F.I.T.-GALILEO JAPAN FUND P R O S P E C T U S

Transcription

1 F.I.T.-GALILEO JAPAN FUND P R O S P E C T U S DILLON EUSTACE SOLICITORS, 33 SIR JOHN ROGERSON S QUAY, DUBLIN 2.

2 SUMMARY The information on F.I.T.-Galileo Japan Fund (the "Fund"), set out below should be read in conjunction with the full text of this document, from which it is derived. Structure: The Fund is open-ended, organised as a unit trust and authorised as a UCITS by the Financial Regulator. Units in the Fund will be registered for sale to the public and to institutional investors in certain Member States of the EU, Switzerland and Liechtenstein. Objective: Medium term capital growth through investment in the Japanese market in corporate stocks and debt instruments. Manager: F.I.T-Galileo Investment Trust Limited, Ireland. Investment Adviser: CATAM Asset Management AG. Administrative Agent: Olympia Capital (Ireland) Limited. Trustee: Société Générale, Dublin Branch. Base Currency: Euro ( ) Distribution Policy: It is not intended that distributions shall be made, as the Fund is a capital growth fund. Annual Accounting Date: 31st December. Dealing Days: Every Tuesday or if a Tuesday is not a Business Day, the next succeeding Business Day. Pricing: Prices are calculated weekly, as at the Valuation Point. The up to date prices will be published weekly on Bloomberg, Telekurs, Reuters and on The Fund has filed a notification under Section 15c Aus1InvestmG (German Foreign Investment Law) with the German Banking Commission. On this basis the Units may be offered to the general public in the Federal Republic of Germany. Further details and explanations appear later in this document. This Prospectus may be translated into German, Italian or other foreign languages, as the case may be. Any such translation shall be a direct translation from this English language Prospectus.

3 The Directors of the Manager of the F.I.T.-Galileo Japan Fund (the "Directors") whose names appear on pages 20 and 21 are the persons responsible for the information contained in this Prospectus. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The Directors accept responsibility accordingly. If you are in any doubt about the contents of this Prospectus you should consult your stockbroker, bank manager, legal adviser, accountant or other financial adviser. F.I.T.-GALILEO JAPAN FUND P R O S P E C T U S Date: 9 February 2007 Distribution of this document is not authorised unless it is accompanied by a copy of the first annual report of the Fund and, if published subsequently, the latest half-yearly report. Such reports will form part of this Prospectus. 3

4 Investors should note that because investments in securities can be volatile and that their value may decline as well as appreciate, there can be no assurance that the Fund will be able to attain its objective. The price of Units, as well as the income therefrom may go down as well as up to reflect changes in the Net Asset Value of the Fund. An investment in the Fund should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors. An investment should only be made by those persons who could sustain a loss on their investment. It is a condition of subscription to the Fund that neither the Manager nor the Investment Adviser shall be liable to investors (or to any other persons) for any error of judgement in the selection of the Fund's investments. Any information or representation not contained herein given or made by any dealer, salesman or other person should be regarded as unauthorised and should accordingly not be relied upon. Neither the delivery of this Prospectus nor the offer, issue or sale of Units in the Fund shall under any circumstances constitute a representation that the information given in this Prospectus is correct as at any time subsequent to the date hereof. This Prospectus will be updated to take into account any material changes. This Prospectus does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Statements made in this Prospectus are based on the law and practice currently in force in Ireland and are subject to changes therein. Unitholders will be bound by the provisions of the Trust Deed. Subject to the exceptions set out below, Units in the Fund may not be purchased by U.S. Persons. The Units in the Fund have not been registered under the United States Securities Act of 1933 as amended (the "Securities Act"). However, Units in the Fund may be placed with, or transferred to, a limited number of sophisticated institutional investors who are in the United States or which are United States persons, pursuant to an exemption to the Securities Act or in circumstances which preclude a requirement to register the Units under the Securities Act and do not cause any investment manager to become subject to the United States Investment Advisers Act of 1940 and do not cause the Fund to become subject to the United States Investment Company Act of Subject to the exceptions set out above, Applicants and transferees will be required to certify that they are not U.S. Persons. The Manager of the Fund is satisfied that no actual or potential conflict of interest arises as a result of the Investment Adviser or the Administrative Agent advising and administering other funds. However, if any conflict of interest should arise, the Manager will ensure that it is resolved fairly in the interest of the Unitholders. 4

5 F.I.T.-GALILEO JAPAN FUND Trustee Société Générale, Dublin Branch Registered Office: Manager F.I.T.-Galileo Investment Trust Limited Registered Office: Third Floor 6 th Floor, Block 3, IFSC House, Harcourt Centre, Irish Financial Services Centre Harcourt Road, Dublin 1 Dublin 2 Ireland Ireland Administrative Agent Olympia Capital (Ireland) Limited 6 th Floor, Block 3, Harcourt Centre, Harcourt Road, Dublin 2 Ireland. Investment Adviser and Promoter Paying Agent in Germany CATAM Asset Management AG, Marcard, Stein & Co. Landstrasse 34, Ballindamm Schaan, Hamburg Liechtenstein Germany Legal Advisers Auditors Dillon Eustace Deloitte & Touche 33 Sir John Rogerson s Quay Deloitte & Touche House Dublin 2 Earlsfort Terrace Ireland Dublin 2 Ireland 5

6 CONTENTS INTERPRETATION...8 INTRODUCTION...13 INVESTMENT POLICY Investment Strategy and Policy.14 Efficient Portfolio Management Techniques 14 Financial Derivative Instruments..14 RISK FACTORS...15 General..15 Political Risks 15 Regulating Risks and Accounting Standards...15 Foreign Exchange/Currency Risks 15 Market Risk...16 Custodial Risk...16 Settlement and Credit Risks..17 Valuation Risk...17 Investment Advisor Valuation Risk..17 Taxation Risk 17 Interest Rate Risk..17 Derivative and Techniques and Investment Risk..18 Securities Lending Risk 18 MANAGEMENT AND ADMINISTRATION OF THE FUND...20 The Manager..20 The Investment Adviser and Promoter...22 The Distributors.22 The Trustee 22 The Administrative Agent.23 Dealings by the Manager, Investment Adviser, Administrative Agent, 23 Trustee and Associates..23 Conflicts of Interest...23 THE UNITS.. 25 Description of the Units.25 Application for Units.25 Savings Plans and Securities Purchasing Contracts..26 Euroclear and Clearstream 27 Anti Money Laundering Procedures. 28 Data Protection Information. 29 Qualified Holders.. 29 Redemption of Units. 29 Publication of Price of Units. 30 Temporary Suspension of Valuation of Units and of Issues and Redemptions PAGE 6

7 MANAGEMENT AND FUND CHARGES. 32 DIVIDENDS AND DISTRIBUTIONS 35 TAXATION 36 General. 36 Unitholders Income Tax, Corporation Tax and Capital Gains Tax. 39 CALCULATION OF THE NET ASSET VALUE OF UNITS. 40 INVESTMENT RESTRICTIONS 45 Financial Derivative Instruments...49 Restrictions on Borrowing, Lending and Dealing 49 GENERAL.. 51 Meetings.. 51 Financial Statements and Supply of Documents. 51 Documents Available for Inspection.. 51 Material Contracts 52 Notices to Unitholders. 53 Litigation and Arbitration Proceedings 53 TERMINATION 54 SCHEDULE SCHEDULE

8 INTERPRETATION In this Prospectus:- all references to " " or "Euro" are to the currency introduced at the start of the third stage of the economic and monetary union pursuant to the Treaty of Rome dated 25th March, 1957 (as amended) establishing the European Community. all references to a specific time of day are to Irish time; "Administration Expenses" means the sums necessary to provide for costs, charges and expenses incurred by the Manager including, but not limited to, the costs, charges and expenses including all translation expenses of registering the Fund in any jurisdiction and calculating the Net Asset Value of Units, cost of preparation and distribution of the Annual and semi-annual Reports and other periodic reports, Unit transaction expenses, audit expenses, cost of periodic update of Prospectus and the publication of Subscription Price and Redemption Price and of any notices given to Unit Holders in whatever manner and including clerical costs of the issue and redemption of Units and all legal and professional expenses which the Manager incurs in litigation on behalf of the Fund or in connection with the establishment and ongoing administration of the Fund or otherwise; "Business Day" means every day, which is a bank business day in Ireland; "Clearstream" means a settlement company formed by the merger of Cedel and Deutsche Borse Clearing; Companies Acts means the Irish Companies Acts 1963 to 2006 "Dealing Day" means every Tuesday or if a Tuesday is not a Business Day, the next succeeding Business Day; "Deposited Property" means all of the assets for the time being held or deemed to be held upon the trusts of the Trust Deed excluding any sums for the time being required to effect a distribution in accordance with Clause of the Trust Deed; "Disbursements" means in relation to the Trustee, all disbursements properly made by the Trustee in connection with its trusteeship of the Fund under the Trust Deed and all costs charges and expenses of every kind which it may suffer or incur in connection with such trusteeship and the administration of the Fund (including the establishment thereof) and all matters attendant thereon or relative thereto including any sub-custodial costs, (which shall be at normal commercial rates), together with VAT if applicable and all legal and other professional expenses incurred or suffered by it in relation to or in any way arising out of the Fund (including the establishment thereof); "Duties and Charges" means in relation to any particular transaction, dealing or valuation all stamp and other duties, taxes, governmental charges, valuation fees, property management fees, agents' fees, brokerage fees, bank charges, transfer fees, registration fees, and other charges whether in respect of the constitution or increase of the Deposited Property or the creation, exchange, sale, purchase, redesignation or transfer of Units or the purchase or proposed purchase of Investments or otherwise which may have become or will become payable in respect of or prior to or upon the occasion of the transaction, dealing or valuation in question but does not mean commission payable to agents or brokers on the issue of Units, together with VAT if any payable on the fees paid by the Manager to the Investment Adviser; 8

9 "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System. Exempt Irish Investor means - a pension scheme which is an exempt approved scheme within the meaning of Section 774 of the Taxes Act or a retirement annuity contract or a trust scheme to which Section 784 or 785 of the Taxes Act applies; - a company carrying on life business within the meaning of Section 706 of the Taxes Act; - an investment undertaking within the meaning of Section 739B(1) of the Taxes Act; - a special investment scheme within the meaning of Section 737 of the Taxes Act; - a charity being a person referred to in Section 739D(6)(f)(i) of the Taxes Act; - a unit trust to which Section 731(5)(a) of the Taxes Act applies; - a specified company within the meaning of Section 734(1) of the Taxes Act; - a qualifying fund manager within the meaning of Section 784A(1)(a) of the Taxes Act where the Units held are assets of an approved retirement fund or an approved minimum retirement fund; - a qualifying savings manager within the meaning of Section 848B of the Taxes Act in respect of Units which are assets of a special savings incentive account within the meaning of Section 848C of the Taxes Act; - a personal retirement savings account ( PRSA ) administrator acting on behalf of a person who is entitled to exemption from income tax and capital gains tax by virtue of Section 787I of the Taxes Act and the Units are assets of a PRSA; - a credit union within the meaning of Section 2 of the Credit Union Act, 1997; or - any other Irish Resident or persons who are Ordinarily Resident in Ireland may be permitted to own Units under taxation legislation or by written practice or concession of the Revenue Commissioners without giving rise to a charge to tax in the Fund or jeopardising tax exemptions associated with the Fund giving rise to a charge to tax in the Fund; provided that they have correctly completed the Relevant Declaration; "Financial Regulator" means the Irish Financial Services Regulatory Authority; "Financial Regulator's Guidance Notes" means the guidance notes issued by the Financial Regulator from time to time in relation to a UCITS; "Fund" means the F.I.T.-Galileo Japan Fund; "Global Certificate" means the global share certificate in registered form which will represent the Units in issue in the Fund which are being cleared through Euroclear; "Intermediary" means a person who: (a) (b) carries on a business which consists of, or includes, the receipt of payments from an investment undertaking on behalf of other persons, or holds units in an investment undertaking on behalf of other persons "Investment" means any investment in which the Fund is permitted to invest; 9

10 Irish Resident - in the case of an individual, means an individual who is resident in Ireland for tax purposes. - in the case of a trust, means a trust that is resident in Ireland for tax purposes. - in the case of a company, means a company that is resident in Ireland for tax purposes. An individual will be regarded as being resident in Ireland for a twelve month tax year if he/she is present in Ireland: (1) for a period of at least 183 days in that twelve month tax year; or (2) for a period of at least 280 days in any two consecutive tax years, provided that the individual is resident in Ireland for at least 31 days in each twelve month period. In determining days present in Ireland, an individual is deemed to be present if he/she is in Ireland at the end of the day (midnight). A trust will generally be Irish resident where the trustee is resident in Ireland or a majority of the trustees (if more than one) are resident in Ireland. A company which has its central management and control in Ireland is resident in Ireland irrespective of where it is incorporated. A company which does not have its central management and control in Ireland but which is incorporated in Ireland is resident in Ireland except where:- - the company or a related company carries on a trade in Ireland, and either the company is ultimately controlled by persons resident in EU Member States or in countries with which Ireland has a double taxation treaty, or the company or a related company are quoted companies on a recognised Stock Exchange in the EU or in a treaty country under a double taxation treaty between Ireland and that country; or - the company is regarded as not resident in Ireland under a double taxation treaty between Ireland and another country. It should be noted that the determination of a company s residence for tax purposes can be complex in certain cases and potential investors are referred to the specific legislative provisions that are contained in Section 23A of the Taxes Act; "Net Asset Value of the Fund" means the net asset value of the Fund calculated in accordance with the provisions of the Trust Deed, as described on page 41 hereof; Ordinarily Resident in Ireland - in the case of an individual, means an individual who is ordinarily resident in Ireland for tax purposes - in the case of a trust, means a trust that is ordinarily resident in Ireland for tax purposes. An individual will be regarded as ordinarily resident for a particular tax year if he/she has been Irish Resident for the three previous consecutive tax years (i.e. he/she becomes ordinarily resident with effect from the commencement of the fourth tax year). An individual will remain ordinarily resident in Ireland until he/she has been non-irish Resident for three consecutive tax years. Thus, an individual who is resident and ordinarily resident in Ireland in the tax year 1 January 2006 to 31 December 2006 and departs from Ireland in that tax year will remain ordinarily resident up to the end of the tax year 1 January 2009 to 31 December

