Investing in Luxembourg - A High Perform Report of the Investing Fund

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1 Investment company under Luxembourg law with variable capital and multiple Sub-Funds Audited Annual Report as at February 28, 2011 This extract of the annual report of (the Company ) refers only to the Sub-Funds authorised in Switzerland. A further Sub-Fund which has been approved by the Commission de Surveillance du Secteur Financier exists but is not designed for offering and distributing in Switzerland. No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current prospectus accompanied by the latest annual and the most recent semi-annual report, if published thereafter.

2 Management and Administration HEAD OFFICE 69, route d Esch L-1470 Luxembourg PROMOTER Sydbank (Schweiz) AG Poststrasse 17 CH-9001 St. Gallen BOARD OF DIRECTORS Dr. Thomas König Chief Executive Officer Sydbank (Schweiz) AG Jürg Willi Compliance Officer Sydbank (Schweiz) AG Mads Schierup Petersen Senior Vice President Sydbank (Schweiz) AG Jørgen Dahl Chief Investment Officer Sydbank (Schweiz) AG INVESTMENT MANAGER Sydbank (Schweiz) AG Poststrasse 17 CH-9001 St. Gallen REVISEUR D ENTREPRISES AGREE KPMG Audit S.à r.l. 9, Allée Scheffer L-2520 Luxembourg CUSTODIAN BANK, DOMICILIARY, ADMINISTRATIVE, CORPORATE, PAYING, LISTING, REGISTRAR AND TRANSFER AGENT RBC Dexia Investor Services Bank S.A. 14, Porte de France L-4360 Esch-sur-Alzette REPRESENTATIVE AND PAYING AGENT IN SWITZERLAND Sydbank (Schweiz) AG Poststrasse 17 CH-9001 St. Gallen LEGAL ADVISER Arendt & Medernach 14, Rue Erasme P.O. Box 39 L-2010 Luxembourg 2

3 Information to Shareholders Annual reports audited by the auditors, and semi-annual reports are available to Shareholders at the registered office of the Company and other locations designated by the former. Annual reports are published within four months of the end of the fiscal year. Semi-annual reports are published within two months of the end of the six-month period. The Annual General Meeting of Shareholders is held each year at the registered office of the Company, or any other place in Luxembourg specified in the notice of the meeting, on the last Wednesday of May at 10:00 a.m. If that day is not a banking day in Luxembourg, it will be held on the next banking day. The Company has been established for an undetermined period. The accounting year of the Company runs from March 1 of each year until February 28 (or February 29, as the case may be) of the next following year. Special Information for investors in Switzerland Sales Prospectus relating to the distribution in Switzerland, copies of the articles of incorporation as well as the annual and semi-annual reports of the Company may be obtained free of charge from the Representative in Switzerland: Sydbank (Schweiz) AG, Poststrasse 17, CH-9001 St. Gallen, pbi@sydbank.ch, The latest Net Asset Values (NAV) are published daily on the electronic platform with the notice "excluding commission" and are also available in the internet on Publications in Switzerland regarding the Company or the Sub-Funds, especially the publication of amendments in the Prospectus or in the articles of incorporation, will be published in the "Schweizerisches Handelsamtsblatt" (SHAB) and on the electronic platform 3

