LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS JANUARY Investment Company with Variable Capital Luxembourg

Transcription

1 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS JANUARY 2013 Investment Company with Variable Capital Luxembourg

2 TABLE OF CONTENTS Page IMPORTANT 2 1 Description 4 2 Management and Administration 5 3 Objectives of the Company 8 4 Common Policy and Investment Restrictions, Selection and Monitoring procedure 8 5 Risk Factors 12 6 Shares, Shareholdings in the Company 13 7 Distribution Policy 18 8 Data Protection 18 9 Net Asset Value Charges and Expenses Taxation Reports and Meetings Compulsory Redemption and Liquidation Other Information 26 ANNEXES 28 - Description of Sub-Fund 28 - Subscription Form 53 - Joint Shareholding Mandate - Facsimile Transmission Instructions - Authorisation for Disclosure of Information

3 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS IMPORTANT Shares of Lloyds TSB International Portfolio (the Company ) may only be subscribed on the basis of the information contained in the present Prospectus and Key Investor Information Document ( KIID ), which includes the Description of the different Sub-Funds. The Prospectus, the KIID of the relevant Sub-Fund and the latest annual and semi-annual reports are offered free to any person who wishes to subscribe, or who applies to the Central Administration or the Representatives of the Company. No information other than that contained in this Prospectus and the documents referred to herein may be given in connection with the offer made hereby. The Company is registered in the Grand Duchy of Luxembourg as an Undertaking for Collective Investment in Transferable Securities (UCITS) subject to Part I of the Law of 17 th December 2010 on Undertakings for Collective Investment (the 2010 Law ). Such registration does not, however, require any Luxembourg authority to approve or disapprove either the adequacy or accuracy of this Prospectus or the portfolio of securities held by the Company. Any representation to the contrary is unauthorised and unlawful. This Prospectus may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised. The articles of incorporation of the Company, as amended from time to time (the Articles of Incorporation ) authorise the Directors to impose or relax restrictions relating to the property of shares or classes of shares and, if necessary, require disposal of the shares, as they may 2 think necessary, to ensure that shares are neither acquired nor held by or on behalf of any person in breach of the law or requirements of any country or governmental or regulatory authority, or in such a manner which might have adverse taxation or other pecuniary consequences for the Company, including any requirement to register under any securities or investment or similar laws or requirements of any country or authority. In particular: The shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the US Securities Act ), or the securities laws of any state or political subdivision of the United States, and may not be offered or sold directly or indirectly, in the United States of America (including the State and the District of Columbia), its territories and possessions and other areas subject to its jurisdiction (the United States ), or to US Persons. US Person has the meaning assigned to it in Regulation S under the United States Securities Act of 1933 (as amended) (the Securities Act ), and includes (a) any natural person resident in the United States; (b) any partnership or corporation organised or incorporated under the laws of the United States; (c) any estate of which any executor or administrator is a US Person; (d) any trust of which any trustee is a US Person; (e) any agency or branch of a non-us entity located in the United States; (f) any non-discretionary account or similar account (other than an estate or trust) ) held by a dealer or other fiduciary for the benefit or account of a US person; (g) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organised, incorporated, or if an individual, resident in the United States; or (h) any partnership or corporation if (i) organised or incorporated under the laws of any non-us jurisdiction and (ii) formed by a US Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organised or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts. Notwithstanding the foregoing, US Persons does not include (a) a discretionary account or similar account (other than an estate or trust) held for the benefit or account of a non-us Person by a dealer or other professional fiduciary organised, incorporated, or, if an individual, resident in the United States; (b) any estate of which any professional fiduciary acting as executor or administrator is a US Person if (i) an executor or administrator of the estate who is not a US Person has sole or shared investment discretion with respect to the assets of the estate, and (ii) the estate is governed by non-us law; (c) any trust of which any professional fiduciary acting as a trustee is a US Person if a trustee who is not a US Person has sole or shared investment discretion with respect to the trust assets, and no beneficiary of the trust (and no settlor if the trust is revocable) is a US Person; (d) an employee benefit plan established and administered in accordance with the law of a country other than the United States and customary practices and documentation of such country; or (e) any agency or branch of a US Person located outside the United States if (i) the agency or branch operate for valid business reasons, and (ii) the agency or branch is engaged in the

4 business of insurance or banking and is subject to substantive insurance or banking regulation (respectively) in the jurisdiction where located. The Company is not and will not be registered under the United States Investment Company Act of 1940, as amended and accordingly is restricted in the number of beneficial holders of its shares that may be US Persons and in the percentage of its outstanding shares that may be owned by certain US Persons. The Articles of Incorporation of the Company contain provisions designed to prevent the holding of its shares by US Persons under circumstances that would cause the Company to violate United States law, and require the immediate redemption or purchase under certain circumstances of shares purchased or beneficiary owned by US Persons (see Redemption of Shares ). Statements made in this Prospectus are based on the legislation and regulations currently in force in the Grand Duchy of Luxembourg and in the countries where the shares of the Company are authorised for sale, and are subject to changes therein. The Directors accept responsibility for the accuracy of the information contained herein as at the date of this Prospectus. Before investing in the Sub-Fund, we recommend you to carefully read this Prospectus and the KIID, and especially the Chapter 5 Risks Factors, the Chapter 6 Shares, Shareholdings in the Company, the Chapter 11 Taxation, the Sub-Fund Description in the Annexes and How to complete the Subscription Form on the page opposite to the attached Subscription Form. If you are in any doubt about the contents of the Prospectus or the KIID, you should consult your bank manager, stockbroker, solicitor, accountant or other financial adviser. Potential subscribers and purchasers of shares in the Sub-Fund should also inform themselves as to the possible tax consequences, the legal requirements and any foreign exchange restrictions or exchange control requirements which you might encounter under the laws of the countries of your citizenship, residence or domicile and which might be relevant to the subscription, purchase, holding or disposal of shares of the Company. If, subsequently to your subscription in one Sub-Fund, you give instruction to convert some or all of your shares into shares relating to any other Sub- Fund or if you become a shareholder of any Sub-Fund by accepting a transfer of its shares or by acquiring its shares in the Luxembourg Stock Exchange or otherwise, you should inform yourself of the Investment Policy and of the Risks Warnings of that particular Sub-Fund. If that Sub- Fund has been newly created and/or if it does not appear in the Annexes of the Prospectus in your possession, you should ask for the latest updated version of the Prospectus and the relevant KIID. They will be sent to you free of charge, on simple request to the Central Administration or to the Representatives of the Company abroad. By signing the attached Subscription Form to invest in shares of any Sub-Fund, or by signing an instruction to convert your shares into shares of any other Sub-Fund, or by signing as Transferee any transfer form relating to shares of any Sub-Fund, or else by acquiring shares of any Sub-Fund through the Luxembourg Stock Exchange or otherwise, you agree, represent, warrant and acknowledge that: a) you have received a copy of the latest available Prospectus and KIID and you have understood the Description, the Investment Policy and the Risks Factors associated to the Sub-Fund you are investing in; b) Lloyds Banking Group plc, its affiliates, subsidiaries and branches or any of its representatives, officers, agents or employees will not make and have not made any warranty, representation or recommendation (whether implied or express) as to the merits of the Sub-Fund and/or as the conditions, financial or otherwise of the Company or its Sub-Fund or as to any other matter relating thereto or in connection therewith and nothing shall be construed as a recommendation by Lloyds Banking Group plc, its affiliates, subsidiaries and branches or any of its representatives, officers, agents or employees to you to purchase or acquire the shares or to become a shareholder of any Sub-Fund; c) notwithstanding (b) above, if any information (including without limitation, any research report(s) on the Company or its Sub-Fund issued by Lloyds Banking Group plc, its affiliates, subsidiaries or branches, whether recently or otherwise), warranty or representation had in fact been made or supplied by Lloyds Banking Group plc or its affiliates, subsidiaries or branches, you have not in any way and at any time howsoever relied on such information, warranty or representation in the making of your investment decision to acquire the shares of the Sub-Fund and/or in your assessment or appraisal of the Company or its Sub-Fund and you have made and will continue to make your own independent appraisal or assessment of the Company or its Sub-Fund relying on your own source of information and such legal, tax, accounting, investment and other advice as you deem appropriate; 3

