REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR … · REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR...

BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016

BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund)

REPORTS AND FINANCIAL STATEMENTS Contents Pages Management and administration ................................................................................................... 1 Report of the Manager to the Unitholders ..................................................................................... 2 Report of the Trustee to the Unitholders ....................................................................................... 3 Independent Auditor’s Report ........................................................................................................ 4 – 6 Statement of Financial Position ..................................................................................................... 7 Statement of Comprehensive Income ............................................................................................ 8 Statement of Changes in Net Assets Attributable to Unitholders................................................. 9 Statement of Cash Flows ................................................................................................................. 10 Notes to the Financial Statements .................................................................................................. 11 – 26 Investment Portfolio (Unaudited) .................................................................................................. 27 Statement of Movement in Investment Portfolio (Unaudited) ..................................................... 28 – 29 Performance Table (Unaudited) ..................................................................................................... 30

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) MANAGEMENT AND ADMINISTRATION Manager Directors of the Manager BOCOM International Asset Management Limited TAN Yueheng 9/F, Man Yee Building CHENG Chuange 68 Des Voeux Road Central Central Hong Kong Trustee and Registrar Sub-custodian Bank of Communications Trustee Limited Citibank, N.A. 1/F, Far East Consortium Building 10/F, Two Harbour Front, 121 Des Voeux Road Central 22 Tak Fung Street, Central Hunghom, Kowloon, Hong Kong Hong Kong Legal Counsel to the Manager Deacons 5/F, Alexandra House 18 Chater Road Central Hong Kong Auditor PricewaterhouseCoopers 21/F, Edinburgh Tower 15 Queen’s Road Central Hong Kong

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A sub-fund of BOCOM International Fund) REPORT OF THE MANAGER TO THE UNITHOLDERS Market Review Some of Asia-Pacific equity markets recorded gains in the Year of 2016. The Pakistan stock market had the best performance with Karachi Stock Exchange KSE100 Index point surging 45.7% followed by the bourses of Thailand and Indonesia, whose the Stock Exchange of Thailand SET Index and Jakarta Stock Exchange Composite Index rose 19.8% and 15.3% respectively in local terms. The China’s stock market underperformed peers in the region, with Shenzhen Stock Exchange Composite Index and Shanghai Stock Exchange Composite Index going down by 14.7% and 12.3% respectively in terms of index points. In Hong Kong, the Hang Seng Index closed the year at 22,000 points, up 0.4% for the year, and the Hang Seng China Enterprises Index decreased by 2.8% to 9,395 points over the year. Within the Hong Kong stock market, the real estate, materials and consumer discretionary sectors were the better performers while the financials and health care sectors lagged. Portfolio Review The fund price of the Sub-fund ended the year at HKD 6.839 as Trustee’s report of 30 December 2016, dropping about 12.4 percent for the year, despite of a rally of fund price of 4.5% from the end of first quarter to the end of third quarter of the year that helped to mitigate the negative performance in of the first quarter of the year. In the first quarter of Year 2016, the Sub-fund added exposure to the utilities(Hong Kong), health care and consumer discretionary sectors shortly before the prices of utilities(Mainland China) and telecommunications stocks started to correct beginning from July. Our overweight allocation to financials, information technology and consumer discretionary stocks became the main performance driver in the Year 2016.

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A sub-fund of BOCOM International Fund) REPORT OF THE TRUSTEE TO THE UNITHOLDERS TO THE UNITHOLDERS OF BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (THE “SUB-FUND”) We hereby confirm that, in our opinion, the Manager of the Sub-Fund has, in all material respects, managed the Sub-Fund in accordance with the provisions of the Trust Deed dated 27 October 2010 and all its supplemental deeds for the year ended 31 December 2016. For and on behalf of Bank of Communications Trustee Limited 21 April 2017

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INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (THE “SUB-FUND”) (A Sub-fund of BOCOM International Fund) Opinion

What we have audited The financial statements of BOCOM International Dragon Core Growth Fund (the “Sub-Fund”), a sub-fund of BOCOM International Fund, set out on pages 7 to 26, which comprise:

• the statement of financial position as at 31 December 2016;

• the statement of comprehensive income for the year then ended;

• the statement of changes in net assets attributable to unitholders for the year then ended;

• the statement of cash flows for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies. Our opinion In our opinion, the financial statements give a true and fair view of the financial position of the Sub-Fund as at 31 December 2016, and of its financial transactions and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Basis for Opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Sub-Fund in accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Other Information

The Trustee and the Manager (the “Management”) of the Sub-Fund are responsible for the other information. The other information comprises all the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (THE “SUB-FUND”) (CONTINUED) (A Sub-fund of BOCOM International Fund) Other Information (Continued) If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Management for the Financial Statements The Management of the Sub-Fund is responsible for the preparation of the financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA, 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. In preparing the financial statements, the Management of the Sub-Fund is responsible for assessing the Sub-Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management either intends to liquidate the Sub-Fund or to cease operations, or have no realistic alternative but to do so. In addition, the Management of the Sub-Fund is required to ensure that the financial statements have been properly prepared in accordance with the relevant disclosure provisions of the Trust Deed dated 27 October 2010, as amended (the “Trust Deed”), and Appendix E of the Code on Unit Trusts and Mutual Funds issued by the Hong Kong Securities and Futures Commission (the “SFC Code”). Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to assess whether the financial statements of the Sub-Fund have been properly prepared, in all material respects, in accordance with the relevant disclosure provisions of the Trust Deed and the SFC Code. As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.