11 The concept of a trust s ordinary residence is somewhat obscure and linked to its tax residence; "Performance Fee" means a fee payable to the Manager and calculated in a manner agreed between the Manager and the Trustee as set out on page 33 hereof; "Prospectus" means the prospectus for the Fund issued by the manager from time to time; "Recognised Exchange" means any regulated stock exchange or market in which the Fund is permitted to invest. A list of these stock exchanges or markets is contained in Clause 6.03 of the Trust Deed and is repeated on page 56 hereof; "Redemption Price" means the Net Asset Value per Unit, determined as at the Valuation Point, less an appropriate provision for Duties and Charges, rounded downwards by not more than one per centum calculated to four decimal places; Relevant Declaration means the declaration relevant to the Unitholder as set out in Schedule 2B of the Taxes Act; Relevant Period means a period of 8 years beginning with the acquisition of a Unit by a Unitholder and each subsequent period of 8 years beginning immediately after the preceding relevant period; "Subscription Price" means the Net Asset Value per Unit, determined as at the Valuation Point plus an appropriate provision for Duties and Charges, plus an initial charge which shall be fixed by the Manager but shall not exceed 6.95% of the said price (without taking into account such initial charge), rounded upwards by not more than one per centum calculated to four decimal places; Taxes Act, The Taxes Consolidation Act, 1997 (of Ireland) as amended; "Trust Deed" means the trust deed dated the 31 st January, 2005 between the Manager and Société Générale, Dublin Branch, as amended by the First Supplemental Trust Deed dated 9 February, 2007; "UCITS" means an undertaking for collective investment in transferable securities, and other liquid financial assets referred to in Regulation 45 of the UCITS Regulations, the sole object of which is the collective investment in transferable securities of capital raised from the public, and which operates on the principle of risk-spreading, the units or shares of which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of that undertaking's assets; "UCITS Regulations" means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003, (Statutory Instrument No. 211 of 2003), as amended, consolidated or substituted (from time to time) and any regulations or notices issued by the Financial Regulator pursuant thereto for the time being in force; "Unit" means a unit or a fraction of a unit in the Fund where additional classes of unit are created the creation must be effected in accordance with the requirements of the Financial Regulator; 11

12 "Unitholder" means a person for the time being entered on the Register as the holder of such Unit including persons so entered as joint holders provided however that "Unitholder" shall not include Non-Exempt Irish Residents or US persons who are specifically excluded from purchasing Units of the Fund; "United States" or "U.S." means the United States of America (including the States and the District of Colombia) its territories, possessions and all other areas subject to its jurisdiction; "U.S. Person" means a citizen, national or resident of the United States, a corporation, partnership or other entity created or organised in or under the laws of the United States, or any estate or trust the income of which is subject to United States federal income taxation regardless of its source. However a foreign branch or agency of a bank or insurance company organised and regulated under U.S. federal or state law (whether acting as principal for its own account, with discretion for others or without investment discretion for non-u.s. persons) is not a U.S. Person in respect of the purchase of Units provided that it is operating for valid business reasons as a locally regulated branch or agency engaged in the banking or insurance business and not solely for the purpose of investing in securities not registered under the United States Securities Act of Valuation Point means 5.00p.m. (Irish time) on the last Business Day prior to each Dealing Day or such other time in respect of each Dealing Day as the Directors of the Manager may from time to time determine with the approval of the Trustee. 12

13 INTRODUCTION F.I.T.-Galileo Japan Fund, (the "Fund") is an open-ended unit trust constituted by a Trust Deed dated 31st January, 2005 as amended by the First Supplemental Trust Deed dated 9 February, 2007 made between the Manager and the Trustee and authorised in Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (S.I. No. 211 of 2003), as amended. Accordingly, the Fund has been authorised by the Irish Financial Services Regulatory Authority (the "Financial Regulator"). Authorisation of the Fund by the Financial Regulator is not an endorsement or guarantee of the Fund by the Financial Regulator nor is the Financial Regulator responsible for the contents of this Prospectus. The authorisation of the Fund by the Financial Regulator shall not constitute a warranty as to the performance of the Fund and the Financial Regulator shall not be liable for the performance or default of the Fund. The objective of the Fund is to achieve medium term capital growth through investment in Japan in corporate stocks and debt instruments. The Fund's investment policy is set out in greater detail on page 14 hereof. The Fund is conceived as an investment instrument for both individual and institutional investors, who specifically want to be part of these markets and investment opportunities. There is no limit to the size or the duration of the Fund. The Manager of the Fund manages the investment portfolio, which constitutes the Fund's assets in accordance with the Fund's investment policies and applicable investment restrictions and in consultation with the Investment Adviser. Investors should be aware that the difference at any one time between the Subscription and Redemption Price of Units in the Fund means that an investment in the Fund should be viewed as medium to long term. The Manager may, at its discretion, terminate the Fund on any such date when the total net value of all the assets of the Fund is of an amount which is less than 1,000,000 or otherwise as provided for in the Trust Deed. Following the termination, the Trustee shall procure the sale of all Investments then remaining in its hands as part of the Fund in such manner and within such period after the termination as the Trustee thinks desirable. The Trustee shall at such time or timing as it shall deem convenient and at its entire discretion distribute to the Unitholders pro rata to the number of Units held by them respectively all net cash proceeds derived from the realisation of the Investments and any cash forming part of the Fund so far as the same are available for the purpose of such distribution. The Manager of the Fund is F.I.T.-Galileo Investment Trust Limited (the "Manager") a limited liability company incorporated in Ireland which is a wholly owned subsidiary of CAT Group AG, a limited liability company incorporated in Switzerland. The Manager has appointed CATAM Asset Management AG (the "Investment Adviser ") to act as the investment manager to the Fund. The Manager has appointed Olympia Capital (Ireland) Limited (the "Administrative Agent") to act as administrative agent in relation to the Fund. 13

14 INVESTMENT OBJECTIVE AND POLICY Investment Strategy and Policy The Fund s investment objective is to maximise the rate of return for investors through a flexible policy of investing in the Japanese market in a portfolio of equities, bonds and convertible bonds traded on the exchanges listed on page 56, subject to the restrictions on investment set out on pages 45 to 47 hereof. Investments in corporate and/or government bonds (which may be fixed or floating) and money market instruments, such as US Treasury bills or certificates of deposit traded on the Japanese Stock Exchanges as detailed in Schedule I of this Prospectus shall carry a Single A or better rating from Standard & Poors. The investment objective may not be altered without approval on the basis of a majority of votes cast at general meeting. In the event of a change of investment objective and/or investment policy, a reasonable notification period (minimum 14 days) must be provided to enable Unitholders redeem their Units prior to implementation of these changes. The Fund may also hold ancillary liquid assets. Efficient Portfolio Management Techniques Where considered appropriate, the Fund may utilise techniques and instruments for efficient portfolio management and/or to protect against foreign exchange risks, subject to the conditions and within the limits laid down by the Financial Regulator. Efficient Portfolio Management ( EPM ) means investment decisions involving transactions that are entered into for one or more of the following specific aims: the reduction of risk; the reduction of cost; or the generation of additional capital or income for the Fund with an appropriate level of risk, taking into account the risk profile of the Fund as described in herein and the general provisions of the UCITS Regulations. These techniques and instruments include but are not limited to futures, options, repurchase/reverse repurchase agreements and forward currency contracts. Forward foreign exchange contracts may be used solely for hedging purposes. Financial Derivative Instruments The Fund may invest in financial derivative instruments including equivalent cash settled instruments dealt in on a Recognised Exchange and/or in over the counter derivative instruments in each case under and in accordance with conditions or requirements imposed by the Financial Regulator. The financial derivative instruments in which the Fund may invest and the expected effect of investment in such financial derivative instruments on the risk profile of the Fund are disclosed in Schedule II hereto. The Fund will use financial derivatives for the purposes of EPM only. The Fund will not be leveraged in excess of 100% of its net assets. The NAV of the Fund may have high volatility due to its employment of financial derivative instruments. The Fund will employ a risk management process which will enable it to monitor, measure and manage the risks attached to financial derivative positions and details of this process have been provided to the Financial Regulator. 14

15 RISK FACTORS Potential investors should consider the following risks before investing in the Fund. Certain of the Funds investment policies involve certain risks that a prospective investor should keep in mind. The Fund is not intended to be a complete investment programme, and there is no assurance that the Fund will achieve its objective. General It should be remembered that the price of Units and the income from them may fall as well as rise, and that investors may not get back the amount they have invested. In addition to market factors, changes in exchange rates may cause the value of Units to go up or down. Units of the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and the amount invested in Units may fluctuate up and/or down. Persons interested in purchasing Units should inform themselves as to (a) the legal requirements within their own countries of residence for the purchase of Units, (b) any foreign exchange restrictions which may be applicable, and (c) the income and other tax consequences of the purchase and repurchase of Units. Investment in certain securities markets involves a greater degree of risk than usually associated with investment in the securities of other major securities markets. Potential investors should consider the following risks and any further risks set out in the relevant Supplements before investing in the Fund. Political Risks The performance of the Fund may be affected by changes in economic and market conditions, uncertainties such as political developments, changes in government policies, the imposition of restrictions on the transfer of capital and in legal, regulatory and tax requirements. The Fund may also be exposed to risks of expropriation, nationalisation and confiscation of assets and changes in legislation relating to the level of foreign ownership. Regulatory Risks and Accounting Standards Disclosure and regulatory standards may be less stringent in certain securities markets than they are in developed OECD member countries and there may be less publicly available information on the issuers than is published by or about issuers in such OECD member countries. Consequently, some of the publicly available information may be incomplete and/or inaccurate. In some countries the legal infrastructure and accounting and reporting standards do not provide the same degree of shareholder protection or information to investors as would generally apply in many developed OECD member countries. In particular, greater reliance may be placed by the auditors on representations from the manager of a company and there may be less independent verification of information than would apply in many developed OECD member countries. The valuation of assets, depreciation, exchange differences, deferred taxation, contingent liabilities and consolidation may also be treated differently from international accounting standards. Foreign Exchange/Currency Risk Assets of the Fund may be denominated in a currency other than the Base Currency of the Fund. Changes in the exchange rate between the Base Currency and the currency of such assets may lead to a depreciation of the value of the Fund s assets as expressed in the Base Currency. The Investment Adviser may or may not try to mitigate this risk by using financial instruments. 15

16 The Fund may from time to time enter into currency exchange transactions either on a spot (i.e. cash) basis or by buying currency exchange forward contracts. Neither spot transactions nor forward currency exchange contracts eliminate fluctuations in the prices of the Fund s securities or in foreign exchange rates, or prevent loss if the prices of these securities should decline. Performance of the Fund may be strongly influenced by movements in foreign exchange rates because currency positions held by the Fund may not correspond with the securities positions held. The Fund may enter into currency exchange transactions in an attempt to protect against changes in currency exchange rates between the trade and settlement dates of specific securities transactions or anticipated securities transactions or for speculative purposes. The Fund may also enter into forward contracts to hedge against a change in such currency exchange rates that would cause a decline in the value of existing investments denominated or principally traded in a currency other than the Base Currency of the Fund. For example, the Fund could enter into a forward contract to sell the currency in which the investment is denominated or principally traded in exchange for the Base Currency of the Fund. Although these transactions are intended to minimise the risk of loss due to a decline in the value of hedged currency, at the same time they limit any potential gain that might be realised should the value of the hedged currency increase. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities will change as a consequence of market movements in the value of such securities between the date when the forward contract is entered into and the date when it matures. The successful execution of a hedging strategy which matches exactly the profile of the investments of the Fund cannot be assured. Market Risk Some of the Recognised Exchanges on which the Fund may invest may prove to be illiquid or highly volatile from time to time and this may affect the price at which the Fund may liquidate positions to meet repurchase requests or other funding requirements. Potential investors should also note that the Fund may have exposure to the securities of small capitalisation companies which are less liquid than larger capitalisation companies and this may result in fluctuations in the price of the Units. Custodial Risk The Trustee shall exercise care and diligence in choosing and appointing sub-custodians as a safekeeping agent so as to ensure the any sub-custodian has and maintains the expertise, competence and standing appropriate to discharge the responsibilities concerned. The Trustee will maintain an appropriate level of supervision over any sub-custodian and make appropriate inquiries from time to time to confirm that the obligations of the subcustodian are completely discharged. However, notwithstanding the exercise by the Trustee of care and diligence in choosing and appointing sub-custodians and undertaking an appropriate level of supervision and enquiry on an ongoing basis into the discharge of the obligations of the sub-custodian, there can be no assurance that losses will not arise to the Fund from the actions or inactions of such sub-custodian. 16

