united global resources fund · the benchmark of the fund: since inception – 30 sep 16: absolute...

United Global Resources FundAnnual Report

for the financial year ended31st December 2017

MANAGERUOB Asset Management LtdRegistered Address:80 Raffles PlaceUOB PlazaSingapore 048624Company Registration No. : 198600120ZTel: 1800 22 22 228

DIRECTORS OF UOB ASSET MANAGEMENTLee Wai FaiEric Tham Kah JinPeh Kian HengThio Boon Kiat

TRUSTEEState Street Trust (SG) Limited168 Robinson Road#33-01, Capital TowerSingapore 068912

CUSTODIAN / ADMINISTRATOR / REGISTRARState Street Bank and Trust Company, acting through its Singapore Branch168 Robinson Road#33-01, Capital TowerSingapore 068912

AUDITORPricewaterhouseCoopers LLP7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

United Global Resources Fund(Constituted under a Trust Deed in the Republic of Singapore)

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A) Fund Performance

Fund Performance/Benchmark Returns

3 mth%

Growth

6 mth%

Growth

1 yr%

Growth

3 yrAnn

CompRet

5 yrAnn

CompRet

10 yrAnn

CompRet

SinceInception

29 May 2006Ann

CompRet

United GlobalResources Fund 11.49 24.05 9.80 4.48 -7.25 -7.03 -3.24

Benchmark 7.45 17.72 14.35 12.15 9.64 7.80 7.55

Source: Lipper, a Thomson Reuters Company.

Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis, with dividends and distributionsreinvested, if any.The benchmark of the Fund: Since Inception – 30 Sep 16: Absolute return benchmark of 6% per annum; 1 Oct 2016 - Current :composite index of 30% MSCI AC World Materials, 35% MSCI AC World Metals & Mining and 35% MSCI AC World Energy.

For the twelve months ended 31 December 2017, the net asset value of the Fund increased by 9.80%, underperforming theweighted benchmark of 14.35%, in Singapore Dollar terms.

The benchmark is composed of: 35% MSCI ACWI Metals & Mining Sector Index which increased 23.8% over the reportingperiod; 30% MSCI ACWI Material Sector Index rising 20.3%; and 35% MSCI ACWI Energy Sector Index which dipped 0.5%,in Singapore Dollar terms. The Fund’s performance reflected improved pricing for the majority of the commodity spectrumduring the reporting period, which resulted in an upward re-rating of the share prices of listed commodity producers. However,exploration and production (E&P) companies were relative underperformers and the Fund was negatively impacted by itsexposure to this sub-sector.

The US Dollar had rallied in the immediate aftermath of President Trump’s election in November 2016. The inability of the newadministration to turn its policies into actual legislation saw the US Dollar index falling by 9.9% in 2017. Trump’s main successwere the tax reforms contained in his Tax Cuts and Jobs Act, which was signed into law on 22 December 2017.

Bulk commodities saw a strong start at the beginning of the reporting period, weathering supply shocks in Australia. Theyremained at elevated levels due to domestic Chinese supply cuts and the ongoing strength in the Chinese housing market.Prices remained high at year-end due to expectations of another La Nina weather event affecting Australian supply. The Fundsaw positive performances by large diversified miners such as BHP Billiton, Glencore and Rio Tinto.

Basemetals prices saw a mixed first half, but finished 2017 strongly as Chinese production cuts and general underinvestmentin new supply factored into a noticeable impact on global inventory levels. Base metals companies such as IndependenceGroup, Lundin Mining, Sandfire andWestern Areas all benefited from an upward movement in metal prices.

The Energy sector saw a mixed performance. Strong global demand then saw prices rally in 2H17, particularly after theOrganisation of Petroleum Exporting Countries (OPEC) extended its production cuts. The Fund benefitted by holdings in oilmajors such as Royal Dutch Shell and Total. However, the Fund was negatively impacted by sharp price declines in E&Pholdings such as Africa Oil and Hess, despite both companies benefiting from strong funding positions and general positivenews flow.

Physical gold prices benefitted from by weakness in the US Dollar and geopolitical uncertainty. The Fund was helped by itsholdings in listed gold and silver companies such as Evolution Mining and Pretium Resources.

As at end-December 2017, the Fund’s allocation in the various investment sectors was:Materials (62.39%), Energy (38.02%)and Cash (-0.41%).

In terms of asset allocation by geographical regions, the Fund was invested in:Canada (24.63%),Australia (23.20%),UnitedKingdom (19.07%), United States (18.16%), Switzerland (5.60%) and other countries (9.75%).


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A) Fund Performance (continued)

Economic and Market Review

2017 began with expectations of a US economic boom, based on the Trump administration’s plans to lower corporate andpersonal tax rates, regulations and invest in domestic infrastructure. This was viewed positively for both the US Dollar and forcommodity prices, with investors anticipating that a pick-up in US demand would augment ongoing strength in China and otheremerging markets. This optimistic view resulted in a broad-based rally in base metal and bulk commodity prices in the firstquarter of 2017 (1Q17), with coking coal prices particularly strong given weather-related supply disruption in Australia.

By 2Q17, political headwinds and overwhelmingly negative press reports raised doubts as to Trump’s ability to advance hispolicy agenda. Despite the lack of progress, anticipation of stronger US economic growth and higher inflation saw the USFederal Reserve (Fed) pivoting to a tightening stance onmonetary policy. Thiswas despite somedivergence in theUSeconomicoutlook, with surveys of future expectations painting a bullish outlook compared to a more mixed picture from actual monthlydata. By mid-year, commodity prices were correcting sharply as investors reconsidered their earlier optimism.

Such concerns were fueled by events in China, the world’s largest crude oil importer and consumer of base metals and bulkcommodities. Early weakness in China’s economic data was compounded by volatility in the finance sector after Chineseregulators began to impose tighter regulations on non-bank financial products. This fueled the sharp sell-off in commodityprices in 2Q17.