5 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS d) none of Lloyds Banking Group plc, its affiliates, subsidiaries and branches, the Company, the Management Company, the Central Administration, the Custodian Bank, the Investment Manager, the Global Distributor of the Company or other parties involved in the management of the Sub-Funds of the Company takes any responsibility as to any tax consequences of your acquisition of or in relation to any dealing in your shares of the Sub-Fund of the Company and that your are advised to consult your own tax adviser concerning your tax position; e) the price and value of the shares of each Sub-Fund can fall as well as rise. Past performance is not necessarily a guide to the future and you may not get back the full amount invested; f) when subscriptions, conversions or redemption s of your shares in the Sub-Fund involve a foreign exchange transaction, they may be subject to fluctuations in currency values. Exchange rates may also cause the value of underlying investments to go up or down. The Company draws the investors attention to the fact that any investor will only be able to fully exercise his investor rights directly against the Company (notably the right to participate in general shareholders meeting) if the investor is registered himself and in his own name in the shareholders register of the Company. In cases where an investor invests in the Company through an intermediary investing into the Company in his own name but on behalf of the investor, it may not always be possible for the investor to exercise certain shareholder rights directly against the Company. It is recommended that Investors take advice on their rights DESCRIPTION The Company is an open-ended investment company (Investment Company with Variable Capital) incorporated for an unlimited period under the provisions of the 2010 Law. The Company was incorporated on 6 th July 1967 under the name Alexander Hamilton Fund and its Articles of Incorporation were published in the Mémorial - Recueil des Sociétés et Associations on 14 th July, Later, the name of the Company and its Articles of Incorporation were modified several times and amendments were published in the Mémorial on 2 nd August 1967, 29 th September 1967, 9 th April 1968, 17 th July 1968, 19 th May 1969, 14 th December 1979, 19 th October 1984, 8 th October 1990, 4 th November 1993, 23 rd July 1996, 16 th July 1998, 20 th July 1999, 25 th July 2001, 12 th December 2005 and for the last time on 6 th January The Company is registered under Number B at the Register of Commerce and Companies of Luxembourg where its co-ordinated Articles of Incorporation are available for inspection and where copies thereof may be obtained upon request. The minimum capital of the Company is the equivalent in USD of 1,250,000 Euros or such other amount that may be determined by the 2010 Law. The Company s registered office is at 49, Avenue J-F Kennedy, L-1855 Luxembourg where the register of shareholders of the Company (the Register of Shareholders ) is kept. The Capital of the Company is represented by fully paid shares of no par value and is at any time equal to its net asset value. Fractions of shares are issued to one thousandth of a share. The reference currency of the Company is the United States Dollars (USD). The Company has various sub-funds that are distinguished mainly by their investment policies each relating to a separate portfolio (each a Sub-Fund and together the Sub-Funds ). Pursuant to the Articles of Incorporation, the Directors may decide to create within each Sub-Fund different classes of Shares the subscription proceeds of which will be commonly invested in accordance with the investment policy of the Sub-Fund concerned, but where different currency hedging techniques and/or sales, conversion or redemption fees and management charges and/ or distribution policies, minimum subscription or holding amounts or any other specific feature may be applied to each class (a Class or Classes ). The issue of Shares of the different Classes may be restricted to specific investors. All references to a Sub-Fund shall, where the context requires, include any Class or Classes which form such Sub-Fund. Where no Classes have been issued within a Sub-Fund, references to a Class shall be to the Sub-Fund. The Sub-Funds invest their assets mainly in transferable securities and in money market instruments in accordance with their respective investment policies while ensuring observance of the principle of risk spreading. The Sub-Funds and the related Class of Shares if any are described in the relevant Annexes to the Prospectus. The Company reserves the right to add new Sub-Funds and related Class of Shares and, in certain circumstances, to close existing Sub-Funds or Classes of Shares.

6 In such cases, this Prospectus will be updated by adding or deleting appropriate Annexes. The proceeds from the allotment and allocation of Shares relating to each Sub-Fund are applied in the books of the Company to the portfolio of cash and securities which represents that Sub-Fund, and the assets and liabilities, income and expenditure attributable to that Sub-Fund are also applied thereto. In the relation between shareholders, each Sub-Fund is considered as a separate entity. The shareholder is entitled to the net asset and the income of the Sub-Fund in which it has invested. Liabilities contracted by one Sub-Fund against third parties are only covered by the net assets of that Sub-Fund. The shareholder having subscribed to shares in any one Class of Shares of a Sub-Fund may at any time request them to be changed into another Class of Shares of the Sub-Fund (in accordance with the conversion procedure as described in Chapter 6 Section 6.5). Subject to the cases set out in Chapters 6 and 9, the price of the shares of each Sub-Fund is calculated each bank business day in Luxembourg (the Calculation day ), on the basis of the net asset value as described in Chapter 9. Except otherwise mentioned in the related Annex of the Sub-Fund, prices of the Shares of each Sub-Fund are published in the Financial Times twice a week, and in in L Écho, De TIJD, Expansión and in any other newspapers designated by the Directors. A bank business day in Luxembourg (a Business day ), in relation to shares of any Class, means any day on which banks are open for business in Luxembourg and such other days as the Directors may decide. The Directors may also decide not to consider as Business day, other days on which banks are otherwise open for business in Luxembourg. In particular, the Directors have decided not to consider as Business days the Friday before Easter (Good Friday) and the 24 th December. The Shares are listed on the Luxembourg Stock Exchange. The latest applicable prices are also available on any Business day at the registered office of the Company, from the Central Administration and from the Representatives of the Company (see Chapter 2 Section 2.10 to Section 2.15). 2. MANAGEMENT AND ADMINISTRATION 2.1. BOARD OF DIRECTORS Chairman of the Board of Directors D.V. THOMAS Director Directors C. GOWLAND Commercial Director Lloyds TSB Bank plc, Geneva Branch C. MARR Head of Financial Markets Lloyds TSB Bank plc, Geneva Branch S. WILLIAMS Business Unit Control Function Director Lloyds TSB Bank plc, Geneva Branch J. ELVINGER Master in Law, Elvinger, Hoss & Prussen, Luxembourg The directors of the Company (the Directors ) are responsible for the Investment Policy, the administration and the management of the Company REGISTERED OFFICE 49, Avenue J-F Kennedy L-1855 Luxembourg 2.3. MANAGEMENT COMPANY CMI Asset Management (Luxembourg) S.A. 40, avenue Monterey L-2163 Luxembourg. The Company has delegated the functions of the investment management of the Company, the central administration, the distribution and the management of the risks of the Sub-Funds to CMI Asset Management (Luxembourg) S.A. (the Management Company ) PROMOTER AND GLOBAL DISTRIBUTOR Lloyds TSB Bank plc Geneva Branch 1, Place Bel-Air CH-1204 Geneva Lloyds TSB Bank plc, Geneva Branch is a branch of Lloyds TSB Bank plc, whose original foundation dates back to Lloyds TSB Bank plc is a wholly-owned subsidiary of Lloyds Banking Group. The Management Company CMI Asset Management (Luxembourg) S.A has delegated the functions of the global distribution to Lloyds TSB Bank plc, Geneva Branch CENTRAL ADMINISTRATION State Street Bank Luxembourg S.A. 49, Avenue J-F Kennedy L-1855 Luxembourg Tel Fax SWIFT: SBOS LU LX 5

