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2004 Additonal Information

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2004 Additonal Information Annual Report 2004 Additional Information The mission of the Caisse is to receive moneys on deposit as provided by law and manage them with a view to achieving optimal return on capital within the framework of depositors’ investment policies while at the same time contributing to Québec’s economic development. Annual Report 2004 – Additional Information I. Composite performance summary 1. Auditors’ Report ................................................................................................. 2 2. General Notes .................................................................................................... 3 3. Short-term Investments ....................................................................................... 5 4. Real Return Bonds……………………………………………………………………………………….. 7 5. Mortgages ......................................................................................................... 9 6. Bonds ..............................................................................................................11 7. Fixed Income - bonds .........................................................................................13 8. Canadian Equity ................................................................................................15 9. Canadian Equity Quoted Markets .........................................................................17 10. U.S. Equity (Hedged) .........................................................................................19 11. U.S. Equity (Unhedged) .......................................................................................21 12. U.S. Equity Quoted Markets ................................................................................23 13. EAFE Foreign Equity (Hedged) ............................................................................25 14. EAFE Foreign Equity (Unhedged) ........................................................................27 15. EAFE Foreign Equity Quoted Markets....................................................................29 16. Emerging Markets Equity .....................................................................................31 17. Emerging Markets Equity Quoted Markets .............................................................33 18. Québec International...........................................................................................35 19. Investments and Infrastructures............................................................................37 20. Private Equity ....................................................................................................39 21. Real Estate........................................................................................................41 22. Commodity Financial Instruments .........................................................................44 23. Hedge Fund Partnership Units .............................................................................46 24. Balanced Fund ..................................................................................................48 II. Financial statistics and review 1. Returns on Specialized Portfolios by Market Indexes or recognized Indexes................ 2 2. Changes in depositors’ holdings ........................................................................... 3 3. Breakdown of depositors’ holdings ........................................................................ 7 4. Annual interest or income paid out on average deposits .......................................... 8 5. Summary of investments....................................................................................... 9 6. Breakdown of investments ..................................................................................10 7. Real Estate Group – Mortgages of $5 million and over ............................................12 8. Investments in shares and bonds of publicly traded companies.................................16 9. Investments in shares and bonds of privately held companies ..................................94 10. Statement of real estate holdings ....................................................................... 112 11. Statement of properties held for resale................................................................ 114 III. Code of ethics and professional conduct I. Composite performance summary Caisse de dépôt et placement du Québec for the period ended December 31, 2004 AIMR-PPS® compliant presentation Samson Bélair/Deloitte & Touche s.e.n.c.r.l. 1, Place Ville Marie Suite 3000 Montréal QC H3B 4T9 Canada Tel: (514) 393-5321 Fax: (514) 390-4111 www.deloitte.ca AUDITORS’ REPORT To the Directors of Caisse de dépôt et placement du Québec We have audited the accompanying Schedules of Composites (the “Schedules”) of Caisse de dépôt et placement du Québec – Depositors account (or the “Caisse”) as at December 31, 2004. The determination of the accounts included in the Schedules and the calculation of their performance in accordance with the Association for Investment Management and Research Performance Presentation Standards (AIMR- PPS®), the U.S. and Canadian version of the Global Investment Performance Standards (GIPS®), is the responsibility of the Caisse’s management. Our responsibility is to express an opinion of the compliance of the Schedules and the performance calculations with AIMR-PPS® based on our audit. We conducted our audit in accordance with the standards for assurance engagements established by the Canadian Institute of Chartered Accountants, and in accordance with the requirements for firm-wide and Performance Examination verifications defined by the AIMR-PPS®, the US and Canadian version of GIPS®. Those standards require that we plan and perform our audit to obtain reasonable assurance whether the Schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the information presented and assessing the significant estimates made by management. In our opinion, the Schedules present fairly, in all material respects, the performance calculations for the years or periods ended December 31, 2004 as referred to above in accordance with the AIMR-PPS®, the U.S. and Canadian version of GIPS®. Chartered Accountants Toronto, Ontario February 17, 2005 General Notes 1. Presentation of the firm The Caisse de dépôt et placement du Québec (the Caisse) is a financial institution that manages funds for pension plans and public and private insurance plans (the Depositors). The Caisse invests in the large capital markets and under the form of private investments and real estate. The Depositors' assets were $102.4 billion as at December 31st, 2004. This document presents the performances related to the funds managed by the Caisse for the Depositors. 2. Compliance statement The Caisse has prepared and presented this report in compliance with the Performance Presentation Standards of the Association for Investment Management and Research (AIMR-PPS®), the U.S. and Canadian version of the Global Investment Performance Standards (GIPS®) for the period of January 1st, 1995 to December 31st, 2004. The CFA Institute (formely known as AIMR) has not been involved with the preparation or review of this report. The Caisse has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Deloitte & Touche LLP has audited that the Schedules of Composites and performance calculations of the Caisse de dépôt et placement du Québec composites are in accordance with the Association for Investment Management and Research Performance Presentation Standards (AIMR-PPS®), the U.S. and Canadian version of the Global Investment Performance Standards (GIPS®). This audit covers the period from January 1st, 1998 to December 31st, 2004, except for the composites created at the end of 2003. For these composites, the audit covers the period from January 1st, 1999 to December 31st, 2004. Results reflect past performance and are no indication of future returns. 3. Performance calculations Performance calculations are based on monthly valuations. The modified Dietz formula is used to calculate returns. Any deposits or withdrawals are made on the first day of the month. Thus returns are not in any way distorted by cash flows occurring during the month concerned. Returns are presented gross of investment and management fees. Each discretionary fee-paying portfolio is included in at least one composite. These composites are valued according to trade date and returns are calculated monthly. Returns are then linked geometrically to produce quarterly and annual returns. Total returns, including realized and unrealized gains plus income, are used to calculate performance. These returns include any income generated on cash or cash equivalents. Interest income is accrued and is included in the market value used to calculate returns. Dividend income is accrued as of its ex-dividend date. The fair value of fixed-income securities is determined by means of valuation methods used in capital markets, such as the annualization of future cash flows at the current interest rate and the closing prices of the major brokers as well as those provided by recognized financial institutions. In addition, certain valuations are made according to commonly used valuation methods or on the basis of similar arm's-length transactions. The fair value of shares traded on a stock exchange is determined from the closing prices on the major stock exchanges as well as those provided
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