Annual Report & Financial Statements

HFC REAL ESTATEINVESTMENT TRUST(HFC REIT)

The Manager

Name: HFCInvestmentServicesLimited

(HFCINVESTMENTS)

CountryofIncorporation: Ghana

RegistrationNumber: 50,533

NatureofCorporateForm: Limitedliability,wholly-ownedsubsidiaryof theHFCBank(Ghana)Ltd.

RegisteredOffice: No.35SixthAvenue,

NorthRidge

P.O.BoxCT.4603

Cantonments,Accra

PrincipalPlaceofBusiness: No.48A,SixthAvenue

NorthRidge,Accra

DateofIncorporation: 7THJULY1993(NamechangedfromHome

FinanceInvestmentFundLimitedtoHFC

InvestmentServicesLimitedon1STOCTOBER 2001).

Capitalization

(asatDecember312011)

Authorized: 1,000,000(Onemillion)Ordinarysharesofno

Parvalue

Issued: 100,000shares

Auditors: ErnstandYoung

G15WhiteAvenue

AirportResidentialArea

P.O.Box16009

Accra

2

NoticeofAnnualGeneralMeeting 4

StatementofTrusteesResponsibilities 5

Trustees’Report 6

Manager’sReport7-12

Auditors’Report13-14

FinancialStatements15-22

NotestotheAccounts23-24

AdmissionForm 25

ProxyForm 26

Contents

3

Notice of Annual General Meeting

NOTICEISHEREBYGIVENthatthe16thAnnualGeneralMeetingofUnitholderswillbeheldattheNationalTheatre,Accraat9.00amonTuesday29thMay,2012totransactthefollowingbusinesses:

AGENDA

1. ToreceivethereportoftheManagerfortheYear2011.

2. ToreceivetheAuditedStatementofIncomeandExpenditureofHFCREITforthefinancialyearendedDecember31,2011togetherwiththeTrusteesandAuditorsreportsthereon.

3. To authorize the Manager to fix the remuneration of the Auditors for Year2012.

AUnitholderhastherighttoappointaproxytoattendandvoteonhis/herbehalfattheMeeting.SuchaproxyneednotbeaUnitholder.AcopyoftheinstrumentappointingtheproxymaybedepositedatanytimepriortothecommencementoftheMeetingattheprincipalplaceofbusinessoftheManager.

HFC INVESTMENTSNo. 48 A, Sixth Avenue North Ridge, Accra

Dated6thMay2012ByOrderoftheManager

PETERLARBI-YEBOA

For:HFCInvestments

4

Statement of Trustee’s Responsibilities

The Trust Deed requires the Trustees to prepare financial statements for eachfinancialperiod,whichgivesatrueandfairviewofthestateofaffairsoftheHFCREIT.Inpreparingthefinancialstatements,theTrusteesarerequiredto:

• Selectsuitableaccountingpoliciesandapplythemconsistently,

• Makejudgmentsandestimatesthatareresponsibleandprudent,

• Statewhetherapplicableaccountingstandardshavebeenfollowed,subjecttoanymaterialdepartures,disclosedandexplaintheminthefinancialstatements,and

• Prepare the financial statements on a going concern basis unless it isinappropriatetopresumethattheInvestmentTrustwillcontinueinbusiness.

TheTrusteesareresponsibleforkeepingproperaccountingrecords,whichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheHFCREIT,whichwillensurethatthefinancialstatementscomplywiththeTrustDeedandSecuritiesIndustryLaw,1993(PNDCL333).TheyarealsoresponsibleforsafeguardingtheassetsoftheInvestmentTrustandtakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

ThestatementsshouldbereadinconjunctionwiththestatementoftheAuditors’responsibilitiesassetoutonpage13,therespectiveresponsibilitiesoftheTrusteesandtheAuditorsinrelationtothefinancialstatement.

5

Report of the Trustee to the Unitholders of the HFC REIT for the year ended 31 December 2011

In our opinion, according to the information made available to us and theexplanationsprovided,weconfirmthatinallmaterialrespects,themanagerhasmanagedtheschemeduringtheperiodcoveredbythesefinancialstatementsinaccordancewiththeTrustDeeddated5thAugust,1994andallregulationsforthetimebeinginforceundertheUnitTrustandMutualFundsRegulations,2001,(L.I.1695).