Fortunately, these market jitters proved temporary as Chinese economic data began to strengthen from June 2017 onwards.This fueled a 2H17 rally in base metals and bulk commodity prices, with pricing helped both by resurgent demand and by thecontinuing efforts to improve Chinese air quality by closing low-quality domestic production. China’s buoyant economicconditions are shown by 2017 official GDP growth of 6.9%, with the National Bureau of Statistics reporting fixed assetinvestment growth of 7.2% year-on-year (yoy), property sales growth of 13.7% yoy and industrial production growth of 6.2%yoy.

In recent years, commodity prices have had an inverse relationship with the US Dollar, with the strength of the latter leading tolower commodity prices. However, President Trump’s continuing political and legislative problems saw the US Dollar weakenthroughout 2H17, helping support the upwardmove in themajority of commodity prices, and supporting improve the profitability,cash flow and financial health of commodity producers. Although Trump eventually succeeded in passing his tax bill, this didnot occur until late December 2017.

Bulk commodity prices performed strongly during the year. Demand for Chinese infrastructure and housing was accompaniedby ongoing steps by China’s National Development and Reform Commission (NDRC) to reduce production of iron ore and coalby small or unlicensed domestic producers. These steps continued to be aggressively enforced, with surprise inspections andpunitive penalties for transgressors. Higher steel prices and improved operating margins were particularly beneficial toproducers of high grade product.

Basemetals prices moved higher during the reporting period, with solid demand leading to further declines in inventory levels.The sharp fall in capital expenditure on new supply lead to a significant tightening in the supply / demand balance for individualmetals such as zinc, lead and tin. This is supportive of future pricing, given the often significant lead times between new mineinvestment and first production.

Energy prices had amixed year. Crude oil markets started the reporting period with a high level of speculative interest, but thensaw prices weaken to below US$45 per barrel (bbl) as investors grew concerned over strong US onshore production, high USinventory levels and OPEC’s ability to maintain supply discipline. Confidence only returned as OPEC maintained supplydiscipline and as US inventories fell consistently throughout the US driving season. Crude oil prices finished the year in anup-trend, with Brent pricing above US$65/bbl after OPEC and Russia extended its production cuts through to December 2018.

Physical gold started the year at US$1,152/oz and ended the reporting period at US$1,303/oz, increasing by 13%. This wasdespite three US interest rate hikes during 2017. The prospect of higher US real rates would normally be viewed as a negativefor gold. However, the potential for widening US trade and fiscal deficits concerned investors, as did rumours of diversificationof global foreign reserves away from the US Dollar. Gold also benefited from uncertainty over the Trump administration’sresponse to various geopolitical challenges.


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A) Fund Performance (continued)

Outlook and Strategy

Forecasts for the global economy are upbeat, with expected 2018GDP growth in excess of 3.0%.Ongoing strength in industrialproduction and manufacturing purchasing managers’ index (PMI) data are encouringing. All major regional economies aregrowing, with the highest growth forecasts centered on emerging markets, which also have the highest propensity forcommodity consumption. In fact, there is a concern that global growthmay be too strong, leading to rising inflationary pressuresas capacity utilisation rates climb and labour markets tighten.

Policymakers are already taking steps to decreasemonetary stimulus and raise interest rates. However, the coming year shouldstill see an overall net expansion in monetary stimulus. After growing balance sheets by an aggregate 17.0% in 2017, currentpolicy statements from the Fed, European Central Bank (ECB) and Bank of Japan (BOJ) would still see an aggregate balancesheet expansion of 4.4% over the coming year. While the Fed is already in tightening mode, it is the expected reduction instimulus by the ECB and BOJ that may gain the most attention and result in the Euro and Japanese Yen strengthening againsttheUSDollar. This could be bullish for commodity prices, which have been negatively correlated to theUSDollar in recent years.

President Trump will be looking to build on the December 2017 tax cuts, which represented his administration’s first policysuccess. Trump is now expected to push for a significant increase in domestic infrastructure spending, and will probably aim topass relevant legislation ahead of the important November 2018 mid-term elections. The Fund believes thatinfrastructure-related spending by other countries, such as China’s “One Belt, One Road” initiative, should also be positive forcommodity demand and pricing.

There was a clear tightening in commodity supply-demand balances in 2017, particularly for base metals. However,management teams continue to be cautious given the weak market conditions in recent years. Most commodity companiesremain reluctant to invest in new projects, and may need a prolonged period of higher pricing to move into expansionary mode.This has positive implications for near-term free cashflows, net debt levels and expected dividend yields. The Fund will maintainits policy of investing in resource companies with strong balance sheets and low production costs relative to their sector.However, the Fund will also look for producers that are nearing completion of growth projects, since such companies offerpotential gains from both volume and pricing.

The Fund expects continued strength in the Energy sector in the coming year, based on continued OPEC production disciplineand on the prospective listing of Saudi Aramco, the world’s largest crude oil producer. Saudi Arabia will be aware that SaudiAramco will be more attractive in both a higher and stable oil price environment. A sharp increase in onshore US shale oilproduction could pose a risk to energy prices, but there are signs that US producers are starting to prefer profitability overvolume growth. The Fund has a current preference for super-majors, which are generating strong free cash flow and offerhealthy dividend yields. The outlook for liquefied natural gas (LNG) producers is healthy, but we remain cautious on domesticUS gas producers given significant onshore supply.

Gold-related assets should remain a relative safe haven for investors concerned by geopolitical or currency risk. The Fundexpects to maintain some exposure to listed gold companies as a way of hedging both potential inflationary pressures andunexpected volatility in global growth.

The outlook for agricultural commodities remains lacklustre given recent good harvests and resulting high crop-to-use levels.The latest data from the Australian Bureau of Meteorology shows a mild La Nina reading, but there have been no reports of anegative impact on South American crop production. The only positive factor is that crop prices are inexpensive from a historicalperspective and have the potential to rally on unexpected weather-related events. The Fund expects to have some exposure tofertilizer companies given current low valuations.

