LINDE PA VALUE FUND SOCIETE D'INVESTISSEMENT A CAPITAL VARIABLE INCORPORATED IN LUXEMBOURG UNAUDITED SEMI-A?"UAL REPORT FOR THE PERIOD AS AT JUNE 30,2003 No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current prospectus accompanied by the latest annual report and the most recent semi-annual report, if published thereafter.
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SOCIETE D'INVESTISSEMENT A INCORPORATED IN LUXEMBOURG
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LINDE PA VALUE FUND
SOCIETE D'INVESTISSEMENT A CAPITAL VARIABLE INCORPORATED IN LUXEMBOURG
UNAUDITED SEMI-A?"UAL REPORT FOR THE PERIOD AS AT JUNE 30,2003
No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current prospectus accompanied by the latest annual report and the most recent semi-annual report, if published thereafter.
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LINDE PARTNERS VALUE FUND SICAV
3 f JtllL. 2003
BOARD OF DIRECTORS
Chairman:
Directors:
Registered Ofice:
Investment Adviser:
Custodian, Administrative, Corporate, Domiciliary and Paying Agent:
Registrar and Trunsjer Agent:
Distributor:
Independent Auditors:
Mr. Bernard HERMAN Senior Vice President Dexia Banque Intemationale A Luxembourg, Luxembourg
Mr. Per LORENZEN Attach6 de Direction Dexia Asset Management, Luxembourg
Mr. Claus LINDE Managing Director and Director Linde Partners Asset Management S.A., Strassen
Mr. Peter ANDERSEN Vice President Dexia Banque Internationale A Luxembourg, Luxembourg
Mr. Per Henrik JENSEN Vice President Dexia Banque Internationale A Luxembourg, Luxembourg
The annual general meeting of Shareholders will be held at the registered office of the SICAV or at such other place in Luxembourg on the second Wednesday of the month of May in each year at 11.30 am., or if any such day is not a bank Business Day in Luxembourg, on the next following bank Business Day in Luxembourg. The first annual general meeting was held in 2002.
Notices of all general meetings are sent to the holders of registered shares by post at least 8 days prior to the meeting at their addresses shown on the register of Shareholders. Such notices include the agenda and specify the time and place of the meeting and the conditions of admission. They also refer to the rules of quorum and majority required by Luxembourg law and laid down in Articles 67 and 67-1 of the Law of August 10, 1915 on commercial companies (as amended) and in the Articles of Incorporation of the SICAV.
Audited annual reports are published within 4 months following the end of the accounting year and unaudited semi- annual reports are published within 2 months following the period to which they refer.
The annual reports are made available at the registered office of the SICAV during normal business hours. The SICAV's accounting year ends on 3 1" December each year. The accounts of the SICAV are held in EUR.
As from June 16, 2003, the net asset value per share of each sub-fund is determined for each class on a daily basis instead of a weekly basis.
A detailed schedule of portfolio changes for each Sub-Fund is available fi-ee of charge upon request at the registered office of the SICAV.
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LINDE PARTNERS VALUE FUND STCAV
DIRECTOR’S REPORT
The first half of 2003 has really been a roller coaster ride with a lot of volatility and uncertainty. Interest rates continued to fall to levels not seen for decades but still completely overshadowed by worries about the world economy, war in Iraq and company earnings.
The average stock market measured by MSCI World grew by 1.9% and MSCI Japan fell by 5.6% both calculated in EUR.
The best performing sector in MSCI World was IT with a positive return of 7.8%. The worst performing sector was Consumer Stables with a negative return of 7.2%.
All 3 sub-funds showed negative returns over the period. Bearing our very conservative investment approach in mind, this is not a huge surprise with the above-mentioned development in MSCI.
Linde Partners Value Fund - Global Linde Partners Value Fund - Blue Chip Value
Linde Partners Value Fund - Japan
-3.3% -3.6%
-6.1%
MSCI World +1.9% +1.9%
MSCI Japan -5.6%
We (still) strongly believe that Japan will be t.2 place to be in .-.e years to come, with politics- reforms and takeovers on the agenda. This will again make Japan a favored place to invest.
We believe that we probably have seen the worst in the stock markets and that the high quality companies we have in the 3 funds will be able to post a positive return in 2003. On the other hand we do not expect a roaring bull marked like we saw in the late 1990s.
Most of our investments are currently trading at 50% of “fair value” with no or low net debt on the balance sheet and positive eamings expectations for 2003.
We look forward to the remainder of the year with confidence.
Luxembourg, July 18,2003
The figures stated in this report are historical and not necessarily indicative at future performance.
