Universe, The CMI Global Network Fund - Clerical Medical

Universe, The CMI Global Network FundNOTES TO THE FINANCIAL STATEMENTS1. GENERALUniverse, The CMI Global Network Fund, (“the Fund”) was incorporated as an investment fund in the Grand Duchy of Luxembourg on 12 April1990 and commenced its activities on 1 June 1990. The articles of incorporation were amended for the last time by notarial deed of 25 July2005 published in the Mémorial on 24 August 2005. The Fund qualifies as an investment company with variable capital (“sociétéd’investissement à capital variable” or “SICAV”) regulated under the part I of the law of 20 December 2002. The Fund is established for anundetermined duration. The Fund comprises 28 sub-funds, each relating to a separate investment portfolio comprising securities, cash,other assets and liabilities.2. SIGNIFICANT ACCOUNTING POLICIESThe Financial Statements are presented in accordance with Luxembourg regulations relating to investment funds.The following is a summary of the significant accounting policies adopted by the Fund:(a)Valuation of Securities:All securities in the investment portfolios are quoted on a recognised stock exchange, or dealt in on another regulated market.Financial instruments, which comprise short-term certificates of deposit and commercial paper, are valued at cost as it is intended tohold these instruments until maturity. The difference between the cost and the maturity value is recognized as interest income overthe year. In these financial statements, securities and financial derivative instruments have been valued using the closing prices on30 March 2010 for securities listed in the American continent’s stock exchange, prices at 1 p.m. (CET) on 31 March 2010 forsecurities listed in the European stock exchange and closing prices on 31 March 2010 for securities listed in eastern countries’ stockexchange.(b)Translation of Foreign Currencies:Transactions in foreign currencies are converted into the currency of the sub-fund at the exchange rate ruling at the date of thetransactions at 1 p.m. (CET). Assets and liabilities are converted into the currency of the sub-fund at the exchange rate ruling at thebalance sheet date at 1 p.m. (CET).The combined statements of net assets, operations and changes in net assets are presented in Euro (EUR), based on the closingexchange rate prevailing at the balance sheet date.(c)Allocation of Expenses:Each sub-fund is charged with the expenses directly attributable to it. Expenses not attributable to a particular sub-fund are normallyallocated to the sub-funds so that each one is charged with the same amount.(d)Income:Dividends are recognised on an ex-dividend basis, net of withholding taxes in the country of origin. Interest is recognised on anaccruals basis.(e)Profit and Loss from Sales of Securities:The realised profit and loss arising on sales of securities is based on the average cost of the securities.(f)Equalisation:The Fund uses the accounting practice of equalisation, by which a portion of the proceeds from subscriptions and costs ofredemptions of shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of thetransaction, is credited or charged to undistributed income. On payment of a dividend the balance on the equalisation account isincluded in the amount available for distribution. As a result, undistributed net investment income per share is unaffected bysubscriptions and redemptions of shares.3. MANAGEMENT FEESThe Fund has appointed as “Management Company”, CMI Asset Management (Luxembourg) S.A., a company incorporated under the laws ofLuxembourg on 22 December 1988. The Management Company is responsible for the day to day management of the investments and isentitled to receive a fee, which is payable monthly in arrears and is based on the net asset value of each of the sub-funds. Fees are charged atthe following rates as stipulated in the Fund’s prospectus:Class 1 Class 2 Class 3 Class 7Equity sub-funds, The CMI Global Mixed sub-fund, and The CMI GlobalBond sub-fund, except for the US Equity sub-fund, Japan Equity andPacific Basin Equity 1.25% 0.33% 0.115% 0.15%The CMI US Equity,Japan Equity and Pacific Basin Equity 0.75% 0.23% 0.115% 0.15%Bond Sub-Funds (except the CMI Global Bond Sub-Fund), CMIG Fixed TermUS Bond Sub-Fund and CMIG Fixed Term Euro Bond Sub-Fund 0.75% 0.23% 0.115% 0.15%Equity Index Tracking and Currency Reserve Sub-Funds 0.50% 0.18% 0.115% 0.15%CMIG Access 80% Sub-Fund N/a N/a N/a 0.15%HLE Euro-Garant 80 Flex (Access 80% Guarenteed Sub-Fund until 1 April2010) HLE Euro-Garant 70 Flex, 1.85% N/a N/a N/a18