The price movements of commodity and related listed commodity companies can be volatile and investors should expect bothstrong rallies as well as sharp corrections. However, the possibility of a weaker USDollar, continued strength in global industrialproduction and limited new supply should be supportive for commodity prices in the medium term. In addition, we believe thecurtailment of Chinese domestic production will move markets into balance, and could represent a good buying opportunityahead of a demand-driven price recovery.


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B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 31 December2017 under review classified by

i) Country

Fair Value(S$)

% of NAV

Australia 2,923,346 23.20

Belgium 189,946 1.51

Canada 3,103,528 24.63

France 387,926 3.08

Germany 266,453 2.12

Hong Kong 239,763 1.90

India 143,145 1.14

Switzerland 705,048 5.60

United Kingdom 2,402,700 19.07

United States 2,288,317 18.16

Portfolio of investments 12,650,172 100.41

Other net assets/(liabilities) (51,472) (0.41)

Total 12,598,700 100.00

ii) Industry

Fair Value(S$)

% of NAV

Energy 4,789,473 38.02

Materials 7,860,699 62.39



Total 12,598,700 100.00

iii) Asset Class

Fair Value(S$) % of NAV

Quoted equities 12,650,172 100.41


Total 12,598,700 100.00

iv) Credit rating of quoted bonds

N/A


-5-

C) Top Ten Holdings

10 largest holdings as at 31 December 2017

Fair Value(S$)

Percentage oftotal net assetsattributable tounitholders

%

ROYAL DUTCH SHELL PLC B SHARES 793,608 6.30

HESS CORP 792,986 6.29

SINO GAS & ENERGY HOLDINGS LTD 729,073 5.79

RIO TINTO PLC 712,641 5.66

GLENCORE PLC 705,048 5.60

PRETIUM RESOURCES INC 611,803 4.86

TREVALI MINING CORP 567,433 4.50

EVOLUTION MINING LTD 553,991 4.40

AFRICA OIL CORP 531,107 4.21

BHP BILLITON PLC 522,956 4.15

10 largest holdings as at 31 December 2016

Fair Value

Percentage oftotal net assetsattributable tounitholders

(S$) %

AFRICA OIL CORP 1,013,500 7.28

HESS CORP 674,928 4.85

ROYAL DUTCH SHELL PLC B SHARE 630,334 4.53

SINO GAS & ENERGY HOLDINGS LTD 593,222 4.26

RIO TINTO PLC 563,838 4.05

EVOLUTION MINING LTD 532,259 3.83

GLENCORE PLC 495,110 3.56

SANDFIRE RESOURCES NL 442,503 3.18

COBALT INTERNATIONAL ENERGY INC 440,634 3.17

FIRST RESOURCES LTD 380,000 2.73


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D) Exposure to derivatives

i) Fair value of derivative contracts and as a percentage of NAV as at 31 December 2017

N/A

Contract orunderlyingprincipalamount

Positivefair value % of NAV

Negativefair value % of NAV

$ $ $

Foreign currency contracts 4,569 1 -* 10 -*

ii) There was a net realised loss of SGD 4,564 on derivative contracts during the financial year ended 31 December 2017.

iii) There was a net unrealised loss of SGD 9 on outstanding derivative contracts marked to market as at 31 December 2017.

E) Amount and percentage of NAV invested in other schemes as at 31 December 2017

N/A

F) Amount and percentage of borrowings to NAV as at 31 December 2017

N/A

G) Amount of redemptions and subscriptions for the financial year ended 31 December 2017

Total amount of redemptions SGD 3,996,062

Total amount of subscriptions SGD 1,563,443

H) The amount and terms of related-party transactions for the financial year ended 31December2017

Please refer to Note 9 of the Notes to the Financial Statements.

I) Expense ratios


J) Turnover ratios


K) Any material information that will adversely impact the valuation of the scheme such ascontingent liabilities of open contracts

N/A


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L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1should be disclosed as well

i) Top 10 holdings at fair value and as percentage of NAV as at 31 December 2017 and 31 December 2016

N/A

ii) Expense ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A

iii) Turnover ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A

1 Where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has aformal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on theunderlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily availableto the Singapore manager.

M) Soft dollar commissions/arrangements

UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products andservices are received from third parties. The products and services relate essentially to computer hardware and softwareto the extent that they are used to support the investment decision making process, research and advisory services,economic and political analyses, portfolio analyses including performance measurements, market analyses, data andquotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management’s duties toclients. As such services generally benefit all of UOB Asset Management’s clients in terms of input into the investmentdecision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms thattrades were executed on a best execution basis and there was no churning of trades.

N) Where the scheme offers pre-determined payouts, an explanation on the calculation of theactual payouts received by participants and any significant deviation from thepre-determined payouts

N/A


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REPORT OF THE TRUSTEE

The Trustee is under a duty to take into custody and hold the assets of United Global Resources Fund (the “Fund”) in trust forthe unitholders. In accordance with the Securities and Futures Act (Cap. 289), its subsidiary legislation and the Code onCollective Investment Schemes, the Trustee shall monitor the activities of the Manager for compliance with the limitationsimposed on the investment and borrowing powers as set out in the Trust Deed in each annual accounting year and reportthereon to unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Fund during the financial yearcovered by these financial statements, set out on pages 13 to 33, in accordance with the limitations imposed on the investmentand borrowing powers set out in the Trust Deed.

For and on behalf of the TrusteeSTATE STREET TRUST (SG) LIMITED

Authorised signatory29 March 2018


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STATEMENT BY THE MANAGER

In the opinion of UOBAssetManagement Ltd, the accompanying financial statements set out on pages 13 to 33, comprising theStatement of Total Return, Statement of Financial Position, Statement of Movements of Unitholders’ Funds, Statement ofPortfolio andNotes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial positionand portfolio holdings of United Global Resources Fund (the “Fund”) as at 31 December 2017, and the financial performanceand movements of unitholders’ funds for the year then ended in accordance with the recommendations of Statement ofRecommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore CharteredAccountants. At the date of this statement, there are reasonable grounds to believe that the Fundwill be able tomeet its financialobligations as and when they materialise.