7 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS The Management Company has delegated the functions of central administration to State Street Bank Luxembourg S.A. ( the Central Administration ). The Central Administration is not responsible for any investment decisions of the Company or the effect of such investment decisions on the performance of the Company. The function of Central Administration includes the accounting, the calculation and publication of the net asset value. The Central Administration has also been appointed as the registrar and transfer agent of the Company. In this function the Central Administration will process all subscriptions, redemptions and transfers of Shares and will register these transactions in the Register of Shareholders. The relationship between the Management Company, the Company and the Central Administration is subject to the terms of the Administration Agreement. The Management Company, subject to the consent of the Company, and the Central Administration may terminate the Administration Agreement on 90 days prior written notice. The Administration Agreement may also be terminated on shorter notice in certain circumstances. The Administration Agreement contains provisions indemnifying the Central Administration, and exempting the Central Administration from liability, in certain circumstances. Subject to the prior written consent of the Board of Directors, the Management Company reserves the right to change the administration arrangements described above by agreement with the Central Administration and/or in its 6 discretion to appoint an alternative central administration without prior notice to Shareholders. Shareholders will be notified in due course of any appointment of an alternative central administration. It being understood that this change in Central Administration arrangements does not include any change of registrar and transfer agent which will be notified to the Company and shareholders in advance. The Company has also appointed the Central Administration as paying agent and listing agent DOMICILIARY AGENT AND CUSTODIAN BANK State Street Bank Luxembourg S.A. 49, Avenue J-F Kennedy L-1855 Luxembourg The Company has designated State Street Bank Luxembourg S.A. as Domiciliary Agent and as Custodian Bank for the Company s assets. The function of Domiciliary Agent includes the domiciliary of the Company in State Street Bank Luxembourg S.A. office and the execution of the services attached therein. The Custodian Bank acts as custodian for all the assets of the Company, including its cash and securities, which will be held either directly or through other financial institutions such as correspondent banks, subsidiaries or affiliates of the Custodian, in accordance with the provisions of the 2010 Law. It is also responsible for the settlement of purchases and sales, the collection of income and other payments due in respect of securities or liquid assets held by the Company. The Custodian Bank shall moreover : - ensure that the sale, issue, repurchase and cancellation of shares effected by or on behalf of the Company are carried out in accordance with the law and the Articles of Incorporation; - ensure that in transactions involving the assets of the Company, the consideration is remitted to it within the usual time limits; - ensure that the income of the Company is applied in accordance with its Articles of Incorporation. The Custodian Bank may entrust all or part of the assets of the Company, in particular securities traded abroad or listed on a foreign stock exchange or admitted to a clearing system, to such clearing system or to such correspondent banks as may be determined by the Custodian Bank from time to time. To the extent required by the 2010 Law, the Custodian Bank s liability shall not be affected by the fact that it has entrusted all or part of the assets in its care to a third party. The rights and duties of the Custodian Bank are governed by the Custody Agreement entered into on 2 nd November, 2010 for an unlimited period of time from the date of its signature. The Company and the Custodian Bank may terminate the Custodian Agreement on 90 days prior written notice. A new custodian shall be appointed within 2 months. However, the Custodian Bank shall continue to act as custodian pending a replacement custodian being appointed and that such replacement is appointed, the Custodian Bank shall take all necessary steps to ensure the good preservation of the interests of the shareholders of the Company. The Custodian Agreement may be terminated on shorter notice in certain circumstances, including where a material breach of the Custodian Agreement by the other party has not been cured within thirty (30) days of that party being given written notice of the material breach.

8 The Custodian Agreement contains provisions indemnifying the Custodian, and exempting the Custodian from liability, in certain circumstances INVESTMENT MANAGERS Scottish Widows Investment Partnership Ltd. (SWIP) 33 Old Broad Street London EC2N 1HZ Tel Lloyds TSB Bank plc Geneva Branch 1, Place Bel-Air CH Geneva Tel Lombard Odier Asset Management (Switzerland) S.A. 6 avenue des Morgines CH-1213 Petit-Lancy Tel The Management Company has delegated the investment management functions to Scottish Widows Investment Partnership Ltd, to Lloyds TSB Bank plc, Geneva Branch and to Lombard Odier Asset Management (Switzerland) S.A.. The Investment Managers will, in accordance with the investment objectives as well as the Investment Policy and Restrictions of the Company, be in charge with the day to day management of the investments of the assets of the Sub-Funds subject to the control of the Management Company INDEPENDENT AUDITOR PricewaterhouseCoopers S.à r.l. Réviseur d entreprises 400, route d Esch L-1471 Luxembourg 2.9. LEGAL ADVISERS Luxembourg Elvinger, Hoss & Prussen 2, Place Winston Churchill L-2014 Luxembourg Switzerland Lenz & Staehelin 30, route de Chêne CH-1211 Geneva REPRESENTATIVE AND SERVICE OF PAYMENT OF THE COMPANY IN SWITZERLAND Lloyds TSB Bank plc Geneva Branch 1, Place Bel-Air CH-1204 Geneva Tel Fax SWIFT: LOYDCHGGXXX The Representative and Paying Agent of the Company in Switzerland is Lloyds TSB Bank plc, Geneva Branch. The Prospectus, Swiss KIID, Articles of Incorporation, annual and semiannual reports of the Company may be obtained, on simple request and free of charge, at Lloyds TSB Bank plc, Geneva Branch. Publications of the Company in Switzerland, shall be made in the Feuille Officielle Suisse du Commerce and on the electronic platform Except otherwise mentioned in the related Annex of the Sub-Fund, the price of the Shares of each Sub-Fund with the mention commissions not included are published each Calculation day in Switzerland in the electronic platform The execution place and the Place of Jurisdiction for shares distributed in or from Switzerland shall be located in Lloyds TSB Bank plc, Geneva Branch. Regarding the Distribution in Switzerland, the Global Distributor may grant retrocessions to the qualified investors listed below, who are holding shares on behalf of third parties (as per the economic meaning): - Life insurance - Pensions Funds and other similar institutions - Investment Foundations - Swiss Management Companies - Management and foreign Funds companies - Investment companies. Furthermore, the Global Distributor may grant trailer fees from the item Distribution in Switzerland to distributors and partners of the distribution as hereafter mentioned: - Distributors subject to authorization within article 19., al.1, LPCC. - Distributors released from the obligation to obtain consent following article 19, al.4, LPCC and article 8, OPCC. - Distribution partners placing exclusively holding shares with institutional investors where the treasury is managed on a professional basis. - Distribution partners placing units of collective investment funds exclusively on the basis of a written wealth management mandate REPRESENTATIVE OF THE COMPANY IN THE UNITED KINGDOM Head Office Lloyds TSB Bank plc 25 Gresham Street UK-London EC2V 7HN Facilities Agent Lloyds TSB Private Banking Ltd 25/27 Perrymount Road Haywards Heath West Sussex RH 16 3 SP Tel Fax

