review ofdocumentation by the Chairperson, the Chairperson be and is hereby authorised to signthe confirmation letter with regard to fitness and probity on behalf of the Company.

Mr. Jordan outlined that details of any outstanding searches would be circulated to theBoard as soon as possible. IT WAS FURTHER NOTED that Mr. Jordan would update theBoard at the next Meeting on fitness and probity.

After due and careful consideration and discussion, the Fitness and probity standardsreport as presented to the Meeting was NOTED by the Board.

Aisling O’Malley

Howard Jordan

8. Updated KIIDs

Ms. Queripel presented to the Board the updated KIID’s in respect of Nippon Growth(UCITS) Fund, Strategic China Panda Fund, Strategic Euro Bond Fund, StrategicEmerging Europe Fund and the Strategic Europe Value Fund, sub funds of the Company,prepared by E.I. Sturdza which formed part of the Board pack, circulated in advance ofthe Meeting.

Ms. Queripel outlined that the KIID’s had been updated with a view to ensuring that thecontent of the “Irish” and “Swiss” KIIDs were identical save for the inclusion of a Swissrequired disclosure. Ms. Queripel confirmed that the risk reward indicators had remainedthe same. In response to a query from the Chairperson, Ms. Queripel advised that therisk reward indicators were monitored on a monthly basis.

The Chairperson queried whether monthly monitoring of KIID’s was sufficient. Ms.O’Malley outlined that she would check this point and revert to the Board.

After due and careful consideration and discussion, the KIID’s in respect of each of thesub funds of the Company as presented to the Meeting was RATIFIED by the Board.

Aisling O’Malley

9. Strategic Global Bond Fund-Report to the Board on the RMB market

*Mr. Vanreas joined the Meeting

Mr.Taylor presented to the Board a report on the RMB market (“RMB market report”)which formed part of the Board pack, circulated in advance of the Meeting.

Mr. Taylor drew the Board’s attention to the key points of the report and outlined that anRMB hedged class would give investors an opportunity to benefit from a strengtheningRenminbi vs. USD as well as offering portfolio diversification benefits. Mr. Taylor furtheroutlined that back testing of the hedged strategy through 2011 revealed that an additionalgain of 3.64% (excluding transaction costs) would have been generated.

Mr. Dillon queried whether the currency risk factor already in the supplement for theStrategic Global Bond Fund would need to be revised to which Mr. Taylor advised thatthe draft supplement contained significant disclosures in that respect and Ms. Queripel

6

outlined that all risk policies would be reviewed in May, 2012 and the currency risk for thefund would form part of these discussions.

Mr. Gutmans outlined that in times where the Euro and USD were under pressure thecreation of the RMB class could be an interesting alternative.

The Chairperson requested an update on the status of the draft Supplement and Ms.O’Malley advised that the Central Bank had reverted with initial non-material commentson the draft Supplement and that a revised draft of the Supplement would be circulated tothe Board for review and comment in due course.

Mr. Kramer queried whether a benchmark had been set for the Fund and Mr. Vanreasoutlined that they were in the process of trying to find an appropriate benchmark for theFund. Ms. O’Malley outlined that the draft supplement had initially referred to abenchmark although E.I. Sturdza had asked that it be removed. Ms. O’Malley furtheroutlined that all other supplements for funds of the Company reference a benchmark. Mr.Vanreas outlined that he would spend time ensuring the most appropriate benchmarkwas chosen for the Fund.

After due and careful consideration and discussion, the RMB market report as presentedto the Meeting was NOTED by the Board.

*Mr. Vanreas left the Meeting

Aisling O’Malley

11. Oversight and Due Diligence Process of the Sub-Investment Advisor.

The Board NOTED the report prepared by Ms. Welsh in respect of a meeting which hadtaken place between Ms. Welsh and Mr. Vanreas on 28

thSeptember 2011 in respect of

the oversight and due diligence process of the Sub-Investment Advisor and that thematters arising from the report were being actioned by the Investment Manager inconjunction with the Sub- Investment Advisor.