For and on behalf of the ManagerUOB ASSET MANAGEMENT LTD

THIO BOON KIATAuthorised signatory29 March 2018


-10-

INDEPENDENTAUDITOR’SREPORTTOTHEUNITHOLDERSOFUNITEDGLOBALRESOURCESFUND

Our Opinion

In our opinion, the accompanying financial statements of United Global Resources Fund (the “Fund”), are properly drawn upin accordancewith the recommendations of Statement of RecommendedAccounting Practice 7 “Reporting Framework for UnitTrusts” issued by the Institute of Singapore Chartered Accountants, so as to present fairly, in all material respects, the financialposition and portfolio holdings of the Fund as at 31 December 2017, and of the financial performance and movements ofunitholders’ funds for the financial year ended on that date.

What we have audited

The financial statements of the Fund comprise:

• the Statement of Total Return for the financial year ended 31 December 2017;

• the Statement of Financial Position as at 31 December 2017;

• the Statement of Movements of Unitholders’ Funds for the financial year ended 31 December 2017;

• the Statement of Portfolio as at 31 December 2017; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

We are independent of the Fund in accordance with the Accounting and Corporate Regulatory Authority Code of ProfessionalConduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements thatare relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ACRA Code.

Other Information

The Fund’s Manager (the “Manager”) is responsible for the other information. The other information comprises all sections ofthe annual report but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form ofassurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in theaudit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, weconclude that there is a material misstatement of this other information, we are required to report that fact. We have nothingto report in this regard.

Responsibilities of the Manager for the Financial Statements

The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with therecommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by theInstitute of Singapore Chartered Accountants and for such internal control as the Manager determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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INDEPENDENTAUDITOR’SREPORTTOTHEUNITHOLDERSOFUNITEDGLOBALRESOURCESFUND

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessthe Manager either intends to terminate the Fund or to cease the Fund’s operations, or has no realistic alternative but to do so.

The Manager’s responsibilities include overseeing the Fund’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted in accordancewith SSAswill always detect amaterialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, designand perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than forone resulting from error, as fraudmay involve collusion, forgery, intentional omissions,misrepresentations, or the overrideof internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Manager.

• Conclude on the appropriateness of theManager’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubton the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required todraw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, andwhether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.

PricewaterhouseCoopers LLPPublic Accountants and Chartered Accountants

Singapore, 2 March 2018

-12-


9

STATEMENT OF TOTAL RETURNFor the financial year ended 31 December 2017

2017 2016

Note $ $

Income

Dividends 268,509 124,657

Interest 1,579 11,737

Total 270,088 136,394

Less: Expenses

Management fee 9 186,904 184,555

Trustee fee 9 5,105 5,000

Audit fee 18,841 17,001

Registrar fee 9 15,636 15,380

Valuation fee 9 15,575 15,380

Custody fee 9 18,385 16,838

Transaction costs 53,620 60,038

Other expenses 71,693 40,801

Total 385,759 354,993

Net income/(losses) (115,671) (218,599)

Net gains/(losses) on value of investments

Net gains/(losses) on investments 1,288,071 4,131,101

Net gains/(losses) on financial derivatives (4,573) -

Net foreign exchange gains/(losses) (23,374) (46,868)

1,260,124 4,084,233

Total return/(deficit) for the year before income tax 1,144,453 3,865,634

Less: Income tax 3 (25,672) (10,210)

Total return/(deficit) for the year 1,118,781 3,855,424


The accompanying notes form an integral part of these financial statements.-13-

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2017

2017 2016

Note $ $

Assets

Portfolio of investments 12,650,172 12,153,278

Receivables 4 51,315 39,598

Cash and bank balances 208,738 831,791

Fixed deposits - 1,006,004

Financial derivatives at fair value 6 1 -

Total assets 12,910,226 14,030,671

Liabilities

Payables 5 311,516 118,133

Financial derivatives at fair value 6 10 -

Total liabilities 311,526 118,133

Equity

Net assets attributable to unitholders 7 12,598,700 13,912,538



STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDSFor the financial year ended 31 December 2017

2017 2016

Note $ $Net assets attributable to unitholders at the beginning of the financialyear 13,912,538 10,205,588

Operations

Change in net assets attributable to unitholders resulting from operations 1,118,781 3,855,424

Unitholders’ contributions/(withdrawals)

Creation of units 1,563,443 4,650,384

Cancellation of units (3,996,062) (4,798,858)

Change in net assets attributable to unitholders resulting from net creationand cancellation of units (2,432,619) (148,474)

Total increase/(decrease) in net assets attributable to unitholders (1,313,838) 3,706,950

Net assets attributable to unitholders at the end of the financial year 7 12,598,700 13,912,538



STATEMENT OF PORTFOLIOAs at 31 December 2017

Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary

Quoted Equities

AUSTRALIA

EVOLUTION MINING LTD 200,000 553,991 4.40

FORTESCUE METALS GROUP LTD 75,000 382,567 3.04

GALAXY RESOURCES LTD 110,000 440,370 3.49

MINERAL RESOURCES LTD 10,000 220,969 1.75

REGIS RESOURCES LTD 75,000 337,098 2.67

SINO GAS & ENERGY HOLDINGS LTD 4,500,000 729,073 5.79

SYRAH RESOURCES LTD 55,000 259,278 2.06

TOTAL AUSTRALIA 2,923,346 23.20

BELGIUM

UMICORE SA 3,000 189,946 1.51

CANADA

AFRICA OIL CORP 353,679 531,107 4.21

FORTUNA SILVER MINES INC 35,000 244,892 1.94

HUDBAY MINERALS INC 35,000 415,495 3.30

NEVSUN RESOURCES LTD 35,000 114,233 0.91

PRETIUM RESOURCES INC 40,000 611,803 4.86

TECK RESOURCES LTD 10,000 350,592 2.78

TREVALI MINING CORP 350,000 567,433 4.50

VERMILION ENERGY INC 5,500 267,973 2.13

TOTAL CANADA 3,103,528 24.63

FRANCE

TOTAL SA 5,250 387,926 3.08

GERMANY

K+S AG 8,000 266,453 2.12

HONG KONG

CNOOC LTD 125,000 239,763 1.90




Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary (continued)