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LINDE PARTNERS VALUE FUND STCAV
COMBINED STATEMENT OF NET ASSETS AS AT JUNE 30,2003 (expressed in EUR)
Linde Partners Linde Partners Linde Partners Combined Value Fund - Value Fund - Value Fund -
Global Japan Blue Chip Value
ASSETS
Investments in securities at market value (note 2a) Cash at bank Amounts receivable on subscriptions lnterest and dividends receivable, net Formation expenses, net (note 2e) Other assets
LIABILITIES
Amounts payable on redemptions Advisory commission payable (note 3) Taxes and expenses payable
TOTAL NET ASSET VALUE
Number of shares outstanding - Capitalisation - Distribution
Net asset value per share - Capitalisation - Distribution
ECONOMIC DMSION OF INWSTMENTS AS AT JUNE 30,2003 (expressed as a percentage of net assets)
Pharmaceuticals Food and non-alcoholic drinks Beverages Retail Apparel Healthcare products Machinery diversified Chemicals Electrical compo & equipment Hand machine tools Cosmetics personal care Building materials and trade Packaging & containers Leisure time
LINDE PARTNERS VALUE FUND -JAPAN (expressed in EUR)
STATEMENT OF INVESTMENTS AS AT JUNE 30,2003
Description Quantity Currency Acquisition cost Evaluation % of net assets
TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING
SHARES
JAPAN ASAHI BREWERIES ASAHI BROADCASTING C O W CHARLE CO LTD CHUO WAREHOUSE CO LTD CHUOH PACK INDUSTRY CO LTD DAIICHI PHARMAC. CO LTD DATNTPPON PHARMACEUTICAL CO DENKYOSHA CO LTD EISAl CO. LTD FAMILYMART CO LTD FUJITEC CO FUJIX LTD ICHIKAWA CO LTD IT0 EN LTD
KIKKOMAN COW. KIRlN BREWERY CO. LTD MAEZAWA KASEI INDUSTRIES CO NISSUI PHARMACEUTICAL CO LTD ON0 PHARMACEUTICAL CO SANKYO CO. LTD TANABE SEIYAKU CO. LTD TOY0 TEC CO LTD WAKTTA + CO LTD WORLD YAMANOUCHI PHARMACEUTICAL YONEX CO LTD YUSHIRO CHEMICAL INDUSTRY CO
GEOGRAPHIC DIVISION OF INVESTMENTS AS AT JUNE 30,2003 (expressed as a percentage of net assets)
Japan
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69.97 69.97 %
LINDE PARTNERS VALUE FUND SICAV
LINDE PARTNERS VALUE FUND - JAPAN
ECONOMIC DIVISION OF INVESTMENTS AS AT JUNE 30,2003 (expressed as a percentage of net assets)
Pharmaceuticals Beverages Building materials and trade Retail Media Distribution wholesale Apparel Food and non-alcoholic dr inks Storage warehousing Commercial services Textiles and garments Chemicals Packaging & containers Leisure time
NOTES TO THE FINANCIAL STATEMENTS AS AT JUNE 30,2003
Note 1 - General
LINDE PARTNERS VALUE FUND (the “SICAV”) is an open-ended investment company registered on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 30ih March 1988 on collective investment undertakings (the “law”). The STCAV was incorporated on September 12, 2001.
The investment objective of the SICAV is to manage the assets of each Sub-Fund for the benefit of its shareholders and to achieve a long-term capital growth by investing in a broad range of transferable securities.
The articles of Incorporation of the SICAV were published in the Memorial, “Recueil des Societes et Associations of Luxembourg”, on October 15, 2001. The SICAV is registered with the Registre de Commerce, Luxembourg under number B-83 606.
The SICAV is incorporated in Luxembourg under the laws of the Grand Duchy of Luxembourg as a “Societe Anonyme” qualifying as a “Societe d’Investissement a Capital Variable” (“SICAV”) with multiple Sub-Funds. The “umbrella” structure offers investors not only the advantage of being able to choose between different Sub-Funds but also of being able to switch between these Sub-Funds; furthermore, within each Sub-Fund, each investor can choose between capitalisation of the Sub-Fund’s earnings and distribution thereof in the form of dividends, by selecting either capitalisation shares or distribution shares.
As at June 30, 2003, three Sub-funds are activated:
- LINDE PARTNERS VALUE FUND - Global denominated in Euro (hereafter called “Global”)
- LINDE PARTNERS VALUE FUND - Japan denominated in Euro (hereafter called “Japan”)
- LINDE PARTNERS VALUE FUND - Blue Chip Value denominated in Euro (hereafter called “Blue Chip Value”)
Note 2 - Significant accounting policies
The financial statements are prepared in accordance with Luxembourg regulations relating to undertakings for collective investment.