4 Directors Report Lots of spectacular natural events were again seen in Do you still remember them? A severe earthquake shook Haiti in January and claimed thousands of victims. Another devastating quake occurred at the end of February, this time in Chile, and was followed by a tsunami. The Icelandic volcano Eyjafjallajökull erupted at the end of March The giant ash cloud brought flights to a standstill in extensive parts of Northern and Central Europe from the middle of April. Also in April, an oil rig exploded in the Gulf of Mexico, leading to a terrible natural disaster. Oil flowed into the sea for weeks and drifted to the US coast. Pakistan was hit in July. Torrential rain led to landslides and extensive flooding. Millions of people were directly affected. At the same time, enormous forest fires raged in Russia as a consequence of a long dry spell. Moscow was shrouded in thick smog for days. And this list is only a selection. Why are we mentioning this here? What does this have to do with the Investment Company? Directly, nothing of course. Naturally these events had a degree of impact on the economy. However, the recollection of these disasters away from the financial markets should put into perspective the observation and importance of price developments. In addition to natural disasters and almost daily terror attacks and continuing fighting in certain regions, there were also crises and discussions with a closer connection to the financial markets during the reporting period. The after-effects of the banking and financial crisis were still being felt. Several major problems were uncovered. For example, Greece was forced to ask the euro states and the International Monetary Fund (IMF) for urgent financial assistance. The country was on the brink of national bankruptcy. Other states are also battling enormous mountains of debt. The euro is in the midst of its biggest crisis since its launch. In the late autumn of 2010, Ireland was also forced to confess that it would be unable to continue without help from other EU countries and the IMF. But debt is not only a problem in Europe. A good few experts also see the USA s indebtedness as a time bomb waiting to go off. Recent protests by broad swathes of society in various Arab countries have made the headlines. Following on from Tunisia and Egypt, where the protests led to the fall of the previous rulers, corresponding revolts have also begun in Libya. Libya is an important oil exporter and thus the unrest is also leaving a mark on the financial and commodities markets. So what does all this mean in relation to the assets managed as part of the investment company s sub-funds? The sub-funds of continue to pursue their respective targets with a relatively moderate risk profile. Appropriate precautions were introduced from 2009 in particular. It can be stated that the global economy developed well overall in the year In an environment of low interest rates and ongoing government economic stimulus programmes, many companies were able to do good business. In emerging countries in particular, and especially in China, the economy is progressing very strongly. The returns achieved in the last financial year once again began to develop more normally, following very strong fluctuations in the years 2008 and The first few months of the reporting period were particularly pleasing. Unfortunately, recent performance was once again dampened somewhat by the latest declines in the first two months of As announced in the last annual report, the reporting period saw a change in investment manager remuneration. Asset management fees were raised from June As a countermove, all commission, refunds and other payments paid by the target funds have since flowed in full into the fund assets and thus to the investors of. We will continue to work with the investment manager to do everything we can to justify the trust placed by investors in the Investment Company. Beginning of March 2011 The Directors: Dr. Thomas König Jürg Willi Jørgen Dahl Mads Schierup Petersen 4

5 Investment Manager s Report The past reporting period (March 2010 February 2011) offered a remarkable mix of positive and negative news as investors around the world eagerly anticipated signs of economic recovery and financial stabilization. Whilst most financial markets delivered positive returns for a second straight year, investors had to endure a host of troubling news and pessimistic market predictions. Even six months into the reporting period in late August 2010, the broad world index for equities had risen only 1%. But the diversified, long-term investment strategy we impose in was rewarded with attractive market returns. Stocks performed well in most developed countries, despite ongoing concerns over a possible double-dip recession, rising government indebtedness, inflation and lately the situation in the Middle East and North Africa. Fixed income returns were positive, as interest rates were falling swiftly until late summer The very low of the interest rates were on September 7, Longer dated bonds hence delivered impressive returns during the first six months of the reporting period returns we are, however, not likely to see any time soon again. From September 2010 and towards the end of the reporting period in February 2011, global interest rates accelerated on the back of continued stimulus from the US Federal Bank (FED) and stronger than expected economic news from primarily the US and Germany. Rates in Europe rose when the concerns about the peripheral countries debt situation were relieved. The last autumn months were particular volatile started out with another big surge in interest rates. A mix of events including the escalation of violence in the Middle East and North Africa, increasing inflation expectations, and peripheral European sovereign credit downgrades supported the rising rates. Despite this, the fixed income investments in the Sub-Funds delivered positively in the period. In retrospect, it was a good period for globally diversified portfolios. Growth measures were among the positive contributors, as moderate economic expansion in the US and in the Euro zone was confirmed. The negative news in the US was mainly linked to the labour market, where signs of recovery still remain to be confirmed. In Europe, the weakening finances of some member states of the European Union, raised concern that the financial crisis had moved from private-sector banks to public-sector balance sheets. The European Union and the International Monetary Fund responded with loans that were conditional that the borrowers had to taking drastic and significant measures. The mixed economic data encouraged the governments and central banks to take additional actions to stimulate economies and support financial markets. The most direct support came as central banks supported government bond markets in the US and Europe. The FED s November announcement of a second round of support to the economy and financial markets (known as QE2 ) helped lift stocks and corporate bond markets. From the start of 2011 and towards the end of the reporting period, markets were widely driven by geopolitical concerns over the developments in the Middle East and in North Africa. This has mainly affected equities in particular equities in the Emerging Markets. Throughout the year we have been consistent in our investment strategy across the profiles of the Sub-Funds. Within the bond segment we were overweight long-dated high-grade bonds, which were very successful and delivered positive net results in the portfolios. Additionally, we favoured corporate bonds instead Emerging Markets bonds. Both types of bonds performed equally well until late December Then, corporate bonds took the lead after the financial markets turned sour on Emerging Market related exposure in general on the back of the geopolitical situation. For the equity investments, we decided to reduce risk in the early summer by selling the more aggressive equity positions such as growth and small-cap equities and instead buying more defensive and less volatile equities such as value and dividend equities. This strategy has proved to be more resilient than a broad market exposure during the first months of March 2011 Sydbank (Schweiz) AG 5