17 Settlement and Credit Risks The trading and settlement practices of some of the stock exchanges or markets on which the Fund may invest may not be the same as those in more developed markets, which may increase settlement risk and/or result in delays in realising investments made by the Fund. In addition, the Fund will be exposed to credit risk on parties with whom they trade and will bear the risk of settlement default. The Trustee may be instructed by the Investment Adviser to settle transactions on a delivery free of payment basis where the Investment Adviser believes that this form of settlement is appropriate. Unitholders should be aware, however, that this may result in a loss to the Fund if a transaction fails to settle and the Trustee will not be liable to the Fund or to the Unitholders for such a loss if the Trustee is acting pursuant to specific proper instructions. Valuation Risk The Fund may invest some of their assets in unquoted securities or quoted securities for which there is no reliable price source available. Such investments will be valued at the probable realisation value as determined in accordance with the provisions set out in the section "Calculation of Net Asset Value". Estimates of the fair value of such investments are inherently difficult to establish and are the subject of substantial uncertainty. The Fund may, for the purpose of efficient portfolio management, invest in derivative instruments and there can be no assurance that the value as determined in accordance with the section "Calculation of Net Asset Value" reflects the exact amount at which those instruments may be "closed out". Investment Adviser Valuation Risk The Manager may consult the Investment Adviser with respect to the valuation of certain investments. Whilst there is an inherent conflict of interest between the involvement of the Investment Adviser in determining the valuation price of the Funds investments and the Investment Advisers other duties and responsibilities in relation to the Fund, the Investment Adviser has in place a pricing committee charged with reviewing all pricing procedures and which follows industry standard procedures for valuing unlisted investments. Taxation Risk Potential investors' attention is drawn to the taxation risks associated with investing in the Fund. See section headed "TAXATION". Interest Rate Risk The fixed and floating rate securities in which the Fund may invest may be interest rate sensitive, which means that their value and, consequently, the Net Asset Value of the Fund may fluctuate as interest rates fluctuate. An increase in interest rates will generally reduce the value of the fixed income securities. The Fund s performance, therefore, will depend in part on the Investment Adviser s ability to anticipate and respond to such fluctuations in market interest rates and to utilise appropriate strategies to maximise returns to the Fund while attempting to minimise the associated risks to its investment capital. Derivatives and Techniques and Instruments Risk 17

18 General The prices of derivative instruments, including futures prices, are highly volatile. Price movements of forward contracts, futures contracts and other derivative contracts are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programmes and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly markets in currencies and interest rate related futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. The use of techniques and instruments also involves certain special risks, including (1) dependence on the ability to predict movements in the prices of securities being hedged and movements in interest rates, (2) imperfect correlation between the hedging instruments and the securities or market sectors being hedged, (3) the fact that skills needed to use these instruments are different from those needed to select the Fund s securities and (4) the possible absence of a liquid market for any particular instrument at any particular time, and (5) possible impediments to effective portfolio management or the ability to meet redemption. Liquidity of Futures Contracts Futures positions may be illiquid because certain commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as "daily price fluctuation limits" or "daily limits". Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a contract for a particular future has increased or decreased by an amount equal to the daily limit, positions in the future can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This could prevent a Fund from liquidating unfavourable positions. Forward Trading Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and "cash" trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals who deal in the forward markets are not required to continue to make markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. Market illiquidity or disruption could result in major losses to a Fund. Securities Lending Risk As with any extensions of credit, there are risks of delay and recovery. Should the borrower of securities fail financially or default in any of its obligations under any securities lending transaction, the collateral provided in connection with such transaction will be called upon. The value of the collateral will be maintained to equal or exceed the value of the securities transferred. However there is a risk that the value of the collateral may fall below the value of the securities transferred. In addition, as a Fund may invest cash collateral received, subject to the conditions and within the limits laid down by the Financial Regulator, a Fund investing collateral will be exposed to the risk associated with such investments, such as failure or default of the issuer of the relevant security. 18

19 MANAGEMENT AND ADMINISTRATION OF THE FUND The Manager F.I.T.-Galileo Investment Trust Limited is a limited liability company incorporated in Ireland on November 16, 1993 and its registered office is at Block 3, Harcourt Centre, Harcourt Road, Dublin 2, Ireland. It is a whollyowned subsidiary of CAT Group AG, a limited liability company registered in Switzerland, the entire issued share capital of which is held by management. The sole business of the Manager is the management of collective investment vehicles. The authorised share capital of the Manager is Euro 1,250,000 of which Euro 475, 000 divided into 475, 000 ordinary shares of Euro 1.00 each is issued and fully paid up. The Manager is satisfied that no actual or potential conflict of interest arises as a result of either the Investment Adviser or the Administrative Agent advising or managing other funds. However, if any conflict of interest should arise, the Manager will ensure that it is resolved fairly in the interest of the Unitholders. The Manager is also the manager of the F.I.T.-Galileo Global Natural Resources Fund, F.I.T.-Galileo China Fund, the F.I.T.-Galileo Delta Growth Fund, and the F.I.T.-Galileo Asian Fund each a UCITS unit trust authorised by the Financial Regulator. The Secretary of the Manager is Tudor Trust Limited of Grand Canal House, 1 Upper Grand Canal Street, Dublin 4. The Board of the Directors of the Manager is as follows:- Bryan Jeeves John Walley Fergus Sheridan Martin Beusch Alexander Jeeves Bryan Jeeves of British nationality, has lived and worked in Liechtenstein since Since 1966, he has been active as interpreter and translator for the Royal Court, the Government and for private concerns. He has also filled the role of official interpreter in English for the Courts of Law, and since 1979 has run his own officially recognised translation bureau. He is the Managing Partner of his own Trust company, Lexamin Trust, advising and acting as Board member for many domestic and foreign companies. He is also the Managing Director of his family's transport company in London which is also active in Germany and South America. Mr. Jeeves is active in the music publishing business as investor and director. He is a past President of the British Swiss Chamber of Commerce having been a Councilor for many years. In September 1992, he was appointed the Honorary British Consul for the Principality of Liechtenstein. In the Spring of 1992, he published the first official English translation of the Liechtenstein Private and Company Law. In June 1993 he was awarded the O.B.E. by Her Majesty the Queen for services to British-Swiss trade relations. 19

20 John Walley is Managing Director of Olympia Capital (Ireland) Ltd., which was formed in 1997/8. The company provides fund accounting and transfer agency services. Previously, he was Group Managing Director of Investors Trust Holdings (Ireland) Limited and its subsidiary Investors Fund Services (Ireland) Limited. Mr. Walley was also Chief Executive of the Chemical Ireland companies (subsidiaries of Chemical Banking Corporation), which he founded in 1990 and subsequently sold to Chemical Bank in Prior to 1990, Mr. Walley worked with Chase Manhattan Bank in Ireland for eighteen years in various senior management capacities and was head of global custody and service products for Chase in Ireland. He is a member of the Institute of Bankers in Ireland. Mr. Walley is an Irish resident. Mr. Fergus Sheridan has been Managing Director of Strategic Risk Management Ltd, an independent consultancy practice, since leaving Irish Life Assurance in March As Corporate Treasurer for The Irish Dairy Board between 1973 and 1988, Mr. Sheridan developed currency and counterparty risk management and funding/interest rate risk management for what is Ireland s largest industry. In 1988, he joined Irish Life Assurance as Head of Treasury and member of the Investment Policy Board, also taking direct responsibility for the Fixed Interest Investment Team in Mr. Sheridan is both a Fellow of the Institute of Chartered Management Accountants, the UK Association of Corporate Treasurers and the Institute of Directors and he advises both domestic and international clients on corporate governance, risk management and policy implementation. Mr. Martin Beusch, a Swiss national, has been an employee of CATAM Asst Management AG since January, His duties with CATAM Asset Management AG include the provision of consultancy and management services to the Fund. Prior to joining CATAM Asset Management AG Mr. Beusch was a partner with Aprotech AG, a technical software and development company, before moving to F.I.T Investment Trust Limited in December 2000 on a consultancy basis. Mr. Alexander Jeeves, a Liechtenstein national, is Managing Director of Jeeves Group and its companies in Liechtenstein, St. Vincent & the Grenadines, St. Kitts & Nevis, St. Lucia and Hong Kong. Mr. Jeeves' responsibilities within the Jeeves Group consist of interacting with clients and intermediaries and building on existing client relationships in the Caribbean and Asia. The address of all the Directors is the registered office of the Manager, 6 th Floor, Block 3, Harcourt Centre, Harcourt Road, Dublin 2, Ireland. The Manager may be removed by the Trustee by notice in writing to the Manager if at any time the Manager should go into liquidation (except voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved in writing by the Trustee) or if a receiver is appointed in respect of any of the assets of the Manager or if an examiner is appointed to the Manager pursuant to the Companies (Amendment) Act, 1990 or if for good and sufficient reason the Trustee is of the opinion and so states in writing that a change of Manager is desirable in the interest of Unitholders or if the holders of more than 50 per cent. of the Units for the time being in issue of the Fund deliver to the Trustee in writing a request that the Manager should retire. The Directors are the persons responsible for the information contained in this document and accept responsibility accordingly. 20

21 The Investment Adviser and Promoter The Manager has appointed CATAM Asset Management AG, as investment adviser to the Fund with discretionary powers pursuant to the Investment Advisory Agreement. Under the terms of the Investment Advisory Agreement the Investment Adviser is responsible, subject to the overall supervision and control of the Directors of the Manager, for managing the assets and investments of the Fund in accordance with the investment objective and policies of the Fund. Neither the Fund nor the Manager shall be liable for any actions, costs, charges, losses, damages or expenses arising as a result of the acts or omissions of the Investment Adviser or for its own acts or omissions in following the advice or recommendations of the Investment Adviser. CATAM Asset Management AG is a limited liability company, incorporated in Liechtenstein on 15 January 1998 and authorised and regulated as an Asset Management company by the Financial Markets Authority in Liechtenstein. It is a wholly-owned subsidiary of CAT Group AG, a limited liability company registered in Switzerland, the entire issued share capital of which is held by management. As at 30 September 2006, the Investment Adviser had funds under management of 178 million. The Distributors The Manager may appoint a Distributor in one or more countries with responsibility for the marketing and distribution of the Shares of the Fund subject to the prior approval of the Financial Regulator. The Trustee The Trustee is Société Générale, whose head office is Société Générale S.A., trading through its Dublin branch. Société Générale S.A., a public limited liability company, was founded in 1864 and is one of France s leading commercial and investment banking institutions with operations throughout the world. It is actively engaged in asset management, private banking and corporate and investment financial services throughout the world. It has over US$23.5 billion in shareholders equity. Société Générale provides global custody services to retail, institutional, industrial and corporate clients and as of June 2006, it had approximately US$2,000 billion in assets under custody. The liability of the Trustee will not be affected by the fact that it has entrusted to a third party some or all of the assets in its safekeeping. In order to discharge its responsibility, the Trustee must exercise care and diligence in choosing and appointing a third party as a safe-keeping agent so as to ensure that the third party has and maintains the expertise, competence and standing appropriate to discharge the responsibilities concerned. The Trustee must maintain an appropriate level of supervision over the safekeeping agent and make appropriate enquiries from time to time to confirm that the obligations of the agent continue to be competently discharged. The Trust Deed contains provisions governing the responsibilities of the Trustee and providing that in the absence of fraud, bad faith, negligence, wilful default or recklessness on the part of the Trustee, the Trustee shall be indemnified. The Trustee must exercise due care and diligence in the discharge of its duties and will be liable to the Trust and the Unitholders for any loss arising from fraud, negligence, bad faith, wilful default or recklessness in the performance of its duties. The Trustee may not be replaced without the prior approval of the Financial Regulator. The Trustee has the right to retire upon the appointment of a new trustee approved by the Financial Regulator. Any successor must be acceptable to the Manager and approved by an Extraordinary Resolution of the 21

22 Unitholders. Services provided include safe keeping and registration, clearance and settlement income collection, corporate actions collection, trustee and compliance services, treasury and cash management. The Trustee has been approved by the Financial Regulator to act as trustee for the Fund. The primary responsibilities of the Trustee are to act as custodian and trustee of all the assets of the Fund. The Administrative Agent Olympia Capital (Ireland) Limited has been appointed by the Manager to act as administrative agent to the Fund. The Administrative Agent was incorporated in Ireland on 17 th May 1994 under the Companies Acts as a private limited liability company. As of 31 December 2006 it had approximately US$8 billion assets under administration. Olympia Capital (Ireland) Limited is a fund administration company based in Dublin, which provides administrative services to offshore funds incorporated in many jurisdictions. Olympia Capital (Ireland) Limited is licensed under the Investment Intermediaries Act, 1995, (as amended) and is under the supervision of the Financial Regulator. Dealings by Manager, Investment Adviser, Administrative Agent, Trustee and Associates There is no prohibition on dealings in the assets of the Fund by the Manager, the Investment Adviser, the Administrative Agent, the Trustee or entities related to the Manager, the Investment Adviser, the Administrative Agent or the Trustee or to their respective officers, directors or executives, provided that the transaction is effected on normal commercial terms negotiated at arms length. Such transactions must be in the best interests of the Unitholders. Transactions permitted are subject to:- (i) (ii) (iii) a certified valuation by a person approved by the Trustee as independent and competent; or the execution of the transaction is on best terms on organised investment exchanges under their rules; or where the conditions set out in (i) or (ii) above are not practical, the transaction is executed on terms which the Trustee is satisfied (or, in the case of a transaction involving the Trustee, on terms which the Manager is satisfied) conform with the principle of execution on normal commercial terms negotiated at arms length. Conflicts of Interest The Manager, the Investment Adviser, the Administrative Agent, the Trustee and their respective affiliates, officers and shareholders (collectively the "Parties") are or may be involved in other financial, investment and professional activities which may on occasion cause conflict of interest with the management of the Fund. These include management of other funds, purchases and sales of securities, investment and management counselling, brokerage services, trustee and custodial services and serving as directors, officers, advisers or agents of other funds or other companies, including companies in which the Fund may invest. In particular, it is envisaged that the Investment Adviser may be involved in valuing the assets of the Fund upon which its remuneration is based and in managing or advising on the investments of other investment funds which may 22