Datedthis20thDayofApril2012

For:MERCHANTBANK(GHANA)LIMITED

6

ECONOMIC OVERVIEW OF YEAR 2011

A. INTRODUCTION

Global EconomyThe year 2011 was a challenging one for most economies. The US economyexperienced slower-than expected growth. Japan’s earthquake and Tsunamicreated an unexpected supply chain disruption globally and affected growth.MeanwhiletherisksanduncertaintyposedbythedebtcrisisinEuropefurtherdeepenedintheyear2011,togetherwithitsfarreachingcontagioneffects.Theglobalsituationwasfurthercompoundedbytheunrestarisingfromthe“arabspring”whichledtoanincreaseinoilprices,sparkingariseininflationglobally.

Ghanaian Economy

Contrarytothedepictionoftheglobaleconomyabove,theGhanaianeconomyrecorded improved macroeconomic indicators in 2011. There was significantgrowthinGDPfrom7.7percentin2010to13.6percentin2011,arisingasaresultofGhana’snewstatusasanoilproducingcountry.

Thekeyhighlightsofyear2011intheGhanaianeconomywereasfollows:

• Interest rates continued their downward trend during 2011 in line withdeclining inflation. There was a significant reduction in the yield of thebenchmark91-dayGovernmentofGhanaTreasuryBillfrom24.71percentinSeptember2008to10.66percentinDecember2011.Furthermorethepolicyratewhichstoodat18percentinDecember2009hadbyDecember2011beenreducedto12.5percent.

• Theservicessectorcontinuedtobethelargestcontributortothecountry’sGDP,accountingfor48.1percentin2011.

HFC Real Estate Investment Trust

Fund Manager’s Report For The Year Ended December 31, 2011

7

• Thetotalvolumeofcrudeoilfromthefirstthreelifting’swas2,980,720barrelswhichrealizedatotalrevenueofUS$337.3million(GH¢506.0million).

• TheStockExchangecontinuedtoenjoyitstaxholidayfromthegovernmentforanother5years.

• Inflationremainedwithinsingle-digitsduringtheyear.From9.1percent inJanuary, itdeclinedto8.4percentattheendofthethirdquarterbutsinceinched up to 8.6 percent in November 2011. The principal factors thatsupported stable inflation conditions include relatively stable exchangerate and favourable food supply conditions during the period, despite theadjustmentinutilitytariffs,wageandoil-inducedpressures

• The financial sector witnessed significant developments during the yearunderreview.SSNIT,asignificantshareholderinmostfinancial institutionsinGhanaoffloadeditsholdingsinsomebanksinthecountry.ItoffloadeditsstakeinTheTrustBank(TTB)toEcobankTransnationalIncorporated(ETI),theParentcompanyofEcobankGhanaLimitedandalsosoldoffitsstakein,FirstAtlanticMerchantBank toaNigeria-basedprivateequity-firm,KaderiNominee. AmalgamatedBankwasacquiredbyBankofAfricaandAccessBankacquiredIntercontinentalBank.

• Asat31stDecember2011theGhanacedihadlostgroundtoallthemajorinternationaltradingcurrenciesonayeartodatebasis.Thischangeinthevalueofthecedihasbeendepictedinthetablebelow.

Currency 4-Jan-11 31-Dec-11 Change YTD

USDollar(USD1.4559 1.58405 0.12815 9%

PoundSterling2.2609 2.4801 0.2192 10%

Euro(EUR)1.9454 2.06783 0.122436%

8

B. STOCK MARKET REVIEW (2011)

Activities on the GSE were encouraging from the inception of the year untilthe second half when the market begun trending downwards leading to abear market and an adverse performance of stock prices. The unfavorabledevelopmentsonthestockmarketlargelyresultedfromthecontagioneffectsoftheglobaleconomiccrisis,particularlyinEurope,leadingtoredemptionofforeigninvestmentsontheexchangetomeetredemptioncallsfacedbyoffshorefunds.TheGSECompositeIndexandtheGSEFinancialStockIndexclosedatayeartodateofnegative3.10%andnegative13.69%respectively.

ThirteenstocksrecordedpricegainswithTotalPetroleumGhanaLtdemergingthebestperformingstockontheGSEfor theyearwith98.30%gain. Six (6)stocksmaintainedtheirpricesandsixteenrecordeddeclines.TherewerethreeinitialpublicoffersontheGSEbyCometProperties,TullowPLCandAccraHeartsofOak. TheoffersofTullowOilPlcandAccraHeartsofOakweresuccessful,whilstthatofCometProperties,aGhanaianrealestatecompanyfailedtoraisetheminimumrequiredcapital.