Jody Welsh

12. Date for future Board Meetings

The Board noted that the dates for future Board Meetings were as follows:

19 April 2012 at 9am (to approve Audited Financial Statements only)22 May 2012 at 9am (to be held in Guernsey)22 August 2012 at 9am30 November 2012 at 9am

13. Any Other Business

Ratification of Passive Hedging Agreement

The execution of the Passive Hedging Agreement between HSBC Bank Plc and E.I.Sturdza Strategic Management Limited was RATIFIED by the Board.

The Supplemental Administration Agreement entered into by the Company with HSBCSecurities Services (Ireland) Limited dated 13

thMarch 2010 was RATIFIED by the

Board.

Authorised Signatory List

Mr. Jordan provided an update to the Board with regard to the updated AuthorisedSignatory List and outlined that further to the Meeting of 8 February, 2012, one of thecomments raised was that the Authorised Signatory List was not sufficient for account

7

opening purposes and hence an updated Authorised Signatory List was presented tothe Board.

The Chairperson pointed out that authority to issue instructions on accounts wasnormally delegated to the Investment Manager. Mr. Jordan outlined that there were twoAuthorised Signatory Lists and it was not intended that this updated AuthorisedSignatory List would give Directors the ability to sign on the accounts.

The Chairperson outlined that it was unusual for there to be just one Director who couldsign from the Authorised Signatory List. The Board were in agreement on this point.

IT WAS NOTED that the Authorised Signatory List would be amended to ensure thattwo signatures from the updated Authorised Signatory List would be necessary. Subjectto this amendment, the Authorised Signatory List was APPROVED.

There being no further business the Board Meeting concluded.

_____________________________Chairperson

Date

Howard Jordan

Matters Arising from the Board Meetings held on the 8February 2012 and on the 23 March 2012

1

E.I. STURDZA FUNDS PLC (“the Company”)Action Points – 8 FEBRUARY 2012

Responsibility StatusAP1 The Chairperson noted notwithstanding there

were stale prices during the period as stated inthe Stale Pricing Report which formed part of theBoard pack, stale prices were not mentioned inthe Administrators Report.

HSSI investigated the price on ENN EnergyHoldings Limited during the period 7th - 13thDecember 2011. Upon investigation HSSI notedthat Bloomberg quoted a price during the period(albeit, the same price repeated) rather thanleaving the price blank. A blank price is theusual indicator of a stale price.

In future, HSSI will report both Zero Movementprices and Stale Prices in our Monthly UCITS IVReport and Quarterly Administrator Reports.

Closed on 22 February, 2012 (see attachedemail to EISSML)

HelenaGilsenan

Closed

AP2 The Chairperson requested that the backgroundto and duration of stale prices and confirmationof escalation to and review by the InvestmentManager be included in the Administrationreport.

Noted for future Administrator Reports

HelenaGilsenan

Closed

AP3 In response to a query from Mr. Dillon, Mr. Mirzaconfirmed that the proposed 2012 Audit feeswere €56,000 plus vat and this would bereflected in the Letter of Engagement, asrequested.

The amended letter was received and circulatedto the Board on the 16 February, 2012.

ShahnawazMirza

Closed

AP4 After further discussion and consideration ITWAS RESOLVED to approve the draft Letter ofEngagement subject to a minor amendment andto authorise any one Director to sign thefinalised Letter of Engagement on behalf of theBoard.

The Letter of Engagement was signed by Ms.Denise Kinsella on the 29 February, 2012.

Tudor TrustLimited

Closed

2

AP5 In response to a question from the Chairperson,Mr. Mizra informed the Board that KPMG hadreceived the first draft of the FinancialStatements of the Company, year ended 31December 2011 (“Financial Statements“) fromHSSI and would circulate the finalised FinancialStatements and associated documentationwithin an appropriate time prior to the 19 April2012 Board Meeting, at which the FinancialStatements would be presented to the Board forapproval.