6 Report of the Réviseur d Entreprises agréé To the Shareholders of, 69, route d Esch, L-1470 Luxembourg We have audited the accompanying financial statements of ("The Sicav") and each of its sub-funds, which comprise the statement of net assets, the statement of investments as at February 28, 2011, the statement of sales and purchases and the statement of operations and changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory information. Board of Directors of the SICAV responsibility for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements, and for such internal control as the Board of Directors of the SICAV determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the Réviseur d Entreprises agréé Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgement of the Réviseur d Entreprises agréé, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Réviseur d Entreprises agréé considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of and each of its sub-funds as of February 28, 2011, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. Other Matter Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the financial statements taken as a whole. Luxembourg, May 20, 2011 KPMG Audit S.à r.l. Cabinet de révision agréé Chrystelle Veeckmans 6

7 Statement of Net Assets as at February 28, Conservative - Stable - Dynamic Consolidated Notes EUR EUR EUR EUR ASSETS Investments in securities at market value (2) 43,071,496 13,130,858 9,189,467 65,391,821 Cash at bank 396, , ,755 1,353,848 Amounts receivable on subscriptions 0 17, ,505 Formation expenses, net (2) 1,128 1, ,333 Other assets 0 3,390 5,102 8,492 TOTAL ASSETS 43,469,611 13,932,859 9,371,529 66,773,999 LIABILITIES Amounts payable on redemptions 340, , ,596 Management fees payable (3) 103,713 36,969 29, ,096 Taxes and expenses payable (6) 44,789 20,047 12,597 77,433 TOTAL LIABILITIES 489,077 57, , ,125 TOTAL NET ASSETS 42,980,534 13,875,843 9,125,497 65,981,874 Net asset value per share Capitalisation Number of shares outstanding Capitalisation 452, , , The accompanying notes form an integral part of these financial statements. 7

8 Statement of Operations and Changes in Net Assets for the year ended February 28, Conservative - Stable - Dynamic Consolidated Notes EUR EUR EUR EUR NET ASSETS AT THE BEGINNING OF THE YEAR 43,832,470 10,638,718 11,142,522 65,613,710 INCOME Dividends, net 160,033 32,288 38, ,029 Trailer fees (10) 35,271 16,048 20,558 71,877 TOTAL INCOME 195,304 48,336 59, ,906 EXPENSES Management fees (3) 399, ,784 99, ,293 Custodian fees 13,675 7,279 6,999 27,953 Domiciliation, administration and transfer agent fees 102,023 40,870 41, ,174 Audit fees, printing and publication expenses 45,559 7,205 12,270 65,034 Subscription tax (5) 4,479 2,192 2,435 9,106 Bank charges 5,548 2,877 2,872 11,297 Interest paid Amortisation of formation expenses (2) 7,426 6,580 1,351 15,357 Other charges 12,755 3,381 2,762 18,898 TOTAL EXPENSES 591, , , ,701 NET INCOME / (LOSS) FROM INVESTMENTS (395,707) (137,031) (110,057) (642,795) Net realised gain/(loss) on sale of investments 1,758, ,263 1,091,829 3,588,051 Net realised gain/(loss) on forward foreign exchange (174,993) (139,318) (75,361) (389,672) Net realised gain/(loss) on foreign exchange (97,620) (59,558) (24,827) (182,005) NET REALISED GAIN/(LOSS) 1,090, , ,584 2,373,579 Change in net unrealised appreciation/(depreciation) on: - investments (770,778) (75,407) 35,061 (811,124) - forward foreign exchange contracts 32,009 12,804 5,487 50,300 NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS 351, , ,132 1,612,755 EVOLUTION OF THE CAPITAL Subscriptions of shares 8,675,339 5,112,059 1,289,363 15,076,761 Redemptions of shares (9,879,145) (2,213,687) (4,228,520) (16,321,352) NET ASSETS AT THE END OF THE YEAR 42,980,534 13,875,843 9,125,497 65,981,874 The accompanying notes form an integral part of these financial statements. 8