Quoted Equities

INDIA

COAL INDIA LTD 26,000 143,145 1.14

SWITZERLAND

GLENCORE PLC 100,000 705,048 5.60

UNITED KINGDOM

BHP BILLITON PLC 19,000 522,956 4.15

RIO TINTO PLC 10,000 712,641 5.66

ROYAL DUTCH SHELL PLC B SHARES 17,500 793,608 6.30

TULLOW OIL PLC 100,000 373,495 2.96

TOTAL UNITED KINGDOM 2,402,700 19.07

UNITED STATES

CHEVRON CORP 1,500 250,956 1.99

EXXON MOBIL CORP 2,500 279,441 2.22

HESS CORP 12,500 792,986 6.29

NEWMONT MINING CORP 7,500 376,063 2.99

NUCOR CORP 3,500 297,389 2.36

THE MOSAIC CO 8,500 291,482 2.31

TOTAL UNITED STATES 2,288,317 18.16

Total Equities 12,650,172 100.41



Net assets attributable to unitholders 12,598,700 100.00




Percentage oftotal net assetsattributable tounitholders at31 December

2017%


2016%

By Geography - Primary (Summary)

Quoted Equities

Australia 23.20 27.34

Belgium 1.51 -

Canada 24.63 20.84

France 3.08 -

Germany 2.12 -

Hong Kong 1.90 -

India 1.14 -

Norway - 1.91

Singapore - 2.73

South Korea - 1.63

Switzerland 5.60 3.56

United Kingdom 19.07 13.10

United States 18.16 16.24

Portfolio of investments 100.41 87.35

Other net assets/(liabilities) (0.41) 12.65

Net assets attributable to unitholders 100.00 100.00




Fair value at31 December

2017$


2017%


2016%

By Industry - Secondary

Quoted Equities

Consumer Staples - - 2.73

Energy 4,789,473 38.02 33.58

Materials 7,860,699 62.39 51.04

Portfolio of investments 12,650,172 100.41 87.35

Other net assets/(liabilities) (51,472) (0.41) 12.65

Net assets attributable to unitholders 12,598,700 100.00 100.00



These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1 General

United Global Resources Fund (the “Fund”) is a Singapore-registered trust fund constituted under a Trust Deed dated 13 April2006 between UOB Asset Management Ltd (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the“Retired Trustee”). The Deed is governed by the laws of the Republic of Singapore.

With effect from 1 April 2017, the Trustee of the Fund has changed from HSBC Institutional Trust Services (Singapore) Limitedto State Street Trust (SG) Limited (the “Trustee”).

The investment objective of the Fund is to achieve long term capital growth by investing in securities (equities or equity-relatedsecurities) issued by companies in the resources, commodities and energy sectors globally.

Subscriptions and redemptions of the units are denominated in theSingaporeDollar and theUnitedStatesDollar. Investorsmaysubscribe in the United States Dollar at the applicable rate of exchange from the Singapore Dollar.

2 Significant accounting policies

(a) Basis of preparation

The financial statements have been prepared under the historical cost convention, modified by the revaluation of financialassets held at fair value through profit or loss, and in accordance with the recommendations of Statement of RecommendedAccounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants.

The Fund has adopted the following Singapore Financial Reporting Standards (“FRS”) and related amendments in accordancewith the recommendations of the RAP 7 issued in March 2017 for annual periods beginning on or after 1 July 2016:

(i) Consolidation and disclosure of interests in other entities

FRS 110 “Consolidated financial statements”FRS 112 “Disclosure of interests in other entities”Amendments to FRS 110, FRS 112 and FRS 27 “Investment entities”

FRS 110 and the amendments define an investment entity and introduce an exception from the consolidation requirements forinvestments entities.

FRS 112 and the amendments require entities to disclose significant judgements and assumptions made in determiningwhether the entity controls, jointly controls, significantly influences or has some interests in other entities. Entities are alsorequired to provide disclosure around certain “structured entities”. The amendments to FRS 112 introduce new disclosurerequirements related to investment entities.

(ii) Offsetting financial assets and liabilities disclosures

Amendments to FRS 32 “Financial instruments: Presentation - Offsetting financial assets and financial liabilities”Amendments to FRS 107 “Disclosures - Offsetting financial assets and financial liabilities”

The amendments to FRS 32 provide clarification on the offsetting criteria in FRS 32 and address inconsistencies in theirapplication.

The amendments to FRS 107 require additional disclosures to enable users of the financial statements to evaluate the effector the potential effects of netting arrangements, including rights of set-off associated with an entity’s recognised financialassets and recognised financial liabilities, on the entity’s financial position.

The adoption of these new or amended FRS impacted the Fund’s level of disclosures in certain of the above noted areas, butdid not result in substantial changes to the accounting policies of the Fund and had no material effect on the amounts reportedfor the current or prior years.


NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2017

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2 Significant accounting policies (continued)

(b) Recognition of income

Dividend income is recognised when the right to receive payment is established. Interest income is recognised on a timeproportion basis using the effective interest method.

(c) Investments

Investments are classified as financial assets at fair value through profit or loss.

(i) Initial recognition

Purchases of investments are recognised on the trade date. Investments are recorded at fair value on initial recognition.

(ii) Subsequent measurement

Investments are subsequently carried at fair value. Net changes in fair value on investments are included in the Statement ofTotal Return in the year in which they arise.