23 have similar or overlapping investment objectives to or with the Fund and that investment opportunities shall be fairly allocated to their respective clients. Each of the Parties will respectively ensure that the performance of their respective duties will not be impaired by any such involvement that they might have. In the event that a conflict of interest does arise, the Directors of the Manager shall endeavour to ensure that it is resolved fairly and in the interests of Unitholders. 23

24 THE UNITS The Units are freely transferable and are entitled to participate equally in the profits and dividends of the Fund, and in its assets in the event of liquidation. The Units, which are of no par value and which must be fully paid upon issue, carry no preferential or pre-emptive rights and are entitled to one vote each at all meetings of Unitholders. A Unit in the Fund represents the beneficial ownership of one undivided share in the assets of the Fund. Where subscription monies will not purchase an exact number of Units, a fraction of a Unit may be issued. Application for Units The Fund's base currency is Euro ( ). During the initial period, which was from 29th September, 1999 to 29th October, 1999, Units in the Fund were issued at the issue price of 100 per Unit, plus an appropriate provision for Duties and Charges, plus an initial charge, which was fixed by the Manager, but not exceeding 6.95% of the said price (without taking into account such initial charge) and then, adjusting the total upwards by not more than one per centum, calculated to four decimal places. Following the initial offer period, Units are issued at the Subscription Price. The Subscription Price is the Net Asset Value per Unit, plus an appropriate provision for Duties and Charges, plus an initial charge which shall be fixed by the Manager but shall not exceed 6.95% of the said price (without taking into account such initial charge), rounded upwards by not more than one per centum calculated to four decimal places. A signed original application for Units should be received by the Administrative Agent at its business address not later than 5.00 pm on the last Business Day prior to any Dealing Day. Applications received on or after 5.00 pm on the last Business Day prior to the relevant Dealing Day may, at the discretion of the Manager be processed on the last Business Day prior to the next succeeding Dealing Day. The Net Asset Value will be determined as at the Valuation Point. The Manager shall receive from persons willing to subscribe for Units as aforesaid, all monies so subscribed on the third Business Day following the relevant Dealing Day. If a Unitholder fails to pay any amount payable in respect of Units on the day appointed for payment, the Manager may either cancel the issue of such Units or serve a notice on the Unitholder requiring payment of the amount outstanding together with accrued interest and any costs incurred by the Fund by reason of non-payment. If the Manager cancels the issue of Units, any relevant funds received will be returned to the applicant without interest at the applicant's risk less an amount to cover any costs incurred by the Fund. The Manager reserves the right in certain circumstances to delay issue until receipt of cleared funds. Applicants may subscribe for Units in the Fund by way of through a savings plan. Each method of application is explained in greater detail below. Units are issued in registered form and shall be represented by written confirmation of entry in the relevant register of Unitholders. Registered certificates will only be issued upon written request. 24

25 Savings Plans and Securities Purchasing Contracts Application for Units may also be made by means of a savings plan ("Savings Plan") where the applicant for Units agrees to purchase Units over a certain period of years. An application for Units by means of a Savings Plan shall be made in the same manner and on the same terms and conditions as set out in Application for Units above. In the case of Savings Plans and Securities Purchasing Contracts, as defined below, where the applicant agrees to purchase Units over a certain period of years a charge for marketing and management costs will be levied in the amount of four months' subscriptions on signing of the contract. This charge may at the time of application be set off against the first four months' payments. Each regular monthly subscription will bear a charge of 6.5% as stated in this Prospectus. The total charge for costs over the duration of the contract will amount to 9.84% of the applicant's gross subscription. The calculation of the Net Asset Value of the Fund is effected as for other subscriptions. Example: Savings Plan of 120 a monthly savings rate of 100. Monthly Savings Amounts (Gross) 12,000 Sales Charge Year Sales Charge for remaining term 780 Net Subscription Amount 10,820 Investors with Savings Plans are informed at least once per quarter, and also at the end of each appropriate calendar quarter by the Manager or its delegates of the position of their Units by way of a statement based on the prevailing daily rate. Investors with securities purchasing contracts under the German 5th Capital Assets Law (Verm BG), ("Securities Purchasing Contracts") are informed annually at the end of the calendar year, of the position of their Units by the Manager or its delegates. Units relating to Savings Plans or Securities Purchasing Contracts are held in a collective custody account with the Trustee for the account of Unitholders who have subscribed for Units through a Savings Plan or by a Securities Purchasing Contract. Investors in Savings Plans or Securities Purchasing Contracts shall be subject to the following terms and conditions:- (a) Following each payment into a Savings Plan or into a Securities Purchasing Contract, Units shall be transferred forthwith to the investor as follows: the Manager shall credit the Savings Plan Account or Securities Purchasing Account, which has been opened in the name of the investor with the Trustee with a corresponding number of Units, or fractions thereof after each effected payment, in the name and on behalf of the Manager. The transfer of ownership of the Units in favour of the purchaser shall be effected through this credit. These Units shall be deemed as subscribed and calculated at the 25

26 Subscription Price valid on the relevant Dealing Day. Units which have been credited to an investor's Savings Plan Account or Securities Purchasing Account shall be held free of charge by the Trustee as part of a collective safe custody account for the aforementioned accounts. (b) (c) (d) After each payment, the investor shall be advised quarterly by the Manager or its delegates of subscriptions to his Savings Plan Account or Securities Purchasing Account in the form of a statement detailing the gross amount paid in, the applicable Sales Charge, the Subscription Price, the number of Units subscribed (or fractions of Units) as well as the total number of Units credited to the investor. For Securities Purchasing Accounts investors shall be sent such information annually at the end of the Fund's financial year. The investor may at any time demand the delivery of registered certificates representing Units held in a Savings Plan Account with the Trustee. Should this be the case, the said Savings Plan Account shall be closed and certificates representing the total amount of Units held in it belonging to the investor shall be delivered to him forthwith in accordance with his instructions. Should the investor also possess fractions of Units in the account, the procedures for redemptions below shall become applicable and the counter-value of such fractions of Units shall be paid forthwith to the investors by the Trustee in accordance with his instructions. Securities Purchasing Accounts under the German 5th Capital Assets Law are hereby not included in such arrangements; they shall be governed either by specific waiting periods or by special withdrawal options as specified in that law. Such Units shall be held separately from other investments in a blocked deposit account. Should a subscription or a request to open a Savings Plan or a Securities Purchasing Account be refused by the Trustee for and on behalf of the Manager, the investor shall be notified forthwith and any payments already made by him shall at the same time be refunded. Euroclear and Clearstream The Global Certificate representing the Units of the Fund, which are to be cleared through Euroclear or Clearstream, will be deposited with a common depositary for Euroclear or Clearstream. The Global Certificate will be exchangeable for definitive certificates in registered form or warrants in the limited circumstances set out therein which include the closure for business of the relevant clearance system for a continuous period of 14 days (other than by reason of holidays statutory or otherwise), the permanent cessation of business by such clearing system and the suffering of material disadvantage by the Fund as a result of changes in the law or regulations (taxation or otherwise) of the United States and its possessions, the United Kingdom, Ireland, Belgium or Luxembourg which would not be suffered were the Units in definitive form. So long as Units are represented by the Global Certificate, transfers of Units may be made between account holders on the books of Euroclear or Clearstream. There is no free transferability of Units without the prior approval of the Directors. Units held through Euroclear or Clearstream are not freely transferable in Euroclear or Clearstream respectively, and no ownership or transfer restrictions will be monitored by Euroclear or Clearstream, the Trustee or the Administrative Agent. However, each transfer request is subject to the prior approval of the Directors. Fractions of Units are not eligible for clearance on Euroclear or Clearstream. Units held through Euroclear or Clearstream are held with specialised depositories, as the case may be. Units held in Euroclear or Clearstream may only be redeemed by the Administrative Agent upon the instructions of Euroclear or Clearstream, as appropriate. Requests for redemptions should initially be sent by the Unitholders to Euroclear or Clearstream, as the case 26

27 may be, for processing. Unitholders should allow seven Business Days for Euroclear or Clearstream to process requests. Units are issued in registered form. Registered certificates will only be issued upon written request. Unitholders will be issued, by the Manager, with a written confirmation of entry in the register of Unitholders. Persons wishing to invest in the Fund should address their applications to: F.I.T. - Galileo Investment Trust Limited c/o Olympia Capital (Ireland) Limited, 6 th Floor, Block 3, Harcourt Centre, Harcourt Road, Dublin 2, Ireland. [email protected] Phone: Fax: or to any other addresses as advised from time to time. Application monies must be paid directly into the account of the Trustee or the Paying Agent in Germany. Anti Money Laundering Procedures Measures aimed at the prevention of money laundering will require a detailed verification of the investor's identity, address and source of funds. Depending on the circumstances of each application, a detailed verification of source of funds might not be required where (i) the investor makes payment from an account held in the investor's name at a recognised financial institution or (ii) the application is made through a recognised intermediary. These exceptions will only apply if the financial institution or intermediary referred to above is located within a country recognised in Ireland as having equivalent anti-money laundering regulations or satisfies other applicable conditions. By way of example an individual will be required to produce a certified copy of a passport or identification card together with two pieces of evidence of his/her address such as a utility bill or bank statement and date of birth and a letter of undertaking from a recognised financial institution and recognised intermediary. In the case of corporate investors, such measures will require production of a certified copy of the certificate of incorporation (and any change of name), a certified copy of the memorandum and articles of association (or equivalent), the names, occupations, dates of birth and resident and business address of all directors and substantial beneficial owners and a certified copy of authorised signatory list. Detailed verification of directors' and substantial beneficial owners' identity and address may also be required. The details given above are by way of example only and the Administrative Agent will request such information and documentation as it considers is necessary to verify the identity, address and source of funds of an applicant. In the event of delay or failure by the applicant to produce any information required for verification purposes, the Administrative Agent may refuse to accept the application and the subscription monies relating thereto or may refuse to process a redemption request until proper information has been provided. Investors should note specifically that redemption proceeds will not be paid to an account which is not in the name of the investor. 27

28 Each applicant for Shares acknowledges that the Administrative Agent shall be held harmless against any loss arising as a result of a failure to process his application for Shares if such information and documentation as has been requested by the Administrative Agent has not been provided by the applicant. Data Protection Information Prospective investors should note that by completing the application form they are providing personal information to the Fund, which may constitute personal data within the meaning of data protection legislation in Ireland. This data will be used for the purposes of client identification, administration, statistical analysis, market research, to comply with any applicable legal or regulatory requirements and, if an applicant s consent is given, for direct marketing purposes. Data may be disclosed to third parties including regulatory bodies, tax authorities in accordance with the European Savings Directive, delegates, advisers and service providers of the Fund and their or the Fund s duly authorised agents and any of their respective related, associated or affiliated companies wherever located (including outside the EEA) for the purposes specified. By signing the application form, investors consent to the obtaining, holding, use, disclosure and processing of data for any one or more of the purposes set out in the application form. Investors have a right to obtain a copy of their personal data kept by the Fund on payment of a fee and the right to rectify any inaccuracies in personal data held by the Fund. Qualified Holders The Manager may restrict or prevent the ownership of Units by any person, firm or corporation. More specifically, US Persons (except those persons specifically excluded in the manner set out on page 12) may not purchase Units of the Fund. Where it appears to the Manager that any person who is precluded from holding Units either alone or in conjunction with any other person is a beneficial owner of Units, the Manager may compulsorily repurchase all the Units so owned. The Administrative Agent shall maintain the Register of Unitholders in the Fund. Any person who, by virtue of his holding, is in breach of the laws and regulations of any competent jurisdiction and whose holding could, in the opinion of the Manager, cause the Fund some financial or fiscal disadvantage, shall indemnify the Fund, the Manager, the Administrative Agent, the Trustee and the Unitholders for any loss suffered by it or them as a result of such person or persons acquiring or holding Units in the Fund. The Manager has power under the terms of the Trust Deed to compulsorily redeem any Units held in contravention of the terms of the Trust Deed. Redemption of Units Units shall be redeemed at the Redemption Price. The Redemption Price is the Net Asset Value per Unit determined in the manner outlined on page 29 of this Prospectus at the Valuation Point, less an appropriate provision for Duties and Charges, rounded downwards by not more than one per centum calculated to four decimal places. In addition a redemption charge (payable to the Fund) of 1% of the Net Asset Value per Unit may be payable, which shall be deducted from the Net Asset Value per Unit and the resultant figure rounded down by not more than one per centum calculated to four decimal places. A Unitholder may at any time by signed original notice addressed to the Manager or to its delegate request the redemption of his holding of Units in whole or in part on every Dealing Day. The redemption notice should be received by the Administrative Agent or its delegate at its business address 28

29 prior to 5.00 pm on the last Business Day prior to the relevant Dealing Day. Any redemption notice received after such time may at the discretion of the Manager, be processed on the last Business Day prior to the next succeeding Dealing Day. The Net Asset Value will be determined at as at the Valuation Point. The proceeds of redemption will be paid in Euro at the expense of the Unitholder by telegraphic transfer of funds to an account nominated by the Unitholder no later than the third Business Day following the Dealing Day on which a redemption notice is received. No redemption payment will be made to an investor until the original subscription application form and all documentation required by or on behalf of the Fund (including any documents in connection with anti-money laundering procedures) has been received from the investor and the anti-money laundering procedures have been completed. A Unitholder may not withdraw his request for redemption except in the event of a suspension of the issue and redemption of Units to and from Unitholders (see below) and in such event a withdrawal will be effective only if written notification is received by the Manager before the termination of the period of suspension. If the request is not so withdrawn the redemption will be made on the Dealing Day next following the end of the suspension. In the interests of Unitholders, if the said request in writing from any Unitholder is in respect of more than 5%, or if such requests in writing from all Unitholders total in aggregate more than 10% of all Units in issue in the Fund on such Dealing Day, after deducting therefrom the number of Units purchased on such Dealing Day, the sum payable to such Unitholder or to all such Unitholders may be determined after sale of sufficient investments from the Fund to provide the Redemption price, on the same basis as for the cancellation of Units by the Manager. If the number of Units falling to be redeemed on any Dealing Day is equal to one tenth or more of the total number of Units in issue on that day then the Manager may in its discretion refuse to redeem any Units in excess of one tenth of the total number of Units in issue as aforesaid and, if it so refuses, the requests for redemption on such Dealing Day shall be reduced rateably and the Units to which each request relates which are not redeemed by reason of such refusal shall be treated as if a request for redemption had been made in respect of each subsequent Dealing Day until all the Units to which the original request related have been redeemed. Requests for redemption which have been carried forward from an earlier Dealing Day shall (subject always to the foregoing limits) be complied with in priority to later requests. Unitholders who requested registered certificates will not be paid until the certificates have been signed on the back and returned to the Manager. Publication of Price of Units Except where the determination of the Subscription and Redemption Prices has been suspended, in the circumstances described below, the up to date Subscription and Redemption Prices of the Units will be made public at the registered office of the Manager and published weekly on Bloomberg, Telekurs, Reuters and on Temporary Suspension of Valuation of Units and of Issues and Redemptions The Manager may temporarily suspend the issue and purchase of Units to and from the Unitholders during:- 29

