WILLERFUNDS NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2010 Page / Page 127 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES PRESENTATION OF THE FINANCIAL REPORTS The financial reports of the Fund are established in accordance with the Luxembourg legal and regulatory requirements concerning undertakings for collective investment. CURRENCY CONVERSION Transactions of a sub-fund expressed in currencies other than the sub-fund's reporting currency are recorded on the basis of the exchange rates prevailing on the date they occur. At the closing date, resulting assets and liabilities are converted into the sub-fund's reporting currency on the basis of the exchange rates prevailing on that date. Exchange differences are included as a separate item in the statement of operations and changes in nets assets. The combined financial statements of the Fund are presented in USD and are the aggregate of the financial statements of the different sub-funds, converted where applicable at the closing exchange rates. 1 USD = 0.745406 EUR 1 USD = 81.104991 JPY For each sub-fund, the net asset value at the beginning of the year is converted into USD on the basis of the exchange rates used at 31 December 2009. The exchange differences between the net asset value at beginning of the year converted at the exchanges rates used at 31 December 2009 and the exchange rates used at 31 December 2010 are included in the account “Reevaluation of opening combined NAV” in the statement of operations and changes in net assets on page 17. VALUATION OF THE SECURITIES PORTFOLIO At the closing date, the value of the securities portfolio is determined as follows: - listed securities or securities dealt in on regulated markets are valued at the last known price at this stock exchange or on this market, unless this price is not representative, - securities which are not listed or dealt in on any regulated markets, and listed securities or securities dealt in on any regulated markets for which the price is not available, or the price as determined pursuant to the sub-paragraph is not representative, are valued on the basis of the reasonably foreseeable sales price determined prudently and in good faith, - options are valued at the last known price on the stock exchanges or regulated markets, where they are listed or traded, - UCITS and other UCIs are valued at their last available net asset value, less any applicable redemption fee. REALISED PROFIT AND LOSS ON SALES OF SECURITIES The cost of securities sold is calculated on the basis of the average cost. Foreign exchange profits and losses resulting from sale of investment are taken in the statement of operations and changes in net assets in the account “Net realised profit/loss on foreign exchange”. INCOME RECOGNITION Dividend income is recorded net of withholding taxes on the ex-dividend date. Interest income is accrued on a daily basis. This is trial version www.adultpdf.com WILLERFUNDS NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2010 Page / Page 128 NOTE 3 – REMUNERATION OF THE MANAGEMENT COMPANY MANAGEMENT FEE The Management Company receives for its services a commission based on the net asset value of each sub-fund of the Fund calculated with the following annual rates: Units of Class "P" Units of Class "I" Sub-fund 0,50% Willerbond Capital $US 0,50% Willerbond European Currencies 1,50% 1,00% Willerequity Europe 1,50% 1,00% Willerequity Greater China 1,50% 1,00% Willerequity Italy 1,50% 1,00% Willerequity Japan 2,00% 1,25% Willerequity Latinamerica 1,50% 1,00% Willerequity North America 2,00% 1,25% Willerequity Russia and Eastern Europe 1,50% 1,00% Willerequity South East Asia 1,50% 1,00% Willerequity Trade Winds 1,50% 1,00% Willer Absolute Return The commission, payable quarterly, is calculated and accrued on each valuation day based on the net asset value of each sub-fund of the Fund. For units of Class "P", the Management Company may waive a portion of its fee in favour of commercialization. PERFORMANCE FEES For the management of the sub-funds investing in equities, the Management Company is also remunerated by a performance fee. This fee is based on the comparison between the performance of a sub-fund and its benchmark, during the financial year. The benchmark is defined for each sub-fund concerned in the prospectus. The performance of a sub-fund is calculated according to the evolution of its net asset