THE EGYPT TRUST
Soci�t� d'Investissement � Capital Fixe
Luxembourg
R.C. no. B 55.584
Unaudited Half-Yearly Report
September 30th, 2008
Table of Contents
Organisation of the Fund
General Information
Interim Management Report
Statement of Net Assets
Shareholders' Equity
Statement of Operations
Statement of Changes in Net Assets
Statistical Information about the Fund
Statement of Changes in Shares Outstanding
Statement of Investments and Other Net Assets
Currency, Geographical and Industrial Classification of the Fund
Notes to the Financial Statements
Organisation of the Fund
Chairman
ALEXANDER E. ZAGOREOS Jermain Hill Lane
U.S.A.-Eagle Bridge, NY 12057
Directors
MICHAEL BECKETT * Northcroft Dulwich Commons
U.K.-London SE21 7EW
MOHAMED HASSANEIN * NATIONAL BANK OF EGYPT
NBE Tower
1187 Corniche El-Nile
Boulak
EGYPT, Cairo
SHAKER ALBERT KHAYATT * KHAYATT & COMPANY INC.
50 Broad Street, Suite 1609
U.S.A.-New York, NY 10004
MOHAMED KAMAL EL-DIN BARAKAT * 151 Mohamed Farid Street
EGYPT, Cairo
MICHAEL TAIT * OXFORD AND EDINBURGH CONSULTANTS
Chairman of the Audit Committee 8 Chalcot Crescent
U.K.-London NW1 8YD
Advisory Board HERBERT GULLQUIST
Registered Office 11, rue Aldringen
L-1118 Luxembourg
Manager LAZARD ASSET MANAGEMENT LLC
30 Rockefeller Plaza
U.S.A.-New York, NY 10112
Investment Adviser NATIONAL BANK OF EGYPT
NBE Tower
1187 Corniche El-Nile
Boulak
EGYPT, Cairo
* Member of the Audit Committee
THE EGYPT TRUST
Organisation of the Fund (continued)
Custodian and Paying Agent KBL European Private Bankers S.A.
43, boulevard Royal
L-2955 Luxembourg
Domiciliary, Registrar, Transfer KREDIETRUST LUXEMBOURG S.A.
and Administrative Agent 11, rue Aldringen
L-2960 Luxembourg
Independent Auditor DELOITTE S.A.
560, rue de Neudorf
L-2220 Luxembourg
Financial Adviser and Broker Arbuthnot Securities Limited
Arbuthnot House
20, Ropemaker Street
U.K.-London EC2Y 9AR
THE EGYPT TRUST
General Information
1. Shareholders will be sent audited annual accounts relating to THE EGYPT TRUST (the "Fund" or the "Corporation"),
which will include a report by the Manager, made up to the last day of March in each year. Shareholders will also be
sent an unaudited half-yearly report covering the six-month period ending September 30th in each year.
2. The Annual General Meeting of Shareholders is held in Luxembourg each year at 4 p.m. on the third Tuesday of
August in each year (or, if such day is not a business day in Luxembourg, on the next following business day). Notices
convening each annual general meeting, including agenda, time and place, and details of attendance, quorum and majority
requirements under Luxembourg law, will be sent to the registered addresses of Shareholders together with the annual
report and accounts not less than 21 days before the date of such meeting.
3. The investment policy of the Corporation is to achieve medium to long-term capital growth through investment
principally in the equities of companies listed on the Egyptian Stock Exchange.
4. The Corporation intends to distribute annually to Shareholders substantially all of its income (including
dividends and interest) available for distribution after deducting fees and expenses.
5. Dividends will only be paid to the extent that they are covered by income received from underlying investments,
shares of profits of associated companies being unavailable for this purpose unless and until distributed to the
Corporation. The Articles of Incorporation provide that dividends shall not be paid out of surpluses arising upon the
realisation of investments.
6. A dividend declared but not claimed by a Shareholder after twelve years from the declaration thereof shall lapse
and revert to the Corporation.
7. The Net Asset Value is expressed in US Dollars and is published on a weekly basis in the "Financial Times".
8. The Shares of the Fund are listed on the London Stock Exchange.
Interim Management Report
Responsibility Statement
We, the Directors of the Egypt Trust, confirm to the best of our knowledge that:
a) the financial statements which have been prepared in accordance with the applicable set of accounting standards
(being the legal and regulatory requirements in Luxembourg relating to investment funds) give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Fund;
b) the Interim Management Report includes a fair review of the information required by the U.K. Disclosure and
Transparency Rules 4.2.7R; and
c) the Interim Management Report includes a fair review of the information required by the U.K. Disclosure and
Transparency Rules 4.2.8R.