GuinnessGhanaBreweriesLtd(GGBL)’srenounceablerightsissuewhichsoughtto raise GH¢70 million was over-subscribed by 44.6%. There were also bonusissuesfromPZCussonsandTheTrustBank(Gambia).

CFAOGhanadelistedfromtheGSEinApril,2011asaresultofaspecialresolutionpassedby shareholders in2009 to take thecompanyoff theexchange.CFAOofferedfourGhanapesewaspershare,representingtwicetheexistingprice.TheGSEmarketclosingtimewaschangedfrom13.00hrsGMTto15.00hrs,effectiveJanuary4,2011.On thesamedate theGSEalso introducedanewmethodofcalculatingclosingpricesofequitiesonthemarket.Closingpricesoflistedequitiesarenowcalculatedusingthevolumeweightedaveragepriceofeachequityforevery given trading day. Two indices have also been constructed namely GSECompositeIndex(GSE-CI)andGSEFinancialStocksIndex.

9

1. Fund Performance

Over the course of the year your fund constructed 6, 3-bedroom houses inCommunity25onlandpurchasedfromTemaDevelopmentCorporation(TDC).Thesalesofthesehousesarenearingcompletionwith80%ofthesalepriceshavingbeenpaidup.

Thefundalsopurchased3,3-bedroomtownhousesintheNorthRidgeresidentialareaatasubstantialdiscountandsoldtwoofthemwithintheyearaheadofthepropertiesbeingcompleted.Yourfundmanagerintendstosellthethirdoneforapremium,oncecompletedin2012.

OthernotableprojectsyourfundparticipatedinwerethefinancingoftheAccraRidge Church Hall and new student hostels being put up by the University ofGhana,Legon

Thesetransactionsaidedthefund’sperformancetoreturnayieldof13.51%fortheperiodunderreview.ThevalueoffundsundermanagementalsoincreasedfromGH¢9.57millionin2010toGH¢11.06millionin2011,reflectingtheconfidenceplacedinthefundbyunitholdersandnewinvestors.

10

HFC REIT/1-YEAR GOG T-BILL

2007 2008 2009 2010 2011 Avg. Yield

REIT17.50%28.97%35.59% 16.00%13.51%22.31%

1-YRGOGNOTE

12.30%20.00%20.00% 15% 11.30%15.63%

GROWTH IN NET FUND VALUE

Year 2007 2008 2009 2010 2011

Value(GH¢m)1.401.715.66 9.57 11.06

 

11

The outlook for the economy is positive, having recorded tremendous growthin2011.Ghana’snewpositionasanoilproducingcountryplacesitfirmlyinthedomain of attracting foreign direct investments. Residential and commercialspace,areanintegralpartofthisdevelopmentandthereiseveryindicationthattherealestatesectorwillremainviableinyearstocome.HFCREITwillthereforeexplore and take advantage of opportunities in the market to ensure aboveaveragereturnsforourcherishedunitholders.

It isalsoanticipated that the implementationof theNewPensionsLaw in thesecondhalf2012wouldmakeavailablesignificantsumsforinvestmentsintherealestatesector. HFCREIT iswellpositionedtoparticipateasan investmentvehicletofurtherimproveonitsgrowthintheyearsaheadforthebenefitofunitholders.

YourFundManagerwillseektoconsolidatethegainsmadeinthepreviousyearsandadoptstrategiestoimprovetheperformancerecord.TheprospectsforHFCREITareverybrightindeedandIwillurgeyoutotakefulladvantagebycontinuingtoinvestinthefund.IthankyouforyourcontinuedandunwaveringtrustintheHFCRealEstateInvestmentTrust.

PETERLARBI-YEBOA

GENERAL MANAGER

2. Outlook For the Year 2012

12

Report on the Financial Statements

We have audited the accompanying financial statements of HFC Real EstateInvestment Trust which comprise the statement of assets and liabilities asof December 31, 2011, the income and distribution accounts, statement ofmovementinnetassetsandissuedsharefortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.