9 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS REPRESENTATIVE OF THE COMPANY IN BELGIUM SG Private Banking SA Kortrijksesteenweg 302 B-9000 Gent Tel Fax SWIFT BIC code: SGABBEB2XXX REPRESENTATIVE OF THE COMPANY IN GIBRALTAR Lloyds TSB Bank plc Gibraltar Branch First Floor, Royal Ocean Plaza Ocean Village P.O Box 482 Gibraltar Tel Fax SWIFT: LOYDGIGXXXX REPRESENTATIVE OF THE COMPANY IN SPAIN Lloyds Bank International S.A.U., Calle Serrano, 90, 5 th Floor Madrid, Spain Tel Fax SWIFT: LOYDESMMXXX REPRESENTATIVE OF THE COMPANY IN FRANCE Société Générale SGSS/INV/CCT/PAS 50, Boulevard Haussmann F PARIS CEDEX 09 Tel or Fax SWIFT BIC Code : SOGEFRPPGSS 3. OBJECTIVES OF THE COMPANY The objective of the Company is to offer a wide range of Sub-Funds the aim of the management of 8 which is to achieve a total return (comprising capital gains and income) corresponding to the kind of assets and to the Investment Policy as defined in the respective Sub-Fund s Description. Current income and capital gains are reinvested, and all investments are effected taking into account the principle of the diversification of risks. The Directors, the Management Company and the Investment Managers will use their best endeavours to achieve this objective. They cannot however, guarantee its achievement. 4. COMMON POLICY AND INVESTMENT RESTRICTIONS A. Common Policy 1. THE COMPANY MAY INVEST: a) in transferable securities and money market instruments admitted to or dealt in on a regulated market; b) in transferable securities and money market instruments dealt in on another market in a Member State (as defined in the 2010 Law) which is regulated, operates regularly and is recognised and open to the public; c) in transferable securities and money market instruments admitted to official listing on a stock exchange or dealt in another market which is regulated, operates regularly and is recognised and open to the public in any other country of Europe, Asia, Oceania, the American and African continents; d) in recently issued transferable securities and money market instruments provided that the terms of the issue provide that application be made for admission to official listing in any of the stock exchanges or other regulated markets and provided that such admission is secured within one year of the issue; e) units of UCITS authorised according to the Council Directive 2009/65/EC, as amended (the Directive ) and/or other UCIs within the meaning of the first and second indents of Article 1(2) of the Directive, whether located in a member State of the EU or not, provided that: - Such other UCIs are authorised under laws which provide that they are subject to a supervision which the Luxembourg supervisory authority considers as equivalent to that laid down by the Community law, and that co-operation between the authorities is sufficiently ensured; - The level of protection for the unitholders in the other UCIs is equivalent to that provided for unitholders in a UCITS, and in particular, that the rules on assets segregation, borrowing, lending, and uncovered sales of transferable securities and money market instruments are equivalent to the requirements of the Directive; - The business of the other UCIs is reported in semi-annual and annual reports enabling the assessment of the assets and liabilities, of the income and of the operations over the reporting period; - The UCITS and other UCIs whose acquisition is contemplated can not, according to their constitutional documents, or any other information obtained by the Promoter or by the Investment Manager of the Sub-Funds, invest globally more than 10% of their assets in other UCITS or other UCIs. Each Sub-Fund may invest a substantial portion of its net asset value in UCITS or other UCIs promoted by Lloyds Banking Group plc.

10 Shareholders of the Sub-Fund should be aware that investments in UCITS and other UCIs might have a number of implications. Investments in UCITS and other UCIs do usually entail a duplication of entrance fees, management fees, administration fees, custodian charges and taxes. However, such duplication is expected to be partly reduced by obtaining waiver of, or reallowances on, sales commission by the UCITS and other UCIs in which investments will be made or by investing in UCITS and other UCIs or share classes of UCITS or other UCIs exempt from sales commission. No subscription or redemption fees will be charged and no duplication of management fees will be incurred, by a Sub-Fund in case of investments in UCITS and other UCIs managed directly or indirectly by the Investment Manager or by a Company to which these companies are linked in by a common management or control or by a direct or indirect holding of more than 10% of the capital or voting rights. The aggregate management commissions charged to the Sub-Funds and to those underlying UCITS and UCIs will fluctuate, depending upon the assets allocation of each Sub-Fund but will not exceed the ratio of all-in fee of any Sub-Fund s. If a Sub-Fund invests principally in UCITS and other UCIs, this will be specifically mentioned in its investment policy. A Sub-Fund (the Investing Sub-Fund ) may subscribe, acquire and/or hold shares to be issued or issued by one or more Sub-Funds (each, a Target Sub-Fund) provided that: - the Target Sub-Fund does not, in turn, invest in the Investing Sub- Fund invested in this Target ; and - no more than 10% of the assets that the Target Sub-Fund whose acquisition is contemplated may, according to its investment policy, be invested in units of other UCITs or UCIs; and - voting rights, if any, attaching to the relevant Shares are suspended for as long as they are held by the Investing Sub-Fund concerned and without prejudice to the appropriate processing in the accounts and the periodic reports; and - the Investing Sub-Fund may not invest more than 20% of its net assets in units of a single Target Sub-Fund; and - in any event, for as long as these Shares are held by the Investing Sub-Fund, their value will not be taken into consideration for the calculation of the net assets of the Company for the purposes of verifying the minimum threshold of the net asset imposed by the 2010 Law; and - there is no duplication of management/subscription or repurchase fee between those at the level of the Investing Sub-Fund of the Company having invested in the Target Sub-Fund, and this Target Sub-Fund. The Company reserves the right to invest, where appropriate, up to 5% of the net asset value of each Sub- Fund in Bond Funds, the principal objective of which is to invest in high yield bonds. f) deposits with credit institutions which are repayable on demand or have the right to be withdrawn, and maturing in no more than 12 months, provided that the credit institution has its registered office situated in a EU Member State, or, if not situated in a EU Member State, is subject to prudential rules, which the Luxembourg supervisory authority considers as equivalent to those laid down by the Community law. However, up to a maximum of 10% of the net assets of each Sub-Fund may be invested in transferable securities and money market instruments which do not meet the criteria stipulated in the above paragraphs and in debt instruments which, by virtue of their characteristics, are equivalent to transferable securities and which are, inter alia, transferable, liquid and have a value which can accurately determined at the time of the calculation of the net asset value. In order to meet redemptions and where it is in the interests of the shareholders, part of the net assets of each Sub-Fund, whatever its objective and investment policy will be invested in liquidities in the form of cash, at sight, at notice or on term deposit or in money market instruments or bonds, the residual maturity of which does not exceed 12 months. However, such investments will always only be deemed ancillary. 2. FURTHERMORE, THE COMPANY MAY FOR EACH SUB-FUND, EXCEPT OTHERWISE SPECIFIED IN THE INVESTMENT POLICY OF THE RESPECTIVE SUB-FUND: a) for the purpose of efficient portfolio management, employ techniques and instruments relating to transferable securities, in particular purchases and sales of call and put options, purchases and sales of futures relating to transferable securities and to any other financial instruments; b) as a global hedge against the risk of unfavourable stock market movements, sell futures or call options or purchase put options on stock market indices; c) as a global hedge against interest rate fluctuations, (i) sell futures and call options or buy put options on 9

11 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS interest rates, (ii) transact interest rate swaps by mutual agreement with first class financial institutions specialising in this type of transaction; d) contract as purchaser or seller repurchase agreements on securities. If, in respect of a specific Sub-Fund, it is intended to make substantial use of this type of agreements, the relevant Sub-Fund Description will comprise a specific statement to that effect; e) deal in the forward foreign exchange or enter into transactions relating to spot or forward contract on currencies: - for spot or forward transactions involving the sale of currencies which are due to the Company in connection with the sale or redemption of assets belonging to the Company or the issue of its shares; or - for spot or forward transactions involving the purchase of currency where such currency is payable by the Company in connection with purchases or subscriptions of assets by the Company or the redemption of its shares; or - as a global hedge against the currency risks (i) for sales of call options, purchases of put options and sales of futures on currency. These financial derivative instruments, including equivalent cash-settled instruments will be dealt in on a regulated market, or in overthe-counter (OTC) financial derivative instruments, provided that: - the underlying asset consists of instruments, financial indices, interest rates, foreign exchange rates or currencies, in which the Company may invest according to its investment objectives; - the counterparties to OTC derivatives transactions are institutions subject to prudential 10 supervision, and belonging to the categories approved by the Luxembourg supervisory authority; - the OTC derivatives are subject to reliable and verifiable valuation on a daily basis and can be sold, liquidated and closed by an offsetting transaction at any time at their fair value and at the Company s initiative; - the risk of counterparty of the Sub-Fund in an OTC derivative transaction will not exceed 10% of its net asset value when the counterparty is a credit institution having its registered office situated in a Member State, or, if not situated in a Member State, being submitted to prudential rules, which the Luxembourg supervisory authority considers as equivalent to those laid down in Community law, or 5% of its net assets value in any other cases. Under no circumstances shall these operations cause the Company to diverge from its investment objectives as laid down in the Articles of Incorporation or in the present Prospectus. The Company shall ensure that its global exposure relating to financial derivative instruments does not exceed the total net value of its portfolio. The Company may invest, as a part of its investment policy and within the limits laid down in point B. 1. f), in financial derivative instruments provided that the exposure to the underlying assets does not exceed in aggregate the investment limits laid down in point B. a), b), c), d) and e). B. Investment Restrictions 1. FOR EACH OF ITS SUB-FUNDS: a) The Company shall not invest more than 10% of its net assets in transferable securities and money market instruments issued by the same issuing body. The limit of 10% under above may be increased to 35% if the transferable securities or money market instruments are issued or guaranteed by a Member State, by its public local authorities, by a non-member State or by public international bodies of which one or more Member States belong. Furthermore, for the Bond Funds, the Company is authorised to invest more than 35% and up to 100% of the net assets of each Sub-Fund, in accordance with the principle of risk spreading, in different transferable securities or money market instruments issued or guaranteed by a Member State, one or more of its local authorities, a non-member State of the European Union (as acceptable by the CSSF, including but not limited to the OECD member states, Singapore or Brazil) or public international body of which one or more Member States of the European Union belong, provided that such investments are spread over at least six different issues, each of them representing not more than 30% of the net assets of such Sub-Fund. b) The limit of 10% of paragraph B.1. a) above may be of a maximum of 25% for certain bonds when they are issued by a credit institution which has its registered office in a Member State, and is subject by law, to special public supervision designed to protect bondholders. In particular, the sums deriving from the issue of these bonds must be invested in accordance with the law in assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in case of bankruptcy of the issuer, would