(iii) Derecognition

Investments are derecognised on the trade date of disposal. The resultant realised gains and losses on the sale of investmentsare computed on the basis of the difference between the weighted average cost and selling price gross of transaction costs,and are taken up in the Statement of Total Return.

(d) Basis of valuation of investments

The fair value of financial assets and liabilities traded in active markets is based on quoted market prices at the close of tradingon the financial year end date. The quoted market price used for investments held by the Fund is the last traded market pricefor both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstanceswhere the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread thatis most representative of fair value.

(e) Foreign currency translation

(i) Functional and presentation currency

The Fund’s investors are mainly from Singapore with the subscriptions and redemptions of the units denominated in theSingapore Dollar and the United States Dollar.

The performance of the Fund is measured and reported to the investors in the Singapore Dollar. The Manager considers theSingapore Dollar as the currency of the primary economic environment in which the Fund operate. The financial statements arepresented in the Singapore Dollar, which is the Fund’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of thetransactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation atyear-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statementof Total Return. Translation differences on non-monetary financial assets and liabilities are also recognised in the Statementof Total Return within “Net gains/losses on investments”.




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2 Significant accounting policies (continued)

(f) Expenses charged to the Fund

All direct expenses relating to the Fund are charged directly to the Statement of Total Return. In addition, certain expensesshared by all unit trusts managed by the Manager are allocated to each fund based on the respective fund’s net asset value.

(g) Financial derivatives

Financial derivatives including forwards and swapsmay be entered into for the purposes efficient portfoliomanagement, tacticalasset allocation or specific hedging of financial assets held as determined by theManager and in accordance with the provisionof the Trust Deed and the Code on Collective Investment Schemes.

Financial derivatives outstanding on the financial year end date are valued at the forward rate or at the current market pricesusing the �mark-to-market� method, as applicable, and the resultant gains and losses are taken up in the Statement of TotalReturn.

(h) Distributions

The Manager has the absolute discretion to determine whether a distribution is to be made. In such an event, an appropriateamount will be transferred to a distribution account, to be paid out on the distribution date. The amount shall not be treated aspart of the property of the Fund. Distributions are accrued for at the financial year end date if the necessary approvals havebeen obtained and a legal or constructive obligation has been created.

(i) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is alegally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the assetand settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must beenforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Fund or thecounterparty.

3 Income tax

2017 2016

$ $

Overseas income tax 25,672 10,210

The Fundwas granted the status of Designated Unit Trust (“DUT”) in Singapore. The Trustee of the Fund ensures that the Fundfulfill their reporting obligations under the DUT Scheme.

Under the DUT Scheme, subject to certain conditions and reporting obligations being met, certain income of the DUT Fund isnot taxable in accordance with Sections 35(12) and 35(12A) of the Income Tax Act. Such income includes:

(i) gains or profits derived from Singapore or elsewhere from the disposal of securities;

(ii) interest (other than interest for which tax has been deducted under Section 45 of the Income Tax Act);

(iii) dividends derived from outside Singapore and received in Singapore;




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3 Income tax (continued)

(iv) gains or profits derived from foreign exchange transactions, transactions in futures contracts, transactions in interest rateor currency forwards, swaps or option contracts and transactions in forwards, swaps or option contracts relating to anysecurities or financial index;

(v) discount, prepayment fee, redemption premium and break cost from qualifying debt securities issued during theprescribed period; and

(vi) distributions from foreign unit trusts derived from outside Singapore and received in Singapore.

The overseas income tax represents tax withheld on foreign sourced income.

4 Receivables

2017 2016

$ $

Amounts receivable for creation of units 29,052 22,985

Dividends receivable 8,714 1,490

Other receivables 13,549 15,123

51,315 39,598

5 Payables

2017 2016

$ $

Amount payable for cancellation of units 230,580 40,872

Amount due to the Manager 50,953 54,732

Amount due to Trustee 1,274 1,400

Tax payables 2,517 -

Other creditors and accrued expenses 26,192 21,129

311,516 118,133




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6 Fair value of financial derivatives

Financial derivatives contracts comprise foreign currency contracts for the sale and purchase of foreign currencies. Thecontract or underlying principal amounts of these financial derivatives and their corresponding gross positive or negative fairvalues at the financial year end date are analysed below.

2017 2016Contract orunderlyingprincipalamount

Positivefair value

Negativefair value

Contract orunderlyingprincipalamount

Positivefair value

Negativefair value

$ $ $ $ $ $

Foreign currency contracts 4,569 1 10 - - -

7 Units in issue

During the financial year ended 31 December 2017 and 2016, the numbers of units issued, redeemed and outstanding wereas follows:

2017 2016

Units at the beginning of the financial year 23,469,321 23,823,226

Units created 2,701,465 8,934,958

Units cancelled (6,789,784) (9,288,863)

Units at the end of the financial year* 19,381,002 23,469,321

*Included above are units denominated in USD 7,814,109 10,056,566

$ $

Net assets attributable to unitholders 12,598,700 13,912,538

Net assets value per unit 0.650 0.592

There is no difference between the net assets attributable to unitholders per unit per financial statements and the net assetsattributable to unitholders per unit for issuing/redeeming of units.

8 Financial risk management

The Fund’s activities expose it to a variety of market risks (including currency risk, interest rate risk and price risk), credit riskand liquidity risk. The Fund’s overall risk management programme seeks to minimise potential adverse effects on the Fund’sfinancial performance. The Fund may use futures contracts, financial options contracts and/or foreign currency contractssubject to the terms of the Trust Deed to moderate certain risk exposures. Specific guidelines on exposures to individualsecurities and certain industries are in place for the Fund at any time as part of the overall financial risk management to reducethe Fund’s risk exposures.




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8 Financial risk management (continued)

TheFund’s assets principally consist of financial instruments such as equity investments and cash. They are held in accordancewith the published investment policies of the Fund. The allocation of assets between the various types of investments isdetermined by the Manager to achieve its investment objectives.

