merchbanc sicav - fundsquare

MERCHBANC SICAV Socittk d’hvestissement A Capital Variable

Luxembourg

UNAUDITED SEMI-ANNUAL REPORT for the period ended March 31,2002

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 and the most recent semi-annual report, if published thereafter.

MERCHBANC SIC.4V

R.C. 1,uxembourg No B-5 1646

DIRECTORY AND ADMINISTRATION 1 BOAKD OF DIRECTORS

Chairman Mr. Joaquin LOPEZ VERAZA Vice-chairman and Executive President of’ Merchbanc. Barcelona

Directors Mr. Henry VERREY Director of Semely Consult & Management Ltd, Geneva

Mr. JosC ISERN ROVIRA General Administrative Manager of Merchbanc, Barcelona

Mr. John PAULY Sous-Directeur, Dexia Banque Internationale 21 Luxembourg, Luxembourg

Mr. Lton HILGER Attach6 de Direction, Dexia Banque Internationale a Luxembourg, Luxembourg

ADMINISTRATION

Registered Office 69, route d’Esch, L-1470 Luxembourg

Investment Adviser MERCHBOLSA, Agencia de Valores. S.A. 279, Diputacih, E-OS007 Barcelona

Custodian DEXIA BANQUE INTEFWATIOKXLE A LUXEMBOURG 69, route d’Esch, L- I470 Luxembourg

Central Administration DEXIA RANQlJE MTERNATIOKALE A LUXEMBOURG 69, route d’Esch, L-1470 Luxembours

Registrar and Transfer Agent FIRST EUROPEAN TRANSFER AGENT 5 , rue Thomas Edison, L-1445 Luxembourg

Auditors DELOITTE & TOUCHE S.A. 3, rue d’Arlon, L-8009 Skassen

MERCHBANC SICAV

I GENERAL INFORMATION I

The Annual General Meeting of shareholders of the SICAV is held at the registered office of the SICAV or at such other place in Luxembourg on the last Wednesday of the month of January in each year at 3.00 p.m., or if any such day is not a hank business day in Luxembourg, on the next following bank business day in Luxembourg.

Notices of all general meetings are published in the MCmorial, Recueil des Societes et Associations, of Luxembourg (the “Memorial”) to the extent required by Luxembourg law, in the Luxemburger Wort and are sent to each holder of registered shares by post at least eight days prior to the meeting at their addresses in the register of shareholders. Such notices include the agenda and specify the time and place of the meeting and the conditions of adrmssion and refer to the requirements of Luxembourg law with regard to the necessary quorum and majorities required for the meeting.

Audited annual reports are published within four months after the financial year-end and unaudited semi-annual reports are published within two months after the end of the relevant period. Such reports are mailed to each registered shareholder at their registered address and are made available at the registered office of the SICAV during normal business hours. The financial year-end of the SICAV is September 30 of each year.

The net asset values and the issue, conversion and sale prices of the shares in any sub-fund are made public and available at the registered office of the SICAV.

Under current legislation and practice, shareholders are not subject to any capital gains, income, withholding, inheritance or other taxes in Luxembourg (except for shareholders domiciled, resident or having a permanent establishment in Luxembourg and for certain former residents of Luxembourg owning more than 25% of the share capital of the SICAV).

Investors should consult their professional advisers on the possible tax or other consequences of buymg, holding, converting, transferring or selling any of the shares under the laws of their countries of citizenship, residence or domicile.

3

MERCHBANC SICAV

COMBINED STATEMENT OF NET ASSETS AS AT MARCH 31,2002

l ’ S Y ELK0 GLOBAL

SHORT-TERM SHORT-TER\l in EURO TOTAL

fin IISD) ( i n til K O ) (in t l J K O ) (in t l J K O )

Investments in securities. at cost

Unrealised appreciation (depreciation)

lnvestments in securities, at market value (note 2)

Cash at bank

Interest and dividends receivable, net

Amounts receivable on subscriptions

Other assets

1,208,771 1,078.025 13,665,561 16,127,495

(1 3,569) (8,338) 1,314,742 1,290,870

1,195,207 1,069,687 14,980,303 17.4 18,365

1,093,063 706,854 588,800 2,547,085

20,225 36,758 3,490 63,403

4,830 0 0 5,530

0 0 635 635

20,035,018 2,313,325 1,813,299 15,573,228

LLADlLlTlES

Amounts payable on redemptions

Advisory commission payable (note 3)