value. If the performance of a sub-fund is positive and higher than its benchmark’s during the year, the variable part of the management fees (performance fees) will represent the smallest amount of the two following ones: (a) 20 % of the difference between the sub-fund performance and its reference benchmark; (b) 20% of the annual performance of the sub- fund. If the performance of a sub-fund is lower than its benchmark’s, the variable part of the management fees will be nil. If the performance of a sub-fund is positive and higher than its benchmark's during the year, this out-performance will be subjected to a provision on account of the "variable management fee" in the net asset value calculation. When a sub-fund under-performs its benchmark from one net asset value calculation to the next, provisions previously accrued will be reduced by a release of provisions, for an amount not exceeding the total accruals made during the current financial year. This is trial version www.adultpdf.com WILLERFUNDS NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2010 Page / Page 129 NOTE 3 – REMUNERATION OF THE MANAGEMENT COMPANY (CONTINUED) For the sub-fund Willer Absolute Return, the Management Company is also remunerated by a performance fee of 7.5% of the positive variation of the net asset value of the sub-fund during the financial year. This performance is calculated according to the “high watermark” principle. The "high watermark" is the highest net asset value reached at the end of a previous fiscal year. Only the performance above such "high watermark" is subject to the performance fee. If the performance of the sub-fund is positive and higher than its "high watermark" during the year, the variable management fee (performance fee) will be accrued in the NAV calculation. In case the net asset value of the sub-fund is below its "high watermark", any provision previously made shall be readjusted by the release of provisions. The provision reversals shall not exceed the accruals of current financial year. This variable management fee will be paid at the close of the financial year, if on that date the sub-fund’s net asset value is above the “high watermark”. NOTE 4 - SUBSCRIPTION TAX The Fund is governed by Luxembourg law. Pursuant to the prevailing legislation and regulations, the Fund is subject to a subscription tax (« taxe d’abonnement ») at the annual rate of 0.05 % which is payable quarterly and calculated on the basis of the net assets of each sub-fund at the end of each quarter. The net assets invested in collective investment undertakings subject to the « taxe d’abonnement » stipulated by Article 129 (3) of the amended law of 20 December 2002 are exempt from the « taxe d’abonnement ». NOTE 5 - FOREIGN EXCHANGE CONTRACTS At the date of the report, the Fund was not engaged in any foreign exchange contracts. NOTE 6 - FUTURE CONTRACTS At the date of the report, the Fund was not engaged in any future contracts. NOTE 7 WRITTEN OPTIONS ON TRANSFERABLE SECURITIES AND INDICES At the date of the report, the following open positions were held on written options: Willerequity Italy Currency Quantity Name Maturity date Strike Commitments EUR Unrealised EUR EUR -80 FTSEMIB/PUT 18/03/2011 18.000,00 3.600.000,00 12.400,00 EUR -50 FIAT/PUT 18/03/2011 15,50 387.500,00 - 3.590,00 Total 3.987.500,00 8.810,00 NOTE 8 - SECURITIES LENDING At the date of the report, the Fund was not engaged by any securities lending transactions. NOTE 9 - CHANGES IN COMPOSITION OF SECURITIES PORTFOLIO Changes in the portfolio of each sub-fund for the period of this report may be obtained upon request, free of charge, at the office of the Management Company and from the agent in charge of financial services in the different countries where the the Fund is distributed. This is trial version www.adultpdf.com WILLERFUNDS NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2010 Page / Page 130 NOTE 10 – PERFORMANCE Performances are calculated based on net asset value per unit. Past performance is no indication of current or future performance. This performance data does not take into account any commissions or costs incurred on the issue and redemption of units. Performance 2010 2009 2008 Willerbond Capital $US 0,74% -0,19% 7,86% Willerbond European Currencies 1,82% 2,49% 5,02% Willerequity North America 8,75% 25,62% -36,10% Willerequity Europe 2,55% 16,16% -39,82% Willerequity Japan 