9 Changes in the Number of Shares for the year ended February 28, Conservative - Stable - Dynamic Capitalisation Number of shares outstanding at the beginning of the year 465, , , Number of shares issued 89, , , Number of shares redeemed (103, ) (24, ) (51, ) Number of shares outstanding at the end of the year 452, , , Statistics - Conservative - Stable - Dynamic EUR EUR EUR Total Net Asset Value February 28, ,980,534 13,875,843 9,125,497 February 28, ,832,470 10,638,718 11,142,522 February 28, ,642,069 19,063,642 4,101,934 NAV per share of the end of the year February 28, 2011 Capitalisation February 28, 2010 Capitalisation February 28, 2009 Capitalisation

10 Conservative Statement of Investments as at February 28, 2011 (expressed in EUR) Description Quantity Currency Cost Evaluation % net assets Investment Funds admitted to an Official Stock Exchange Listing France Lyxor ETF EuroMts 1-3Y/CAP/DIS 56,155 EUR 6,566,375 6,565, Lyxor ETF EuroMts 3-5Y/CAP/DIS 67,000 EUR 8,626,939 8,541, ,193,314 15,107, Germany DWS Euro Strategie 1* EUR Luxembourg Axa IM Fixed Income Investment Strategies - US Short Duration High Yield Fund -I-EUR/CAP 18,339 EUR 1,951,144 2,379, Dexia Bonds Mortgages I/CAP 61,067 EUR 8,205,623 8,328, Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 242,259 EUR 3,612,444 4,467, JP Morgan Funds - Aggregate Bond Fund A-INC/USD 0** USD Schroder International Selection Fund - Euro Short Term Bond -A-/CAP 525,640 EUR 3,478,207 3,511, Sparinvest Sicav - Long Danish Bond - DKK I 133,570 DKK 2,828,864 2,718, Valueinvest Lux Global -I1-/CAP 41,600 EUR 6,579,894 6,558, ,656,177 27,964, Total Investment Funds admitted to an Official Stock Exchange Listing 41,849,504 43,071, TOTAL INVESTMENT PORTFOLIO 41,849,504 43,071, * Effective number is ** Effective number is

11 Conservative Statement of Sales and Purchases for the year ended February 28, 2011 (expressed in units/shares) Description Purchased Sold Investment Funds Denmark Inv. Sydinvest Intl Bric Equities 0 17,615 Inv. Sydinvest Intl Danish Bonds 843, ,000 Inv. Sydinvest Intl Far East Equities 0 28,930 France Lyxor ETF EuroMts 1-3Y/CAP/DIS 57,995 1,840 Lyxor ETF EuroMts 3-5Y/CAP/DIS 67,000 0 Germany DWS Top Dividend 6,056 6,056 Ireland Invesco Global Small Cap Equity Fund A/DIS 15,494 15,494 Luxembourg Axa IM Fixed Income Investment Strategies - US Short Duration High Yield Fund -I-EUR/CAP Bantleon Anleihenfonds - Return /-IA-DIS 4,224 45,091 Dexia Bonds Mortgages I/CAP 30,099 2,826 DWS Invest Euro-Gov Bonds -LC-/CAP 15,359 50,990 Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 68, ,628 JP Morgan Funds - Aggregate Bond Fund A-INC/USD 39, ,463 JP Morgan Funds - Europe Dynamic Fund - A-(ACC)EUR 0 74,758 JP Morgan Funds - Global Focus Fund -A-/CAP 66,671 66,671 JP Morgan Funds - US Select 130/30 -A-/CAP 0 219,613 Schroder International Selection Fund - Euro Short Term Bond -A-/CAP 96, ,533 Schroder International Selection Fund - Global Inflation Linked Bond -A-/CAP 33, ,795 Sparinvest Sicav - Long Danish Bond - DKK UKI-DIS 218, ,473 Sparinvest Sicav - Long Danish Bond - DKK I 485, ,618 Valueinvest Lux Glob-I1-/CAP 33,109 6,636 Switzerland DWS (CH) / Money Market (Euro) 15,244 26,345 11