Performance fee (note 3) Taxes and expenses payablc (note 5 )

Number of shares outstanding

Net asset value per share

256 0 0 293

962 754 19,369 2 1,224

1,548 1,098 236,064 238,934

2,746 1.870 17,741 22,756

5,512 3,122 273,174 283,207

2,307,813 1,809,577 15,300,054 19,751,811

357,467.143 472,531,467 2,039,160.000

6.456 3.830 7.503

The accompanying notes form an integral part of these fmancial statements.

4

-US$ SHORT-TERM-

I STATEMENT OF INVESTMENTS AS AT MARCH 31.2002 I

(expressed in USD)

Quantity/ Acquisition ?Lo net Description Face value Currency cost Evaluation assets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING

BONDS

UNITED STATES

USA 5.75% 97-02 Notes USA 5.875% 97-02 Notes

USA 6.25% 93-03 Notes USA 5.75% 97-31.10.02 Notes

USA 5.625% 00-30. I 1.02

USA 6.125% 00-3 1.08.02 Tb

TOTAL BONDS

400,000 70,000

1,000 300,000

1,000 400.000

TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING

TOTAL INVESTMENTS

USD 413,250 408,563 17.70 USD 72,406 7 1,564 3.10 USD 1,030 1,019 0.04 USD 308,297 304,969 13.21 USD 1,043 1,030 0.04 USD 412,750 408,062 17.68

1,208,776 1,195,207 5 I .77

1.208.776 1.195.207 5 1.77

1.208.776 1.195.207 51.77

The accompanying notes form an integral part of these financial statements.

6

MERCHBANC SICAV

-US$ SHORT-TERM-

SCHEDULE OF GEOGRiPHICAL AND ECONOMIC DIVISION OF INk'ESTMENTS AS AT MARCH 31,2002

(expressed as a percentage of net assets)

Geographical division

Economic division

STATES. PROVINCES AND MUNICIPALl'I*IES

5 1.77

51.77 %

5 1.77

51.77 %

7

-.

MERCHBANC SICAV

-EURO SHORT-TERM-

S'I;.\'TE\IENT OF INVESTMENTS 4s AT MARCH 31,2002 J (expressed in EURO)

Quantity/ Acquisition % net Description Face value Currency cost Evaluation assets

TRANSFERABLE SECURITIES ADLIITTED TO AN OFFICIAL STOCK EXCHANGE LISTING

BONDS

GERMANY

Germany 4.25% 01-13.03.03 Germany 4.5% 97-02 Serie 123 Germany 5% 00-13.9.02 Germany 5% 00-14.6.02 Germany 5% 97-2002 S. 125 Germany 7.25% 92-02

TOTAL BONDS

1,000 EUR 1,005 1,003' 0.06 400,000 EUR 40 1,720 400,460 22.13 200,000 EUR 201,400 201,230 11.12 100,000 EUR 100,870 100,285 5.54

10,000 EUR 10,080 10,077 0.56 350,000 EUR 362,950 356,632 19.71


TOTAL INVESTMENTS

1,078,025 1,069,687 59.12

1,078,025 1,069,687 59.12

1,078,025 1,069,687 59.12

The accompanying notes form an integral part of these financial statements,

8

MERCHBANC SICAV

-EURO SHORT-TEEM-

SCHEDtrLE OF GEOGR4PHICAL AND ECONOMIC DIVISION OF INVESTMENTS AS AI' MARCH 31,2002



GERMhNY 59.12

Economic division

STATES, PROVINCES AND MLYICIPALITTES

59.12 Yo

59.12

59.12 %

9

..... . .. . . .

MERCHBANC SICAV

-GLOBAL in EURO-

I STATEMEST OF INVESTMENTS AS AT MARCH 31.2002 I

(expressed in EURO)

Quantity/ Acquisition YO net Description Face value Currency cost Evaluation assets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING

SHARES

BERMUDA ISLANDS Tyco Intl Ltd (new) 7.000 USD 239.855 259.019 1.69

CANADA Nortel Networks Co (hld)

SWITZERLAND Serono Sa Coinsins -b-

GERMANY Daimlerchrysler Siemens Ag Inam.