Please refer to Tab 4-8 of the 19 April, 2012Board pack.

ShahnawazMirza

Closed

AP6 In response to a question from the Chairpersonas to why the trade file did not include theaforementioned trade, Ms. Byrne agreed torevert to HSSI to clarify their fund accountingsystem to include the recording of trades andagreed to update the Board further on thismatter.

HTIE confirmed that a redemption trade for€1.7m was processed 21 December 2012 whichwas subsequently cancelled upon request fromthe Directors' in order to implement a gatedredemption process. This caused the accountingplatform, Geneva, to show excess cash on theFund's valuation. This showed as a cashreconciling item compared to the actual bankaccount.

Maureen Byrne Closed

AP7 Ms. Courtney noted that the Central Bank ofIreland (“Central Bank”) was yet to revert inrespect of the currency hedging submission. Ms.O’Malley advised that she would keep the Boardupdated with regard to any developments inrespect of this matter.

A letter of response was received from theCentral Bank on 16 February, 2012.

NatalieCourtney/Aisling

O’Malley

Closed

AP8 In response to a request from the Board, Mr.Jordan agreed to liaise with Ms. Courtney inrespect to the collation of the abovedocumentation and to provide assistance to thenon Irish resident Directors regarding the thirdparty checks.

The Fitness and Probity documentation was filedwith the Central Bank prior to the 31 March2012.

Howard Jordan/Natalie

Courtney

Closed

3

AP9 The Board agreed to forward their selfcertification letters and Curriculum Vitaes’ to Mr.Jordan as soon as possible and requested DillonEustace to perform the third party checks inrespect of the Irish resident Directors.

The Fitness and Probity documentation was filedwith the Central Bank prior to the 31 March,2012.

Board ofDirectors/ Dillon

Eustace

Closed

AP10 After further discussion and consideration, theBoard requested that the due diligencedocumentation in respect of each Director betabled and reviewed by the Board at an ad-hocBoard Meeting of the Company prior tosubmission to the Central Bank of a letter ofconfirmation from the Company confirmingadherence to its due diligence requirements.

The ad-hoc Board Meeting was held on the 23February 2012.

Howard Jordan/Tudor TrustLimited

Closed

AP11 Ms. Courtney advised the Board that based onearlier discussions regarding the enactment of aredemption gate in relation to StrategicEmerging Europe Fund, she would update thenote accordingly in the Designated IndividualReport, to be presented at the next quarterlyBoard Meeting.

Please revert to Tab 6 of the 22 May 2012 Boardpack.

NatalieCourtney

Closed

AP12 Following a query from Mr. Farrell, Mr. Dillonagreed to revert to Mr. Farrell, to confirm if Mr.Farrell might be exempt on the basis that feespayable to him were paid to a partnershipalthough he felt this exemption may just apply tocertain Irish partnerships.

Please refer to the report prepared by DillonEustace which formed the 23 March, 2012Board pack.

Brian Dillon Closed

AP13 After further discussion and consideration, it wasagreed to request the Dillon Eustace TaxDepartment to review the Board’s position and toprovide a note to the Boards highlighting any taximplications as a result of this tax treatment ofDirectors fee.

Please refer to the report prepared by DillonEustace which formed the 23 March, 2012Board pack.

Dillon Eustace Closed

4

AP14 In response to a question from Mr. Dillon, Ms.Courtney confirmed that at the time of theMeeting with HSSI, she was not aware of HSSIhaving had a physical AML visit by the CentralBank and agreed to revert and confirm this tothe Board in due course.

Verbal update to be provided at the BoardMeeting.

NatalieCourtney

Open

AP15 In response to a question from the Chairperson,Ms. Courtney confirmed that the oversight of theInvestment Manager does not specifically coverthe role of Distributor and agreed to include therole of Distributor as part of the Supervision ofDelegates Report going forward, as theCompany distributes in many markets.