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INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (THE “SUB-FUND”) (CONTINUED) (A Sub-fund of BOCOM International Fund)

Auditor’s Responsibilities for the Audit of the Financial Statements (Continued)

• Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Sub-Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Sub-Fund to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Matters under the relevant disclosure provisions of the Trust Deed and the SFC Code In our opinion, the financial statements have been properly prepared, in all material respects, in accordance with the relevant disclosure provisions of the Trust Deed and the SFC Code. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 21 April 2017

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 Note 2016 2015 HKD HKD Assets Financial assets at fair value through profit or loss 3(a) 178,242,770 205,584,815 Amounts due from brokers - 796,362 Interest receivable - 211,913 Dividend receivable - 149,760 Cash and cash equivalents 3(d) 9,393,990 50,698,043 ────────── ──────────

Total assets 187,636,760 257,440,893 ---------------- ---------------- Liabilities Amounts due to brokers - 711,625 Trustee fee payable 9(b) 53,809 70,514 Management fee payable 9(a) 240,318 322,841 Redemption payable 9(c) 67,810 41,647,350 Accrued expense and other payables 259,306 258,403 ────────── ──────────

Total liabilities 621,243 43,010,733 ---------------- ---------------- Equity Net assets attributable to unitholders 8 187,015,517 214,430,160 ══════════ ══════════

Approved by the Trustee and the Manager on 21 April 2017. …………………………..…………………………..…… …………………………..…………………………..…… For and on behalf of the Trustee For and on behalf of the Manager Bank of Communications Trustee Limited BOCOM International Asset Management Limited The notes on pages 11 to 26 form an integral part of these financial statements.

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 Note 2016 2015 HKD HKD Income Interest income 183,180 282,935 Dividend income 3,666,385 3,642,402 Net loss on investments 6 (23,911,402) (93,024,953) ───────── ─────────

Total income (20,061,837) (89,099,616) -------------- -------------- Expenses Management fee 9(a) 2,924,836 2,733,930 Trustee fee 9(b) 653,770 649,984 Sub-custodian fee 99,101 190,426 Audit fee 203,482 192,346 Transaction costs 9(d) 1,691,685 7,627,680 Bank charges 5,060 6,075 Legal and professional fees 27,401 14,886 Other expenses 18,650 46,610 ───────── ─────────

Total operating expenses 5,623,985 11,461,937 -------------- -------------- Operating loss (25,685,822) (100,561,553) Withholding taxes (111,616) (155,000) ───────── ─────────

Total comprehensive income (25,797,438) (100,716,553) ═════════ ═════════

The notes on pages 11 to 26 form an integral part of these financial statements.

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE YEAR ENDED 31 DECEMBER 2016 Note 2016 2015 HKD HKD Net assets attributable to unitholders at the beginning of the year 214,430,160 68,184,154

---------------- ---------------- Proceeds from subscription of units 89,656 428,562,147 Payments on redemption of units (1,706,861) (181,599,588) ────────── ──────────

Net (decrease)/increase from unit transactions (1,617,205) 246,962,559 ---------------- ---------------- Total comprehensive income for the year (25,797,438) (100,716,553) ---------------- ---------------- Net assets attributable to unitholders at the end of the year 8 187,015,517 214,430,160

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016 2016 2015 HKD HKD Operating activities Total comprehensive income for the year (25,797,438) (100,716,553) Adjustment for: Dividend income (3,666,385) (3,642,402) Interest income (183,180) (282,935) Withholding taxes 111,616 155,000 ───────── ──────────

Operating cash flows before working capital changes (29,535,387) (104,486,890) Change in operating assets and liabilities Decrease/(increase) in financial assets at fair value through profit or loss 27,342,045 (143,257,675)

Decrease/(increase) in amounts due from brokers 796,362 (320,031) Decrease in amounts due to brokers (711,625) (1,557,819) (Decrease)/increase in trustee fee payable (16,705) 38,870 (Decrease)/increase in management fee payable (82,523) 230,625 Increase/(decrease) in accrued expense and other payables 903 (42) ───────── ──────────

Cash used in operating activities (2,206,930) (249,352,962) Interest received 395,093 129,426 Dividend received 3,816,145 3,492,642 Withholding taxes paid (111,616) (155,000) ────────── ──────────

Cash inflow/(outflow) from operating activities 1,892,692 (245,885,894) ---------------- ---------------- Financing activities Proceeds from issue of units 89,656 428,562,147 Payments on redemption of units (43,286,401) (139,952,238) ────────── ──────────

Cash (outflow)/inflow from financing activities (43,196,745) 288,609,909 ---------------- ---------------- Increase in cash and cash equivalents (41,304,053) 42,724,015 Cash and cash equivalents at beginning of the year 50,698,043 7,974,028 ───────── ─────────

Cash and cash equivalents at end of the year 9,393,990 50,698,043 ═════════ ═════════

Analysis of balances of cash and cash equivalents Bank balances 9,393,990 50,698,043 ═════════ ═════════


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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A Sub-fund of BOCOM International Fund) NOTES TO THE FINANCIAL STATEMENTS