SPAIN Acerinox Sa, Madrid Sol Melia Sa Telefonica Sa /a.d.r.

FINLAND Nokia Oy Ab /sponsored A&

GREAT-BRITAM Astrazeneca /spons.adr

ISRAEL Check Point Software Techno

6,000

80

1,500 1,750

1,000 15,000 2,163

4.000

1,344

1,000

239,855 259,019 1.69

USD 15 1,244 30,843 0.20 15 1,244 30,843 0.20

CHF 26.8 15 80.788 0.53 26,X 15 80,788 0.53

USD 11 1,958 77,33 1 0.5 1 EUR 64,629 13 1,5 13 0.86

176,587 208,844 1.37

EUR 20,s 1 1 40,640 0.27 EUR 145,2 12 131,550 0.86 USD 1 19,29 1 8 1,993 0.54

285,314 254,183 1.67

USD 56,050 94,980 0.62 56,050 94,980 0.62

USD 33,535 76,305 0.50 33,535 76,305 0.50

USD 71.241 34.805 0.23 71,241 34,805 0.23

10

MERCHBANC SICAV

-GLOBAL in EURO-

S'TA'I'EMENT OF INVESTMENTS AS AT MARCH 31,2002 (continued)

(expressed in EURO)


SOUTH KOREA Sk Telecom kpons.adr( li9act)

SWEDEN Ericsson Te1.-b-/adr

UNITED STATES Adc Telecomiunications Alliance Capmgmt Hldpartners Amazon Com Inc Amgen Inc. Aol Time Warner Inc. Applied Materials Inc Applied Micro Circuits Ariad Pharmaceuticals Ariba Inc. A t & T At&t Wireless Servic. Inc Atmel Bank Of America Corp Bea Systems Inc. Bed Bath & Beyond Inc. Bk Of New York Co Boston Scientific Corp. Brinker International Inc. Bristol Myers Squibb Carnival Corp Catalina Marketing Cow. Cendant Corporation Ciena Corp Cisco Systems Inc. Citigroup Inc Clear Channel Communications Coming Inc. Dell Computer Corp Ebay Inc Emc Corp Estee Lauder Cos "a" Gateway Inc. Genzyme Corp.(general Division Gillette Co Hca Inc Human Genome Sciences I2 Technologies

3,182

6,000

4,000 1,500

10,500 16,000 9,500 5,500 5,500 5,000 7,500 2,500

965 13,000 2,500 1,000 5,000 1,600

17,000 2,500 4,000 3,000 3,500

12,000 2,000 4,000 1,600 3,000 3,600 8,000 5,000 1,000 3,000 2,000

12,000 3,500 2,000 7,000 4,000

USD 38,141 89,618 0.59 38,141 89,618 0.59

USD 44.194 28.714 0.19

USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USL) USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

11

44,194

102,450 77,861

450,098 175,775 452,350 60,647

277,83 1 6 1,547

356,307 85,315 29,175 72,558

124,375 43,580 52,925 44,646

396,933 38,801

233,354 99,976 65,35 1

252,802 179,543

19,293 45,539

202,472 87,812

246,228 251,538

65,344 119,172 58,816

168,948 133,898 48,039

2 18,010 13333 1

28,7 14

18,639 79,684

171,905 1,093,228

257,227 34 1,73 1

50,375 30,454 38,897 44,937

9,888 150,9 19 194,688 15,696

193,199 76,973

488,328 92,764

185,426 112,142 146,259 263,782

20,608 77,532 90,712

176,576 3 1,406

239,144 324,232

13,647 117,328 14,47 1

599,966 136,28 1 100,933 174,629 23,172

0.19

0.12 0.52 1.12 7.15 1.68 2.23 0.33 0.20 0.25 0.29 0.06 0.99 1.27 0.10 1.26 0.50 3.19 0.61 1.21 0.73 0.96 1.72 0.13 0.5 1 0.59 1.15 0.21 1.56 2.12 0.09 0.77 0.09 3.92 0.89 0.66 1.14 0.15

MERCHBANC SICAV

-GLOBAL in EURO-

STATEMENT OF INVESTMENTS AS AT MARCH 31,2002 (continued)