Trustee’s Responsibility for the Financial Statements

The Trustee are responsible for the preparation and fair presentation of thesefinancialstatementsinaccordancewithGhanaAccountingStandardsandinthemannerrequiredbyUnitTrustandMutualFundsRegulations,2001,(L.I.1695)andtheCompaniesCode,1963(Act179).Thisresponsibilityincludes:designing,implementing and maintaining internal control relevant to the preparationand fair presentation of financial statements that are free from materialmisstatements,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditor’s Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithInternationalStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements.The procedures selecteddepend on the auditor’s judgment, including the assessment of the risks ofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

Independent Auditor’s Report to the Members of HFC REIT for the year ended 31 December 2011

13

HFC BROKERAGE SERVICES LTD.

We undertake the following

Brokerage ServicesPortfolio ManagementResearch, andCorporate Finance

Timely Delivery and Value Addition is our Hallmark !!!

Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevantto the entity’s preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of theentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadeby the Trustee, as well as evaluating the overall presentation of the financialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionofHFCRealEstateInvestmentTrustasofDecember31,2011andofitsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithGhanaAccountingStandardsandcomplywiththeCompaniesCode,1963(Act179)andhavebeenproperlypreparedinaccordancewiththeUnitTrustandMutualFundsRegulations,2001,(L.I.1695).

Report on Other Legal and Regulatory Requirements

TheCompaniesCode,1963,(Act179)requiresthatincarryingoutourauditweconsiderandreporttoyouonthefollowingmatters.Weconfirmthat:

1. Wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposeofouraudit.

2. InouropinionproperbooksofaccountshavebeenkeptbytheTrust,sofarasappearsfromourexaminationofthosebooks,and

3. TheTrust’sStatementofassetsandliabilitiesandtheincomeanddistributionaccountareinagreementwiththebooksofaccounts.

CHARTEREDACCOUNTANTS

FARRARAVENUE

ACCRA

20thApril201214

HFC BROKERAGE SERVICES LTD.

We undertake the following

Brokerage ServicesPortfolio ManagementResearch, andCorporate Finance

Timely Delivery and Value Addition is our Hallmark !!!

HFC REIT

Financial Statements

Market

Value

% Net

AssetsDescription Notes

GH ¢

Properties

ServicedPlots 155,168 1.44

InvestmentProperty 1,984,445 18.39

WorkInProgress 524,770 4.86

TOTAL 2,664,383 24.70

SHORT TERM FUNDS

CashatBankandonCall 4 149,841 1.39

TreasuryBills 700,000 6.49

FixedDeposits 3,852,148 35.71

Bonds 1,750,000 16.22

HFCEquityTrust 315,346 2.92

6,617,494 61.34

Total Short Term Funds 6,767,335 62.73

TotalInvestments 9,431,718 87.42

OtherAssetsinExcessofLiabilities 1,356,801 12.58

Total Net Assets 10,788,519 100.00

HFC Real Estate Investment TrustStatement Of Assets and LiabilitiesAs At 31 December 2011

17

HFC Real Estate Investment TrustStatement Of Assets And LiabilitiesAs At 31 December 2011

2011 2010Notes GH ¢ GH ¢

Assets:TotalInvestments 9,431,718 8,388,135

Receivables:

PropertyDebtors 1,021,231 23,930DepositforLand 750,000 750,000Interest 5 397,795 264,874OtherReceivable 4,095 0

Total Assets 11,604,839 9,426,939

Liabilities:

AmountDuetoManagers 22,000 20,330 HFCUnitTrustCurrentAccount 0 6,454

OtherCreditors 370,471 103,191 Deposits 6 409,349 40,865

AccruedCharges 14,500 33,481 TotalLiabilities 816,320 204,321

Net Assets 10,788,519 9,222,618

SIGNEDFORHFCINVESTMENTS12thAPRIL2012.