1 General information

BOCOM International Fund (the “Trust”) is an umbrella unit trust governed by its Trust Deed dated 27 October 2010, as amended (the “Trust Deed”) made between BOCOM International Asset Management Limited as the Manager (the “Manager”) and Bank of Communications Trustee Limited as the Trustee (the “Trustee”). The terms of the Trust Deed are governed by the law of Hong Kong. The Trust is authorised by the Securities and Futures Commission of Hong Kong (the “SFC”) under 104(1) of the Hong Kong Securities and Futures Ordinance. BOCOM International Dragon Core Growth Fund (the “Sub-Fund”) is one of the sub-fund under the Trust Fund available for investment as at 31 December 2016. The date of inception of BOCOM International Dragon Core Growth Fund was 27 October 2010. The Sub-Fund is also registered as eligible Collective Investment Scheme under the Capital Investment Entrance Scheme in 2012. The Sub-Fund seeks to deliver long-term capital growth through investing at least 70% of its latest available net asset value in H-shares, red-chips, and other companies listed on the Hong Kong Stock Exchange which have considerable interests in the Greater China region (inclusive of Mainland China, Hong Kong, Macau and Taiwan). The Manager is owned by BOCOM International Holdings Company Limited, which itself is a subsidiary of Bank of Communications Co., Ltd. (“BOCOM”, and together with BOCOM International Holdings Company Limited and its affiliates, the “BOCOM Group”). The financial statements are presented in Hong Kong dollars (“HKD”), which is same as the functional currency of the Sub-Fund.

2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

(a) Basis of preparation

The financial statements of the Sub-Fund have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets held at fair value through profit or loss. The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires the Trustee and the Manager to exercise their judgment in the process of applying the Sub-Fund’s accounting policies. The area involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

(i) Standards and amendments to existing standards effective 1 January 2016

There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 January 2016 that have had a material impact on the Sub-Fund.

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2 Summary of significant accounting policies (Continued) (a) Basis of preparation (Continued)

(ii) New standards and amendments to standards that are relevant to the Sub-Fund but are not yet effective and have not been early adopted by the Sub-Fund HKFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of HKFRS 9 was issued in July 2014. It replaces the guidance in HKAS 39 that relates to the classification and measurement of financial instruments. HKFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in HKAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. HKFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes.

Contemporaneous documentation is still required but is different to that currently prepared under HKAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Management is yet to assess HKFRS 9’s full impact. There are no other standards, interpretations or amendments to existing standards that are not yet effective that would be expected to have a significant impact on the Sub-Fund.

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2 Summary of significant accounting policies (Continued) (b) Investments

(i) Classification

The Sub-Fund classifies its investments as financial assets at fair value through profit or loss. These financial assets are designated by the Management at fair value through profit or loss at inception. Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Sub-Fund’s documented investment strategies. The Sub-Fund’s policies require the Management to evaluate the information about these financial assets on a fair value basis together with other related financial information.

(ii) Recognition/derecognition

Purchases and sales of investments are accounted for on a trade date basis. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Sub-Fund have transferred substantially all risks and rewards of ownership.

(iii) Measurement

Investments are initially recognised at fair value. Transaction costs are expensed in the statement of comprehensive income. Subsequent to initial recognition, all investments are measured at fair value. Realised and unrealised gains and losses on investments are recognised in the statement of comprehensive income in the period in which they arise.

(iv) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the reporting date. In circumstances where the last traded price is not within the bid-ask spread, management will determine the point within the bid-ask spread that is most representative of fair value.

(v) Transfers between levels of the fair value hierarchy

Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period.

(c) Income and expenses

Interest income is recognised on a time-proportionate basis using the effective interest method. Dividend income is recorded on the ex-dividend date with the corresponding foreign withholding taxes recorded as an expense. Expenses are accounted for on an accrual basis.

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2 Summary of significant accounting policies (Continued) (d) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Sub-Fund operates (the “functional currency”). The Sub-Fund invest in mainly equity securities in Hong Kong and the performance of the Sub-Fund is measured and reported to the unitholders in Hong Kong dollar. The Manager considers Hong Kong dollar as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Hong Kong dollar, which is the Sub-Fund’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the reporting date. Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive income within net gain/(loss) on investments.

(e) Cash and cash equivalents

Cash and cash equivalents include cash in hand, demand deposits, other short-term highly liquid investments with original maturities of three months or less.

(f) Amounts due from/to brokers Amounts due from and to brokers represent receivables for securities sold and payables for securities purchased that have been contracted for but not yet settled or delivered on the reporting date respectively.

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2 Summary of significant accounting policies (Continued)

(g) Redeemable units

The Sub-Fund issues redeemable units which are redeemable at the holder’s option represents puttable financial instruments of the Sub-Fund. The Sub-Fund classifies its puttable financial instruments as equity as those puttable financial instruments meet all the following criteria:

• the puttable financial instruments entitle the holder to a pro-rata share of net asset value;

• the puttable financial instruments are the most subordinated units in issue and unit features are identical;

• there are no contractual obligations to deliver cash or another financial asset; and

• the total expected cash flows from the puttable financial instrument over its life are based substantially on the profit or loss of the respective Sub-Fund.

Units are issued and redeemed at the holder’s option at prices based on the Sub-Fund’s net asset value per unit at the time of issue or redemption. The Sub-Fund’s net asset value per unit is calculated by dividing the net assets attributable to unitholders with the total number of outstanding units. In accordance with the prospectuses of the Sub-Fund, investment positions are valued based on the last bid price for the purpose of determining the net asset value per unit for subscription and redemptions of the Sub-Fund.

(h) Distribution to unitholders

No distribution will be paid from the Sub-Fund. (i) Transaction costs

Transaction costs are costs incurred to acquire financial assets at fair value through profit or loss. They include the fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs are expensed as incurred in the statement of comprehensive income.