12 be used on a priority basis for the repayment of principal and payment of the accrued interest. If a Sub-Fund invests more than 5% of its assets in the bonds referred to in the first sub-paragraph and issued by a single issuer, the total value of such investments may not exceed 80% of the value of its net assets. c) A Sub-fund shall not invest more than 20% of the net assets of any Sub-Fund in deposits with the same issuing body d) The total value of the individual holdings which represent more than 5% of the net assets invested in transferable securities and money market instruments issued by the same issuing body, shall not exceed 40% of the net assets of that Sub- Fund. This limitation does not apply to deposits made with financial institutions subject to prudential supervision and to OTC derivative transactions made with those financial institutions. e) Notwithstanding the individual limits laid down in paragraph A.2 e) last indent and paragraphs a) and c) above, the Company may not combine for each Sub-Fund: - investments in transferable securities or money market instruments issued by a single body, - deposits made with a single body and/or - exposures arising from OTC derivative transactions undertaken with a single body, in excess of 20% of its net assets. f) The transferable securities and money market instruments referred to in point paragraph A.2 e) last indent and paragraphs a) and c) above are not included in the calculation of the limit of 40% referred to in point B.1. d) above. The limits set out in point B.1. may not be combined, and thus investments in transferable securities or money market instruments issued by the same body, in deposits or financial derivative instruments made with this body carried out in accordance with the present point B.1 may not exceed a total of 35% of the assets of a Sub-Fund. Companies which are included in the same group for the purposes of consolidated accounts, as defined in accordance with Directive 83/349/EEC or in accordance with recognised international accounting rules, are regarded as a single body for the purpose of calculating the limits contained in the present point B.1. f). A Sub-Fund may cumulatively invest up to 20% of its assets in transferable securities and money market instruments within the same group. 2. FURTHERMORE, THE COMPANY MAY NOT: a) invest more than 10% of the net assets of each Sub-Fund in shares or units issued by a single UCITS and/or other UCI unless the relevant Sub-Fund is set up as a Fund of Funds or a specific derogation to this limitation is stated in the investment policy of a Sub-Fund. For the purpose of the application of this limit, each Sub-fund of an umbrella UCITS or UCI is considered as a separate UCITS or other UCI provided that the principle of segregation of each Sub-Fund obligations vis-à-vis third parties is ensured. The underlying investments held by the UCITS or other UCIs in which the Company invests do not have to be considered for the purposes of the application of limits as stated in the above point B.1. b) invest more than 30% of the net assets of each Sub-Fund in shares or units of other UCIs other than UCITS, c) invest in voting shares of companies which would enable the Company to exercise a significant influence over the management of their issuer; d) acquire more than: - 10% of the non-voting shares of the same issuer; - 10% of the bonds of the same issuer; - 10% of the money market instruments issued by the same issuer; - 25% of the units of the same UCITS and/or other UCIs. In case of a UCITS or other UCI with multiple sub-funds, this restriction is applicable by reference to all units issued by the UCITS or other UCI concerned, all sub-funds combined; except if at the time of purchase of such securities as described on second, third and fourth indents above the gross amount of bonds or money market instruments or the net amount of the securities in issue cannot be calculated. The limits laid down above do not have to be respected when exercising subscription rights attaching to transferable securities or money market instruments which form part of the assets of the relevant Sub-Fund. If one of the limits referred to above is exceeded for reasons beyond the control of the Company or as a result of the exercise of subscription rights attaching to securities held in portfolio, the Company must adopt as a priority objective the remedying of that situation, taking due account of the interests of the shareholders. e) However, the limits laid down in paragraphs c) and d) above are waived as regards to transferable securities and money market 11

13 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS instruments issued or guaranteed by (i) a Member State or its local authorities, (ii) a non EU Member State, (iii) public international bodies of which one or more EU Member States are members or (iv) an issuer of a non-member State of the EU which invests its assets mainly in the securities of issuing bodies having their registered office in that state, where under the legislation of that state, such a holding represents the only way in which the Company can invest in the securities of issuing bodies of that state and provided that the issuer in which the Company invests, complies in its investment policy with the limits laid down in Articles 43, 46 and 48 (1) and (2) of the 2010 Law. f) invest neither in precious metals nor certificates representing these. The Company may, however, hold gold warrants or gold options which are acquired by investment in transferable securities with such warrants provided that these warrants or options are never exercised or detached from the underlying securities; g) contract loans except where these are occasional and temporary, the total of which shall in any case not exceed 10% of the net assets of each Sub-Fund; h) grant loans to any person nor act as guarantor on behalf of third parties except (i) in the form of bank deposits placed with the Custodian Bank, or another bank or deposittaking institution duly approved by the Custodian Bank (ii) as subscriptions, purchases or holdings of debentures or (iii) through securities lending transactions held directly or through a standardised lending system organised by a recognised clearing institution or through a lending system organised by a financial institution subject 12 to prudential supervision rules considered by the Luxembourg supervisory authority as equivalent to those prescribed by Community Law and specialised in this type of transactions. Such securities lending transactions, as defined above, shall be used for the purpose of efficient portfolio management and shall not result in a change of investment objective of the Sub-Fund nor result in additional risk higher than the risk profile as described in the description of a Sub-Fund. i) carry out uncovered sales of transferable securities, money market instruments, share or units of UCITS and/or other UCIs and financial derivative instruments. C. Selection and Monitoring Procedure applied for the Sub-Funds structured as a Fund of Funds 1. SELECTION PROCEDURE Investments are chosen from a carefully selected range of Funds rated highly by the Sub-Fund Investment Manager. The UCITS and UCIs selection consists of: - a quantitative screening the goal of which is to identify amongst the worldwide universe, the Funds that will meet pre-established standard criteria of past performances and ranking, size, Alpha, Beta and annual volatility; - the performance of due diligence analysis allowing an objective assessment of all preselected Funds which will identify (i) the investment strategy and (ii) the UCITS and UCIs Funds Managers risk management; - a qualitative screening carried out with on site visits and interviews of the UCITS and UCI s Funds Managers, including their diligence to comply with the Funds investment policy and guidelines and the analysis of their back office functions and support systems. This selection provides the Investment Managers with an updated list of UCITS and UCIs encompassing all types of strategies. 2. MONITORING PROCEDURE The selected list of UCITS and UCIs will be monitored in order to assure that the Funds still meet the standard of the select list. 5. RISK FACTORS Investors should note that a significant proportion of the assets of certain Sub-Funds will be invested in securities or other instruments issued by Latin American, Asia or Emerging European entities or their offshore subsidiaries. Before investing in the Company, prospective investors should carefully review the relevant Sub-Fund s Investment Policy. Investors should also bear in mind that in addition to the normal risks associated with the type of instruments in which each Sub-Fund invests, they may be exposed to the risks of investing in Latin American, Asian or Emerging European countries, including possible currency devaluation, inflation, imposition of exchange controls, changes in taxes or local laws. Moreover, the analysis of credit risk of individual issuers is more difficult in Latin American, Asian or Emerging European countries than in most OECD countries. Rating methods are not well developed, and name selection by the Investment Manager