By order of the Board
Alexander E. Zagoreos
Chairman
November 28th, 2008
Investment Policy
* Asset Allocation: The Fund invests primarily in equity securities of Egyptian companies listed on Cairo and
Alexandria Stock Exchanges as well as other exchanges.
We use a bottom-up, fundamental company analysis to identify companies that have strong earnings-generation ability
but are inexpensively priced.
We continuously monitor potential and existing holdings in the Fund, in addition to the overall macro-economic
environment in Egypt. The asset allocation and security selection changes accordingly.
* Risk Diversification: The Fund will run a fairly concentrated portfolio subject to exposure limits detailed below;
but in the meanwhile aims to provide broad exposure to the market through holding a diversified portfolio.
The liquidity of the Egyptian market is fairly limited compared to developed markets. When making an investment
decision, liquidity concerns weigh in. We aim to keep 90 percent of the Fund's NAV in highly liquid securities and cash.
The remaining 10 percent would provide the flexibility to invest in attractively priced securities with low liquidity or
in pre-IPO companies.
* Exposure Limits: Maximum weighting in any single security should not exceed 10 percent of NAV - Passive breaches
should be brought back in line with the policy in manner consistent with the best interest of the shareholders, and
Maximum weighting in any single sector should not exceed 25 percent of NAV. The Fund treats Real Estate & Property
Development as a separate sector and not part of financials.
* Gearing: The Fund Manager is not allowed to use gearing.
Portfolio Performance & Market Overview:
(Price Only - Net of Fees) Q endingSeptember 30 Q endingJune 30 6 Months 1 Year
Egypt Trust Fund NAV -28.10% -6.93% -32.97% -14.88%
IFC Egypt Investable USD* -30.28% -10.32% -37.48% -18.86%
The Cairo & Alexandria Stock Exchanges set new records during the six months period ending September 30th 2008.
During early May, the stock market managed to reach new life highs before switching course to record its largest
quarterly loss ever during the quarter ending
September 30th 2008.
We had a conservative view earlier in the year that stock prices were at or in some cases exceeded their fair
valuations and consequently we shifted the portfolio to a defensive approach including raising cash levels. As the
market continued to drop until it reached what we believed was an attractive valuation later in the summer, we started
adjusting the portfolio again. During September, the whole world fell victim for the crises in the United States and its
far-reaching implications. This caused September to be one of the worst months globally with all markets on the MSCI
index recording losses.
While generally during this period we outperformed the market by nearly 450 bps, we still recorded our worst
quarterly performance in Quarter ending September 30th as panic took over the markets. The chart below shows the
quarterly performance of The Egypt Trust vs. the IFC Index for the past three years.
Portfolio Structure
The Egypt Trust's portfolio remains fairly concentrated subject to the general investment guidelines. As of
September 30th 2008, The Egypt Trust held 27 names.
The top 10 holdings in the portfolio now constitute 64.76% of NAV, up from 55.45% at the end of March. Details of
the top 10 holdings could be found in the table below.
Top 10 Holdings Portfolio (%)
Telecom Egypt 8.8
Orascom Construction Industries 8.3
Egyptian Financial & Industrial Company 7.9
EFG-Hermes 6.8
Orascom Telecom Holding 6.7
National Soci�t� G�n�rale Bank 5.7
Commercial Intl Bank Ltd 5.7
Egyptian International Pharmaceuticals Industries Company 5.7
Alexandria Mineral Oils Company 5.2
Talaat Moustafa Group Holding 4.0
TOTAL 64.8%
Currently, no stocks exceed the 10% single issuer limit.
Sector allocation was fairly stable from March 31st with the exception of Industrial as we were raising the weight
of Orascom Contruction, which fell to very attractive levels, and Real Estate, mainly as a result of other stocks
defending better. Financials and Telecoms remain the two largest sectors in the Trust.