(j) Taxation

The Sub-Fund currently incurs a withholding tax imposed by certain countries on investment income. Such income is recorded gross of withholding tax in the statement of comprehensive income.

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3 Financial risk management

The Sub-Fund’s activities may expose it to a variety of risks including but not limited to: market risk (including market price risk, interest rate risk and currency risk), credit and counterparty risk and liquidity risk which are associated with the markets in which the Sub-Fund invests. The following is a summary of the main risks and risk management policies.

(a) Market price risk Market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual instrument or factors affecting all instruments in the market. The following table discloses the financial assets at fair value through profit or loss of the Sub-Fund by product type:

2016 2015 HKD HKD Listed equity securities 178,242,770 190,577,990 Debt securities - 15,006,825 ────────── ─────────

178,242,770 205,584,815 ══════════ ═════════

The following table discloses the non-derivative financial assets at fair value through profit or loss of the Sub-Fund by industrial sectors:

2016 2015

HKD % of net asset

value HKD % of net asset

value Consumer, Cyclical 24,134,320 12.91 37,717,200 17.58 Consumer, Non-cyclical 20,419,660 10.92 44,132,490 20.58 Communications 32,243,190 17.24 19,763,700 9.22 Industrial 20,604,800 11.02 10,629,900 4.97 Financial 49,865,700 26.66 32,081,600 14.94 Energy 5,840,000 3.12 12,994,000 6.07 Technology - - 7,286,700 3.40 Utilities 19,681,100 10.52 25,972,400 12.11 Government - - 15,006,825 7.00 Basic Materials 5,454,000 2.92 - - ─────────── ─────── ─────────── ───────

Grand Total 178,242,770 95.31 205,584,815 95.87 ═══════════ ═══════ ═══════════ ═══════

The Sub-Fund’s market price risk is managed through diversification of the investment portfolio ratios by exposures to different industries. There is no exposure to individual investments/issuers representing over 10% of the Sub-Fund’s net asset value at the reporting date.

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3 Financial risk management (Continued)

(a) Market price risk (Continued) At 31 December 2016, the Sub-Fund invests in listed equity securities and is susceptible to market price risk arising from uncertainties about future values of those investments. The listed equity securities are publicly traded. If the prices of listed equity securities had increased/decreased by 10%, the Sub-Fund’s pre-tax profits for the year would have resulted in an increase/decrease of HKD17,824,277 (2015: HKD19,057,799).

(b) Interest rate risk The majority of the Sub-Fund’s financial assets and liabilities are non-interest bearing. As a result, the Sub-Fund is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. As at 31 December 2016 and 2015, interest rate risk arises from cash and cash equivalents and investment in debt securities. As interest from these interest bearing assets are immaterial, the Sub-Fund consider that changes in their fair value and future cash flows in the event of a change in market interest rates will not be material. Accordingly, no sensitivity analysis has been disclosed for these cash and cash equivalents and investment in debt securities.

(c) Currency risk Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Sub-Fund is not exposed to currency risk arising from balances and transactions in foreign currencies as a majority of their assets and liabilities are denominated in HKD, the Sub-Fund’s functional and presentation currency. Accordingly, the Management considers that it is not necessary to present a sensitivity analysis of currency risk.

(d) Credit and counterparty risk

Credit and counterparty risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Sub-Fund. The Sub-Fund limits its exposure to credit risk by transacting the majority of its securities and contractual commitment activities with broker-dealers, banks and regulated exchanges with high credit ratings and that the Sub-Fund considers to be well established. All transactions in listed securities are settled or paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made when the broker has received payment. Payment is made on a purchase when the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. The credit risk exposure from the investment in debt securities is considered insignificant. The Sub-Fund is also exposed to credit and counterparty risk on cash and cash equivalents. The Trustee entered into a Global Custodial Services agreement with Citibank N.A., Hong Kong Branch on 25 January 2008. According to the Global Custodial Services agreement, the investment of the Sub-Fund is held in the name of the Trustee or such other name as the Trustee may reasonably designate and will indicate that the investments do not belong to the sub-custodian and are segregated from the sub-custodian’s assets. The Sub-Fund’s money is held in the name of the Trustee or such other name as the Trustee may reasonably designate and will be held by the sub-custodian.

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3 Financial risk management (Continued) (d) Credit and counterparty risk (Continued)

The table below summarises the net exposure to the Sub-Fund’s counterparties together with their credit ratings.

As at 31 December 2016

HKD Credit rating

Source of credit rating

Investments Citibank, N.A. 178,242,770 A+ Standard & Poor’s Cash and cash equivalents Citibank, N.A. 9,393,990 A+ Standard & Poor’s As at 31 December 2015

HKD Credit rating

Source of credit rating

Investments Citibank, N.A. 205,584,815 A Standard & Poor’s Cash and cash equivalents Citibank, N.A. 50,698,043 A Standard & Poor’s

As at 31 December 2016, the Sub-Fund does not invest in debt securities. The table below summarises the credit rating of the Sub-Fund’s debt portfolio, which represents 7.00% of the net asset value as at 31 December 2015: Portfolio by rating category of bonds:

2015

Rating % of net

asset value Standard & Poor's

AAA 7.00 The maximum exposure to credit risk as at 31 December 2016 and 2015 is the carrying amount of the financial assets as shown on the statement of financial position. The Manager considers that none of these assets are impaired nor past due (2015: Nil).