…………………...GENERALMANAGER …………………………DIRECTOR

18

HFC Real Estate Investment TrustIncome And Distribution AccountsFor The Year Ended 31 December 2011

2011 2010

Notes GH ¢ GH ¢

Investment Income

ProfitonSaleofHouses 136,542 628,251 TreasuryBills 367,030 281,030

FixedDeposits 509,134 426,149

Bonds 90,790 0

CallAccount 5,324 54,262

Interest 2,542 220,435

RentIncome 126,418 61,314

OtherIncome 93,709 101,304

Total Income 1,331,489 1,772,745

Expenses

ManagementFees 253,319 215,946

AuditorsRemuneration 14,500 13,500

OtherExpenses 3 1,102,506 475,176

1,370,325 704,622

NetInvestmentIncome (38,836) 1,068,123

Accumulated Net Investment Income

BALANCE AT 1 JANUARY 2,439,674 1,371,551

NetProfitForTheYear 38,836 1,068,123

BALANCE AT 31 DECEMBER 2,400,838 2,439,674

19

HFC Real Estate Investment TrustStatement Of Movement In Net AssetsFOR THE YEAR ENDED 31 DECEMBER 2011

2010 2010

Notes GH ¢ GH ¢

NetInvestmentIncome 38,836 1,068,123

UnrealisedGains 7 392,892 0

NetIncreaseinNetAssetsResultingfromOperations

354,056 1,068,123

CapitalTransactions

ValueofUnitsSoldandConverted 4,100,712 5,145,940

ValueofUnitsDisinvested (2,888,867) (1,824,515)

NetProceedsfromCapitalTransactions 1,211,845 3,321,425

TotalIncreaseinNetAssets 1,565,901 4,389,548

NetAssets:

Balance at I January 9,222,618 4,833,070

TotalIncreaseinNetAssets 1,565,901 4,389,548

Balance at 3I December 10,788,519 9,222,618

Statement Of Movement In Issued UnitsFOR THE YEAR ENDED 31 DECEMBER 2011

Number of Units at I January 10,689,157 6,645,768

NumberofUnitsIssuedduringtheyear 4,259,042 6,227,591

14,948,199 12,873,359

NumberofUnitsdisinvestedduringtheyear (2,863,483) (2,184,202)

Number of Units at 3I December 12,084,716 10,689,157

20

HFC Real Estate Investment TrustCapital AccountFor The Year Ended 31 December 2011

2010 2009

CAPITAL ACCOUNT Units GH ¢ Units GH ¢

Balanceat1stJanuary 10,682,157 6,782,944 6,638,768 3,461,519

ValueofUnitssold&Converted 4,259,042 4,100,711 6,227,591 5,145,940

14,941,199 10,883,655 12,866,359 8,607,459

ValueofUnitsDisinvested (2,863,483) (2,888,867) (2,184,202) (1,824,515)

12,077,716 7,994,788 10,682,157 6,782,944

Balanceat31December 12,077,716 7,994,788 10,682,157 6,782,944

21

HFC Real Estate Investment TrustNotes To The Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2011

1 ACCOUNTING POLICIES

ThesignificantaccountingpoliciesadoptedbytheTrustandwhichhavebeenusedinpreparingthesefinancialstatementsarestatedbelow:

1.1 Basis of Accounting TheTrustpreparesthefinancialstatementsunderthehistoricalcostconvention

asmodifiedbytherevaluationofProperties..

1.2 Income IncomefromSaleofpropertiesisrecognisedonlywhenthetrusthastransfer

ownershipofthepropertytothebuyer.

1.3 Investments Investments in bills and bonds have been stated at cost. Investments in

properties have been stated at current market values. Investment income isaccountedforonaccrualbasis. .

1.4 Foreign Currency Assets and liabilitiesdenominated in foreign currencies are translated into

cedisattheexchangeratesrulingatthebalancesheetdateInvestments.Gainsandlossesresultingfromforeigncurrencytranslationareincludedinthe incomeandexpenditurestatementfortheyear.

2 MANAGEMENT FEES Thisisbasedon2.5%ofthefairmarketvalueofthetotalassetsownedbythe

Trust.

22

3 OTHER EXPENSES comprise of the following:

2011 2010

GH ¢ GH¢

BankCharges 17,172 5,312

SalesCommission 0 15,300

InterestExpense 1,007,235 75,015

GeneralExpenses 78,099 36,704

1,102,506 132,331

4 CASH AT BANK AND ON CALL

CashatBank 149,841 329,121

149,841 329,121

5 INTEREST RECEIVABLE

FixedDeposits 108,223 136,647

Call 21,083 22,249

Bonds 90,790 0

TreasuryBills 177,699 105,978

397,795 264,874

23

6 DEPOSITORS

Amountspaidbycustomersinrespectofsubsequentpurchaseofhouses.