Sector Allocation March 08 September 08
Financial 16.1 19.7
Telecom 18.8 19.3
Material 13.2 16.3
Industrial 4.2 10.9
Real Estate 14.8 10.8
Petrochemicals 8.0 8.9
Consumer Discretionary 7.3 6.4
Healthcare 6.0 6.2
Other 11.6 1.7
TOTAL 100.00% 100.00%
Economic Overview:
The rising inflation in Egypt dominated the macro-economic scene for the large part of 2008. Inflation exceeded 25%
in August. The inflation level, which was one of the highest amongst the peer group, made investors question the
sustainability of Egypt's growth story. Naturally attention now is focused on how the Egyptian economy may weather the
global economic recession.
The Egyptian banking sector remains healthy with virtually no exposure to the "toxic assets" and is also fairly
liquid with loan to deposits ratios under 50%. Additionally, the Egyptian banking sector remains dependant on retail
banking. This should make the Egyptian banking system relatively safe from the liquidity crises in global financial
markets.
The Egyptian economy however will suffer from a drop in demand primarily in Europe, as this is the main destination
of Egyptian exports as well as the main origin of tourists. Global recession would also mean lower revenues from the
Suez Canal as global trade slows down. Despite this, Egypt could come out of this crises with minimum damage if it
manages to maintain the strong domestic demand we have been seeing for the past few years. This would necessitate the
adoption of expansionary policies (both fiscal and monetary), shifting the focus from fighting inflation (which will
ease considerably as the global decline in commodities filters through the economy) to preventing growth from falling
considerably. We believe Egypt could achieve a real growth rate of around 4-4.5% in 2009.
Outlook
The value we see today in Egyptian equities is the largest in the past 15 years. Unfortunately, volatility will
likely continue to dominate the market in the short term (6-12 months) preventing any significant recovery. On the
slightly longer term (12 months +) we will probably see a meaningful rebound from current levels. We will continue our
disciplined approach of investing in value by focusing on fundamentals.
Overview of events September 30th 2008:
Following its worst quarterly performance on record, the Cairo and Alexandria Stock Exchanges continued to suffer,
losing 44.57% for the quarter to November 21st. This brings the year to date decline to 63.13%, as measured by the IFC
S&P Investable index. The Egypt Trust to record a loss of 36.83% for the quarter to November 21st and 55.37% year to
date.
The decline was largely in line with the performance of global equity markets that are witnessing unprecedented
volatility as fears of a global recession continue. While Egypt was relatively shielded from the effects of the global
liquidity crunch given its reliance on the local market (which remains highly liquid), it will not escape the effect of
a recession particularly in Europe, its main trading partner. This said, we believe the current valuation of equities
assumes a doomsday scenario and consequently offers significant value for the medium to long-term investor.
Luxembourg, November 28th, 2008 The Board of Directors
Principal Risks and Uncertainties
The success of the fund may be affected by general economic and market conditions, such as interest rate changes,
availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political
circumstances. These factors may affect the level and volatility of securities that the fund invests in. The manager
actively monitors these factors and, to the degree possible, attempts to mitigate their negative impact on the fund.
Note: The information in this report represents historical data and is not an indication of future results.
Statement of Net Assets
(in USD)
ASSETS September 30th, 2008 September 30th, 2007
Securities' portfolio at market value 76,157,420 88,254,168
Cash at bank 4,398,906 3,596,174