(e) Liquidity risk

Liquidity risk is the risk that the Sub-Fund may not be able to generate sufficient cash resources to settle its obligations in full as they fall due or can only do so on terms that are materially disadvantageous. The Sub-Fund is exposed to daily redemptions of units in the Sub-Fund. The Sub-Fund invest the majority of their assets in securities that are traded in an active market which can be readily disposed of.

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3 Financial risk management (Continued) (e) Liquidity risk (Continued)

The table below analyses the Sub-Fund’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

Less than 3 months HKD As at 31 December 2016 Management fee payable 240,318 Trustee fee payable 53,809 Accrued expenses and other payables

Redemption payable 259,306

67,810 ────────── Contractual cash outflow 621,243 ══════════ As at 31 December 2015 Management fee payable 322,841 Trustee fee payable

Amount due to brokers 70,514

711,625 Accrued expenses and other payables

Redemption payable 258,403

41,647,350 ────────── Contractual cash outflow 43,010,733 ══════════

Units are redeemed on demand at the unitholder’s option. With a view to protecting the interest of unitholders, the Manager is entitled, with the approval of the Trustee, to limit the number of units of the Sub-Fund redeemed on any dealing day to 10% of the total number of units in issue. As at 31 December 2016, there were 2 (2015: 2) unitholder accounts each holding more than 10% of the sub-Fund’s units. As at 31 December 2016, the total assets of the Sub-Fund amounted to HKD187,636,760 (2015: HKD257,440,893). The Sub-Fund manages its liquidity risk by investing in securities that it expects to be able to liquidate within 3 months or less. The following table illustrates the expected liquidity of assets held:

Less than

3 months Over

3 months HKD HKD As at 31 December 2016 Total assets 187,636,760 - ══════════ ═════ As at 31 December 2015 Total assets 257,440,893 - ══════════ ═════

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3 Financial risk management (Continued) (f) Fair value estimation

The Sub-Fund classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). • Inputs other than quoted prices included within level 1 that are observable for the asset or

liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. The determination of what constitutes “observable” requires significant judgment by the Sub-Fund. The Sub-Fund consider observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The following table analyses within the fair value hierarchy the Sub-Fund’s financial assets and liabilities measured at fair value at 31 December 2016 and 31 December 2015:

Level 1 Level 2 Level 3 Total

HKD HKD HKD HKD


Assets

Financial assets at fair value

through profit or loss

- Listed equity securities 177,845,870 - 396,900 178,242,770

─────────── ─────────── ─────────── ───────────

Total assets 177,845,870 - 396,900 178,242,770

══════════ ══════════ ═══════════ ═══════════


Assets

Financial assets at fair value

through profit or loss

- Listed equity securities 188,622,260 - 1,955,730 190,577,990

- Listed debt securities 15,006,825 - - 15,006,825

─────────── ─────────── ─────────── ───────────

Total assets 203,629,085 - 1,955,730 205,584,815

══════════ ══════════ ═══════════ ═══════════

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3 Financial risk management (Continued) (f) Fair value estimation (Continued)

Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1, include active listed bonds, active listed equities, exchange traded funds and derivatives. The Sub-Fund does not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active and are valued based on quoted market prices or broker quotes, or financial instruments for which there is no active market and are valued based on valuation models supported by observable inputs are classified within level 2. The quotes are periodically reviewed by the Manager.

Investments classified within level 3 have significant unobservable inputs, as they trade infrequently. Level 3 Instruments include equity securities which have been suspended for a considerable period of time. As observable prices are not available for these securities, the Sub-Fund used valuation techniques to derive the fair value. As at 31 December 2016, there was 1 (2015: 2) level 3 investments held by the Sub-Fund. The suspended securities classified within level 3 have been suspended from trading since March 2015. As at 31 December 2016, the investments were valued by the Manager with reference to the last traded price prior to the suspension and a liquidity discount.

The following table presents the transfers between levels for the year ended 31 December 2016.

Level 1 Level 3 HKD HKD Transfer between levels 1 and 3: Listed equity security 978,600 (978,600)

The equity security transfer out of level 3 relate to positions whose trading was resumed as at 31 December 2016 but was suspended on 31 December 2015.

Transfers between levels of the fair value hierarchy, for the purpose of preparing the above table, are deemed to have occurred at the beginning of the reporting period.

The following table presents the movement in level 3 instruments: 2016 2015 HKD HKD Opening balance 1,955,730 - Purchases - 1,909,816 Sales - (641,758) Transfer from level 1 into level 3 - 1,404,000 Transfer from level 3 into level 1 (978,600) - Losses recognised in statement of comprehensive income (580,230) (716,328) ──────── ────────

Closing balance 396,900 1,955,730 ════════ ════════

Change in unrealised gains or losses for level 3 assets held at year end and included in other net changes in fair value on financial assets and liabilities at fair value through profit or loss (580,230) (595,223)

════════ ════════

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3 Financial risk management (Continued)

(f) Fair value estimation (Continued)

If the liquidity discount on the latest bid price of suspended securities had increased/decreased by 10%, the Sub-Fund’s profits for the year would have resulted in an increase/decrease of HKD139,590 (2015: HKD279,390).

(g) Capital risk management The Sub-Fund’s capital is represented by the net assets attributable to unitholders. The Sub-Fund strive to invest the subscriptions in investments that meet the Sub-Fund’s investment objectives while maintaining sufficient liquidity to meet unitholder redemptions. The Management may redeem and issue new units in accordance with the constitutive documents of the Sub-Fund.