(a) Market risk

Market risk is the risk of loss arising from uncertainty concerning movements in market prices and rates, including observablevariables such as interest rates, credit spreads, exchange rates, and others that may be only indirectly observable such asvolatilities and correlations. Market risk includes such factors as changes in economic environment, consumption pattern andinvestor’s expectation etc. which may have significant impact on the value of the investments. The Fund’s investments aresubstantially dependent on changes in market prices and are monitored by the Manager on a regular basis so as to assesschanges in fundamentals and valuation. Although the Manager makes reasonable efforts in the choice of investments, eventsbeyond reasonable control of the Manager could affect the prices of the underlying investments and hence the asset value ofthe Fund.Guidelines are set to reduce theFund’s risk exposures tomarket volatility such as diversifying the portfolio by investingacross various geographies, alternatively, the Fund may be hedged using derivative strategies.

(i) Foreign exchange risk

The Fund has monetary financial assets and liabilities denominated in currencies other than the Singapore Dollar and it maybe affected favourably or unfavourably by exchange rate regulations or changes in the exchange rates between the SingaporeDollar and such other currencies. The Manager may at his discretion, implement a currency management strategy either toreduce currency volatility or to hedge the currency exposures of the Fund.

The table below summarises the Fund’s exposure to foreign currencies at the end of the financial year.

As at 31 December 2017SGD USD CAD AUD GBP Others Total$ $ $ $ $ $ $

AssetsPortfolio ofinvestments - 2,288,318 2,572,422 2,923,346 3,107,747 1,758,339 12,650,172

Receivables 41,931 2,916 1,259 - - 5,209 51,315Cash and bankbalances 47,291 137,711 3,600 - - 20,136 208,738

Total Assets 89,222 2,428,945 2,577,281 2,923,346 3,107,747 1,783,684 12,910,225

Liabilities

Payables 170,389 139,261 313 - - 1,553 311,516

Total Liabilities 170,389 139,261 313 - - 1,553 311,516

Foreigncurrencycontracts(notional value) 4,117 (527) (3,590) - - -Net currencyexposure (77,050) 2,289,157 2,573,378 2,923,346 3,107,747 1,782,131




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(a) Market risk (continued)

(i) Foreign exchange risk (continued)

As at 31 December 2016SGD USD CAD AUD GBP Others Total$ $ $ $ $ $ $

AssetsPortfolio ofinvestments 380,000 2,480,174 2,678,129 3,803,621 2,318,232 493,122 12,153,278

Receivables 27,422 12,176 - - - - 39,598

Fixed deposits 1,006,004 - - - - - 1,006,004Cash and bankbalances 766,944 64,847 - - - - 831,791

Total Assets 2,180,370 2,557,197 2,678,129 3,803,621 2,318,232 493,122 14,030,671

Liabilities

Payables 102,722 15,411 - - - - 118,133

Total Liabilities 102,722 15,411 - - - - 118,133

Net currencyexposure 2,077,648 2,541,786 2,678,129 3,803,621 2,318,232 493,122

Investments, which is the significant item in the Statement of Financial Position is exposed to currency risk and other price risk.The other price risk sensitivity analysis includes the impact of currency risk on non-monetary investments. The Fund’s netfinancial assets comprise significantly non-monetary investments, hence currency risk sensitivity analysis has not beenperformed on the remaining financial assets.

(ii) Price risk

Price risk is the risk of potential adverse changes to the value of financial investments because of changes inmarket conditionsand volatility in security prices.

The table below summarises the impact of increases/decreases from the Fund’s investments in equities on the Fund’s netassets attributable to unitholders at 31 December 2017 and 2016. The analysis is based on the assumption that the indexcomponents within the benchmark increased/decreased by a reasonable possible shift, with all other variables held constantand that the fair value of the Fund’s investments moved according to the historical correlation with the index.

Benchmark component

2017Net impact tonet assets

attributable tounitholders

2016Net impact tonet assets

attributable tounitholders

$ % $ %

30% MSCI AC World Materials,35% MSCI ACWorld Metals & Mining and 35% MSCI ACWorld Energy 2,580,635 20 2,333,429 20




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(a) Market risk (continued)

(iii) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

Investment funds that invest in equity securities may be subject to interest rate risk as any interest rate change may affect theequity risk premium though at varying degrees. Tomanage this risk, theManager analyses how interest rate changesmay affectdifferent industries and securities and then seeks to adjust the Fund’s portfolio investments accordingly. However, the effectsof changes in interest rates on the Fund’s portfolio may not be quantified as the relationship between the interest rates and thevalue of equity securities is indirect.

Other than the cash and bank balances which are at short term market interest rates, and therefore subject to insignificantinterest rate risk, the Fund’s financial assets and liabilities are largely non-interest bearing.

Hence, no sensitivity analysis has been presented separately.

(b) Liquidity risk

The Fund is exposed to daily cash redemptions and disbursements for the settlements of purchases. The Manager thereforeensures that the Fund maintains sufficient cash and cash equivalents and that it is able to obtain cash from the sale ofinvestments held to meet its liquidity requirements. Reasonable efforts will be taken to invest in securities which are traded ina relatively active market and which can be readily disposed of.

The Fund’s investments in listed securities are considered to be readily realisable as they are listed on established regionalstock exchanges.

The table below analyses the Fund’s financial liabilities into relevant maturity groupings based on the remaining period at thefinancial year end date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2017

Payables 311,516 - -

Financial derivatives at fair value

- Foreign currency contracts 10 - -

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2016

Payables 118,133 - -




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(c) Credit risk

The Fund takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due.The Fund’s credit risk is concentrated on cash and bank balances, and amounts or securities receivable on the sale andpurchase of investments respectively. In order to mitigate exposure to credit risk, all transactions in listed securities aresettled/paid for upon delivery and transacted with approved counterparties using an approved list of brokers that are regularlyassessed and updated by the Manager.

The table below summarises the credit rating of banks and custodians in which the Fund’s assets are held as at 31 December2017 and 2016.