NatalieCourtney

Noted

AP16 In response to a question by the Chairperson,Ms. Welsh informed the Board that theInvestment Managers report on the oversightand due diligence process of the Sub InvestmentAdvisors was provided at the last Board Meetingand would circulate this report via email to theBoard for their information.

Please refer to the report prepared by E.I.Sturdza which formed the 23 March, 2012 Boardpack

Jody Welsh Closed

AP17 The Chairperson further requested that theInvestment Managers oversight and duediligence process of the Sub InvestmentAdvisors coincide with Ms. Courtney’sSupervision of Delegates Report going forward.

Jody Welsh Noted

AP18 After further discussion and consideration. ITWAS RESOLVED to authorise Dillon Eustace toprepare and process the necessarydocumentation in respect of the establishmentand approval of the Strategic Global Bond Fund,and the registration of the Strategic Global BondFund in the required jurisdictions.

Please refer to Tab 12 of the 19 April, 2012Board pack.

Dillon Eustace Closed

AP19 In response to a question from Mr. Yntema, Ms.Welsh agreed to prepare and circulate a reportto the Board on the proposed RMB class and inparticular anticipated performance of the RMBagainst the US Dollar.


Jody Welsh Closed

5

AP20 The Chairperson requested that reference toderivatives be included in the Risk Report goingforward especially the usage and exposure toderivatives.

Please refer to Tab 9 of the 22 May, 2012 Boardpack.

Jody Welsh Closed

AP21 The Chairperson requested that the strategicdirection and product profile of the fund rangewould be revisited when the Board receivesinformation on the outcomes from the E.I.Sturdza strategy meetings.

Verbal update to be provided at the 22 May,2012 Board Meeting.

GeorgesGutmans

Open

AP22 In response to a question from Mr. Yntema, Mr.Gutmans stated that Nigeria as a newjurisdiction for investment may be a suitablemarket for private banks more so thaninvestment funds. Mr. Gutmans confirmed thatfurther research on this jurisdiction was requiredbefore a decision was to be made.

Verbal update to be provided at the 22 May,2012 Board Meeting.

GeorgesGutmans

Open

AP23 After further discussion and consideration, it wasagreed to hold an AML training session prior tothe 22 August 2012 Board, which AML trainingwould be provided by Bridge Consulting.

AML training will take place prior to the 22August, 2012 Board Meeting.

NatalieCourtney

Open

AP24 After further discussion and consideration it wasagreed that Ms. Queripel would prepare a notefor the Board highlighting specific provisions ofthe Code which would require furtherconsideration by the Board. The Board agreed todiscuss the adoption of the Code at the 22 May,2012 Board Meeting.

Please refer to Tab 18 of the 22 May, 2012Board pack.

Kwan Queripel Closed

6

AP25 The Board NOTED that a copy of the Minutes ofthe Board Meeting held on the 30 November,2011 (“Minutes”) had formed part of the Boardpack, circulated in advance of the BoardMeeting. Following appropriate consideration, ITWAS RESOLVED to approve the Minutes forsigning by the Chairperson.

The Minutes of the Board Meeting held on the30 November, 2011 was signed by Ms. DeniseKinsella on the 8 February, 2012.

Tudor TrustLimited

Closed

AP26 In respect of Action Point 2, the Board NOTEDthat there was outstanding credit documentationto be finalized by HSSI and to be signed by anyone Director on behalf of the Company.

Amendment to Overdraft Agreements forStrategic Emerging Europe Fund and StrategicEurope Value Fund were executed on 14December, 2011.

CiaranByrne/HelenaGilsenan

Closed

AP27 After further discussion and consideration ITWAS RESOLVED to approve the UCITS IVletters in respect of each of the Sub InvestmentAdvisors, and to authorise any one Director tosign each of the UCITS IV letters on behalf ofthe Board

The UCITS IV letters in respect of each of theSub Investment Advisors were signed by Ms.Denise Kinsella on the 8 February, 2012.