Receivable on treasury transactions - 343,584
Income receivable on portfolio 209,196 1,013,870
Interest receivable on bank accounts 4,997 5,700
Other receivables - 77,808
Prepaid expenses 3,183 3,421
Total assets 80,773,702 93,294,725
LIABILITIES
Bank liabilities 2,610,396 944,241
Payable on treasury transactions 557,394 -
Payable on repurchased of Shares - 501,118
Expenses payable 201,524 281,884
Total liabilities 3,369,314 1,727,243
NET ASSETS at the End of the Period 77,404,388 91,567,482
Number of Shares outstanding 2,438,782 2,459,945
Net Asset Value per Share 31.74 37.22
Shareholders' Equity represented by
(in USD)
September 30th, 2008 September 30th, 2007
Capital: 8,513,347 Shares at USD 2.00 17,026,694 17,026,694
Share Premium 73,633,306 73,633,306
Legal Reserve 1,702,669 1,702,669
Profit brought forward 61,553,644 33,192,484
Total Capital and Reserves 153,916,313 125,555,153
Cost of 1,663,837 Shares held in Treasury -15,939,917 -15,939,917
Repurchase of 4,410,728 Shares at the -60,919,585 -59,959,021
request of Shareholders
Net realised gain for the period 7,404,843 10,484,396
Unrealised appreciation/depreciation on -7,057,266 31,426,871
securities
Total Shareholders' Equity 77,404,388 91,567,482
Statement of Operations
(in USD)
INCOME From April 1st, 2008 From April 1st, 2007
to September 30th, 2008 to September 30th, 2007
Dividends, net 3,465,172 2,419,607
Interest on bank accounts 72,370 93,912
Received commissions - 32,711
Other income - 4,246
Total income 3,537,542 2,550,476
EXPENSES
Management fees 507,955 417,933
Advisory fees 126,989 104,483
Custodian fees 19,833 14,824
Bank and financial services 215,072 125,908
Central administration costs 41,181 29,059
Audit and supervisory fees 34,377 22,113
Printing and publication expenses 26,358 37,499
Subscription duty ("taxe d'abonnement") 23,134 21,742
Interest paid - 318
Directors' fees and expenses 201,834 78,945
Other expenses 103,086 14,095
Total expenses 1,299,819 866,919
NET INVESTMENT INCOME 2,237,723 1,683,557
NET REALISED GAIN/LOSS
- on sale of securities (-1 year) 4,847,367 282,515
- on sale of securities (+1 year) 398,272 8,484,191
- on foreign exchange -78,519 34,133
REALISED GAIN 7,404,843 10,484,396
CHANGE IN NET UNREALISED
APPRECIATION/DEPRECIATION
- on securities -45,445,736 8,006,682
INCREASE IN NET ASSETS AS A RESULT OF -38,040,893 18,491,078
OPERATIONS
Repurchase of Shares at the request of - -653,364
Shareholders
TOTAL CHANGE IN NET ASSETS -38,040,893 17,837,714
TOTAL NET ASSETS AT THE BEGINNING OF THE 115,445,281 73,729,768
PERIOD
TOTAL NET ASSETS AT THE END OF THE 77,404,388 91,567,482
PERIOD
Statement of Changes in Net Assets
(in USD)
From April 1st, 2008 From April 1st, 2007
to September 30th, 2008 to September 30th, 2007
Net Assets at the beginning of the period 115,445,281 73,729,768
Net investment income 2,237,723 1,683,557
Net realised gain/loss on foreign -78,519 34,133
exchange
Net realised gain on sale of securities 4,847,367 282,515
(-1 year)
Net realised gain on sale of securities 398,272 8,484,191
(+1 year)
Net realised gain for the period 7,404,843 10,484,396
Repurchase of Shares at the request of - -653,364
Shareholders
Change in unrealised -45,445,736 8,006,682
appreciation/depreciation on securities
Net Assets at the End of the Period 77,404,388 91,567,482
Statistical Information about the Fund
(in USD)
September 30th, 2008 March 31st, 2008 March 31st, 2007
Net Assets 77,404,388 115,445,281 73,729,768
Net Asset Value per Share 31.74 47.34 29.75
Statement of Changes in Shares Outstanding
For the period ended September 30th, 2008
Number of Shares Outstanding at the Beginning of the Period 2,438,782
Number of Shares repurchased held in Treasury -
Number of Shares repurchased at the request of Shareholders -
Number of Shares Outstanding at the End of the Period 2,438,782
Statement of Investments and other Net Assets
September 30th, 2008
(in USD)
Currency Number Description Cost Market value