409,349 40,865

409,349 40,865

7 UNREALIZED GAINS / (LOSSES)

MarketValueofInvestmentProperty 1,537,120 0

CostofInvestmentProperty (1,144,228) 0

ChangeinUnrealisedgains 392,892 0

AddUnrealisedgainsfrompreviousyears 0 0

Unrealisedgainsasat31December 392,892 0

8 CONTINGENT LIABLITIES Therewerenocontingentliabilityattheendoftheyear.

24

Admission Form

AnnualGeneralMeetingtobeheldattheNationalTheatre,Accraat09:00amonTuesday29thMay2012.

A Unitholder who is unable to attend an Annual General Meeting (AGM) isallowedtovotebyproxy.TheProxyformonthenextpagehasbeenpreparedtoenableyoutoexerciseyourrighttovoteincaseyoucannotpersonallyattendthemeeting.

Provisionhasbeenmadeon the formfor theChairmanof themeeting toactasyourproxy,butifyouwish,youmayindicateintheblankspaceontheform(marked**)thenameofanypersonwhetheraUnitholderornot,whowillattendthemeetingandvoteonyourbehalfinsteadoftheChairmanoftheMeeting.

Pleasesigntheproxyformonthenextpageandpostitsoastoreachtheaddressinthefrontnotlaterthan29thMay2012.

IfexecutedbyaBodyCorporate,theproxyformshouldbearitscommonsealorbesignedonbehalfbyadirector.

IMPORTANT:a) ThenameoftheUnitholdermustbewritteninBLOCKLETTERSontheProxy

formwheremarked(**)

b) ThisadmissionformmustbeproducedbytheUnitholderorhis/herproxyinordertoobtainadmissiontotheAnnualGeneralMeeting.

c) UnitholdersortheirProxiesarerequestedtosigntheadmissionformbeforeattendingthemeeting.

d) Incaseofjointholders,eachjointholdershouldsign.

25

Hfc Real Estate Investment Trust/Proxy Form

AnnualGeneralMeetingtobeheldattheNationalTheatre,Accraat09:00amonTuesday29thMay,2012.

I/we**..............................................................beingaUnitholder(s)herebyappoint .........................................................................or failinghim/hertheChairmanoftheMeetingasmy/ourproxytoactandvoteforme/usandonmy/ourbehalfattheAnnualGeneralMeetingoftheFundtobeheldon29thMay2012andatanyadjournmentthereof

Datedthis20thDayofApril2012

...........................................

UnitHolder(s)Signature

RESOLUTION FOR AGAINST

Toadoptthe2011Manager’sReport

Toapprovetheaccountsanddistributionstatementforthefinancialyearended31stDecember,2011.

To authorize the Manager to Fix the Auditor’sRemuneration

Pleaseindicatewithan“X”intheappropriatesquarehowyouwishyourvotestobecastontheresolutionsetoutabove.

Unlessotherwiseinstructedtheproxywillvotefororabstainfromvotingathis/herdiscretion.

(Do not complete this form if you will attend the meeting)

26

NOTESHFC UNIT TRUST2008 Annual Report and Financial Statement

ii

owned subsidiary of

THE MANAGERName: HFC Investment Services Limited (HFCISL)Country of Incorporation: Ghana

Registration Number: 50,533

Nature of Corporate Form: Limited liability, wholly- HFC Bank (Ghana) Ltd.

Registered Of ce: Ebankese No. 35 Sixth Avenue, North Ridge P. O. Box CT. 4603 Cantonments, Accra

Principal Place of Business: HFC Bank (Ghana) Ltd., Ridge Branch 6 Sixth Avenue, Ridge Ambassadorial Enclave, West Ridge, Accra

Date of Incorporation: 7th JULY 1993 (Name changed from Home Finance Invest ment Fund Limited to HFC Investment Services Limited on 1ST OCTOBER 2001).

Capitalization (as at December 31, 2008)Authorized: 1,000,000 (One million) Ordinary shares of no Par value Issued: 100,000 shares

Auditors: Pricewaterhousecoopers Chartered Accountants UNA Home, Accra Airport City.

HFC BANK DEFINES MICROFINANCING IN GHANA

Hi -5 Loan

(Loan Improvement Loan)

Busy Bee Loan

(Business Development Loan)

Boafo Express OPEN Loan

PURPOSE PURPOSE

This product is for home completion or construction in stages. We believe

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1.