12 Stable Statement of Investments as at February 28, 2011 (expressed in EUR) Description Quantity Currency Cost Evaluation % net assets Investment Funds admitted to an Official Stock Exchange Listing Denmark Inv. Sydinvest Intl Bric Equities 22,930 EUR 576, , Inv. Sydinvest Intl Emerging Market Local Currency Bonds 66,285 EUR 964, , ,540,728 1,607, France Lyxor ETF EuroMts 1-3Y/CAP/DIS 8,125 EUR 950, , Lyxor ETF EuroMts 3-5Y/CAP/DIS 16,010 EUR 2,058,680 2,041, ,009,576 2,991, Germany DWS Top Dividend 5,149 EUR 394, , , , Great Britain M&G Investment Funds - Global Basics Fund - Euro A Acc 11,097 EUR 230, , , , Ireland Invesco Bond Series - Sterling Bond Fund -A-/CAP 0* GBP Luxembourg Axa IM Fixed Income Investment Strategies - US Short Duration High Yield Fund -I-EUR/CAP 7,374 EUR 864, , Dexia Bonds Mortgages I/CAP 18,832 EUR 2,539,416 2,568, Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 44,089 EUR 684, , Invesco Funds Sicav - Emerging Local Currencies Debt Fund -A-/CAP 0** USD JP Morgan Funds - Aggregate Bond Fund A-INC/USD 0*** USD JP Morgan Funds - Global Focus Fund -A-/CAP 42,411 EUR 614, , Sparinvest Sicav - Long Danish Bond - DKK I 39,763 DKK 839, , Valueinvest Lux Global -I1-/CAP 12,826 EUR 2,029,897 2,022, ,571,618 7,848, Total Investment Funds admitted to an Official Stock Exchange Listing 12,746,265 13,130, TOTAL INVESTMENT PORTFOLIO 12,746,265 13,130, ** Effective number is * Effective number is *** Effective number is

13 Stable Statement of Sales and Purchases for the year ended February 28, 2011 (expressed in units/shares) Description Purchased Sold Investment Funds Denmark Inv. Sydinvest Intl Bric Equities 5, Inv. Sydinvest Intl Danish Bonds 204, ,800 Inv. Sydinvest Intl Emerging Market Local Currency Bonds 66, Inv. Sydinvest Intl Far East Equities 0 13,050 France Lyxor ETF EuroMts 3-5Y/CAP/DIS 16,010 0 Lyxor ETF EuroMts 1-3Y/CAP/DIS 10,860 2,735 Germany DWS Top Dividend 5, Great Britain M&G Investment Funds - Global Basics Fund - Euro A Acc 22,360 11,263 Ireland Invesco Global Small Cap Equity Fund A/DIS 7,808 7,808 Invesco Bond Series - Sterling Bond Fund -A-/CAP 9, ,961 Luxembourg Axa World Fund - US High Yield Bonds -A- EUR 158 2,211 AXA Im /US Sh Dur H.Y-I- EUR/CAP 3,137 2,368 Bantleon Anl-Return /-IA-DIS 4,377 4,377 Dexia Bonds / Mortgages/I/CAP 11, DWS Inv./Euro Gov.Bds-Lc-CAP 4,976 9,660 Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 13,935 16,983 Invesco Funds Sicav - Emerging Local Currencies Debt Fund -A-/CAP 2,036 57,722 Invesco EUR.Corp.Bd-C-/CAP 35,466 35,466 JP Morgan Funds - Aggregate Bond Fund A-INC/USD 22,380 90,400 JP Morgan Funds - Europe Dynamic Fund - A-(ACC)EUR 0 60,663 JP Morgan Funds - US Select 130/30 -A-/CAP 0 101,332 JP Morgan Funds - Global Focus Fund -A-/CAP 42, Schroder International Selection Fund - Us Small & Mid-Cap Equity EUR 0 4,854 Schroder International Selection Fund - Global Inflation Linked Bond -A-/CAP 10,057 32,261 Sparinvest Sicav - Long Danish Bond - DKK UKI-DIS 58, ,809 Sparinvest Sicav - Long Danish Bond - DKK I 137,484 97,722 Valueinvest Lux Glob-I1-/CAP 10,713 1,012 Switzerland DWS (CH) / Money Market (Euro) 2,213 8,428 13