% of total net
assets
INVESTMENTS IN SECURITIES
TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE
LISTING
Shares
Banks
EGP 600,000 Commercial Intl Bank 1,329,279 4,386,990
5.67
Ltd
EGP 200,000 Credit Agricole 610,904 502,389
0.65
Egypt
EGP 955,000 National Soci�t� 1,243,936 4,397,703
5.68
G�n�rale Bank Reg
3,184,119 9,287,082
12.00
Capital goods
EGP 107,500 El Sewedy Cables Hg 2,252,240 1,996,513
2.58
Co
EGP 110,000 Orascom Construction 5,278,365 6,411,613
8.28
Industrie Reg
7,530,605 8,408,126
10.86
Consumer durables and apparel
EGP 250,000 Olympic Group Fin 1,982,841 1,652,885
2.14
Inv Co SAE
EGP 300,000 Oriental Weavers Co 2,737,204 1,653,804
2.14
4,720,045 3,306,689
4.28
Diversified financial services
EGP 850,000 EFG-Hermes 7,471,333 5,298,052
6.84
Energy
EGP 350,000 Alexandria Mineral 5,001,061 4,031,239
5.21
Oils Co
Hotels, restaurants and leisure
EGP 3,000,000 Talaat Moustafa 6,080,476 3,114,664
4.02
Group Holding
Insurance
EGP 250,000 Delta Insurance 875,573 655,090
0.85
Investment companies
USD 2,000,000 Al Arafa Inv & 2,560,740 1,620,000
2.09
Consulting
Materials
EGP 666,664 Egyptian Financial & 1,348,665 6,130,075
7.92
Indust Co Reg
EGP 3,000 El Ezz Aldekhela 808,807 733,738
0.95
Steel Alex Co
EGP 450,000 El Ezz Steel Rebars 1,766,185 1,542,172
1.99
SAE
EGP 200,000 Paint and Chemical 1,282,264 1,653,804
2.14
Ind
EGP 1,000,000 Sidi Kerir 3,557,373 2,855,568
3.69
Petrochemicals
EGP 150,000 Suez Cement Co 1,549,490 860,529
1.11
EGP 75,000 Torah Portland 1,864,756 1,707,690
2.21
Cement Co
12,177,540 15,483,576
20.01
Pharmaceuticals and biotechnology
EGP 949,735 Egyptian Intl Pharm 3,045,759 4,380,439
5.66
Industr Co
EGP 33,897 Memphis Pharmaceutic 526,830 450,527
0.58
Chem Ind
3,572,589 4,830,966
6.24
Real estate
EGP 262,000 Heliopolis Housing & 4,447,794 1,665,303
2.15
Dev SA
EGP 250,000 Palm Hills 733,276 664,278
0.86
Devlopments SAE
EGP 150,000 Sixth of Octob Dev & 4,537,734 2,874,586
3.71
Inv Co SA
9,718,804 5,204,167
6.72
Telecommunication services
EGP 150,000 Egyptian Co for 3,918,555 2,936,880
3.79
Mobile Com
EGP 700,000 Orascom Telecom 8,544,893 5,177,324
6.69
Holding
EGP 2,500,000 Telecom Egypt 7,858,353 6,803,565
8.79
20,321,801 14,917,769
19.27
TOTAL INVESTMENTS IN SECURITIES 83,214,686 76,157,420
98.39
CASH AT BANKS 4,398,906
5.68
BANK LIABILITIES -2,610,396
-3.37
OTHER NET ASSETS/(LIABILITIES) -541,542
-0.70
TOTAL NET ASSETS 77,404,388
100.00
Currency, Geographical and Industrial Classification of the Fund
September 30th, 2008
(in percentage of net assets)
Currency Classification
Egyptian Pound 96.30 %
US Dollar 2.09 %
TOTAL INVESTMENTS IN SECURITIES 98.39 %
US Dollar 5.68 %
TOTAL CASH AT BANKS 5.68 %
Egyptian Pound -0.62 %
US Dollar -2.75 %
BANK LIABILITIES -3.37 %
OTHER ASSETS AND LIABILITIES -0.70 %
TOTAL NET ASSETS 100.00 %
Geographical Classification
Egypt 98.39 %
TOTAL INVESTMENTS IN SECURITIES 98.39 %
OTHER ASSETS AND LIABILITIES 1.61 %
TOTAL NET ASSETS 100.00 %
Industrial Classification
Materials 20.01 %
Telecommunication services 19.27 %
Banks 12.00 %
Capital goods 10.86 %
Diversified financial services 6.84 %
Real estate 6.72 %
Pharmaceuticals and biotechnology 6.24 %
Energy 5.21 %
Consumer durables and apparel 4.28 %
Hotels, restaurants and leisure 4.02 %
Investment companies 2.09 %
Insurance 0.85 %
TOTAL INVESTMENTS IN SECURITIES 98.39 %
OTHER ASSETS AND LIABILITIES 1.61 %
TOTAL NET ASSETS 100.00 %
Notes to the Financial Statements
September 30th, 2008
NOTE 1 - GENERAL
THE EGYPT TRUST (the "Fund" or the "Corporation") is a closed-end investment corporation incorporated as an
investment corporation under the laws of the Grand Duchy of Luxembourg and qualifies as a " soci�t� d'investissement �
capital fixe" under the amended law of December 20th, 2002 (the "2002 Law") regarding undertakings for collective
investments and the law of August 10th, 1915, as amended regarding commercial companies. The Fund is governed by Part II
of the Luxembourg 2002 Law.