4 Critical accounting estimates and judgements Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below. Financial assets and liabilities at fair value through profit or loss The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Manager uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. The Sub-Fund values these investments with reference to last transaction price, as well as considering liquidity factors and other comparable listed companies in the same industry. Also refer to note 3(f).

5 Financial instruments by category Financial assets Apart from financial assets of investments as disclosed in the statement of financial position which are classified as at fair value through profit or loss, all other financial assets as disclosed in the statement of financial position, including amounts due from brokers, interest receivable, dividend receivable and cash and cash equivalents, are categorised as “loans and receivables”. Financial liabilities All financial liabilities as disclosed in the statement of financial position, including management fee payable, trustee fee payable, redemption payable, accrued expenses and other payables, are categorised as “other financial liabilities”.

6 Net changes in fair value on investments 2016 2015 HKD HKD Net unrealised gains/(losses) of investments 5,904,589 (12,360,126) Net realised losses on sale of investments (29,815,991) (80,664,827) ─────────── ─────────── (23,911,402) (93,024,953) ═══════════ ═══════════

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7 Number of units in issue and net assets attributable to unitholders per unit

As at 31 December 2016, the Sub-Fund issued one class of units. The movements of the redeemable units are as follows:

2016 2015 Number of units in issue at the beginning of the year 27,567,553.029 7,228,673.964 Units issued 12,255.424 39,673,067.581 Units redeemed (233,897.781) (19,334,188.516) ──────────── ──────────── Number of units in issue at the end of the year 27,345,910.672 27,567,553.029 ════════════ ════════════

The following table details the net asset value per unit of each class of units (before amortisation of establishment costs) at the reporting date:

Net assets

Number of Units

outstanding Net asset

value per unit HKD HKD At 31 December 2016 187,015,517 27,345,910.672 6.838 ══════════ ════════════ ═════ At 31 December 2015 215,276,551 27,567,553.029 7.809 ══════════ ════════════ ═════

8 Reconciliation between net assets attributable to unitholders to unitholders per the

financial statements

In accordance with the Sub-Funds’ prospectuses, the establishment costs of the Sub-Funds will be amortised over the first five years and the financial assets at fair value through profit or loss will be valued using the latest bid price. However, the accounting policy of the Sub-Funds for the purpose of financial statements preparation in compliance with HKFRS is to expense establishment costs in the statement of comprehensive income as incurred and to value the financial assets at fair value through profit or loss using the fair value as described in Notes 2(b) and 4 to these financial statements. The differences between the valuation in accordance with HKFRS and the valuation in accordance with the Sub-Funds’ prospectuses resulted in adjustments in the net asset value. 2016 2015 HKD HKD Accounting NAV as reported in the statement of financial

position 187,015,517 214,430,160 Adjustment for amortisation of establishment costs - 8,221 Adjustment for valuing the investment at latest bid price - 838,170 ─────────── ─────────── Dealing NAV 187,015,517 215,276,551 ═══════════ ══════════

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9 Transactions with the Trustee and its affiliates and the Manager and its connected persons The following is a summary of significant related party transactions/transactions entered into during the year between the Sub-Fund and the Trustee and its affiliates and the Manager and its Connected Persons. Connected Persons of the Manager are those as defined in the Code on Unit Trusts and Mutual Funds established by the Securities & Futures Commission of Hong Kong (the “SFC Code”). All transactions entered into during the year between the Sub-Fund and the Manager and its Connected Persons were carried out in the normal course of business and on normal commercial terms. To the best of the Manager’s knowledge, the Sub-Fund does not have any other transactions with Connected Persons except for those disclosed below.

(a) Management fee

The Manager is entitled to receive a management fee calculated at the annual rate of 1.5% per annum of the net asset value of the portfolio on the relevant valuation date, which shall be accrued daily and payable monthly in HKD in arrears as specified in the explanatory memorandum issued in respect of the Sub-Fund. The total management fee for the year amounted to HKD2,924,836 (2015: HKD2,733,930). As at 31 December 2016, the Sub-Fund has management fee payable to the Manager of HKD240,318 (2015: HKD322,841), which is included in management fee payable in the statement of financial position.

(b) Trustee fee The Trustee of the Sub-Fund is entitled to a fee payable monthly in arrears calculated as 0.30% to 0.35% per annum (2015: 0.30% to 0.35%) and subject to a minimum annual fee of HKD350,000, which is accrued daily and is payable monthly in arrears. The total trustee fee for the year amounted to HKD653,770 (2015: HKD649,984). As at 31 December 2016, trustee fee payable to the Trustee is HKD 53,809 (2015: HKD70,514), which is included in trustee fee payable in the statement of financial position.

(c) Redemption payable

As at 31 December 2016, the total redemption payable amounted to nil (2015: 41,647,350) is payable to a fellow subsidiary of the Manager.

(d) Brokerage fee and amounts due from/to brokers During the year, the total aggregate value of the transactions of the Sub-Fund effected through BOCOM International Securities Limited, who is a fellow subsidiary of the Manager, amounted to HKD170,469,435 (2015: HKD684,674,804), representing 27.52% (2015: 23.80%) of the total transactions in value during the year. The total brokerage commission paid to BOCOM International Securities Limited in relation to such transactions amounted to HKD204,403 (2015: HKD787,116), with an average commission rate of 0.12% (2015: 0.11%), which is included in transaction costs in the statement of profit or loss and other comprehensive income.