30 (i) (ii) (iii) (iv) any period when any Recognised Exchange on which a substantial portion of the investments of the Fund from time to time are quoted is closed other than for ordinary holidays, or during which dealings therein are restricted or suspended; the existence of any state of affairs which constitutes an emergency as a result of which disposal or valuation of assets owned by the Fund would be impracticable; any period during which there is a breakdown in the means of communication normally employed in determining the price of any of the Investments or the current prices on any Recognised Exchange; or any period when the Fund is unable to repatriate funds for the purpose of making payments on the purchase of Units from Unitholders or during which any transfer of funds involved in the realisation or acquisition of Investments or payments due on purchase of Units from Unitholders cannot in the opinion of the Manager be effected at normal rates of exchange. Any such suspension shall be notified to the Trustee and the Financial Regulator without delay and will be communicated to the persons likely to be affected thereby in such manner as the Manager may deem appropriate. Any such suspension shall be publicised in a newspaper circulating in the European Union, if in the opinion of the Manager, it is likely to exceed fourteen (14) days and shall be notified to investors requesting issue or redemption of Units by the Manager at the time of application or filing of the irrevocable written request for such redemption. 30

31 MANAGEMENT AND FUND CHARGES The Manager shall be entitled by way of remuneration for its services to receive a fee from the Deposited Property which shall accrue weekly and be paid monthly in arrears (or otherwise as may be agreed between the Manager and the Trustee), (the "Service Charge"). The current Service Charge payable to the Manager in respect of the F.I.T.-Galileo Japan Fund is 1.5% per annum of the Net Asset Value of the Fund, which percentage may be altered by the Manager and the Trustee with the sanction of the Unitholders by way of an extraordinary resolution and of the Auditors any time after two years from the date of this Prospectus provided that the Financial Regulator is notified three months prior to such alteration taking place. The Service Charge shall accrue weekly and be paid weekly in arrears. In addition to such remuneration, the Manager shall be entitled to be repaid all of its Administration Expenses, which shall be repaid to it from the Deposited Property. Such remuneration and repayment of Administration Expenses shall be in addition to any sums the Manager may be entitled to receive or retain pursuant to any other provision hereof. The Manager is also entitled to a fee of 20% per Unit per week of the increase in the Net Asset Value per Unit, which shall accrue weekly and shall be paid weekly in arrears (the "Performance Fee"), subject to the approval of the Trustee. The Performance Fee is only payable, if in the week concerned, an absolute increase in the Net Asset Value per Unit has been achieved, compared with the highest Net Asset Value per Unit calculated on the last Dealing Day in any previous week on which a Performance Fee was charged. The initial offer period was the first relevant period for the calculation of the Performance fee and the initial offer price was the first relevant price for calculation of the Performance fee. The calculation of the Performance Fee, must be verified by the Trustee. Where a Performance Fee is payable out of the Fund it shall be calculated upon the increase in the Net Asset Value per Unit calculated at the end of the relevant period. Included in that calculation shall be net realised and unrealised capital gains plus net realised and unrealised capital losses as at the end of the relevant period. As a result, Performance Fees may be paid on unrealised gains, which may subsequently never be realised. The Trustee shall once in each month upon such date as may be agreed between the Trustee and the Manager and in default of agreement on the first Dealing Day in each month, raise out of that part of the Deposited Property and pay to the Manager the Service Charge provided always that if the Manager shall fail to perform any of its covenants under Clause of the Trust Deed the Trustee may retain the Service Charge or so much thereof as the Trustee shall from time to time consider necessary. In turn, the Manager shall pay the fees and, where appropriate, the expenses of the Investment Adviser, which shall be agreed in writing from time to time and the Investment Adviser shall receive no remuneration directly from the Fund. The Administrative Agent shall receive by way of annual remuneration for its services a sum which shall not exceed 0.15% of the Net Asset Value of the Fund subject to a minimum annual fee of US$48,000 which fee shall accrue weekly and be paid monthly in arrears (or otherwise as may be agreed between the Manager and the Administrative Agent). The Trustee shall receive by way of annual remuneration for its services a sum which shall not exceed 0.18% of 31

32 the Net Asset Value of the Fund (plus VAT, if any) subject to a minimum annual fee of EUR 7,500 (per subfund) which fee shall accrue weekly and be paid monthly in arrears. In addition to such remuneration the Trustee shall be paid transaction fees which shall be at normal commercial rates, and shall be entitled to be repaid all of its Disbursements. The Administrative Agent shall also be reimbursed for all reasonable disbursements and reasonable out-of-pocket expenses incurred by it in the performance of its duties. All Disbursements shall be retained by the Trustee out of the Deposited Property. Notwithstanding the provisions of the Deed neither the Trustee nor the Manager shall be required to effect any transaction or dealing with any part of the Investments or of the Deposited Property on behalf of or at the request of any Unitholder unless such Unitholder shall first have provided to their or its satisfaction as the case may be for all Duties and Charges and any necessary stamp duty which may be payable in respect of such transaction or dealing provided always that the Trustee or the Manager shall be entitled to pay and discharge all or any of such Duties and Charges or stamp duty on behalf of the Unitholder and to retain the amount so paid out of any moneys or property to which such Unitholder may be or become entitled as a result hereof. The Paying Agent in Germany receives an annual fee of 6,000 from the Fund in addition to the reimbursement of normal banking expenses incurred in the transfer of money. The German Federal Control Office for Credit Matters in Berlin levies an annual fee of approximately Euro for the inspection of documents which have to be submitted to it under the provisions of Clause 16e Section 1 Number 2 of the Ans1Investmg (the German Foreign Investment Law). The Fund is responsible for the expenses incurred by it in connection with litigation. Pursuant to provisions contained in the Trust Deed, the Fund shall indemnify the Trustee in certain circumstances including costs and expenses incurred in litigation by or on behalf of the Fund. The Manager is entitled to recover from the Fund the costs and expenses incurred by it in litigation by or on behalf of the Fund. The organisational, administrative and other expenses incurred in connection with the preparation of the initial offering of the Units of the Fund shall be amortised in the accounts of the Fund over five years. The approximate value for the organisational expenses is expected to be no more than Euro 63,500. The Fund shall pay all expenses in connection with the ongoing administration of the Fund. The costs charged to the Fund include: - the Administration Expenses as set out in the Trust Deed - all taxes which may be due on the assets and the income of the Fund; - usual banking fees due on transactions involving assets of the Fund (such fees to be included in the Subscription Price and to be deducted from the Redemption Price); - the remuneration of the Manager and the Trustee including the fees and expenses of sub-custodians at normal commercial rates; - the cost of printing certificates; 32

33 - the cost of preparing and/or filing the Trust Deed and all other documents concerning the Fund, including registration statements and prospectuses and explanatory memoranda with all authorities (including local security dealers' associations) having jurisdiction over the Fund or the offer of Units in the Fund; - the cost of preparing, in such languages as are necessary for the benefit of the Unitholders, including the beneficial holders of the Units, and distributing annual, half-yearly and such other reports or documents as may be required under the applicable laws or regulations of the above cited authorities; - the cost of accounting, book-keeping; - the cost of preparing and distributing public notices to the Unitholders; - lawyers' and auditors' fees; and all similar administrative charges, including the printing costs of copies of the above mentioned documents or reports which are utilised by any distributors of the Units in the course of their business activities, except all advertising expenses and other expenses directly incurred in offering or distributing the Units. All recurring charges will be charged first against income, then against capital gains and then against assets. 33

34 DIVIDENDS AND DISTRIBUTIONS As the investment objective of the Fund is medium to long-term capital growth, it is the present intention of the Manager that all earnings, dividends and other distributions of whatever kind as well as realised capital gains arising from the Fund's investments shall be automatically reinvested by the Manager pursuant to the investment policy of the Fund for the benefit of the holders of Units in the Fund. Accordingly, it is not the present intention of the Manager to declare dividends in the Fund. 34

35 TAXATION General The information given is not exhaustive and does not constitute legal or tax advice. Prospective investors should consult their own professional advisers as to the implications of their subscribing for, purchasing, holding, switching or disposing of Units under the laws of the jurisdictions in which they may be subject to tax. The following is a brief summary of certain aspects of Irish taxation law and practice relevant to the transactions contemplated in this Prospectus. It is based on the law and practice and official interpretation currently in effect, all of which are subject to change. Dividends, interest and capital gains (if any) which the Fund receive with respect to its investments (other than securities of Irish issuers) may be subject to taxes, including withholding taxes, in the countries in which the issuers of investments are located. It is anticipated that the Fund may not be able to benefit from reduced rates of withholding tax in double taxation agreements between Ireland and such countries. If this position changes in the future and the application of a lower rate results in a repayment to the Fund the Net Asset Value will not be restated and the benefit will be allocated to the existing Unitholders rateably at the time of the repayment. Irish Taxation The Manager has been advised that on the basis that the Fund is resident in Ireland for taxation purposes the taxation position of the Fund and the Unitholders is as set out below. The Fund The Fund shall be regarded as resident in Ireland for tax purposes if the Trustee of the Fund is regarded as tax resident in Ireland. It is the intention of the Manager that the business of the Fund will be conducted in such a manner as to ensure that it is Irish resident for tax purposes. The Manager has been advised that the Fund qualifies as an investment undertaking as defined in Section 739B of the Taxes Act. Under current Irish law and practice, it is not chargeable to Irish tax on its income and gains. However, tax can arise on the happening of a chargeable event in the Fund. A chargeable event includes any distribution payments to Unitholders or any encashment, redemption, cancellation, transfer or deemed disposal (a deemed disposal will occur at the expiration of a Relevant Period) of Units. No tax will arise on the Fund in respect of chargeable events in respect of a Unitholder who is neither Irish Resident nor Ordinarily Resident in Ireland at the time of the chargeable event provided that a Relevant Declaration is in place and the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct. In the absence of a Relevant Declaration there is a presumption that the investor is Irish Resident or Ordinarily Resident in Ireland. A chargeable event does not include: - An exchange by a Unitholder, effected by way of an arms length bargain where no payment is made to the Unitholder, of Units in the Fund for other Units in the Fund; 35

36 - Any transactions (which might otherwise be a chargeable event) in relation to units held in a recognised clearing system as designated by order of the Irish Revenue Commissioners; - A transfer by a Unitholder of the entitlement to a Unit where the transfer is between spouses and former spouses, subject to certain conditions; or - An exchange of Units arising on a qualifying amalgamation or reconstruction (within the meaning of Section 739H of the Taxes Act) of the Fund with another investment undertaking. If the Fund becomes liable to account for tax if a chargeable event occurs, the Fund shall be entitled to deduct from the payment arising on a chargeable event an amount equal to the appropriate tax and/or where applicable, to appropriate or cancel such number of Units held by the Unitholder or the beneficial owner of the Units as are required to meet the amount of tax. The relevant Unitholder shall indemnify and keep the Fund indemnified against loss arising to the Fund by reason of the Fund becoming liable to account for tax on the happening of a chargeable event if no such deduction, appropriation or cancellation has been made. Dividends received by the Fund from investment in Irish equities may be subject to Irish dividend withholding tax at the standard rate of income tax (currently 20%). However, the Fund can make a declaration to the payer that it is a collective investment undertaking beneficially entitled to the dividends which will entitle the Fund to receive such dividends without deduction of Irish dividend withholding tax. No stamp duty is payable in Ireland on the issue, transfer, repurchase or redemption of Units in the Fund. Where any subscription for or redemption of Units is satisfied by the in specie transfer of securities, property or other types of assets, Irish stamp duty may arise on the transfer of such assets. No Irish stamp duty will be payable by the Fund on the conveyance or transfer of stock or marketable securities provided that the stock or marketable securities in question have not been issued by a company registered in Ireland and provided that the conveyance or transfer does not relate to any immovable property situated in Ireland or any right over or interest in such property or to any stocks or marketable securities of a company (other than a company which is an investment undertaking within the meaning of Section 739B of the Taxes Act) which is registered in Ireland. To the extent any Units are not held in a recognised clearing system at the time of a chargeable event, the following tax consequences will arise on a chargeable event. Unitholders who are neither Irish Residents nor Ordinarily Resident in Ireland The Fund will not have to deduct tax on the occasion of a chargeable event in respect of a Unitholder if (a) the Unitholder is neither Irish Resident nor Ordinarily Resident in Ireland, (b) the Unitholder has made a Relevant Declaration and (c) the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct. In the absence of a Relevant Declaration tax will arise on the happening of a chargeable event in the Fund regardless of the fact that a Unitholder is neither Irish Resident nor Ordinarily Resident in Ireland. The appropriate tax that will be deducted is as described below. To the extent that a Unitholder is acting as an Intermediary on behalf of persons who are neither Irish Resident nor Ordinarily Resident in Ireland no tax will have to be deducted by the Fund on the occasion of a chargeable event provided that the Intermediary has made a Relevant Declaration that he/she is acting on behalf of such persons and the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct. 36