The Fund was incorporated in Luxembourg on July 23rd, 1996 for an indefinite period.
The Fund's Articles of Incorporation (the "Articles") have been published in the " M�morial, Recueil des Soci�t�s et
Associations " and they have been filed with the Registrar of the Luxembourg District Court, where copies thereof may be
obtained. In addition, a legal notice concerning the issue of the Shares is on file with the Registrar of the Luxembourg
District Court.
The Fund's investment policy is to achieve medium to long-term capital growth through investment principally in the
equities of companies listed on the Egyptian Stock Exchange.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
a) Presentation of Accounts
The financial statements are presented in conformity with Luxembourg legal and regulatory requirement relating to
investment funds. The Fund keeps its books and records in USD.
b) Valuation
1) The Net Asset Value per Share (the "NAV") is calculated in accordance with Article 22 of the Fund's Articles on
each Valuation Date (as defined in the Articles). "Valuation Date" means the date fixed by the Board for the valuation
of the Shares being Friday of each week (or, if that day is not a business day in Luxembourg, on the next business day).
The NAV is determined by dividing the Net Assets of the Fund, being the value of its assets less liabilities, by the
number of Shares then outstanding.
2) In calculating the NAV, income and expenses are treated as accruing from day to day and the Fund's Articles
provide, inter alias, that:
(i) unquoted investments will initially be valued at cost price, which will include any expenses relating to their
acquisition;
(ii) a revaluation of unquoted investments to a value in excess of or below cost may be made where, in the opinion
of the Board, or in the opinion of the Fund's Manager (where the Board has delegated its powers), it is justified.
Factors affecting such revaluations may include: the prices at which further issues of capital or dealings between third
parties take place, the market value of comparable companies (making appropriate adjustments for such factors as
limitation of marketability) or the price at which any agreement has been entered into, or is reasonably contemplated,
for the sale of the investments;
(iii) securities which are listed on an official stock exchange or traded on any other regulated market will be
valued at the last available price on the principal market on which such securities are traded, or by a pricing service
approved by the Board;
(iv) assets or liabilities expressed in terms of currencies other than US dollars will be translated into US dollars
at the prevailing market rate for such currencies at the Valuation Date.
3) First-in first-out method: Purchases of securities are recorded at cost. Realized gains and losses on securities
sold are computed on the first-in first-out basis.
4) The value of cash in hand or on deposit, bills and notes payable on presentation, accounts due, prepaid expenses
and dividends and interest declared and fallen due but not yet received consists of the nominal value of such assets,
except, however, in the event that it seems improbable that such value can be realized, in which event the value is
determined by deducting a sum which the Board considers appropriate to reflect the realizable value of such assets.
5) Foreign currencies monetary assets and liabilities denominated in foreign currencies in the Statement of Net
Assets are translated into USD at the exchange rates ruling at the date of the report. Transactions in foreign
currencies are recorded in USD based on the exchange rates in effect at the date of transactions. The following
significant exchange rates have been applied for the conversion as at the date of the report:
USD
1 EGP Egyptian Pound 0.1837560
1 EUR Euro 1.4047500
c) Income Recognition
Interest is recorded on an accrual basis, net of any withholding taxes in the relevant country. Dividend income is
recorded on the ex-date, net of any withholding taxes in the relevant country.
d) Net Realised Gain/Loss
The net realised gain/loss on sale of securities is split between two accounts depending on the fact that the
securities have been owned during more than one year or not.
e) Payable on treasury transactions
The heading "Payable on treasury transactions" relates to foreign currency operations and foreign forward exchange
contracts transactions not yet recorded in "Cash at banks".
NOTE 3 - MANAGEMENT AND ADVISORY FEES
The Fund pays Lazard Asset Management LLC, the Manager, annual management fees of 1.00%, of the value of the gross
assets of the Corporation, payable monthly in arrears and to National Bank of Egypt, the Investment Adviser, 0.25%, per
annum, of the value of the gross assets of the Corporation, payable monthly in arrears.
NOTE 4 - TAXES
As a Luxembourg investment company, under present laws the Fund is not subject to income taxes in Luxembourg. Taxes
may be withheld at the source on dividends and interest received on investment securities.
According to the Luxembourg 2002 Law, the Fund is subject to Luxembourg subscription duty (" taxe d'abonnement ") at
the rate of 0.05% per annum of its Net Assets, such tax being payable quarterly on the basis of the Total Net Assets of
the Fund at the end of the relevant quarter.