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9 Transactions with the Trustee and its affiliates and the Manager and its connected persons (Continued)

(d) Brokerage fee and amounts due from/to brokers (Continued) As at 31 December 2016 and 2015, no amount due from/to BOCOM International Securities Limited.

(e) Transactions with the Manager’s parent company As at 31 December 2016, BOCOM International Holdings Company Limited, the holding company of the Manager, held 4,000,000 units (2015: 4,000,000 units) in the Sub-Fund.

(f) Transactions with the Manager’s subsidiary

As at 31 December 2016, BOCOM International Global Investment Limited, the subsidiary company of the Manager, held 21,401,515.392 units (2015: 21,401,515.392 units) in the Sub-Fund.

(h) Transaction with the director of the Manager

As at 31 December 2016, a director of the Manager held 50,000 units (2015: 50,000 units) in the Sub-Fund.

10 Taxation

Hong Kong Profits Tax No provision for Hong Kong profits tax has been made for the Sub-Fund as they were authorised as collective investment schemes under Section 104 of the Hong Kong Securities and Futures Ordinance and is therefore exempt from profits tax under Section 26A(1A) of the Hong Kong Inland Revenue Ordinance. People’s Republic of China The Sub-Fund invests in shares of companies in People’s Republic of China (“PRC”) listed on overseas stock exchanges including the H-shares listed in Hong Kong stock exchange (“H-shares”). Under the PRC Corporate Income Tax Law, the Sub-Fund may be liable to pay PRC tax on the capital gains realised in the trading of H-shares. However, no provision was made for taxation from such gains in the financial statements as the Fund Manager believe that the Sub-Fund can sustain a position for not filing a tax return based on the existing tax regulations and that the enforcement of China tax on capital gains is remote.

Withholding Tax Income from investments held by the Sub-Fund may be subject to withholding taxes in jurisdictions other than that of the Sub-Fund as imposed by the country of origin. Withholding taxes are shown as a separate line item in the statement of profit or loss and other comprehensive income.

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11 Soft commission arrangements

The Manager confirms that there has been no soft commission arrangement existing during the year ended 31 December 2016 (2015: nil) in relation to directing transactions of the Sub-Fund through a broker or dealer.

12 Distribution to unitholders

The Sub-Fund did not make any distribution during the year ended 31 December 2016 and 2015.

13 Approval of financial statements The financial statements were approved by the Trustee and the Manager on 21 April 2017.

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND

(A sub-fund of BOCOM International Fund) INVESTMENT PORTFOLIO (UNAUDITED) AS AT 31 DECEMBER 2016

Investments (95.31%) Holdings Fair Value % of Net

assets HKD

Equity securities (95.31%) Listed in Hong Kong

ANHUI CONCH CEMENT CO LTD 400,000 8,420,000 4.50% BYD ELECTRONIC INTERNATIONAL CO LTD 1,920,000 11,712,000 6.26% CHINA ANIMAL HEALTHCARE LTD 270,000 396,900 0.21% CHINA CONSTRUCTION BANK CORP 1,800,000 10,728,000 5.74% CHINA NATIONAL BUILDING MATERIAL CO LTD 2,100,000 7,875,000 4.21% CHINA SHENHUA ENERGY CO LTD 400,000 5,840,000 3.12% CLP HOLDINGS LTD 150,000 10,687,500 5.72% CSPC PHARMACEUTICAL GROUP LTD 530,000 4,361,900 2.33% GEELY AUTOMOBILE HOLDINGS LTD 885,000 6,513,600 3.48% GF SECURITIES CO LTD 340,000 5,494,400 2.94% GUANGDONG INVESTMENT LTD 880,000 8,993,600 4.81% GUANGZHOU AUTOMOBILE GROUP CO LTD 620,000 5,809,400 3.11% HONG KONG EXCHANGES & CLEARING LTD 60,000 10,992,000 5.88% HSBC HOLDINGS PLC 130,000 8,086,000 4.32% IMAX CHINA HOLDING INC 100 3,800 0.01% JIANGXI COPPER CO LTD 505,000 5,454,000 2.92% LINK REIT 118,000 5,941,300 3.18% SHANGHAI JIN JIANG INTERNATIONAL HOTELS GROUP CO LTD

5,788,000 11,807,520 6.31%

SINO BIOPHARMACEUTICAL LTD 1,290,000 7,030,500 3.76% SUN HUNG KAI PROPERTIES LTD 88,000 8,624,000 4.61% TENCENT HOLDINGS LTD 72,700 13,791,190 7.37% TONG REN TANG TECHNOLOGIES CO LTD 601,000 8,630,360 4.62% XINJIANG GOLDWIND SCIENCE & TECHNOLOGY CO LTD

330,000 4,309,800 2.30%

ZTE CORP 500,000 6,740,000 3.60% ─────────── ───────

178,242,770 95.31% ------------------ ------------ Total investments 178,242,770 95.31% ------------------ ------------ Other net assets 8,772,747 4.69% ─────────── ───────

Total net assets as at 31 December 2016 (after amortisation of establishment costs)

187,015,517

100.00%

═══════════ ═══════

Total Investments at cost 182,001,291 ═══════════

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A sub-fund of BOCOM International Fund) STATEMENT OF MOVEMENTS IN INVESTMENT PORTFOLIO (UNAUDITED) FOR THE YEAR ENDED 31 DECEMBER 2016