Tudor TrustLimited

Closed

AP28 After further discussion and considerationsubject to maintenance of the account under thecontrol of the Custodian and payment of anyproceeds of the account into an account underthe control of the Custodian, IT WASRESOLVED to approve the opening of a cashaccount with RBSI in respect of the StrategicChina Panda Fund and to authorise any oneDirector and the Company Secretary to sign theapplication form on behalf of the Company.

The RBSI bank account application form wassigned by Ms. Denise Kinsella and Ms. VivienneFeaheny on the 8 February, 2012.

Tudor TrustLimited

Closed

7

AP29 After further discussion and consideration ITWAS RESOLVED to approve the side letter, thepurpose of which was to update the list of sub-funds registered in Switzerland, and to authoriseany one Director to sign the side letter on behalfof the company.

The side letter was signed by Ms. DeniseKinsella on the 8 February, 2012.

Tudor TrustLimited

Closed

AP30 The Chairperson noted the inclusion of a reportprepared by E.I. Sturdza on a redemption gateactivation which formed part of the Board pack,circulated in advance of the Board Meeting.After further discussion and consideration it wasagreed to defer the adoption of this policy untilthe March 2012 ad-hoc Board Meeting in orderto provide the Board with adequate time toreview the documentation.


Jody Welsh Closed

AP31 The Chairperson requested that furtherinformation be provided by HSBC on theproposed programme including in relation tocounterparty risk, custody and collateralmanagement at the March 2012 ad-hoc BoardMeeting of the Company in order that the Boardmay fully consider this matter.


Howard Jordan Closed

AP32 Mr. Gutmans noted that as stated in the report,should the majority of the portfolio of StrategicEurope Value Fund be lent i.e. 90-95%, HSBChad estimated that this would generate anincome in the region of €90,000-€110,000 perannum depending on the level of stock lendingdecided upon. Mr. Gutmans queried this pointand requested clarification on the figuresprovided. Mr. Jordan agreed to revert to theBoard with a more accurate estimate of thereturns.



Imelda Murphy

From: [email protected]

Sent: 24 April 2012 17:38

To: Imelda Murphy

Subject: Stale Price on SCPF in December

Page 1 of 2

24/04/2012

Hi Imelda,

As requested, see below email of 22-Feb-2012 re. Stale Price on Strategic China Panda Fund.

regards,Helena

Helena GILSENANClient Account Manager | Fund Services | HSBC Securities Services, Ireland

1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland

----- Forwarded by Helena GILSENAN/AMIE/HSBC on 24/04/2012 17:36 -----

Hi Richard,

As requested, we investigated the price on ENN Energy Holdings Limited during the period 7th - 13thDecember. Upon investigation we noted that Bloomberg quoted a price during the period (albeit, thesame price repeated) rather than leaving the price blank. A blank price is the usual indicator of a stale

price.

In future, we will report both Zero Movement prices and Stale Prices in our Monthly UCITS IV Report and

Quarterly Administrator Reports.

Apologies that this was omitted from the December UCITS IV Report and the Administrator's Report to

the Directors dated 8th February 2012

If you have any questions, please let me know.

____________________________________________________________

____________________________________________________________

Protect our environment - please only print this if you really have to!

Phone +353-1-635 6209

Fax +353-1-649 7558

Email [email protected]

From: Helena GILSENAN/AMIE/HSBC

To: [email protected]

Cc: [email protected], Amy WALSH/AMIE/HSBC@HSBC, Robert J BROGAN/AMIE/HSBC@HSBC

Date: 22/02/2012 13:54

Subject:Stale Price on SCPF in December

kind regards,

Helena

Helena GILSENANClient Account Manager | Fund Services | HSBC Securities Services, Ireland

1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland

----------------------------------------- SAVE PAPER - THINK BEFORE YOU PRINT! This E-mail isconfidential. It may also be legally privileged. If you are not the addressee you may not copy,forward, disclose or use any part of it. If you have received this message in error, please delete it andall copies from your system and notify the sender immediately by return E-mail. Internetcommunications cannot be guaranteed to be timely secure, error or virus-free. The sender does notaccept liability for any errors or omissions.

