GUOSEN RMB RENAISSANCE FUND (A Sub-Fund of Guosen RMB Investment Series)

GUOSEN RMB RENAISSANCE FUND (A sub-fund of Guosen RMB Investment Series) REPORTS AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 23 MARCH 2012 (DATE OF COMMENCEMENT OF OPERATIONS) TO 31 DECEMBER 2012 GUOSEN RMB RENAISSANCE FUND (A sub-fund of Guosen RMB Investment Series) Content Page Management and Administration 1 Report of the Manager 2 Report of the Trustee 3 Independent Auditor’s Report 4 - 5 Statement of Financial Position 6 Statement of Comprehensive Income 7 StatementofChangesinNetAssetsAttributabletoUnitholders 8 StatementofCashFlows 9 Notes to the Financial Statements 10 - 26 Investment Portfolio (Unaudited) 27 Statement of Movements in Investment Portfolio (Unaudited) 28 - 29 Performance Table (Unaudited) 30 GUOSEN RMB RENAISSANCE FUND (A sub-fund of Guosen RMB Investment Series) MANAGEMENT AND ADMINISTRATION Directors of the Manager Trustee and Registrar Li Pak Wang, Daniel BOCI-Prudential Trustee Limited Yang Jianxin 12/F & 25/F, Citicorp Centre, Xiong Li Ting 18 Whitfield Road, Causeway Bay, Hong Kong Manager Legal Advisor Guosen Securities (HK) Asset Management Deacons Company Limited 5/F, Alexandra House, 8/F, Li Po Chun Chambers, 18 Chater Road, 189 Des Voeux Road Central, Central, Hong Kong Hong Kong Custodian Bank of China (Hong Kong) Limited 14/F, Bank of China Tower 1 Garden Road Hong Kong RQFII Custodian Bank of China Limited No. 1, Fuxingmen Nei Dajie Beijing 100818 China Auditor PricewaterhouseCoopers 21/F, Edinburgh Tower 15 Queen’s Road Central Hong Kong - 1 - GUOSEN RMB RENAISSANCE FUND (A sub-fund of Guosen RMB Investment Series) REPORT OF THE MANAGER Performance Review Guosen RMB Renaissance Fund was launched on 23 March 2012. The fund invests in mainland China under the RQFII regime with RMB 900 million quota owned by Guosen Securities (Hong Kong) Financial Holdings Co., Ltd. As of 31 December 2012, the net asset value per share of the Fund was 100.44 (Class I), up 4.19% MoM and up 0.44% since launch. We have mainly invested in CBs, A-shares and money market funds since launch. The equity market in China rebounded strongly in December 2012. We liquidated most of the positions in A-shares and CBs to lock in profits at end of December 2012. Review and outlook of the Market China’s economy showed more signs of stabilization in the fourth quarter of 2012, with moderate cyclical uptrend ahead. However, we do not expect the inflation to rebound quickly because of the relatively weak demand recovery. We estimate the CPI in 2013 not higher than 3%. The PBoC has held the interest rates and RRR unchanged throughout 2H 2012. In our view, the interest rate down cycle has been over, but we still expect a moderate YoY increase of total bank loans in 2013. The pro-growth policy will remain to support the economy. Internationally, the fiscal cliff in US was avoided by the two parties in the last minute as expected, while the Euro zone debt crisis was eased recently. The stabilizing mechanisms including ESM will effectively lower the risk of disordered exit and systematic crisis. After the QE3 of Fed and OMT of ECB, the BOJ may further enlarge its balance sheet. The huge monetary easing of major currencies will provide the financial market with superfluous liquidity. The emerging markets including China will be under pressure of capital inflow again. As a whole, we expect China market to have relatively good performance in 2013. The equity market may continue to rebound and outperform the fixed income assets despite the volatility throughout the year. Guosen Securities (HK) Asset Management Company Limited 26 April 2013 - 2 - -J GUOSEN RMB RENAISSANCE FUND J (Asub-fund of Guosen RMBInvestment Series) REPORT OF THE TRUSTEE J We hereby confirm that, in our opinion, the Manager, Guosen Securities (HK) Asset Management Company Limited, has, in all material respects, managed Guosen RMB Renaissance Fund for the year th J ended 31st December 2012 in accordance with the provisions of the Trust Deed