14 Dynamic Statement of Investments as at February 28, 2011 (expressed in EUR) Description Quantity Currency Cost Evaluation % net assets Investment Funds admitted to an Official Stock Exchange Listing Denmark Inv. Sydinvest Intl Bric Equities 37,370 EUR 931,503 1,078, Inv. Sydinvest Intl Emerging Market Local Currency Bonds 32,500 EUR 471, , Inv. Sydinvest Intl Far East Equities 23,325 EUR 394, , ,796,834 1,979, France Lyxor ETF EuroMts 1-3Y/CAP/DIS 1,670 EUR 195, , , , Germany DWS Top Dividend 8,503 EUR 641, , , , Great Britain M&G Investment Funds - Global Basics Fund - Euro A Acc 26,937 EUR 553, , , , Luxembourg Axa IM Fixed Income Investment Strategies - US Short Duration High Yield Fund -I-EUR/CAP 3,794 EUR 429, , Dexia Bonds Mortgages I/CAP 10,588 EUR 1,429,775 1,444, Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 26,505 EUR 410, , JP Morgan Funds - Global Focus Fund -A-/CAP 59,976 EUR 851, , Sparinvest Sicav - Long Danish Bond - DKK I 24,028 DKK 505, , Valueinvest Lux Global -I1-/CAP 11,410 EUR 1,764,722 1,798, ,392,368 5,672, Total Investment Funds admitted to an Official Stock Exchange Listing 8,579,796 9,189, TOTAL INVESTMENT PORTFOLIO 8,579,796 9,189,

15 Dynamic Statement of Sales and Purchases for the year ended February 28, 2011 (expressed in units/shares) Description Purchased Sold Investment Funds Denmark Inv. Sydinvest Intl Bric Equities 14,035 20,445 Inv. Sydinvest Intl Emerging Market Local Currency Bonds 39,445 6,945 Inv. Sydinvest Intl Far East Equities 25,920 28,320 France Lyxor ETF EuroMts 1-3Y/CAP/DIS 4,020 2,350 Germany DWS Top Dividend 10,119 1,616 Great Britain M&G Investment Funds - Global Basics Fund - Euro A Acc 55,414 28,476 Ireland Invesco Global Small Cap Equity Fund A/DIS 16,881 16,881 Luxembourg AWF US High Yield Bonds-A-EUR 478 4,553 Axa IM Fixed Income Investment Strategies - US Short Duration High Yield Fund -I-EUR/CAP 1,307 3,181 Bantleon Anleihenfonds - Return /-IA-DIS 5,249 5,249 Dexia Bonds Mortgages I/CAP 6,190 3,936 DWS Invest Euro-Gov Bonds -LC-/CAP 1,910 6,097 Franklin Templeton Investment Funds Global Bond Fund.-A- EUR HDG CAP 8,480 22,425 Franklin Templeton Investment Funds Mutual European Fund -A-ACC/CAP 0 38,011 Invesco Funds Sicav - Emerging Local Currencies Debt Fund -A-/CAP 0 47,953 JP Morgan Funds - Europe Dynamic Fund - A-(ACC)EUR 0 113,643 JP Morgan Funds - US Select 130/30 -A-/CAP 0 209,322 JP Morgan Funds - Global Focus Fund -A-/CAP 80,746 20,770 Schroder International Selection Fund - Us Small & Mid-Cap Equity EUR 0 14,318 Schroder International Selection Fund - Global Inflation Linked Bond -A-/CAP 10,053 33,911 Sparinvest Sicav - Long Danish Bond - DKK I 41,415 17,387 Sparinvest Sicav - Long Danish Bond - DKK UKI 34,275 34,275 Valueinvest Lux Glob-I1-/CAP 10,061 3,190 15