NOTE 5 - REPURCHASES OF SHARES HELD IN TREASURY
The Fund is not obliged to purchase Shares at the request of Shareholders.
The maximum price at which Shares can be repurchased will be the NAV. Under Luxembourg law, repurchases may only be
made to the extent that the Corporation has distributable reserves available for the purpose, being Share premium or
accumulated reserves.
Any Shares so repurchased will be held in treasury or will be cancelled by way of reduction of issued capital. The
Shares held in treasury may be resold at any time, at the discretion of the Board, if a premium to the NAV may be
obtained. Details of such repurchases and sales will be communicated to all Shareholders as well as to the London and
the Luxembourg Stock Exchanges and to the Egyptian Stock Exchange if the Shares are listed there.
The Fund did not repurchase any Shares during the period September 30th 2008. At the date of the report, a total of
1,663,837 Shares are held in Treasury for an amount of USD 15,939,917.
NOTE 6 - REPURCHASES AT THE REQUEST OF SHAREHOLDERS
Following to the Extraordinary General Meeting on November 17th, 2003 and to the circular resolution on December
24th, 2003 Shareholders may request the Corporation from December 29th, 2003 to redeem all or part of their Shares
quarterly at a redemption price equal to the NAV of the applicable Valuation Date, reduced by a redemption fee of up to
5% for the benefit of the Corporation to cover dealing charges. At the date of the report there is no "received
commissions" in the statement of operations. The Corporation shall redeem such Shares within the sole limitations set
forth by law, the Fund's Articles and the prospectus and subject to any event giving rise to suspension as referred in
the prospectus.
If the total value of requests for redemption of Shares received on any specific redemption date exceeds 10% of the
total Net Asset Values of Shares in issue, the redemption requests will be reduced pro rata to the holdings of the
Shareholders who applied for redemption.
NOTE 7 - CAPITAL
The authorized Share capital of the Corporation on incorporation of the Fund was USD 40,000,000 divided into
20,000,000 Shares with a par value of USD 2 each.
On December 12th, 1997, a capital increase of 8,490,847 Shares has been registered with a par value of USD 2 each.
The Fund is required by Luxembourg law to transfer at least 5% of its yearly net profits to a non-distributable
legal reserve until such reserve amounts to 10% of the Fund's nominal Share capital. This reserve is not available for
dividend distribution.
According to the Fund's Annual General Meeting Minutes on August 19th, 2008, no dividend has been distributed.
NOTE 8 - CUSTODIAN FEES
The Custodian will receive, under the terms of the Custodian Agreement, fees for its services at rates to be agreed
from time to time between the Fund and the Custodian in accordance with Luxembourg practice.
NOTE 9 - DIRECTORS FEES
Each of the Directors shall be paid a fee at such a rate (if any) as the Board shall determine provided that the
aggregate of such fees shall not exceed USD 200,000 per annum or such higher amount as may from time to time be decided
by resolution of the Corporation.
The Directors shall also be entitled to reimbursement of all travelling, hotel and other expenses properly incurred
by them in attending and returning from meetings or otherwise in connection with the business of the Corporation.
NOTE 10 - BENEFICIAL AND NON-BENEFICIAL INTEREST OF DIRECTORS IN THE SHARE CAPITAL
As of September 30th, 2008 the beneficial and non-beneficial interests of the Directors in the Share capital are the
following:
Alexander E. Zagoreos 2,500 Shares
NOTE 11 - DIRECTORS' INTEREST IN SIGNIFICANT CONTRACTS
Alexander E. Zagoreos was a Managing Director of Lazard Asset Management LLC through December 31st, 2005 and became
a Limited Managing Director effective January 1st, 2006. He became a Senior Advisor on January 1st, 2008.
NOTE 12 - SUBSTANTIAL SHAREHOLDING
All issued Shares of the Fund are on deposit with a registered clearinghouse and, accordingly, the Directors are not
in a position to state the exact size of any Shareholdings in the Fund.
NOTE 13 - CHANGES OF THE INVESTMENT PORTFOLIO
The changes of the investment portfolio referring to the period of the report are available free of charge at the
registered office of the Fund.
NOTE 14 - ADDENDUM TO THE PLACING MEMORANDUM
The Board has resolved to amend the prospectus with a consolidated addendum to the prospectus dated August 2nd,
1996. The prospectus may not be distributed without the consolidated addendum dated December 2003.
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