____________________________________________________________

____________________________________________________________

Protect our environment - please only print this if you really have to!

Phone +353-1-635 6209

Fax +353-1-649 7558

Email [email protected]

Page 2 of 2

24/04/2012

1

E.I. STURDZA FUNDS PLC (“the Company”)Action Points – 23 March 2012

Responsibility StatusAP1 The Chairperson tabled the proposal that the

Strategic Europe Value Fund stock lendingprogram report would be approved subject toreview of the securities lending documentationby Dillon Eustace to ensure the Central Bank ofIreland’s (“Central Bank”) requirements werereflected therein. The Chairperson asked Mr.Jordan and Ms. Queripel to progress with theimplementation of this. Mr. Farrell queried costson this and Ms. Queripel and Mr. Jordan agreedto provide costs to the Board as soon aspossible.

Kwan Queripel/Howard Jordan

Open

AP2 After due and careful consideration anddiscussion, the Directors Remuneration & PAYEObligations report as presented to the Meetingwas NOTED by the Board and Ms Queripel wasrequested to progress any necessaryregistrations with the Irish RevenueCommissioners.

Please refer to Tab 16 of the 22 May, 2012Board pack.

Kwan Queripel Closed

AP3 After due and careful consideration, IT WASRESOLVED that subject to review ofdocumentation by the Chairperson, theChairperson be and is hereby authorised to signthe confirmation letter with regard to fitness andprobity on behalf of the Company.

The Chairperson signed the confirmation letteron behalf of the Company and Mr. Jordansubmitted the confirmation letter to the CentralBank on 27 March, 2012 prior to the deadline ofthe 31 March, 2012.

Aisling O’Malley Closed

AP4 Mr. Jordan outlined that details of anyoutstanding searches would be circulated to theBoard as soon as possible. IT WAS FURTHERNOTED that Mr. Jordan would update the Boardat the next Meeting on fitness and probity.

Ms. McDonnell received the relevant Gardasearches in respect of Mr. Dillon, Ms. Gordonand Mr. Robinson and immediately forwarded allresults to Mr. Jordon upon receipt of same.

Mr. Jordon to forward foreign searches andGarda searches to the Board for theirinformation.

Howard Jordan Inprogress

2

AP5 The Chairperson queried whether monthlymonitoring of KIID’s was sufficient. Ms. O’Malleyoutlined that she would check this point andrevert to the Board.

Ms. O’Malley emailed the Board and Sturdza on23 March, 2012 and Sturdza have confirmed thatSRRI is in fact monitored on a weekly basis (notmonthly as was indicated at the Board Meeting).

Aisling O’Malley Closed

AP6 The Chairperson requested an update on thestatus of the draft Supplement and Ms. O’Malleyadvised that the Central Bank had reverted withinitial non-material comments on the draftSupplement and that a revised draft of theSupplement would be circulated to the Board forreview and comment in due course.

Central Bank review ongoing.

Aisling O’Malley Inprogress

AP7 The Board NOTED the report prepared by Ms.Welsh in respect of a meeting which had takenplace between Ms. Welsh and Mr. Vanreas on28 September, 2011 in respect of the oversightand due diligence process of the Sub-InvestmentAdvisor and that the matters arising from thereport were being actioned by the InvestmentManager in conjunction with the Sub- InvestmentAdvisor.

Jody Welsh Open

AP8 IT WAS NOTED that the Authorised SignatoryList would be amended to ensure that twosignatures from the updated AuthorisedSignatory List would be necessary. Subject tothis amendment, the Authorised Signatory Listwas APPROVED.

The amended Directors Authorised SignatoryList has been signed by each of the Directors.


Directors Information –verbal confirmation

Dates for Future Board Meetings

22 August 2012 at 9am28 November 2012 at 9am

Any Other Business