(expressed in ELRO)

Quantity/ Acquisition % net Description Face value Currency cost Evaluation assets

UNITED STATES (continued) Imclone Systems Inc Immunex Intel Corp. Jds Uniphase Corp Juniper Networks Inc. Knight Trading Group Inc Lexmark Intl Inc. Loral Space & Communications Lsi Logic Corp. Lucent Technologies Inc Mattel Inc. Medtronic Tnc. Mellon Financial Co Microsoft Corp Morgan Stanley Dean Witter Myriad Genetics Inc. Network Appliance Corp Network Associates Inc Nextel Communications "a" Nike Inc "b" Office Depot Inc Palm Inc. Pfizer Inc. Protein Design Labs Inc Qualcomm Inc. Sepracor Inc. Siebel Systems Inc. Solectron Corp Starbucks Corp. Stilwell Financial Inc/w.i. Sun Microsystems Sycamore Networks Tellabs Inc. Texas Instruments Inc Thermo-electron Corp Tiffany & Co Tricon Global Restaurants Unitedhealth Group Inc Viacom Inc "b" Visx Inc. (delaware) Walt Disney Co/disney Series Worldcom Inc /group Shs

2,500 9,500 5,000 2,500 1,600 4,000 1,600 6,000 4,000 5,775 9,000 2,000 1,600 2,500 1,600 2,000 5,000

2 1,000 8,000 1,500 4,750

20,023 20,000 18,000 13,000 3,000 2,000 3,000 7,000 8,000 1,600

18,667 7,000 8,000 5,000

16,000 4,000 6,000 3,500 4,000 2,000

10,000

USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

87,266 172,195 86,005

258,139 194,908 144,814 71,458 86,438 5 1,733

174,025 167,516 62,389 56,929

193,455 116,685 137,282 342,561 439,133 105,753 65,271 76,801

323,042 222.679 177,424 3 12,690 119,416 83,915 22,705 75,858

194,327 67,247

568,142 227,796

74,597 99,133

203,591 186,864 140,380 232,176 155,654 53,745

70,496 329,120 174,080

16,858 23,118 32,698

104,743 14,769 77,852 3 1,273

2 14,735 103,521 70,690

172,620 104,98 1 76,730

116,664 58 1,83 1 49,276

103,057 107,948 9 1,467

909,955 353.014 560,215

66,632 74,669 26,790

185,368 224,306

16,157 84,4 18 83,909

303,166 1 18,667 651,211 269,185 524,953 193,823 80,875 52,847

0.46 2.15 1.14 0.1 1 0.15 0.2 1 0.68 0.10 0.5 1 0.20 1.40 0.68 0.46 1.13 0.69 0.50 0.76 3.80 0.32 0.67 0.7 1 0.60 5.95 2.3 1 3.66 0.44 0.49 0.18 1.21 1.47 0.1 11 0.55 0.55 1.98 0.78 4.26 1.76 3.43 1.27 0.53 0.35

USD 273,535 77,164 ' 0.50 12,4383 12 13,723,629 89.68

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MERCHBANC SICAV

-GLOBAL in EURO-

I STATEMENT OF INVESTMENTS AS AT MARCH 31,2002 (continued). I (expressed in ELRO)


HONG KONG Tommy Hilfiger Corp. 6,000 USD 103,773 98,575 0.64

103,773 98,575 0.64

TOTAL SHARES


TOTAL INVESTMENTS

13,665,561 14,980,303 97.91

13,665,561 14,980,303 97.91

13.665.561 14.980.303 97.91

The accompanying notes form an integral part of these financial statements.