14 is on a best effort basis. Prospective Investors should bear in mind that there is a significant risk of default by issuers. Specific risk factors of the Sub-Fund structured as a Fund of Funds 1. ILLIQUIDITY OF THE UCITS AND UCIS Although UCITS and UCIs in which the Sub-Fund invests are open-ended Funds with payment of their redeemed shares in due time, there may be, in exceptional circumstances, a lack of liquidity at the level of the investments made by such UCITS and UCIs which may affect the liquidity of the shares of the Sub-Fund, as well as its net asset value calculation, the issue and the redemption of its shares (see Chapter 6, B). 2. NATURE OF THE INVESTMENTS OF THE SUB-FUND The Investment Manager seeks to monitor investments and trading activities of the UCITS and UCIs to which the Company has allocated assets. However, investment decisions are normally made independently at the level of such UCITS and UCIs and are solely subject to the restrictions set out in the Articles of Incorporation or Prospectuses of such UCITS and UCIs. Although due diligence is conducted by the Investment Manager (see C above), neither the Company nor the Investment Manager or the Custodian Bank are liable for the compliance with such restrictions. 3. EXPOSURE TO FOREIGN EXCHANGE RISK According to their individual investment policy, the Sub-Funds may invest in UCITS, UCIs or other instruments in a currency other than the currency in which they are denominated. Such exposure entails risks of foreign exchange rates falls, which will not automatically be hedged. Moreover, even when hedging techniques are used, it may not be possible to eliminate totally the exposure to currencies other than the Fund s currency. Prospective investors should read the entire Prospectus and the KIID and fully evaluate all other information that they deem to be necessary for determining whether to invest in the Sub-Fund. Prospective investors should ensure that they fully understand the content of this Prospectus and KIID. As these Sub- Funds may not be suitable for all investors, if you have any doubts, you should seek advice from your investment advisor before taking any action. Past performance is not necessarily a guide to the future. 4. RISKS ASSOCIATED WITH FINANCIAL DERIVATIVE INSTRUMENTS The Target Fund or their Investment Manager(s) may use financial derivative instruments traded on a Regulated Market and on over-thecounter markets. The use of these strategies involves certain special risks, including without limitation: - dependence on the ability to predict movements in the prices of securities being hedged and movements in interest rates, - imperfect correlation between the hedging instruments and the securities or market sectors being hedged, - the fact that skills needed to use these instruments are different from those needed to select the Fund s securities, - the possible absence of a liquid market for any particular instrument at any particular time, - possible impediments to effective portfolio management or the ability to meet repurchase requests or other short term obligations because of the percentage of a fund s assets segregated to cover its obligations and - the risk of counterparty default delaying or impeding the recovery of the Target Fund s assets. The Target Fund s ability to use these strategies may be limited by market conditions, regulatory limits and tax considerations and these strategies may be used only in accordance with the Investment Objectives of the Target Fund. 6. SHARES, SHAREHOLDINGS IN THE COMPANY 6.1. THE SHARES Shares in the Company will be issued in registered form only by way of entries in the Register of Shareholders. Shares of a same Sub-Fund in the Company, subject to the conditions as mentioned below, are freely transferable and, upon issue, are entitled to participate equally in the profits and dividends of the Sub-Fund to which they relate. Shares carry no preferential or pre-emptive rights and each share is entitled to one vote at all shareholders Meetings. The Articles of Incorporation can be amended by the General Meeting of shareholders, which are subject to the quorum and majority requirements in accordance with the law. 13

15 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS Any amendment in the Articles of Incorporation affecting the rights of the shareholders of any Sub-Fund vis-à-vis those of any other Sub-Fund shall be subject further to the quorum and majority requirements in those Sub-Funds. However, any resolution of the General Meeting of shareholders, deciding the distribution of dividends on shares of a Sub-Fund, shall be approved by the shareholders of this Sub-Fund. The shares issued have no par value and must be fully paid. The number of shares issued will be unlimited. In the event of dissolution of the Company, the net proceeds of the liquidation corresponding to each Sub-Fund will be distributed in proportion to the shareholdings in such Sub-Fund APPLICATIONS Applications for subscription, conversion and redemption will be accepted any Business day by the Central Administration and by the Representatives of the Company (see Chapter 2 Section 2.10 to Section 2.15) who will forward them to the Central Administration. Orders must be received, by the Central Administration, by 5.00 p.m. (Luxembourg time), on each Business day and will be executed on the following Business day (the Calculation Day ) at the price determined on the basis of the net asset value calculated that Calculation day, except otherwise mentioned in the related Annex of the Sub-Fund. Consequently, subscriptions, conversions and redemptions will be calculated on an unknown net asset value basis. The fax instructions will be only accepted if the Mandate Authority to act on instructions given by facsimile transmission has been 14 mailed to the Central Administration, duly completed and signed by all the shareholders prior to any order execution by the Central Administration SHARE CLASSES For some Sub-Funds, in addition to Class A, a Class Q will be issued in respect of a Sub-Fund. Class Q is not available to any person other than: a) a company which is in the group of companies consisting of the ultimate Lloyds Banking Group and each of the subsidiaries of that Group company; or b) a company, not being a company of the type referred to in the preceeding paragraph (a) to whom the Management Company at its entire discretion has determined that such Shares may be made available SUBSCRIPTION OF SHARES The minimum initial investment in shares in any one Sub-Fund is USD 10,000 (or its equivalent in another currency) except as otherwise mentioned in the Description of a Sub-Fund. Subsequent subscriptions of shares relating to a Sub-Fund in which the applicant is an existing holder may be made for a minimum of USD 5,000 (or its equivalent in another currency) except as otherwise mentioned in the Description of a Sub-Fund. The right is reserved for the Company to ask any subscriber for an amount of less than USD 10,000 for proof of his minimum initial shareholding in the Sub-Fund. The Company or the Promoter may, however, decide not to apply the above-mentioned minima in the event of exceptional transactions and transactions undertaken for specific reasons. In exceptional circumstances and upon approval of the Directors, Shares may also be issued upon acceptance of the subscription against contributions in kind of transferable securities and other assets considered acceptable by the Directors and compatible with the Investment Policy and the investment objective of the relevant Sub-Fund, subject to applicable laws and regulations. Any such subscription in kind will be valued in a special report prepared by the Company s auditor if legally required. Any expenses incurred in connection with such contributions shall be borne by the shareholders concerned. Applications for shares must reach the Central Administration, on the basis of the Subscription Form attached to this Prospectus. Applications by tested SWIFT or by fax must contain all the information asked for in the Subscription Form. In an effort to deter money laundering and financing terrorism, the Company, the Management Company, the Investment Manager, the Global Distributor, any distributor or sub-distributor, and the Central Administration must comply with all applicable international and Luxembourg laws and circulars regarding the prevention of money laundering and financing terrorism and in particular with the Luxembourg law dated 12 th November, 2004 against money laundering and terrorism financing, as amended and circulars of the supervising authority. To that end, the Company, the Management Company, the Investment Manager, the Global Distributor, any distributor or sub-distributor, and the Central Administration may request information necessary to establish