dated 12 January 2012. On behalfof J BOCI- Prudential Trustee Li . d, the Trustee 26 April 2013 J J ] ] ] ] ] J • J INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF GUOSEN RMB RENAISSANCE FUND (A sub-fund of Guosen RMB Investment Series) Report on the Financial Statements We have audited the financial statements of Guosen RMB Renaissance Fund (the “Sub-Fund”), a sub-fund of Guosen RMB Investment Series (the “Trust”) set out on pages 6 to 26, which comprise the statement of financial position as at 31 December 2012, and the statement of comprehensive income, statement of changes in net assets attributable to unitholders and statement of cash flows for the period from 23 March 2012 (date of commencement of operations) to 31 December 2012, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements The Trustee and the Manager (the “Management”) of the Sub-Fund are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards, and are responsible for ensuring that the financial statements have been properly prepared in accordance with the relevant disclosure provisions of the Trust Deed dated 12 January 2012 (the “Trust Deed”), and the relevant financial statements disclosure provisions specified in Appendix E of the Code on Unit Trusts and Mutual Funds established by the Securities and Futures Commission of Hong Kong (the “SFC Code”), and for such internal control as the Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Sub-Fund’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Sub- Fund’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. - 4 - ) INDEPENDENT AUDITOR'S REPORT TO THE UNITHOLDERS OF GUOSEN RMB RENAISSANCE FUND (A sub-fund ofGuosen RMB Investment Series) (CONTINUED) J Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Sub-Fund as at 3 1 December 2 012 , and of its financial performance and its cash flows for the period from 23 March 2012 (date of commence ment of operations) to 3 1 December 2012 in ] accordance with Intern ational Financial Reporting Standards. Emphasis ofMa tter ] We draw att ention to Note 3 to the financial statements which indicates that the Management considers that the enforcement of PRC tax on gains on A-Shares , debt securities and collective investment schemes and interest income arising from debt securities is uncertain as at the date of approval of these financial statements and that the Management has exercised significant J judgment in their assessment of the tax charge and the relevant provision included in the financial statements of the Sub-Fund as at 3 1 December 2012. Our opinion is not qualified in ] respect of this matter. Repor t on Other Legal a nd Regulatory Disclosure Requirements ] We report that the financial statements have been properly prepared in accordance with the relevant disclosure provisions of the Trust Deed and the relevant financial statements disclosure provisions specified in the SFC Code. :] Other Matters This report, including the opinion, has been prepared for and only for you, as a body, and for no other purp ose. We do not assume responsibility towards or accept liability to any other person :1 for the contents of this report. ] PricewaterhouseCoopers Certified Public Accountants J Hong Kong, 2 6 April 2013 J J ] ] - 5 - J GUOSEN RMB RENAISSANCE FUND J (Asub-fund of Guosen RMBInvestment Series) STATEMENT OF FINANCIAL POSITION J AS AT 31 DECEMBER 2012 Note RMB ASSETS J Investments 4(a) 175,936,220 Dividend and interest receivable 646,427 Prepayments and other assets 261,956 J Cash and cash equivalents 4(d) , 729,964,674 TOTAL ASSETS J LIABILITIES Accrued expenses and other payables 1,454,402 Provision for taxation 9 2,078,436 J TOTAL LIABILITIES ------------------- ] NET ASSETS ATTRIBUTABLE TO UNITHOLDERS ] J ] ] ] • ] l oved by the Trustee and the Manager on 26 April 2013. l kt~ .-ztil .~ i. .................... t<e1{.,- . l Trustee Manager J J The notes on pages 10 to 26 form an integral part of these financial statements. ] -6- GUOSEN RMB RENAISSANCE

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