For business expansion (groups)

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Payment of medical bills

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Buying consumables

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House furnishing

5.

Payment of rent

GROUPS

Group size 5 to 10 people

Members should be prepared to co-guarantee each other

REPAYMENT TERMS

4 to 12 months.

This product is for SSNIT Informal Sector Clients only.

The guarantee for the loan is the money in the clients occupational scheme account.

Client must contribute to the account for at least five months and must continue to contribute after the loan has been contracted

LOAN

AMOUNTS

GH¢500 to GH¢20,000

GH¢500 to GH¢10,000

GH¢100 to GH¢5000

Up to four times of client’s contribution in occupational scheme account.

REPAYMENT

TERMS

4 to 24 months

Because you

have different needs, we offer flexible repayment methods:

(a)

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(b)

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ELEGIBILITY

CRITERIA

ELIGIBILITY:

Applicants must

1.

Be aged between 18 and 60 years

2.

Operate a micro/small business

3.

Be of good character

Have adequate repayment capacity

4. Have adequate repayment capacity

ELIGIBILITY:

Applicants must

1. Be aged between 18 and 60 years

2.Operate a micro/small business

3.Be of good character

4.Have adequate repayment capacity

ELIGIBILITY

Applicants must

1.

Must have micro or small business

2.

Not above 60 ye ars by end of the loan period.

ELIGIBILITY

Applications must1. Must be a

contributor to the SSNIT Informal Sector Fund for at least 5 months

CONTACT S HEAD OFFICERing Road South, East Industrial AreaOld Fadama Road, Agbogbloshie, P.O. Box CT4603, Acc ra, GhanaTel (0233-21) 670807 /670816Fax (0233-21) 670847

TUDU BRANCHHFC BankG2, St Francis Building, TuduTel (233-21) 666203 / 675114FAX (233-21) 675894

TECHIMAN BRANCHHFC BankAbammu, (Techiman – Tamale Main StreetTel (233-653) 22054Fax (233-653) 22414

TAKORADI HFC BANK OLD GNTC BUILDING MARKET CIRCLE

HFC Bank in partnership with CHF International of USA established a microfinance service company in December 2006 called BOAFO MICROFINANCE SERVIVES LTD. Boafo is a subsidiary of HFC Bank with a mission “To serve the credit demands of low and moderate-income Ghanaian households to maximize their pursuit of shelter, business, education, and other opportunities.” We offer individual loans from GH¢500.00 to GH¢20,000.00 per person.

AGBOGBLOSHIE BRANCH

HFC BANK

HFC BankTel 021 670859 / 670816Fax 021 670847

KOFORIDUA BRANCHHFC BankTel 081 26847 / 26845Fax 081 26843

KUMASI BRANCHHFC BankAdum Roundabout, Adum KumasiTel 051 32597 / 31579Fax 051 31580

ASHAIMAN BRANCH HFC BankTel 022 301468

28

HFC UNIT TRUST2008 Annual Report and Financial Statement

ii

owned subsidiary of

THE MANAGERName: HFC Investment Services Limited (HFCISL)Country of Incorporation: Ghana

Registration Number: 50,533

Nature of Corporate Form: Limited liability, wholly- HFC Bank (Ghana) Ltd.

Registered Of ce: Ebankese No. 35 Sixth Avenue, North Ridge P. O. Box CT. 4603 Cantonments, Accra

Principal Place of Business: HFC Bank (Ghana) Ltd., Ridge Branch 6 Sixth Avenue, Ridge Ambassadorial Enclave, West Ridge, Accra

Date of Incorporation: 7th JULY 1993 (Name changed from Home Finance Invest ment Fund Limited to HFC Investment Services Limited on 1ST OCTOBER 2001).

Capitalization (as at December 31, 2008)Authorized: 1,000,000 (One million) Ordinary shares of no Par value Issued: 100,000 shares

Auditors: Pricewaterhousecoopers Chartered Accountants UNA Home, Accra Airport City.

HFC BANK DEFINES MICROFINANCING IN GHANA

Hi -5 Loan

(Loan Improvement Loan)

Busy Bee Loan

(Business Development Loan)

Boafo Express OPEN Loan

PURPOSE PURPOSE

This product is for home completion or construction in stages. We believe

in the old saying that “Rome was not built in a day”.