16 Notes to the Financial Statements as at February 28, 2011 NOTE 1 GENERAL ( the Company ) is an Investment Company with Variable Capital (SICAV) incorporated under Luxembourg law in the form of a limited company in accordance with the provisions of the amended Luxembourg law of August 10, 1915 on commercial companies and organised in accordance with Part II of the Law of December 20, 2002 on undertakings for collective investment. The Company was set up for an unlimited duration on April 10, The Company s articles of incorporation were published in the Mémorial C, Recueil des Sociétés et Associations (the Mémorial ) on May 5, 2006 after being deposited on April 24, 2006 with the Registrar of the Luxembourg District Court. At the time of its formation, the Company was denominated PEERLESS SICAV. On March 5, 2007, following an Extraordinary General Meeting of Shareholders, the Company name was changed into. The amendments of the articles of incorporation were published in the Mémorial on March 29, These documents are available for inspection and copies can be obtained on paying a fee to the Registrar. The Company is registered in the Luxembourg Trade Register under number R.C.S. B On February 28, 2011, the following Sub-Funds are available to investors: Traditional Management Sub-Funds: Name ISIN Swiss Security No. Conservative LU Stable LU Dynamic LU The Company shall be considered as one single legal entity. With regard to third parties, in particular towards the Company s creditors, each Sub-Fund shall be exclusively responsible for all liabilities attributable to it. NOTE 2 SIGNIFICANT ACCOUNTING POLICIES a) Valuation of investments (i) the value of any cash on hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends declared and interest accrued, and not yet received shall be deemed to be the full amount thereof, unless, however, the same is unlikely to be paid or received in full, in which case the value thereof is determined after making such discount as the Directors may consider appropriate to reflect the true value thereof; (ii) the value of securities which are admitted to official listing on any stock exchange are based on the latest available price or, if appropriate, on the average price on the stock exchange which is normally the principal market of such securities, and each security dealt on any other Regulated Market shall be based on the last available price; (iii) in the event that any assets are not admitted to official listing on any stock exchange or dealt on any other Regulated Market, or if, with respect to assets admitted to official listing on any stock exchange, or dealt on any other Regulated Market as aforesaid, the price as determined pursuant to paragraph (ii) is, in the opinion of the Directors, not representative of the fair market value of the relevant assets, the value of such assets are be based on the reasonably foreseeable sales price determined prudently and in good faith by the Directors. If the Company had calculated the net asset values solely with a view to publication, the market prices used to value the net assets would have been the closing prices on February 28, However, these net asset values would not have been significantly different from those shown in these financial statements, except for the following sub-funds: DYNAMIC: an increase in net asset value of about 0.55% would have been observed. (iv) the liquidating value of futures, forward or options contracts not admitted to official listing on any stock exchange or dealt on any other Regulated Market shall mean their net liquidating value determined, pursuant to the policies established prudently and in good faith by the Directors, on a basis consistently applied for each different variety of contracts. The liquidating value of futures, forward or options contracts admitted to official listing on any stock exchange or dealt on any other Regulated Market is based upon the last available settlement prices of these contracts on stock exchanges and Regulated Markets on which the particular futures, forward or options contracts are traded by the Company; provided that if a futures, forward or option contract could not be liquidated on the day with respect to which net assets are being determined, the basis for determining the liquidating value of such contract shall be such value as the Directors may deem fair and reasonable; 16

17 Notes to the Financial Statements (continued) as at February 28, 2011 NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (v) units or Shares of open-ended UCIs are valued at their latest official net asset values, available at the Sub-Funds NAV calculation date as reported or provided by such UCIs or their agents. The Net Asset Value is final and binding notwithstanding any different later determination; (vi) the value of money market instruments not admitted to official listing on any stock exchange or dealt on any other Regulated Market and with remaining maturity of less than 12 months and of more than 90 days is deemed to be the nominal value thereof, increased by any interest accrued thereon. Money market instruments with a remaining maturity of 90 days or less and not traded on any market are valued by the amortised cost method, which approximates market value; and (vii) all other securities and assets are valued at fair market value as determined in good faith pursuant to procedures established by the Directors. b) Realised gains/losses on sale of securities Gains and losses on investment securities sold are computed on the basis of average cost. c) Foreign exchange conversion The Net Asset Value is expressed in EUR for each Sub-Fund. Assets and liabilities which are not denominated in EUR are translated into EUR at the rate of exchange prevailing as at year end. The exchange rates used for conversion as at February 28, 2011 are : 1 EUR = DKK 1 EUR = GBP 1 EUR = USD 1 EUR = SEK d) Cost of investment securities The acquisition cost of investment securities in each Sub-Fund deriving in currencies other than the currency of denomination is converted to the base currency at the exchange rates prevailing at the purchase date. e) Consolidated financial statements of the SICAV The Net Asset Value of the Company is expressed in EUR, and consolidation of the various Sub-Funds is obtained by adding up the Net Asset Value of all Sub-Funds. f) Income from investments Dividends are recognised as income on the date the securities are first quoted ex-dividend, to the extent information thereon is reasonably available to the company. Interest is accrued for each net asset valuation. g) Formation expenses The costs and expenses incurred in connection with the incorporation of the Company, including those incurred in the preparation and publication of the Prospectus, as well as the taxes, duties and any other publication expenses amount to EUR ,-. These costs and expenses are borne by the initial Sub-Funds and will be amortised over a period of five years. 17