37 Unitholders who are neither Irish Residents nor Ordinarily Resident in Ireland and who have made Relevant Declarations in respect of which the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct, will not be liable to Irish tax in respect of income from their Units and gains made on the disposal of their Units. However, any corporate Unitholder which is not Irish Resident and which holds Units directly or indirectly by or for a trading branch or agency in Ireland will be liable to Irish tax on income from their Units or gains made on disposals of the Units. Where tax is withheld by the Fund on the basis that no Relevant Declaration has been filed with the Fund by the Unitholder, Irish legislation provides for a refund of tax only to companies within the charge to Irish corporation tax, to certain incapacitated persons and in certain other limited circumstances. Unitholders who are Irish Residents or Ordinarily Resident in Ireland Unless a Unitholder is an Exempt Irish Investor and makes a Relevant Declaration to that effect and the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct or unless the Units are purchased by the Courts Service, tax at the standard rate of income tax (currently 20%) will be required to be deducted by the Fund from a distribution (where payments are made annually or at more frequent intervals) to a Unitholder who is Irish Resident or Ordinarily Resident in Ireland. Similarly, tax at the standard rate plus 3% (i.e. currently 23%) will have to be deducted by the Fund on any other distribution or gain arising to the Unitholder (other than an Exempt Irish Investor who has made a Relevant Declaration) on an encashment, redemption or transfer of Units by a Unitholder who is Irish Resident or Ordinarily Resident in Ireland. In addition, the Finance Act 2006 introduced an automatic exit tax for Unitholders who are Irish Resident or Ordinarily Resident in Ireland in respect of Units held by them in the Fund at the ending of a Relevant Period. Such Unitholders- (both companies and individuals) will be deemed to have disposed of their Units ( deemed disposal ) at the expiration of that Relevant Period and will be charged to tax at the standard rate of income tax plus 3% (i.e. currently 23%) on any deemed gain (calculated without the benefit of indexation relief) accruing to them based on the increased value (if any) of the Units since purchase or since the previous exit tax applied, whichever is later. For the purposes of calculating if any further tax arises on a subsequent chargeable event (other than chargeable events arising from the ending of a subsequent Relevant Period or where payments are made annually or at more frequent intervals), the preceding deemed disposal is initially ignored and the appropriate tax calculated as normal. Upon calculation of this tax, credit is immediately given against this tax for any tax paid as a result of the preceding deemed disposal. Where the tax arising on the subsequent chargeable event is greater than that which arose on the preceding deemed disposal, the Fund will have to deduct the difference. Where the tax arising on the subsequent chargeable event is less than that which arose on the preceding deemed disposal, the Fund will refund the Unitholder for the excess provided (i) the Unitholder has provided the Fund with a declaration confirming that the subsequent chargeable event is effected for bona fide reasons and does not form part of any transaction of which the main purpose or one of the main purposes is the recovery of the tax arising on the preceding deemed disposal and (ii) the Fund is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct. Unitholders (depending on their own personal tax position) who are Irish Resident or Ordinarily Resident in Ireland may still be required to pay tax or further tax on a distribution or gain arising on an encashment, redemption, cancellation or transfer of their Units. Alternatively they may be entitled to a refund of all or part of any tax deducted by the Fund on a chargeable event. 37

38 Capital Acquisitions Tax The disposal of Units may be subject to Irish gift or inheritance tax (Capital Acquisitions Tax). However, provided that the Fund falls within the definition of investment undertaking (within the meaning of Section 739B of the Taxes Act), the disposal of Units by a Unitholder is not liable to Capital Acquisitions Tax provided that (a) at the date of the gift or inheritance, the donee or successor is neither domiciled nor Ordinarily Resident in Ireland; (b) at the date of the disposition, either the Unitholder disposing ( disponer ) of the Units is neither domiciled nor Ordinarily Resident in Ireland or the disposition is not subject to Irish law; and (c) the Units are comprised in the gift or inheritance at the date of such gift or inheritance and at the valuation date. With regard to Irish tax residency for Capital Acquisitions Tax purposes, special rules apply for non-irish domiciled persons. A non-irish domiciled donee or disponer will not be deemed to be resident or ordinarily resident in Ireland at the relevant date unless; i) that person has been resident in Ireland for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls; and ii) that person is either resident or ordinarily resident in Ireland on that date. European Savings Directive Dividends and other distributions made by the Fund, together with payment of the proceeds of sale and/or redemption of Units in the Fund, may in future (depending on the investment portfolio of the Fund and the location of the paying agent the definition of a paying agent for the purposes of the Savings Directive is not necessarily the same person who may legally be regarded as the paying agent) be subject to the exchange of information regime or withholding tax imposed by EU Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments. If a payment is made to a Unitholder who is an individual resident in a Member State of the European Union (or a residual entity established in a Member State) by a paying agent resident in another Member State (or in certain circumstances the same Member State of the Unitholder) then the Directive may apply. The Directive applies to payments of interest made on or after 1 July 2005, applicants for Units in the Fund will be requested to provide certain information as required under the Directive. It should be noted that the imposition of exchange of information and/or withholding tax on payments made to certain individuals and residual entities resident in an EU Member State also applies to those resident or located in any of the following countries; Anguilla, Aruba, British Virgin Islands, Cayman Island, Guernsey, Isle of Man, Jersey, Montserrat, Netherlands Antilles and Turks and Caicos Islands. Finally, the following countries, Andorra, Liechtenstein, Monaco, San Marino and Switzerland, will not be participating in automatic exchange of information. To the extent that they will exchange information it will be on a request basis only. Their participation is confined to imposing a withholding tax. 38

39 The Fund's base currency is Euro ( ). CALCULATION OF THE NET ASSET VALUE The Net Asset Value of the Fund will be expressed as a per Unit figure. The Administrative Agent will calculate the Net Asset Value of the Fund on the last Business Day prior to each Dealing Day. The Net Asset Value will be calculated by dividing the value of the assets of the Fund less its liabilities, as at the Valuation Point, by the number of Units then in issue or deemed to be in issue. "Value" with reference to an Investment (except as herein otherwise specifically provided) shall be calculated in the following manner: (a) assets listed or traded on a stock exchange or regulated market (other than those referred to at (e) and (h) below) for which market quotations are readily available shall be valued at the last traded price at the close of business on the relevant market that most immediately precedes the time at which the Net Asset Value per Unit is calculated provided that the value of any investment listed on a stock exchange or regulated market but acquired or traded at a premium or at a discount outside or off the relevant stock exchange or on a regulated market may be valued taking into account the level of premium or discount as at the date of valuation of the investment as determined by the Manager approved for such purpose by the Trustee. If, for specific assets the prices at the close of business on the relevant market that most immediately precedes the time at which the Net Asset Value per Unit is calculated do not, in the opinion of the Manager, reflect their fair value, or are not available the value shall be valued at its probable realisation value estimated with care and in good faith by the Manager or may be valued by a competent person, appointed by the Manager and approved for such purpose by the Trustee, or may be valued by any other means providing such value is approved by the Trustee; (b) if the assets are listed or traded on several stock exchanges or regulated markets, the price at the close of business that most immediately precedes the time at which the Net Asset Value per Unit is calculated on the stock exchange or regulated market which, in the opinion of the Manager, constitutes the main market for such assets, will be used; (c) in the event that any of the investments are not listed or traded on any stock exchange or regulated market, such securities shall be valued at their probable realisation value estimated with care and in good faith by the Manager. Such probable realisation value will be determined: (i) (ii) by using the original purchase price; where there have been subsequent trades with substantial volumes, by using the last traded price provided the Manager in consultation with the Investment Adviser considers such trades to be at arm s length; (iii) where the Manager in consultation with the Investment Adviser believes the investment has suffered a diminution in value, by using the original purchase price which shall be discounted to reflect such a diminution; (iv) if the Manager in consultation with the Investment Adviser believes a mid-quotation from a broker is reliable, by using such a mid-quotation or, if unavailable, a bid quotation, which must be approved by the Trustee. Alternatively, the Manager in consultation with the Investment Adviser, may use such probable realisation 39

40 value estimated with care and in good faith and as may be recommended by a competent professional appointed by the Manager or the Investment Adviser and approved for such purpose by the Trustee. Due to the nature of such unquoted securities and the difficulty in obtaining a valuation from other sources, such competent professional may be related to the Investment Adviser. Alternatively, such investments may be valued by any other means, providing such value is approved by the Trustee. (d) cash and other liquid assets will be valued at their face value with interest accrued, where applicable, up to the close of business on the relevant market that most immediately precedes the time at which the Net Asset Value per Unit is calculated. (e) units or shares in open-ended collective investment schemes will be valued at the net asset value at the close of business on the relevant market that most immediately precedes the time at which the Net Asset Value per Unit is calculated; units or shares in closed-ended collective investment schemes will, if listed or traded on a stock exchange or regulated market, be valued at the official close of business price on the principal exchange or market for such investment as at the time at which the Net Asset Value per Unit is calculated or, if unavailable at the probable realisation value, as estimated with care and in good faith and as may be recommended by a competent professional appointed by the Manager or the Investment Adviser and approved for the purpose by the Trustee. (f) the Manager may adjust the value of such investments if it considers such adjustment is required to reflect the fair value thereof in the context of currency, marketability and/or such other considerations which are deemed relevant with the approval of the Trustee; (g) any value expressed otherwise than in the base currency of the Fund (whether of an investment or cash) and any non-base currency borrowing shall be converted into the base currency at the rate (whether official or otherwise) which the Manager deems appropriate in the circumstances; (h) exchange traded derivative instruments will be valued on each Dealing Day at the settlement price for such instruments on such market as at the close of business on the Business Day immediately preceding the relevant Dealing Day. If such price is not available such value shall be the probable realisation value estimated with care and in good faith by the Manager, or may be valued by a competent person, appointed by the Manager and approved for such purpose by the Trustee, or may be valued by any other means provided such value is approved by the Trustee. Over-the-counter derivative instruments will be valued on daily at the settlement price as at the close of business on the Business Day immediately preceding the relevant Dealing Day, as calculated by the counterparty on a daily basis and verified on a weekly basis by the Investment Adviser (being independent from the counterparty), approved for such purpose by the Trustee. Forward foreign exchange contracts shall be valued with reference to the prevailing market maker quotations, namely, the price at which a new forward contract of the same size and maturity could be undertaken, or, if unavailable, they shall be valued on each Dealing Day at the settlement price as at the close of business on the Business Day immediately preceding the relevant Dealing Day, as provided by the counterparty on a daily basis and verified on a weekly basis by the Investment Adviser (being independent from the counterparty), approved for such purpose by the Trustee. In the event of it being impossible, impractical or incorrect to carry out a valuation of a specific investment in accordance with the valuation rules set out in paragraphs (a) to (h) above, or if such valuation is not representative of the securities fair market value, the Manager is entitled to use an alternative valuation 40

41 method which has been approved by the Trustee in order to reach a proper valuation of that specific investment. For the purposes of ascertaining market quotations, the Manager shall be entitled to use and rely upon Reuters or Bloomberg or other recognised mechanised systems of valuation dissemination approved by the Trustee. In calculating the value of the Fund:- (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) every Unit in the Fund agreed to be issued by the Manager shall be deemed to be in issue and the Fund shall be deemed to include not only the relevant cash and property in the hands of the Trustee but also the amount of any cash or other property to be received in respect of those Units agreed to be issued after deducting therefrom (in the case of Units agreed to be issued for cash) or providing thereout the duties and charges and preliminary charges referred to in sub-clause 5.05 of the Trust Deed; where Investments have been agreed to be purchased or sold but such purchase or sale has not been completed such Investments shall be included or excluded and the gross purchase or net sale consideration excluded or included as the case may require as if such purchase or sale had been duly completed. Once notified to the Administrative Agent, trades are effective from the trade date. where notice of a reduction of the Fund by the cancellation of Units has been given by the Manager to the Trustee pursuant to Clause of the Trust Deed but such cancellation has not been completed the Units to be cancelled shall be deemed not to be in issue and the Value of the Fund shall be reduced by the amount payable to the Manager upon such cancellation; any Value expressed otherwise than in Euro (whether of an Investment or cash) and any non-euro borrowing shall be converted into Euro at the rate (whether official or otherwise) which the Manager after consulting with or in accordance with a method approved by the Trustee deems appropriate in the circumstances having regard (inter alia) to any premium or discount which may be relevant and to costs of exchange; there shall be deducted from the Deposited Property the total amount of any actual or estimated liabilities properly payable out of capital including outstanding borrowings (if any) but excluding liabilities taken into account under sub-paragraph (ii) above and any estimated liability for tax on unrealised capital gains; there shall be deducted from the Deposited Property on each Accounting Date (and thereafter for so long as the same remains payable) the total amount of any actual or estimated liabilities for tax (if any) on realised capital gains in respect of the Accounting Period then ended and there shall be added to the Deposited Property on each Accounting Date (and thereafter for so long as the same remains receivable) the actual or estimated amount of any taxation of a capital nature which may be recoverable; there shall be deducted from the Deposited Property such sum in respect of tax (if any) on net capital gains realised during the current Accounting Period prior to the valuation being made as in the estimate of the Manager will become payable in respect of the Fund; there shall be deducted from the value of any Investment in respect of which a Call Option has been 41