Holdings

2015 Additions Disposals 2016

Investments

3SBIO INC 366,500 647,500 1,014,000 -

AIA GROUP LTD 170,000 - 170,000 -

AIR CHINA LTD - 1,000,000 1,000,000 -

ANHUI CONCH CEMENT CO LTD - 400,000 - 400,000

AVICHINA INDUSTRY & TECHNOLOGY CO LTD 1,590,000 - 1,590,000 -

BAIC MOTOR CORP LTD - 918,500 918,500 -

BYD ELECTRONIC INTERNATIONAL CO LTD - 1,920,000 - 1,920,000

CAR INC 980,000 - 980,000 -

CGN POWER CO LTD 4,580,000 - 4,580,000 -

CHEUNG KONG INFRASTRUCTURE HOLDINGS

LTD

- 133,000 133,000 -

CHINA ANIMAL HEALTHCARE LTD 270,000 - - 270,000

CHINA CONSTRUCTION BANK CORP - 1,800,000 - 1,800,000

CHINA LONGYUAN POWER GROUP CORP LTD 2,225,000 - 2,225,000 -

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS

LTD

- 480,000 480,000 -

CHINA MOBILE LTD 226,000 - 226,000 -

CHINA NATIONAL BUILDING MATERIAL CO

LTD

- 2,100,000 - 2,100,000

CHINA SHENHUA ENERGY CO LTD - 800,000 400,000 400,000

CHINA VANKE CO LTD - 300,000 300,000 -

CHINASOFT INTERNATIONAL LTD 2,270,000 - 2,270,000 -

CITIC SECURITIES CO LTD - 360,000 360,000 -

CLP HOLDINGS LTD - 150,000 - 150,000

COSMO LADY CHINA HOLDINGS CO LTD 500,000 - 500,000 -

CSPC PHARMACEUTICAL GROUP LTD - 830,000 300,000 530,000

DONGFENG MOTOR GROUP CO LTD - 800,000 800,000 -

GEELY AUTOMOBILE HOLDINGS LTD - 885,000 - 885,000

GF SECURITIES CO LTD - 340,000 - 340,000

GREAT WALL MOTOR CO LTD 1,300,000 1,850,000 3,150,000 -

GUANGDONG INVESTMENT LTD 1,160,000 400,000 680,000 880,000

GUANGZHOU AUTOMOBILE GROUP CO LTD - 1,890,000 1,270,000 620,000

GUOTAI JUNAN INTERNATIONAL HOLDINGS

LTD

- 1,270,000 1,270,000 -

HAITONG SECURITIES CO LTD - 420,000 420,000 -

HONG KONG & CHINA GAS CO LTD - 737,000 737,000 -

HONG KONG EXCHANGES & CLEARING LTD 90,000 60,000 90,000 60,000

HSBC HOLDINGS PLC 102,000 254,800 226,800 130,000

IMAX CHINA HOLDING INC - 102,300 102,200 100

JIANGXI COPPER CO LTD - 505,000 - 505,000

LINK REIT - 220,000 102,000 118,000

NEW WORLD DEVELOPMENT CO LTD - 113,000 113,000 -

PICC PROPERTY & CASUALTY CO LTD - 450,000 450,000 -

PING AN INSURANCE GROUP CO OF CHINA LTD - 115,000 115,000 -

SHANGHAI JIN JIANG INTERNATIONAL

HOTELS GROUP CO LTD

4,560,000 1,380,000 152,000 5,788,000

SINO BIOPHARMACEUTICAL LTD 2,300,000 - 1,010,000 1,290,000

SKYWORTH DIGITAL HOLDINGS LTD 1,560,000 - 1,560,000 -

SOUND GLOBAL LTD 200,000 - 200,000 -

SUN HUNG KAI PROPERTIES LTD - 88,000 - 88,000

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A sub-fund of BOCOM International Fund) STATEMENT OF MOVEMENTS IN INVESTMENT PORTFOLIO (UNAUDITED) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2016

Holdings

2015 Additions Disposals 2016

Investments

SUNNY OPTICAL TECHNOLOGY GROUP CO LTD - 381,000 381,000 -

TENCENT HOLDINGS LTD - 97,700 25,000 72,700

TONG REN TANG TECHNOLOGIES CO LTD 824,000 - 223,000 601,000

XINJIANG GOLDWIND SCIENCE &

TECHNOLOGY CO LTD

- 330,000 - 330,000

XINYI GLASS HOLDINGS LTD - 1,100,000 1,100,000 -

YANZHOU COAL MINING CO LTD - 1,232,000 1,232,000 -

ZTE CORP - 500,000 - 500,000

HKGB FLOAT 08/11/2017 1,900,000 - 1,900,000 -

HK GOVT BOND PROGRAMME 08/07/2018 12,450,000 - 12,450,000 -

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BOCOM INTERNATIONAL DRAGON CORE GROWTH FUND (A sub-fund of BOCOM International Fund) PERFORMANCE TABLE (UNAUDITED) FOR THE YEAR ENDED 31 DECEMBER 2016 Net asset values

Net asset value Net asset value

per unit HKD HKD At 31 December 2016 (Dealing NAV) 187,015,517 6.838 ═════════ ═════════

At 31 December 2015 (Dealing NAV) 215,276,551 7.809 ═════════ ═════════




Highest and lowest net asset value per unit (Dealing NAV) Highest net

asset value per unit

Lowest net asset value per

unit Year ended 31 December 2016 7.623 6.382 ══════ ══════

Year ended 31 December 2015 12.316 7.612 ══════ ══════




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