Whether you are a worker, artisan or petty trader you can own a home or improve your existing house in the following ways:

�

Buy a plot of land

We will need proof of ownership to the piece of land on which you intend to build.

�

Build a structure

You can borrow to lay a foundation, erect walls, roof or add rooms (if you have an existing house).

�

Buy Fittings & Fixtures

Your structure is complete! You can borrow to buy shutters, kitchen or bathroom fittings.

�

Make Finishing Touches

Make your house habitable by plastering, painting, ceiling or general decoration. Our HI-5 loan can do this for you.

�

Connect Utilities

The HI -5 loan can facilitate connection to electricity, water and telephone. Call us now.

Let us inject some life into your business with the Boafo Busy Bee Loan. We offer loans for:

�

Working capital

�

Business expansion

�

Business assets

�

Other short -term financial support

This is a multi -purpose loan product designed for groups and individuals. The loan can be used in any of the following areas:

1.

For business expansion (groups)

2.

Payment of medical bills

3.

Buying consumables

4.

House furnishing

5.

Payment of rent

GROUPS

Group size 5 to 10 people

Members should be prepared to co-guarantee each other

REPAYMENT TERMS

4 to 12 months.

This product is for SSNIT Informal Sector Clients only.

The guarantee for the loan is the money in the clients occupational scheme account.

Client must contribute to the account for at least five months and must continue to contribute after the loan has been contracted

LOAN

AMOUNTS

GH¢500 to GH¢20,000

GH¢500 to GH¢10,000

GH¢100 to GH¢5000

Up to four times of client’s contribution in occupational scheme account.

REPAYMENT

TERMS

4 to 24 months

Because you

have different needs, we offer flexible repayment methods:

(a)

Collection

You don’t have to leave your business to repay a loan; we will come for it. Your business needs you.

(b)

Self Deposit

Loan Repayment is so easy that you can make deposits directly to you r account in ANY HFC Bank branches countrywide.

Express Loans can be repaid in any of HFC Bank branches. Payments are on weekly, bi -weekly or monthly bases according to the repayment schedule provided.

Collection by field officers of the fund and repaym ent is on weekly, bi-weekly or by monthly basis

ELEGIBILITY

CRITERIA

ELIGIBILITY:

Applicants must

1.

Be aged between 18 and 60 years

2.

Operate a micro/small business

3.

Be of good character

Have adequate repayment capacity

4. Have adequate repayment capacity

ELIGIBILITY:

Applicants must

1. Be aged between 18 and 60 years

2.Operate a micro/small business

3.Be of good character

4.Have adequate repayment capacity

ELIGIBILITY

Applicants must

1.

Must have micro or small business

2.

Not above 60 ye ars by end of the loan period.

ELIGIBILITY

Applications must1. Must be a

contributor to the SSNIT Informal Sector Fund for at least 5 months

CONTACT S HEAD OFFICERing Road South, East Industrial AreaOld Fadama Road, Agbogbloshie, P.O. Box CT4603, Acc ra, GhanaTel (0233-21) 670807 /670816Fax (0233-21) 670847

TUDU BRANCHHFC BankG2, St Francis Building, TuduTel (233-21) 666203 / 675114FAX (233-21) 675894

TECHIMAN BRANCHHFC BankAbammu, (Techiman – Tamale Main StreetTel (233-653) 22054Fax (233-653) 22414

TAKORADI HFC BANK OLD GNTC BUILDING MARKET CIRCLE

HFC Bank in partnership with CHF International of USA established a microfinance service company in December 2006 called BOAFO MICROFINANCE SERVIVES LTD. Boafo is a subsidiary of HFC Bank with a mission “To serve the credit demands of low and moderate-income Ghanaian households to maximize their pursuit of shelter, business, education, and other opportunities.” We offer individual loans from GH¢500.00 to GH¢20,000.00 per person.

AGBOGBLOSHIE BRANCH

HFC BANK

HFC BankTel 021 670859 / 670816Fax 021 670847

KOFORIDUA BRANCHHFC BankTel 081 26847 / 26845Fax 081 26843

KUMASI BRANCHHFC BankAdum Roundabout, Adum KumasiTel 051 32597 / 31579Fax 051 31580

ASHAIMAN BRANCH HFC BankTel 022 301468

DESIGNED & PRINTED BY TYPE : 0302 232252 / 0302 254011

HFC Investments No. 48 A, Sixth Avenue

North Ridge, Accra