2,76% -0,13% -44,22% Willerequity South East Asia 18,78% 57,91% -47,83% Willerequity Greater China 11,80% 52,17% -44,44% Willerequity Latinamerica 12,01% 75,83% -42,67% Willerequity Russia and Eastern Europe 21,12% 108,06% -69,76% Willerequity Trade Winds 16,73% 25,59% -36,66% Willerequity Italy -2,35% 22,92% -37,29% Willer Absolute Return* 2,03% - - * launched on 17 September 2010 This is trial version www.adultpdf.com WILLERFUNDS Page / Page 131 INFORMATIONS SUPPLEMENTAIRES (non auditées) TOTAL EXPENSE RATIO ("TER") et PORTFOLIO TURNOVER RATE ("PTR") Sans commission Avec commission TER par part (en %) au 31/12/10 Catégorie de parts de performance de performance Willerbond Capital $US P 0,84% 0,84% Willerbond European Currencies P 0,85% 0,85% Willerequity North America P 1,88% 1,88% Willerequity Europe P 1,87% 2,48% Willerequity Japan P 1,90% 2,87% Willerequity South East Asia P 1,89% 2,31% Willerequity Greater China P 1,89% 2,24% Willerequity Latinamerica P 2,39% 2,39% Willerequity Russia and Eastern Europe P 2,42% 4,10% Willerequity Trade Winds P 1,89% 1,89% Willerequity Italy P 1,88% 1,88% Willer Absolute Return* P 1,86% 2,02% * Le TER ne prend pas en compte les coûts chargés au niveau des fonds sous-jacents qui ne sont pas uniformément disponibles. Le TER est annualisé à partir de la date de la première souscription. Portfolio Turnover Rate (en %) au 31/12/10 Willerbond Capital $US 143,10% Willerbond European Currencies 214,03% Willerequity North America 90,76% Willerequity Europe 635,66% Willerequity Japan 36,77% Willerequity South East Asia 35,67% Willerequity Greater China 35,85% Willerequity Latinamerica 397,81% Willerequity Russia and Eastern Europe 34,93% Willerequity Trade Winds 114,09% Willerequity Italy 183,00% Willer Absolute Return 2,50% Les TER et PTR présentés dans ce rapport sont calculés en respect de la directive émise le 16 mai 2008 par l’Association Suisse des Fonds de placement (Swiss Funds Association "SFA"). Le TER et le PTR sont calculés sur les 12 derniers mois précédant la date de ce rapport. Les frais sur transactions ne sont pas repris dans le calcul du TER. This is trial version www.adultpdf.com WILLERFUNDS Page / Page 132 SUPPLEMENTARY INFORMATION (unaudited) TOTAL EXPENSE RATIO (“TER”) and PORTFOLIO TURNOVER RATE (“PTR”) Without With TER per unit (in %) as at 31/12/2010 Class of units performance fees performance fees Willerbond Capital $US P 0,84% 0,84% Willerbond European Currencies P 0,85% 0,85% Willerequity North America P 1,88% 1,88% Willerequity Europe P 1,87% 2,48% Willerequity Japan P 1,90% 2,87% Willerequity South East Asia P 1,89% 2,31% Willerequity Greater China P 1,89% 2,24% Willerequity Latinamerica P 2,39% 2,39% Willerequity Russia and Eastern Europe P 2,42% 4,10% Willerequity Trade Winds P 1,89% 1,89% Willerequity Italy P 1,88% 1,88% Willer Absolute Return* P 1,86% 2,02% * The TER takes no account of the expenses charged at the level of underlying funds as they are not uniformly available. The TER is annualized from the date of the first subscription. Portfolio Turnover Rate (in %) as at 31/12/10 Willerbond Capital $US 143,10% Willerbond European Currencies 214,03% Willerequity North America 90,76% Willerequity Europe 635,66% Willerequity Japan 36,77% Willerequity South East Asia 35,67% Willerequity Greater China 35,85% Willerequity Latinamerica 397,81% Willerequity Russia and Eastern Europe 34,93% Willerequity Trade Winds 114,09% Willerequity Italy 183,00% Willer Absolute Return 2,50% The TER and PTR published in this report were calculated in accordance with the guidelines issued by the Swiss Funds Association “SFA” on 16 May 2008. The TER and the PTR are calculated over the last 12 months preceding the date of this report. Transaction fees are not taken into account in the calculation of TER. This is trial version www.adultpdf.com . reporting currency on the basis of the exchange rates prevailing on that date. Exchange differences are included as a separate item in the statement of operations and changes in nets assets. The. 2009. The exchange differences between the net asset value at beginning of the year converted at the exchanges rates used at 31 December 2009 and the exchange rates used at 31 December 2010 are. account “Reevaluation of opening combined NAV” in the statement of operations and changes in net assets on page 17. VALUATION OF THE SECURITIES PORTFOLIO At the closing date, the value of