16 the identity of a potential investor and the origin of subscription proceeds. Failure to provide documentation may result in a delay or rejection by the Company of any subscription or conversion or a delay in payout the redemption proceed. Neither the Company, the Management Company, the Investment Manager, the Global Distributor, any distributor or sub-distributor nor the Central Administration have any liability for delays or failure to process deals as a result of the applicant providing no or any incomplete documentation. Furthermore, Lloyds Banking Group plc rules require the Central Administration to comply, at all times, with the internal control procedures of Lloyds Banking Group plc regarding the prevention of money laundering and financing of terrorism. In this context, the Central Administration is required to obtain evidence of identities and addresses of its shareholders and co-shareholders and to inquire as to their source of wealth in order to ensure that these funds are not derived from illegal activities. For that purpose, investors attention is drawn to the fact that the Subscription Form must be fully completed and that the required attachments must be forwarded together with the Subscription Form to the Central Administration. The Subscription Form of a subscriber must be accompanied, in the case of individuals by a true certified copy of the original of: - A passport [page bearing photograph, date of birth and page bearing the signature]; or - A national identity card (Continental European residents); or - A current full United Kingdom driving licence (UK residents only), and for corporations, by an original or a certified copy of the articles and an original or a certified copy of an extract from the Register of Commerce together with a list of directors and authorised signatories. All copies of identity documents must be legible and valid at the time of the subscription. They must be certified as true copies by a public notary, an embassy, a consulate or High Commission of the country of issue of the document. Upon expiry of existing documents, shareholders must provide the Company or the Central Administration with certified copies of replacement documents. The Company or the Central Administration will not, in principle, accept subscriptions from investors resident in countries where financial institutions or professionals of the financial sector are not subject to an identification obligation equivalent to that required under Luxembourg law. Furthermore, the Company or the Central Administration reserve the right to verify any of the information provided with by the shareholders or the co-shareholders. Subscriptions may be temporarily suspended until the Company or the Central Administration is fully satisfied as to the identification of the subscribers, their source of wealth and the source of the funds. Namely, the Company or the Central Administration reserves the right, at its sole discretion, to reject, suspend or restrict any request for subscriptions: - if sections of the Subscription Form are left blank or if information is not legible, complete or valid at the time of the subscription; - if the request of subscription is not made in conformance with the Articles of Incorporation or is in violation with the law and legal provisions of the country of residence of the subscriber; - if the request of subscription comes from investors whom the Company considers to be «market timers». «Market timers» and investments associated with «market timing» practices are defined under heading «Conversion of shares between Sub-Fund». A contract note confirming the details of the subscription and substituting the confirmation of registration will be sent to shareholders on the next open Business day of the applicable Calculation day. The subscription price for shares of these Sub-Funds, corresponds to the net asset value per share of the applicable Calculation day, increased by any taxes and brokerage fees, as well as by a subscription fee being fixed at a maximum rate of 4.25%, calculated on the net asset value per share and payable to the Distributor, who may, at its discretion, decide to reallow all or part of the fee to professional intermediaries. Amounts will be rounded up or down according to customary banking practice. Payment from the shareholders (and not from third-party) in the currency of the shares subscribed, or in another currency if requested by the applicant, should be made by bank transfer in cleared funds to the account of the Central Administration within the Business days following the Calculation day as stated in the Description of each Sub-Fund. The applicant may also pay the subscription amount by sending, together with its Subscription Form, a cheque to the order of State Street Bank Luxembourg S.A.. In that case, the Company or the Central Administration reserves the right to accept the subscription only when 15

17 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS the cheque has been paid, and at the latest on the first open Business day in Luxembourg following the reception by the Custodian Bank of the cleared funds confirmation. The Custodian bank s cheque collection fee, if any, will be deducted from the subscription amount. If the payment is made in a different currency to that of the shares subscribed, the exchange rate shall be determined by the Central Administration and the applicant will be charged with the customary fees and exchange commission. In any case, if monies are not received as described above, the Company or the Central Administration reserves the right to cancel any allotment of the relevant shares without prejudice to the right of the Company or of the Central Administration to obtain compensation for any loss directly or indirectly resulting from the failure of an applicant to effect settlement. If an allotment is cancelled and cleared monies are subsequently received, the Company or the Central Administration may either return the application monies at the cost of the applicant and subject to any applicable charges, or issue shares on the date cleared monies are received, at the price determined on the basis of the net asset value calculated that Business day but subject to any applicable charges REDEMPTION OF SHARES Requests for redemption of shares, possible at any time, must be accompanied by the registered share certificates and by payment instructions. The redemption price of shares corresponds to the net asset value per share of the applicable Calculation day, less taxes, and brokerage fees, and if the Directors 16 consider it appropriate, a redemption fee payable to the Distributor which shall not exceed 1% of the net asset value. The amount will be rounded up or down according to customary banking practice. If compliance with redemption instructions results in a residual holding in any one Sub-Fund of less than USD 10,000 (or its equivalent in other currencies) or any other amount as specified in the Description of a Sub-Fund, the Company may compulsorily redeem the residual shares at the current bid price and pay the proceeds thereof to the shareholder. A contract note confirming the details of the redemption will be sent to on the next open Business day of the Calculation day. Subject to the receipt of the registered share certificates, payment will be effected by the Central Administration by bank transfer in the currency of the relevant Sub-Fund, or in a different currency where requested by the shareholder, within the Business days following the Calculation day, as stated in the description of each Sub-Fund. Payment may also be made by banker s draft at the request of the shareholder. Any costs so incurred will be deducted from the redemption proceeds. In exceptional circumstances, the Directors may request that a shareholder accepts redemption in kind. The shareholders may always request a cash redemption payment in the reference currency of the relevant Class. Where the shareholder agrees to accept redemption in kind he will, as far as possible, receive a representative selection of the relevant Class holdings pro rata to the number of shares redeemed and the Company will make sure that the remaining shareholders do not suffer any loss therefrom. The value of the redemption in kind will be certified by certificate drawn up by the independent auditors of the Company to the extent required by Luxembourg laws and regulations, except where the redemption in kind exactly reflects the shareholder s prorata Share of investments. Any request for redemption shall be irrevocable except in the event of suspension of redemption. In the absence of revocation, redemption will occur as of the first Calculation Day after the end of the suspension. If the payment is requested in any currency other than that of the redeemed Shares, the exchange rate shall be determined by the Central Administration, and the customary fees and exchange commission will be deducted from the proceeds of the redemption. The proceeds of the redemption will be paid only in favour of the shareholder(s). The right is reserved, if it is in the general interest of the shareholders, for the Company to defer the redemption of its shares or of the Shares of one of these Sub-Funds in the cases and in accordance with the details described in Chapter 9 Section B. The Company shall not be bound to redeem on any Calculation day more than 10% of the net asset value of a Class issued by any Sub-Fund. If the Company receives requests on any Calculation day for redemption which exceeds this, the Company may proportionally reduce these redemption requests and postpone the part of them which

18 has not been redeemed for the next Calculation day which must be within 7 Calculation days. Dealing of such postponed requests will be given priority over later requests CONVERSION OF SHARES BETWEEN SUB-FUNDS Shareholders will be entitled to convert some or all of their Shares relating to any Class of any Sub-Fund into shares relating to any other Class of the same or other Sub-Fund. Provided that the calculation of the net asset value per Share, and the issue and redemption of Shares of either of the respective Sub-Funds have not been suspended, cancelled or postponed, the conversion of Shares will be calculated in accordance with the following formula: (B x C) x E A = D where A is the number of Shares of the new Class of the Sub-Fund to which the shareholder shall become entitled; B is the number of Shares of the original Class of the Sub-Fund to be converted; C is the first net asset value per Share of the original Class of the Sub-Fund following the receipt of the conversion order by the Central Administration; D is the first net asset value per Share of the new Class of the Sub-Fund following the receipt of the conversion order by the Central Administration; E is the rate of exchange determined by the Central Administration. Applications for conversion of Shares should include the number of Shares of the Class of the Sub-Fund or amount to be converted and the proportion of their value to be allocated to each new Class of Shares of the Sub-Fund as well as any delivery instructions for the Share certificates. In the case of registered shares, the name and signature of all the shareholders must appear on the application for conversion (unless the Joint Shareholding Mandate has been signed by all the shareholders). Contract notes for the subscription and redemption and, where appropriate, the registered share certificates will be drawn up in accordance with the customary issuing and redemption procedures. The Company reserves the right to modify or impose restrictions regarding the frequency of conversions. Specifically, the exception clause as described in the above Section 4, last paragraph will apply in case of conversion. The Company does not knowingly allow investments which are associated with Market Timing and Late Trading practices, as such practices may adversely affect the interests of all non-market timing shareholders by harming Sub- Fund s performance and diluting profitability. The Late Trading practice consists to transmit to the Central Administration, for application at the net asset value calculated that day, orders that have been received after the deadline for the reception of the orders as fixed in Chapter 6, Section 6.2 above. In general, Market Timing refers to the investment behaviour of an individual or a group of individuals buying, selling or converting shares or other securities on the basis of predetermined market indicators. Market timers also include individuals or groups of individuals whose securities transactions seem to follow a timing pattern or are characterised by frequent or large conversions. The Company may therefore combine shares which are under common ownership or control for the purposes of ascertaining whether an individual or group of individuals can be deemed to be involved in market timing practices. Common ownership or control includes without limitation legal or beneficial ownership and agent or nominee relationships giving control to the agent or nominee of Shares legally or beneficially owned by others. Accordingly, the Company reserves the right to reject any application for switching of Shares by investors whom the Company considers market timers TRANSFER OF SHARES The transfer of registered Shares to third parties may be effected by sending a duly completed Transfer Form to the Central Administration. Transfer Forms are available from the Central Administration. Where share certificates have been issued, they must be returned to the Central Administration together with a Transfer Form. If the transfer is requested in favour of persons who are not already shareholders of the Company, identification procedures and controls relating to prevention of money laundering and financing terrorism as stated under Point 3 above will apply STATEMENTS OF HOLDINGS All shareholders will be sent a statement confirming the number and value of Shares held by them in each Sub-Fund at the beginning of the second quarter of each year. 17