18 Notes to the Financial Statements (continued) as at February 28, 2011 NOTE 3 MANAGEMENT FEES For each Sub-Fund, the Investment Manager is entitled to an annual management fee as shown below: Sub-Fund Up till As from Conservative 0.75% 0.95% Stable 0.75% 1.15% Dynamic 0.75% 1.25% The fee is payable quarterly in arrears and calculated on the average net asset value of each Sub-Fund for the relevant quarter. NOTE 4 DUPLICATION OF FEES The Company may pay fees of the target UCITS and/or UCIs ( duplication of fees ) as detailed in its prospectus. However, the Sub-Funds may not invest in underlying UCIs which are themselves submitted to a management fee exceeding 3%. Triplication of management fees is however prohibited (in case of an investment by a Sub-Fund in a fund of fund where a management fee or performance fee would be charged at the level of both the fund of fund and the underlying fund, the Sub-Fund management fee will not be charged on the portion of such assets). NOTE 5 SUBSCRIPTION TAX Each of the Company s Sub-Funds is subject to a subscription tax (taxe d abonnement) at an annual rate of 0.05% p.a. Such rate may be decreased to 0.01% p.a. for certain Sub-Funds or Classes of Shares which are restricted to Institutional Investors as specified in the relevant Data Sheet. This tax is calculated and payable quarterly on the basis of the Net Asset Value of the Company s assets at the end of each quarter. This tax is not due on that portion of the Company s assets invested in other Luxembourg UCIs. In addition, the issue of Shares in the Company is not subject to any registration duties or other taxes in Luxembourg. NOTE 6 TAXES AND EXPENSES PAYABLE - Conservative - Stable - Dynamic EUR EUR EUR Subscription tax (Note 5) 1, Custodian, domiciliation, administration and transfer agent fees 20,029 8,312 7,000 Audit, printing and publication expenses 23,539 11,250 5,321 TOTAL 44,789 20,047 12,597 NOTE 7 FORWARD FOREIGN EXCHANGE CONTRACTS On February 28, 2011, there was no Forward Foreign Exchange Contract. 18

19 Notes to the Financial Statements (continued) as at February 28, 2011 NOTE 8 TOTAL EXPENSE RATIO (TER) AND PORTFOLIO TURNOVER RATE (PTR) TER per sub-fund TER Conservative Stable Dynamic Capitalisation 1.32% 1.59% 1.72% Synthetic TER Capitalisation 1.88% 2.31% 2.82% Average Net Asset Value 44,573, ,996, ,513, Determination of TER The Total Expense Ratio (TER) expresses the sum of all costs charged on an ongoing basis to the Sub-Fund s assets (operating expenses) taken retrospectively as a percentage of the average net assets of the Sub-Fund. The expenses are listed in the Statement of Operations and Changes in Net Assets on page 8. Determination of Synthetic TER The synthetic TER takes into account that the Company s Sub-Funds invest in other investment funds ( target funds ) and that the TER of these target funds have an important impact on the overall costs and thus on the performance of the Company s Sub-Funds. The synthetic TER is calculated as the sum of: the prorated TER of the individual target funds, weighted on the basis of their proportion in the net fund assets of the fund as of the closing date of the financial year or the end of the first half of the financial year the issue and redemption commissions of the target funds actually paid and the TER of the Sub-Fund. The TER is calculated in accordance with the Swiss Fund Association guidelines. PORTFOLIO TURNOVER RATE Conservative Stable Dynamic Capitalisation % % % 19

20 Notes to the Financial Statements (continued) as at February 28, 2011 NOTE 9 PERFORMANCE DATA in EUR Conservative Stable Dynamic Per period From to % -1.90% -3.31% From to % 5.81% 11.95% From to % 25.74% 35.10% From to % % % From to % -0.75% 0.12% From to % -0.18% -2.46% From to % 3.37% 8.59% Cumulated since inception ( ) to % -8.41% % Source: Net asset values (NAV) calculated and published by the RBC Dexia Investor Services Bank S.A. Important notice: Past performance is no indication of current or future performance. The performance data do not take account of taxes, commissions and costs incurred on the issue and redemption of shares. NOTE 10 REBATES AND TRAILER FEES According to the applicable prospectus of the Company, the entitlement for rebates that the Investment Manager received in the reporting year for investments made on behalf of the Company was as follows: As from , all rebates, fees, commissions, reimbursements or other financial benefits paid by target funds are entirely credited to the Company s assets. Up till , such compensation was paid on to the Investment Manager as an additional remuneration. Sub-Fund Period In favour of Sub-Fund -- in EUR Conservative From to From to ,271 In favour of Investment Manager -- in EUR 31,940 Stable From to From to ,048 10,760 Dynamic From to From to ,558 17,422 20