13

MERCHBANC SICAV

-GLOBAL in EURO-

I SCHEDULE OF GEOGRAPHICiU AND ECONOXIIC DIVISION OF INVESTMENTS AS AT MARCH 31,2002 I

IJNl’fED STATES BERMUDA ISLANDS SPAIN Ci ERMA NY HONG KONG FINLAND SOUTH KOREA SWITZERLAND

ISRAEL CANADA SWEDEN

GREAT-BRITAIN



89.68 1.69 1.67 1.37 0.64 0.62 0.59 0.53 0.50 0.23 0.20 0.19

97.9194

Economic division

PHARMACEUTICALS AND COSMETICS ELECTRONICS AND ELECTRICAL EQUIPMENT NEWS TRANSMISSION OTHER SERVICES MISCELLANEOUS OFFICE EQUIPMENT, COiMPUTERS CONSUMER GOODS INTERNET SOFTWARE HOLDING AND FINANCE COMPXYIES LEISURE CHEMICALS BANKS AND FINANCIAL INSTITLITIONS RETAIL FOOD AND DISTILLERIES TRANSPORTATION TEXTILE AUTOMOBILE NDUSTRY MINES, HEAVY INDUSTRIES

24.49 12.16 9.82 9.54 7.92 6.60 5.66 4.93 3.90 3 2 3 2.65 2.36 1.26 1.21 0.73 0.67 0.5 1 0.27

97.91 %

14

MERCHBANC SICAV

NOTES TO THE FINANCIAL STATEMENTS AS AT MAFtCH 31,2002

NOTE 1 - GENERAL

MERCHBANC SICAV is an investment company organised as a societe anonyme under the laws of the Grand Duchy of Luxembourg and qualifies as a societe d’investissement a capital variable (SICAV). The SICAV was incorporated in Luxembourg on July 14. 1995 for an unlimited period. The Articles of Incorporation of the SICAV were published in the Memorial, Recueil des SocietCs et Associations, of Luxembourg, on hugust 29, 1995. The SICAV is registered with the ReglStTe de Commerce. Luxembourg under number B-5 1646.

As of March 3 1,2002, the SICAV included three active sub-funds - Merchbanc SICAV - US$ Short-Term (expressed in USD) - Merchbanc SICAV - EURO Short-Term (expressed in EURO) - Merchbanc SICAV - Global in EURO (expressed in EURO)

As to the following sub-funds, the Board of Directors will decide at a later stage of an initial subscription period by a circular resolution : - - - - - -

Merchbanc SlCAV - Mixed (expressed in USD) Merchbanc SICAV - Global in USD (expressed in USD) Merchbanc SICAV - PTAS Capsula 1 (expressed in EURO) Merchbanc SICAV - PTAS Capsula 2 (expressed in EURO) Merchbanc SICAV - PTAS Capsula 3 (expressed in EURO) Merchbanc SICAV - PTAS Capsula 4 (expressed in EURO)

The Articles of Incorporation of the SICAV allow the Board of Directors to create additional sub-funds.

The SICAV’s objective is to provide subscribers with a choice of sub-funds investing in a wide range of transferable securities on a worldwide basis and featuring a diverse array of investment objectives, including capital growth and income, while retaining the administrative advantages of one single corporate entity.

By decision of the Board of Directors, the two sub-funds (( Merchbanc SICAV - US$ Short-Term )) and (( Merchbanc SICAV - EURO Short-Term)) may invest their assets in repurchase agreements concluded with high quality financial institutions specialised in this type of transaction on the conditions laid down in the Prospectus dated (( February 2000 D.

Shareholders may convert shares of any sub-fund into shares of any other existing sub-fund in accordance with the conditions set out in the prospectus. Conversions to the “EURO Capsula I ” , “EURO Capsula 2”, “EURO Capsula 3” andor “EURO Capsula 4” will not be permitted due to their specific investment policy and objectives.

Effective February 1,2000, the consolidation currency of the SICAV has been changed to EURO.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Valuation of investment securities

1 - The value of securities which are quoted or dealt in on any stock exchange is in respect of each security, the latest available publicised price, and where appropriate, the middle market price on the stock exchange which is normally the principal market for such security.

2 - Securities dealt in on another regulated market are valued in a manner as near as possible to that described in the preceding paragraph.

15

MERCHBANC SICAV

NOTES TO THE EiAiiCIAL STATEMENTS AS AT MARCH 31,2002 (continued)

3 - 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 I and/or 2 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.

b) Net realised profit (loss) on sale of investments

The net realised profit (loss) on sale of investments is calculated on the basis of the average cost of the securities sold.

c) Foreign exchange translation of each sub-fund

The total column of the combined statement of net assets and the combined statement of changes in net assets is the sum of the statements of each sub-fund and is expressed in EURO. Bank accounts, other net assets and market value of the investment portfolio expressed in currencies other than EURO are translated into EURO at applicable exchange rates at March 3 1, 2002.