19 LLOYDS TSB INTERNATIONAL PORTFOLIO PROSPECTUS 7. DISTRIBUTION POLICY The main objective of the Company is to achieve the optimal growth of its capital and therefore, except otherwise mentioned in the related Annex of the Sub-fund, it is not planned to distribute any dividends. All income accruing to each of the different Sub-Funds is continuously reinvested therein. For the Sub-Funds which offer Distributive Share Classes, it is the intention of the Board of Directors to distribute substantially the taxable income earned on investment. Every resolution of the annual general meeting deciding the distribution of a dividend in a Sub- Fund must be approved by the Shareholders of the said Sub-Fund by a simple majority vote of the Shareholders present or represented. Entitlement to dividends and allocations not claimed within five years of the due date shall be forfeited and the corresponding assets shall revert to the Sub-Fund concerned. 8. DATA PROTECTION The Company, in its capacity as data controller, collects, stores and processes by electronic or other means the data supplied by shareholders at the time of their subscription for the purpose of fulfilling the services required by the shareholders and complying with its legal obligations. The data processed includes in particular the name, address and invested amount of each shareholder. The data supplied by shareholders is processed for the purpose of administering your account, i.e. (i) maintaining the register of shareholders, (ii) processing 18 subscriptions, redemptions and conversions of shares and payments of dividends to shareholders, (iii) performing controls on late trading and market timing practices, and (iv) complying with applicable anti-money laundering and prevention of terrorism financing rules. In the context of the above mentioned purposes, the Company can delegate the processing of personal data to its agents, in particular the Central Administration, the Registrar and Transfer Agent. As regards processing carried out by the Central Administration, the Registrar and Transfer Agent, the Company agrees to disclose the following data: - general personal data, including your name, addresses, phone numbers, fax numbers, addresses, passport details; - data relating to the Financial Intermediary / Distributor via which you have invested in the Company, including the name, addresses, phone numbers, fax numbers, addresses of such Financial Intermediary / Distributor; - data relating to your investment in the Company, including data relating to the bank accounts and settlement accounts linked to your investment in the Company (account name, account number), amount invested in the Company, number and value of the shares held in the Company, outstanding and total commitments to invest in the Company, elections as to EUSD status; - data relating to transfers of shares in the Company such as the name of the transferor and the transferee, the amount of shares transferred, the amount pending to be paid, the time and date of payments and transfers of shares; to International Financial Data Services (Canada) Limited, a company incorporated under the laws of Ontario, Canada as corporation number with registered office at 30 Adelaide Street E, Suite 1, Toronto, Ontario, M5C 3G9 (the Recipient ). 9. NET ASSET VALUE A. General 1. The net asset value of shares of each Class of the Company shall be expressed in the currency of denomination of the relevant Class or in any other currency as specified in the Description of a Sub-Fund, as determined by the Directors, as a per share figure and shall be determined on each Calculation Day, based on the last available prices of the Business day on the relevant markets preceding the Calculation Day (the Valuation Day ). It is determined by dividing the net assets of the Company allocated to the relevant Class, being the value of the assets of the Company corresponding to such Class, less the liabilities and commitments which are attributable to such Class at such time or times as the Directors may determine, by the number of shares then outstanding adjusted to reflect any dealing charges, swing pricing technique or fiscal charges which the Directors considers appropriate to take into account and by rounding the resulting sum to the nearest smallest unit of the currency concerned. If a substantial modification of the prices on stock exchange markets, on which an important part of investments made by the Company and attributable to a particular Class are negotiated or

20 quoted has occurred, since the closing of the offices of the relevant day, the Company may cancel the first valuation and make a second valuation in order to protect the interest of the shareholders of the Company. For this purpose, the assets of the Company shall be deemed to include: a) all cash on hand or on deposit including any interest accrued thereon; b) all bills and demand notes and accounts receivable (including proceeds of securities sold but not delivered); c) all bonds, time notes, shares, stock, units in undertakings for collective investment, debenture stocks, subscription rights, warrants, options and other investments and securities owned or contracted for by the Company; d) all stock dividends, cash dividends and cash distributions receivable by the Company (provided that the Company may make adjustments with regard to fluctuations in the market value of securities caused by trading ex-dividends, ex-rights, or by similar practices); e) all interest accrued on any interestbearing securities owned by the Company except to the extent that the same is included or reflected in the principal amount of such security; f) all other assets of every kind and nature, including, if any, the prepaid expenses of the Company, not yet written off and all the eventual formation expenses of the Company insofar as the same have not been written off. The liabilities of the Company shall be deemed to include: a) all borrowing, bills and other amounts due; b) all accrued or payable administrative expenses (including but not limited to investment advisory fee or management fee, custodians, representatives and agents of the Company); c) all known liabilities, present and future, including all matured contractual obligations for payments of money or property, including the amount of any unpaid dividends declared by the Company where the Calculation Day falls on the record date for determination of the person entitled thereto or is subsequent thereto; d) an appropriate provision set aside for futures taxes as at the date of the valuation and any other provisions or reserves approved by the Board of Directors; e) all other liabilities of the Company of whatsoever kind and nature except liabilities represented by shares in the Company. In determining the amount of such liabilities, the Company shall take into account all expenses payable by the Company which shall comprise formation expenses, fees and expenses payable to its investment advisers or investment managers, fees and expenses payable to its directors or officers, its accountants, custodians and its correspondents, domiciliary, registrar and transfer agents, any paying agent and permanent representatives in places of registration, any other agent employed by the Company, fees and expenses incurred in connection with the general infrastructure of the Company, the listing of the shares of the Company at any stock exchange or to obtain a quotation on another regulated market, all professional and other fees (including fees for legal, consultancy or auditing services), promotional, marketing, printing, reporting and publishing expenses, including the cost of advertising or preparing and printing of prospectus and KIID or explanatory memoranda or sales brochures, registration statements, annual and semi-annual reports, taxes or governmental charges, and all other operating expenses, including the cost of buying and selling assets, interest, currency conversion costs, bank charges and brokerage, postage, telephone and facsimile. The Company may take into account recurring or regular administrative and other expenses by estimating them for the year or for any other period in advance and may accrue the same in equal proportions over any such period. 2. VALUTATION OF THE ASSET The assets of each class of shares are valued in the following way: a) securities listed on a stock exchange or on other regulated markets, which operate regularly and are recognised and open to the public, will be valued at the last available price; in the event that there should be several such markets, on the basis of the last available price of the main market for the relevant security. Should the last available price for a given security not truly reflect its fair market value, then that security shall be valued on the basis of the probable sales price which the Directors deem it is prudent to assume; (b) securities not listed on a stock exchange or on any other regulated markets, which operate regularly and are recognised and open to the public, will be valued on the basis of their last available price. Should the 19