42 written within the permitted limits of the Financial Regulator the value of such option calculated by reference to the lowest available market dealing offered price quoted on a Recognised Exchange or if no such price is available a price certified by a stockbroker or other person approved by the Trustee or such price as the Manager considers in the circumstances to be reasonable and which is approved by the Trustee; (ix) (x) (xi) (xii) (xiii) (xiv) there shall be added to the Deposited Property a sum representing any interest or dividends accrued but not received (interest and dividends being deemed to have accrued as provided in sub-clause of the Trust Deed); there shall be added to the Deposited Property the amount (if any) available for distribution in respect of the last preceding Accounting Period but not distributed in respect thereof; there shall be added to the Deposited Property the total amount (whether actual or estimated by the Manager) of any claims for repayment of any taxation levied on income including claims in respect of the Service Charge and Double Taxation Relief; there shall be deducted from the Deposited Property any amount of the Service Charge accrued but remaining unpaid together with a sum equal to the Value Added Tax chargeable (if any) in respect of the management services supplied in consideration of the said amount of the Service Charge; there shall be deducted from the Deposited Property the total amount (whether actual or estimated by the Manager) of any liabilities for taxation leviable on income including Income Tax and Corporation Tax (but not taxes leviable on capital or on realised or unrealised capital gains); there shall be deducted from the Deposited Property the total amount (whether actual or estimated by the Manager) of any other liabilities properly payable out of income including accrued interest on borrowings (if any). The liabilities of the Fund shall be deemed to include:- (i) (ii) the total amount of any actual or estimated liabilities properly payable out of the Fund including any outstanding borrowings of the Fund and all accrued interest, fees and expenses payable thereon (but excluding liabilities taken into account in determining the value of the assets of the Fund) and any estimated liability for tax on unrealised capital gains; such sum in respect of tax (if any) on net capital gains realised during the current Accounting Period prior to the valuation being made as in the estimate of the Manager will become payable; (iii) the amount (if any) of any Distribution declared by the Manager pursuant to Clause of the Trust Deed in respect of the last preceding Accounting Period but not distributed in respect thereof; (iv) the remuneration of the Manager accrued but remaining unpaid together with value added tax thereon and Administration Expenses; (v) the total amount (whether actual or estimated by the Manager) of any liabilities for taxation leviable on income including income tax and corporation tax, if any (but not taxes leviable on capital or on realised or unrealised capital gains); 42

43 (vi) the total amount of any actual or estimated liabilities for withholding tax (if any) payable on any of the Investments of the Fund in respect of the current Accounting Period; (vii) the remuneration of the Trustee accrued but remaining unpaid, together with value added tax thereon, if any, Disbursements and the costs referred to in Clause 5.10 of the Trust Deed; and (viii) the total amount (whether actual or estimated by the Manager) of any other liabilities properly payable out of the assets of the Fund. In the event of it being impossible or impracticable to carry out a valuation of an Investment in accordance with the valuation rules set out above, the Manager is entitled to use other generally recognised valuation methods approved by the Trustee in order to reach a proper valuation of such Investment. Examples for the calculation of the Net Asset Value and the Subscription and Redemption prices of Units: Euro Investments at market value 16,915,000 Handling Charges/Sales tax/ 85,000 Stockbrokers Commissions Cash and receivables 4,000,000 Total of Assets 21,000,000 Less Liabilities (1,000,000) Net Asset Value of the Fund's Assets 20,000,000 Divided by number of units outstanding 200,000 = Net Asset Value per Unit (Redemption Price) 100 Subscription Price (= Net Asset Value plus 6.95% of Net Asset Value)

44 INVESTMENT RESTRICTIONS The permitted investments and investment restrictions applying to the Fund, in accordance with the qualifications and exemptions contained in the Regulations, and in the Financial Regulator's Notices, are set out below. The Manager may from time to time impose such further investment restrictions as shall be compatible with or in the interest of the Unitholders, in order to comply with the laws and regulations of the countries where Units of the Fund are placed. Any such further restrictions shall be in accordance with the requirements of the Financial Regulator's Notices; General 1 Permitted Investments Investments of the Fund are confined to: 1.1 Transferable securities and money market instruments which are either admitted to official listing on a stock exchange in a Member State or non-member State or which are dealt on a market which is regulated, operates regularly, is recognised and open to the public in a Member State or non-member State. 1.2 Recently issued transferable securities which will be admitted to official listing on a stock exchange or other market (as described above) within a year. 1.3 Money market instruments, as defined in the UCITS Notices, other than those dealt on a regulated market. 1.4 Units/shares of UCITS. 1.5 Units/shares of non-ucits as set out in the Financial Regulator s Guidance Note 2/ Deposits with credit institutions as prescribed in the UCITS Notices. 1.7 Financial derivative instruments as prescribed in the UCITS Notices. 2 Investment Restrictions 2.1 The Fund may invest no more than 10% of its Net Asset Value in transferable securities and money market instruments other than those referred to in paragraph The Fund may invest no more than 10% of its Net Asset Value in recently issued transferable securities which will be admitted to official listing on a stock exchange or other market (as described in paragraph 1.1) within a year. This restriction will not apply in relation to investment by the Fund in certain US securities known as rule 144A securities provided that: - the securities are issued with an undertaking to register with the US Securities and Exchanges Commission within one year of issue; and - the securities are not illiquid securities i.e. they may be realised by the Fund within seven days at the 44

45 price, or approximately at the price, at which they are valued by the Fund. 2.3 The Fund may invest no more than 10% of its Net Asset Value in transferable securities and money market instruments issued by the same body provided that the total value of transferable securities and money market instruments held in the issuing bodies in each of which it invests more than 5% is less than 40%. 2.4 Subject to the prior approval of the Financial Regulator, the limit of 10% (in 2.3) is raised to 25% in the case of bonds that 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 bond-holders. If the Fund invests more than 5% of its net assets in these bonds issued by one issuer, the total value of these investments may not exceed 80% of the net asset value of the Fund. 2.5 The limit of 10% (in 2.3) is raised to 35% if the transferable securities or money market instruments are issued or guaranteed by a Member State or its local authorities or by a non-member State or public international body of which one or more Member States are members. 2.6 The transferable securities and money market instruments referred to in 2.4. and 2.5 shall not be taken into account for the purpose of applying the limit of 40% referred to in The Fund may not invest more than 20% of its Net Asset Value in deposits made with the same credit institution. Deposits with any one credit institution, other than a credit institution authorised in the EEA (European Union Member States, Norway, Iceland, Liechtenstein), a credit institution authorised within a signatory state (other than an EEA Member State) to the Basle Capital Convergence Agreement of July 1988 (Switzerland, Canada, Japan, United States) or a credit institution authorised in Jersey, Guernsey, the Isle of Man, Australia or New Zealand held as ancillary liquidity, must not exceed 10% of net assets. This limit may be raised to 20% in the case of deposits made with the Trustee. 2.8 The risk exposure of the Fund to a counterparty to an OTC derivative may not exceed 5% of its Net Asset Value. This limit is raised to 10% in the case of a credit institution authorised in the EEA, a credit institution authorised within a signatory state (other than an EEA Member State) to the Basle Capital Convergence Agreement of July 1988 or a credit institution authorised in Jersey, Guernsey, the Isle of Man, Australia or New Zealand. 2.9 Notwithstanding paragraphs 2.3, 2.7 and 2.8 above, a combination of two or more of the following issued by, or made or undertaken with, the same body may not exceed 20% of net assets: - investments in transferable securities or money market instruments; - deposits, and/or - risk exposures arising from OTC derivatives transactions The limits referred to in 2.3, 2.4, 2.5, 2.7, 2.8 and 2.9 above may not be combined, so that exposure to a single body shall not exceed 35% of Net Asset Value. 45

46 2.11 Group companies are regarded as a single issuer for the purposes of 2.3, 2.4, 2.5, 2.7, 2.8 and 2.9. However, a limit of 20% of Net Asset Value may be applied to investment in transferable securities and money market instruments within the same group The Fund may invest up to 100% of its Net Asset Value in transferable securities and money market instruments issued by or guaranteed by any Member State, its local authorities, non-member States or public international body of which one or more Member States are members. The individual issuers must be listed in the prospectus and may be drawn from OECD Governments (provided the relevant issues are investment grade), the European Investment Bank, the European Bank for Reconstruction and Development, the International Finance Corporation, the International Monetary Fund, Euratom, the Asian Development Bank, the European Central Bank, the Council of Europe, Eurofima, the African Development Bank, the International Bank for Reconstruction and Development (The World Bank), the Inter American Development Bank, the European Union, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae), the Student Loan Marketing Association (Sallie Mae), the Federal Home Loan Bank, the Federal Farm Credit Bank and the Tennessee Valley Authority. However, the Fund must hold securities from at least six different issues, with securities from any one issue not exceeding 30% of the Net Asset Value of the Fund. 3. Investment in Collective Investment Schemes ("CIS") 3.1 The Fund may not invest more than 20% of its Net Asset Value in any one CIS. 3.2 Investment in non-ucits may not, in aggregate, exceed 30% of its Net Asset Value. 3.3 The CIS are prohibited from investing more than 10 per cent of their Net Asset Value in other CIS. 3.4 When the Fund invests in the shares/units of other CIS that are managed, directly or by delegation, by the Manager or by any other company with which the Manager is linked by common management or control, or by a substantial direct or indirect holding, the Manager or other company may not charge subscription, conversion or redemption fees on account of the Fund's investment in the shares/units of such other CIS. 3.5 Where a commission (including a rebated commission) is received by the Manager or the Investment Adviser by virtue of an investment in the units/shares of another CIS, this commission must be paid into the property of the Fund. 4. General Provisions 4.1 The Fund may not acquire any shares carrying voting rights which would enable it to exercise significant influence over the management of an issuing body. 4.2 The Fund may acquire no more than: (i) 10% of the non-voting shares of any single issuing body; (ii) 10% of the debt securities of any single issuing body; 46

47 (iii) 25% of the shares/units of any single CIS; (iv) 10% of the money market instruments of any single issuing body. NOTE: The limits laid down in (ii), (iii) and (iv) above may be disregarded at the time of acquisition if at that time the gross amount of the debt securities or of the money market instruments, or the net amount of securities in issue cannot be calculated and 4.2 shall not be applicable to: (i) transferable securities and money market instruments issued or guaranteed by a Member State or its local authorities; (ii) transferable securities and money market instruments issued or guaranteed by a non-member State; (iii)transferable securities and money market instruments issued by public international bodies of which one or more Member States are members; (iv) shares held by any Fund in the capital of a company incorporated in a non-state which invests its assets mainly in the securities of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which the Fund can invest in the securities of issuing bodies of that State. This waiver is applicable only if in its investment policies the company from the non-member State complies with the limits laid down in 2.3 to 2.11, 3.1, 4.1 and 4.2, and provided that where these limits are exceeded, 4.5 and 4.6 are observed; (v) shares held by an investment company or investment companies in the capital of subsidiary companies carrying on only the business of management, advice or marketing in the country where the subsidiary is located, in regard to the repurchase of shares / units at shareholders / unitholders request exclusively on their behalf. 4.4 The Fund need not comply with the investment restrictions herein when exercising subscription rights attaching to transferable securities or money market instruments which form part of their assets. 4.5 The Financial Regulator may allow recently authorised UCITS to derogate from the provisions of 2.3 to 2.12, 3.1 and 3.2 for six months following the date of their authorisation, provided they observe the principle of risk spreading. 4.6 If the limits laid down herein are exceeded for reasons beyond the control of the Fund, or as a result of the exercise of subscription rights, then the Fund must adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interests of its Unitholders. 4.7 Neither the Manager, nor the Fund, may carry out uncovered sales of: - transferable securities; - money market instruments; - units of CIS; or - financial derivative instruments. 4.8 The Fund may hold ancillary liquid assets. 5 Financial Derivative Instruments ("FDIs") 47

48 5.1 The Fund s global exposure (as prescribed in the Financial Regulator s UCITS Notices) relating to FDI must not exceed its total net asset value. 5.2 Position exposure to the underlying assets of FDI, including embedded FDI in transferable securities or money market instruments, when combined where relevant with positions resulting from direct investments, may not exceed the investment limits set out in the Financial Regulator's UCITS Notices. (This provision does not apply in the case of index based FDI provided the underlying index is one which meets with the criteria set out in the Financial Regulator UCITS Notices.) 5.3 The Fund may invest in FDIs dealt in over-the-counter ("OTC's") provided that the counterparties to OTC's are institutions subject to prudential supervision and belonging to categories approved by the Financial Regulator. 5.4 Investment in FDIs is subject to the conditions and limits laid down by the Financial Regulator. It is not the current intention of the Fund to use FDI's for investment purposes. Should this intention change the prospectus shall be amended accordingly and a risk management process shall be submitted to the Financial Regulator in advance. It is intended that any Fund should have power to avail of any change in the investment restrictions laid down in the Regulations which would permit investment by the Fund's in securities, derivative instruments or in any other forms of investment in which investment is as at the date of this Prospectus, restricted or prohibited under the Regulations. Restrictions on Borrowing, Lending and Dealing (1) The Fund may only borrow an amount which in the aggregate does not exceed 10% of the Net Asset Value of the Fund. Such borrowings may, however, only be made on a temporary basis. The Fund may give a charge over the assets of the Fund in order to secure borrowings. Further, the Fund may not invest more than 10% of its Net Asset Value in partly paid securities. (2) The Fund may acquire foreign currency by means of a "back-to-back" loan. Foreign currency obtained in this manner is not classed as borrowings for the purposes of the borrowing restrictions contained in the Regulations and (1) above, provided that the offsetting deposit:- (i) (ii) is denominated in the base currency of the Fund; equals or exceeds the value of the foreign currency loan outstanding. However, where foreign currency borrowings exceed the value of the back-to-back deposit, any excess is regarded as borrowing for the purpose of Regulation 70 of the Regulations and (1) above. (3) The Fund may not, save as set out in (1) above, mortgage, hypothecate or in any manner transfer as security for indebtedness, any securities owned or held by the Fund provided that the purchase or sale of securities on a when-issued or delayed-delivery basis, and margin paid with respect to the writing of options or the purchase or sale of forward or futures contracts, are not deemed to be the pledge of the assets. 48