Income and expenses in currencies other than EURO are translated into ELRO at exchange rates prevailing at the transaction date.

Exchange rates used as at March 3 1, 2002 :

1 EURO = 0.873450 USD

d) Translation adjustment

Opening net assets are maintained at the closing rate of the previous year. Exchange differences arising in aggregate are included in the combined statement of changes in net assets for the year under translation adjustment.

e) Cost of investment securities of each sub-fund

Cost of investment securities expressed in currencies other than the sub-fund’s currency is translated into the sub-fund’s currcncy at the exchange rate applicable at the purchase date.

f) Valuation of securities bought‘sold in the context of repurchase agreements

The SICAV enters into repurchase agreements in order to have the right to selVpurchase bonds or Treasury Notes at saine point during a predetermined period at a resale/repurchase price which is fixed upon conclusion of the agreement. Upon expiry of the agreement, however, the SICAV/seller retains the right to decide whether or not to repurchase the securities sold in the context of the repurchase agreement.

Securities purchased in the context of a repurchase agreement are valued at their acquisition cost expressed in their original currency, without taking into account their market value at the year end. Interest accrued since the date of acquisition is included under “Interest receivable”.

Securities sold in the context of a repurchase agreement are no longer included in the “Statement of Investments”. They are valued on the basis of the market rate prevailing at the year end. The resulting net unrealised profit or loss (the difference between market value and the fixed repurchase price less interest) is recorded under unrealised profitfloss on repurchase transactions. These valuation principles are based on the assumption that the securities in question are held until maturity.

16

MERCHBANC SICAV

NOTES TO THE FINrtVCIAL STATEMENTS AS AT MARCH 31,2002 (continued) 1 NOTE 3 - ADVISORY AND PERFORKLANCE COMMISSIOXS

As remuneration for its services. the Investment Adviser receives from the SICAV a monthly fee at the following annual rates applicable on the average net assets ofeach sub-fund :

- 0.5% for US$ Short-Term - 0.5% for EURO Short-Term - 1.5% for Global in EURO

During the period ended March 3 1, 2002, the Investment Adviser renounced part of the advisory commission (part of out of pocket and auditor’s expenses are paid from the advisory commission) for the sub-funds US$ Short-Term, EURO Short- Term and Global in EURO.

The XICAV also pays to the Investment Adviser an additional performance fee at the following percentages of the increase in the total net assets of each sub-fund calculated over a 12 month-period corresponding in practice to a financial year.

This calculation, in respect of each sub-fund, is based on the total net asset figures before deduction of the accrued performance fee and is adjusted for any proceeds received on subscriptions and/or for any amount paid on redemptions :

- 5% for US$ Short-Term - 5% for EURO Short-Term - 10% for Global in EURO

The performance commission is calculated at the end of each financial year (last day of September) and is payable yearly at the beginning of the subsequent financial year.

The performance will be measured independently of the positive or negative performance of the previous financial year, any negative performance for a financial year will not carry over into the succeeding years.

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. The SICAV is, however, as from January 1, 2002, 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 of all its sub-funds at the end of the relevant quarter. The Board of Directors has decided to change the investment policy of the sub-funds Merchbanc Sicav - US$ Short-Term and Merchbanc Sicav - EURO Short-Term so as to hlfill the conditions to take advantage of the reduction of the subscription tax to 0.01% p.a. on their net assets.

No subscription tax is payable on the assets held by the SICAV in other UCITS already subject to that tax in Luxembourg.

17

MERCHBANC SICAV

NOTES TO THE FISXYCIAL STATEMENTS AS AT MARCH 31,2002 (concluded)

NOTE 5 - TAXES AND EXPENSES PAYABLE

US$ EURO GLOBAL SHORT-TERWI SHORT-TEFUVI in EURO

(in USD) (in EURO) (in EURO) Subscription tax (note 4) 53 35 1,917 Depositary bank commission, domiciliation, administration and transfer agent fees 1,734 1,355 11,577 Audit fees, printing and publication 927 448 4,052 expenses Other taxes and fees 27 22 195

2,746 1,870 17,741

18

merchbanc sicav - fundsquare

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