a) Valuation of investments
The basic accounting principles for determining the Net Asset Value of the Sub-Funds are set forth in the Articles of Incorporation, the material provisions of which provide as follows:
(1) the value of any cash on hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received are deemed to be the full amount thereof, unless in any case the same is unlikely to be paid or received in full, in which case the value thereof is arrived at after making such discount as the Directors may consider appropriate in such case to reflect the true value thereof;
(2) the value of securities which are quoted or dealt in on any stock exchange is in respect of each security, the last known price, and where appropriate, the middle market price on the stock exchange which is normally the principle market for such security;
(3) securities dealt in on another Regulated Market are valued in a manner as near as possible to that described in the preceding paragraph;
(4) in the event that any of the securities held in any portfolio on the relevant Valuation Day are not quoted or dealt in on a stock exchange or another Regulated Market or, for any of the securities, no price quotation is available, or if the price as determined pursuant to sub-paragraphs (2) and/or (3) is not in the opinion of the Directors representative of the fair market value of the relevant securities, the value of such securities is determined based on the reasonably foreseeable sales price determined prudently and in good faith;
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LINDE PARTNERS VALUE FUND SICAV
NOTES TO THE FINANCIAL STATEMENTS AS AT JUNE 30,2003 (continued)
(5) all other assets are valued at their respective fair values as determined in good faith by the Directors in accordance with generally accepted valuation principles and procedures.
b) Net realised profit / (loss) on sales of investments
The net realised profit or loss on sales of investments is determined on the basis of the average cost of invest- ments sold.
c) Conversion of foreign currencies
The SICAV maintains its accounting records in EUR and its financial statements are expressed in this currency.
Assets and liabilities expressed in currencies other than EUR are translated into EUR at the exchange rates prevailing as at June 30, 2003.
Income and expenses in currencies other than EUR are translated into EUR at the exchange rates prevailing at the transaction date.
The resulting profits and losses on translation are included in the Statement of Changes in Net Assets.
d) Combined financial statements of the SICAV
The combined statements of the SICAV are drawn up in Euro. Each item of the statement of net assets and state- ment of changes in net assets at June 30, 2003 are equal to the sum of the corresponding items in the financial statements of each Sub-Fund.
e) Formation expenses
The STCAV bears the costs of its establishment, including the costs of introduction with the regulatory authori- ties, notarial charges, the cost of preparing and printing the Prospectus and share certificates, and any other fees and costs incurred in connection with the establishment and launching of the SICAV.
These costs are amortised over the 5 first financial years on the assets of the Sub-Funds existing at the setting up of the SJCAV.
Costs in relation with the subsequent launching of new Sub-Funds are amortised on the assets of these new Sub- Funds over 5 financial years.
Note 3 - Investment advisory fees and performance fees
The Investment Adviser receives from the SICAV a monthly fee of 1.20% p.a. calculated on the average net asset value of Global, Japan and Blue Chip Value payable within the first ten business days after the last day of each month.
In addition, an annual performance fee is payable to the Investment Adviser mentioned above and is calculated as a percentage per annum of the increase in the net asset value of the Sub-Funds over the relevant financial year (excluding this performance fee) and adjusted for any proceeds from subscriptions or amounts paid out for redemp- tions.
Performance of the Sub-Funds means the variation in percentages of the net asset value per share determined with reference to the amounts and prices of the last Valuation Day in each financial year compared to the net asset value per share determined on the first Valuation Day of the same financial year.
The performance fees are equal to 10% of such performance.
The performance fee (if any) is accrued in respect of the Sub-Funds on each Valuation Day but is paid within 10 Business Days after the relevant financial year-end.
Any negative performance fee for a financial year is carried over into the succeeding year(s) to offset any positive performance in that subsequent period.
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LINDE PARTNERS VALUE FUND SICAV
NOTES TO THE FINANCIAL STATEMENTS AS AT JUNE 30,2003 (continued)
Note 3 - Investment advisory fees and performance fees (continued) The performance fee which is effectively calculated at the end of each financial year only is provisioned at each Net Asset Value calculation so as to be faithfully reflected at each Net Asset Value calculation.
Note 4 - Subscription tax Under current law and practice, the SICAV is not liable to any Luxembourg income tax, nor are dividends paid by the SICAV liable to any Luxembourg withholding tax. However, the SICAV is liable in Luxembourg to a tax of 0.05% per annum of its net assets, such tax being payable quarterly and calculated on the basis of the net assets at the end of the relevant quarter.
Such tax is not applicable in respect of the portion of the assets of the SICAV (if any) invested in other Luxembourg collective investment undertakings.
No stamp duty or other tax is payable in Luxembourg on the issue of shares in the STCAV except a tax, payable once only, of EUR 1,239.47 which was paid upon incorporation.
Note 5 - Depositary bank commission The depositary bank is entitled to receive from the SICAV a commission payable quarterly in arrears, expressed as a percentage at the average net assets of the SICAV. As from October 28, 2002 the minimum was increased from EUR 6,500 to EUR 10,000 per year for the whole SICAV.
Note 6 - Distribution fees The distributor receives a quarterly fee applicable on the average net assets of each Sub-Fund that it has contributed to the SICAV at the maximum annual rate of 1%.