49 (4) Without prejudice to the powers of the Fund to invest in transferable securities, the Fund may not lend or act as guarantor on behalf of third parties. (5) The Fund may engage in stocklending for the purpose of efficient portfolio management, in accordance with the guidelines set out by the Financial Regulator. 49

50 GENERAL Meetings The Trustee or the Manager may convene a meeting of Unitholders at any time. The Trustee must convene such a meeting if requested to do so, by the holders of not less than 15% in aggregate, of the Units in issue. Not less than fourteen (14) days' notice of every meeting must be given to Unitholders. A meeting shall, notwithstanding that it has been called by short notice be deemed to have been duly called if so agreed by the Auditors and all the Unitholders entitled to attend and vote thereat. The notice shall specify the place, day and hour of meeting and the terms of the resolution to be proposed. A copy of the notice shall be sent by post to the Trustee, unless the meeting shall be convened by the Trustee. A copy of the notice shall be sent by post to the Manager, unless the meeting shall be convened by the Manager. The accidental omission to give notice to or the non-receipt of notice by any of the Unitholders shall not invalidate the proceedings at any meeting. The quorum shall be Unitholders present in person or by proxy holding or representing at least one tenth of the value of the Units for the time being in issue. No business shall be transacted at any meeting unless the requisite quorum is present at the commencement of business. At any meeting (a) on a show of hands every Unitholder who is present in person or by a proxy shall have one vote and (b) on a poll every Unitholder who is present in person or by proxy shall have one vote for every EUR 100 in value of Units of which he is the Unitholder. A resolution in writing signed by all of the Unitholders for the time being entitled to attend and vote on such a resolution shall be as valid as if the resolution had been passed at a meeting duly convened. Financial Statements and Supply of Documents The accounting year of the Fund terminates on the 31st December in each year. The financial statements of the Fund will be proposed in Euro. Annual reports, incorporating audited financial statements, will be prepared within four months from the end of the period to which they relate and will be supplied to each Unitholder upon written request free of charge. Similarly, semi annual reports, incorporating unaudited financial statements will be prepared within 2 months from the end of the period to which they relate and will be supplied to each Unitholder upon written request free of charge. The annual report shall be prepared as from 31st December each year. The semi-annual report shall be prepared as from 30 June each year. A copy of the Trust deed and the First Supplemental Trust Deed will be sent by the Manager to Unitholders, on request, free of charge. Documents Available for Inspection Copies of the following documents may be inspected at the registered office of the Manager during usual business hours on weekdays, except Saturdays and public holidays: (a) Trust Deed; 50

51 (b) Annual reports, incorporating audited financial statements, and half-yearly reports, incorporating unaudited financial statements, when published; (c) Material Contracts referred to on page 52; Copies of the documents referred to at (c) above can be obtained on request from the Manager on payment of a fee of Euro per document. Copies of the Trust Deed, annual and half-yearly reports can be obtained from the Manager free of charge. Material Contracts The following contracts, not being contracts entered into in the ordinary course of business, have been entered into and are or may be material:- Trust Deed dated the 31 st January, 2005 and the First Supplemental Trust Deed dated 9 February, 2007 between the Manager and Société Générale, Dublin Branch; Investment Advisory Agreement dated 9 February 2007 between the Manager and the Investment Adviser, pursuant to which the latter was appointed Investment Adviser to the Manager. This Agreement may be terminated by either party on 90 days written notice; Administrative Agreement dated 26 th April, 2004 between the Manager and Olympia Capital (Ireland) Limited pursuant to which the later was appointed Administrative Agent to the Manager. The Administrative Agreement provides that the Manager shall indemnify and keep indemnified and hold harmless the Administrative Agent (and each of its directors, officers, servants and employees) from and against any and all third party actions, proceedings, claims, demands, losses, liabilities, damages, costs and expenses (including reasonable legal and professional fees and expenses arising therefrom or incidental thereto) which may be made or brought against or directly or indirectly suffered or incurred by the Administrative Agent (or any of its directors, officers, servants, employees) arising out of or in connection with the performance of the Administrative Agent s duties hereunder otherwise than by reason of the negligence, wilful default, recklessness, bad faith or fraud of the Administrative Agent or any of its directors, officers, servants or employees. The Administration Agreement provides for limitation on the liability of the Administrative Agent for any loss suffered by the Fund, the Manager or any other person, in connection with the performance of its obligations under the Administrative Agreement, except where that loss results directly from fraud, negligence, willful default, recklessness, material breach or bad faith on the part of the Administrative Agent. The Agreement may be terminated by either party on 90 days written notice to the other party; Paying Agency Agreement dated 28th September, 1999 between the Manager, the Trustee, and Marcard Stein & Co. pursuant to which the latter was appointed Paying Agent with respect to the sale of Units in Germany. This Agreement shall continue for a period of two years and thereafter may be terminated by either party on 90 days written notice; 51

52 Notices to Unitholders Any Notices required to be sent to Unitholders, may be sent to the Unitholder either by post to the address of the Unitholder, or the first named joint Unitholders on the relevant register of Unitholders or to the most recently available telefax number of any such Unitholder. Litigation and Arbitration Proceedings The Fund is not involved in any litigation nor is the Manager aware of any pending or threatened litigation. 52

53 TERMINATION The Fund may be terminated in the following circumstances: (a) By the Trustee, if it appears that: (i) (ii) (iii) (iv) (v) the Manager is in compulsory liquidation or has ceased business; the Manager is incompetent or fails to perform its duties satisfactorily or if the Manager shall do any other thing which in the opinion of the Trustee is calculated to bring the Trust into disrepute or is actively harming the Unitholders' interest; the Manager has become subject to de facto hostile control; any law has been passed which renders it illegal or, in the reasonable opinion of the Trustee, impracticable or inadvisable to continue the Fund. By the Trustee, if after six months from the date on which the Trustee has expressed in writing to the Manager its desire to retire the Manager has failed to appoint a new Trustee in accordance with the Trust Deed. (b) By the Manager, if it appears that: (i) (ii) (iii) the total value of the Fund falls below Euro 1 million; the Fund is no longer an authorised UCITS; any law which has been passed which renders it illegal or, in the reasonable opinion of the Manager, impracticable or inadvisable to continue the Fund. (c) By the Unitholders at any time by Extraordinary Resolution of a Meeting of the Unitholders duly convened and such termination shall take effect from the date on which the said Resolution is passed or such later date (if any) as the Resolution may provide. In the case of (b) above, the Manager must, if practicable, give six months notice to the Unitholders before termination. Not later than two months before the termination of the Fund, the Trustee shall give notice to the Unitholders advising them of the impending distribution of the property. Following the termination the Trustee shall procure the sale of all Investments then remaining in its hands as part of the property of the Fund in such manner and within such period after the termination of the Trust as the Trustee thinks desirable. The Trustee shall at such time or times as it shall deem convenient and at its entire discretion distribute to the Unitholders pro rata to the number of units held by them respectively all net cash proceeds derived from the realisation of the Investments and any cash then forming part of the property of the Fund so far as the same are available for the purpose of such distribution. Every such distribution shall be made only after the Certificates relating to the Units in respect of which the same is made (if any) shall have been lodged with the Trustee together with such form of request for payment and receipt as the Trustee shall in its absolute discretion require. The Trustee however shall be entitled to retain out of any monies in its hands full provision for all costs, charges and expenses, claims and 53

54 demands relating to the Fund for which the Trustee is or may become liable or incurred, made or expended by the Trustee in connection with the termination of the Fund and out of the monies so retained to be indemnified and saved harmless against any such costs, charges, expenses, claims and demands. The Trustee shall also be entitled to lodge into Court any unclaimed net proceeds or other cash held by the Trustee after 12 months from the date on which proceeds were payable. The Trustee has the right to deduct any expenses it may incur in carrying out this provision. 54

55 SCHEDULE 1 RECOGNISED EXCHANGES With the exception of permitted investments in unlisted securities or in units of open-ended collective investment schemes the Fund will only invest in securities and financial derivative instruments traded on a stock exchange or market which meets the regulatory criteria (regulated, operate regularly, be recognised and open to the public) and which are listed in this Prospectus in accordance with Financial Regulator requirements. The Financial Regulator does not issue a list of approved stock exchanges or markets. The stock exchanges and regulated markets, which satisfy the regulatory criteria include: (i) all stock exchanges which are:- - in a member state of the European Union; or - in a member state of the European Economic Area (EEA) (Norway, Iceland and Liechtenstein) - a stock exchange located in any of the following countries:- Australia Canada Japan Hong Kong New Zealand Switzerland United States of America (ii) in any of the following:- Japan - Tokyo Stock Exchange Japan - Osaka Stock Exchange Japan - Nagoya Stock Exchange Japan - Sapporo Stock Exchange Japan - Niigata Stock Exchange Japan - Kyoto Stock Exchange Japan - Hiroshima Stock Exchange Japan - Fukuoka Stock Exchange (iii) the market organised by the International Securities Markets Association; the market conducted by the "listed money market institutions", as described in the Financial Services Authority publication "The regulation of the wholesale cash and OTC Derivatives Markets: "The Grey Paper"; AIM - the Alternative Investment Market in the UK, regulated and operated by the London Stock Exchange; the market in US government securities conducted by primary dealers regulated by the Federal Reserve Bank of New York and the Over-the-Counter Market in Canadian Government bonds, regulated by the Investment Dealers Association of Canada; 55

56 the Over-the-Counter market in the United States of America regulated by the National Association of Securities Dealers Inc. (may also be described as: the over-the-counter market in the United States conducted by primary and secondary dealers regulated by the Securities and Exchanges Commission and by the National Association of Securities Dealers (and by banking institutions regulated by the US Controller of the Currency, the Federal Reserve System or Federal Deposit Insurance Corporation); the French Markets for Titres de Créances Négotiables (the Over-the-Counter markets in negotiable debt instruments); NASDAQ in the United States of America; NASDAQ Europe (is a recently formed market and the general level of liquidity may not compare favourably to that found on more established exchanges); the Over-the-Counter market in Japan regulated by the Securities Dealers Association of Japan. The Fund may, in the future invest in other markets (not listed above) which are regulated, operate regularly and are recognised and open to the public. Details of such regulated markets will be noted in an Addendum to this Prospectus. 56

57 SCHEDULE II Financial Derivative Instruments and Efficient Portfolio Management 1. Financial Derivative Instruments The financial derivative instruments which the Fund may invest in and the expected effect of investment in such financial derivative instruments on the risk profile of a Fund are set out below. In addition the attention of investors is drawn to the section of the Prospectus headed Efficient Portfolio Management and the risks described under the headings Derivatives and Techniques and Instruments Risk and Currency Risk in the Risk Factors Section of the Prospectus and, if applicable to a particular Fund, the relevant Supplement. In general, these financial derivative instruments and techniques and instruments include, but are not limited to futures, options, warrants and forward currency contracts subject to the conditions set down by the Financial Regulator. More specifically, the Fund may purchase warrants, options and futures to gain exposure to listed securities or indices. The company may use index futures to manage exposure to indices. The Fund may invest in foreign currency-denominated securities for efficient portfolio management and/or to protect against foreign exchange risks. The Fund will typically use these instrument and/or techniques as set out under the heading Investment Policies in the Prospectus. The Fund will not be leveraged in excess of 100% of its net assets. Futures would be used to gain exposure to positions in a more efficient manner. For example a single stock future could be used to provide the Fund with exposure to a single security. Index futures could also be used to manage risk, for example an index future to hedge the risk of a security or group of securities held within the underlying index or with a high correlation with the underlying index. Options would be held as long positions (buying calls and puts). Calls would be held to give exposure to underlying securities or indices. Puts would be held to hedge position exposure, for example index puts to hedge market risk in a single security or group of securities. Options on interest rates and currencies may also be used in order to protect the Company from interest rate and foreign exchange risks. Warrants would be held to gain exposure to underlying securities for the purpose of efficient portfolio management. Forward currency contracts would be used to hedge against currency risk that has resulted from positions held in the Fund that are not in the base currency of the Fund). The Fund, may, for example, use forward currency contracts by selling forward a foreign currency against the base currency to protect the Fund from foreign exchange risk that has risen from holding assets in that currency. Derivative Instruments General/Interest Rate Risks The Fund may use derivative instruments traded on organised exchanges and over-the-counter markets to attempt to hedge or reduce the overall risk of its investment and to manage interest rate risk. Exchange Rate Risks 57

58 The Fund may employ techniques and instruments intended to provide protection against exchange rate risks, in the context of the management of its assets and liabilities. In this regard, the Fund may: (i) (ii) (iii) utilise OTC contracts; utilise currency options; hedge exposure to one currency by entering into forward currency transactions in a related currency because of the institutional and expected future correlation between the two currencies. Repurchase/Reverse Repurchase and Stocklending Agreements Subject to the conditions and limits set out in the UCITS Regulations and the Financial Regulator s Notices, and for the purposes of efficient portfolio management, the Fund may use repurchase agreements, reverse repurchase agreements and/or stock lending agreements to generate additional income for the Fund. Repurchase agreements are transactions in which one party sells a security to the other party with a simultaneous agreement to repurchase the security at a fixed future date at a stipulated price reflecting a market rate of interest unrelated to the coupon rate of the securities. A reverse repurchase agreement is a transaction whereby the Fund purchases securities from a counterparty and simultaneously commits to resell the securities to the counterparty at an agreed upon date and price. A stocklending agreement is an agreement under which title to the loaned securities is transferred by a lender to a borrower with the borrower contracting to deliver equivalent securities to the lender at a later date. 58