The credit ratings are based on the Viability ratings published by Fitch.

Credit ratingas at 31December2017

Credit ratingas at 31December2016

Bank and custodian

State Street Bank and Trust Company aa- aa-

Bank

United Overseas Bank Limited n/a aa-

Counterparty of foreign currency contracts

State Street Bank and Trust Company aa- n/a

The maximum exposure to credit risk at the financial year end date is the carrying amount of the portfolio of investments andcash and bank balances as presented in Statement of Financial Position.

(d) Capital management

The Fund’s capital is represented by the net assets attributable to unitholders. The Fund strives to invest the subscriptions ofredeemable participating units in investments that meet the Fund’s investment objectives while maintaining sufficient liquidityto meet unitholder redemptions.

(e) Fair value estimation

The Fund classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used inmaking the measurements. The fair value hierarchy has the following levels:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is,as prices) or indirectly (that is, derived from prices) (Level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).




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(e) Fair value estimation (continued)

The following table analyses within the fair value hierarchy, the Fund’s financial assets and liabilities (by class) measured at fairvalue at 31 December 2017 and 2016:

Level 1 Level 2 Level 3 Total$ $ $ $

As at 31 December 2017Assets

Portfolio of investments

- Quoted equities 12,650,172 - - 12,650,172

Financial derivatives at fair value - 1 - 1

Total 12,650,172 1 - 12,650,173

Liabilities

Financial derivatives at fair value - 10 - 10

Total - 10 - 10

Level 1 Level 2 Level 3 Total

$ $ $ $As at 31 December 2016Assets

Portfolio of investments

- Quoted equities 12,153,278 - - 12,153,278

Total 12,153,278 - - 12,153,278

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1,comprise listed equities. The Fund does not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices,dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2.

Except for cash and bank balances which are classified as Level 1, the Fund’s assets and liabilities not measured at fair valueat 31 December 2017 and 2016 have been classified as Level 2. The carrying amounts of these assets and liabilitiesapproximate their fair values as at the financial year end date.




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(f) Offsetting financial assets and financial liabilities

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is alegally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the assetand settle the liability simultaneously. The gross and net positions of financial assets and liabilities that have been offset in theStatement of Financial Position are disclosed in the first three columns of the tables below.

Financial assets Effects of offsetting on the Statements ofFinancial Position

Related amount not offset

Grossamounts offinancialassets

Grossamounts

set off in theStatements

ofFinancialPosition

Net amountof

financialassets

presented inthe

Statementsof

FinancialPosition

Financialinstruments

Collateralpledged/received Net amount

$ $ $ $ $ $

31 December 2017Derivative financialinstruments 4,570 (4,569) 1 (1) - -

Total 4,570 (4,569) 1 (1) - -

31 December 2016Derivative financialinstruments - - - - - -

Total - - - - - -




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(f) Offsetting financial assets and financial liabilities (continued)

Financial liabilities Effects of offsetting on the Statements ofFinancial Position

Related amounts not offset

Grossamounts offinancialliabilities

Grossamounts

set off in theStatements

ofFinancialPosition

Net amountof

financialliabilities

presented inthe

Statementsof

FinancialPosition

Financialinstruments

Collateralpledged/received Net amount

$ $ $ $ $ $

31 December 2017Derivative financialinstruments 4,579 (4,569) 10 (1) - 9

Total 4,579 (4,569) 10 (1) - 9

31 December 2016Derivative financialinstruments - - - - - -

Total - - - - - -

9 Related party transactions

(a) TheManager and the Trustee of the Fund areUOBAssetManagement Ltd andState Street Trust (SG) Limited respectively.State Street Trust (SG) Limited replaced HSBC Institutional Trust Services (Singapore) Limited as the Trustee with effect from1 April 2017. The Manager is a subsidiary of United Overseas Bank Limited while the Trustee is a subsidiary of State StreetBank and Trust Company.

Management fee and valuation fee are paid to the Manager for the financial year. Trustee fee and registrar fee were paid to theRetired Trustee for the period from 1 January 2017 to 31 March 2017.

With effect from 1 April 2017, trustee fee is paid to the Trustee while registrar fee and custody fee are paid to State Street Bankand Trust Company, Singapore Branch.

These fees paid or payable by the Fund shown in the Statement of Total Return and in the respective Notes to the FinancialStatements are on terms set out in the Trust Deed. All other related party transactions are shown elsewhere in the financialstatements.




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9 Related party transactions (continued)

(b) As at the end of the financial year, the Fund maintained the following accounts with the related parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Cash and bank balances 208,738 -

United Overseas Bank Limited

Cash and bank balances - 8,789

Fixed deposits - 1,006,004

(c) The following transactions took place during the financial year between the Fund and related parties at terms agreedbetween the parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Bank charges 3,771 -

United Overseas Bank Limited

Bank charges 50 50

The Hongkong and Shanghai Banking Corporation Limited

Bank charges 1,529 -

(d) UOB Kay Hian Pte Ltd is an affiliated company of United Overseas Bank Limited.

During the financial year, the Fund has brokerage fee paid or payable to UOB Kay Hian Pte Ltd as follows:

2017 2016

$ $

Brokerage charges - 637




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10 Financial ratios

2017 2016$ $

Total operating expenses 330,780 290,673Average daily net asset value 12,464,847 12,286,129Expense ratio1 2.65% 2.37%

Lower of total value of purchases or sales 11,421,182 11,627,950Average daily net assets value 12,464,847 12,286,129Turnover ratio2 91.63% 94.64%

1 The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore

(“IMAS”). The calculation of the Fund’s expense ratio at financial year end was based on total operating expenses divided by the

average net asset value respectively for the financial year. The total operating expenses do not include (where applicable) brokerage

and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses,

front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received.

The Fund does not pay any performance fee. The average net asset value is based on the daily balances.2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The

calculation of the portfolio turnover ratiowas based on the lower of the total value of purchases or sales of the underlying investments

divided by the average daily net asset value.




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