United Asia Pacific Infrastructure Fund · State Street Bank and Trust Company, acting through its Singapore Branch 168 Robinson Road #33-01, Capital Tower Singapore 068912 AUDITOR

United Asia Pacific Infrastructure FundAnnual Report

for the financial year ended31st December 2017

MANAGERUOB Asset Management LtdRegistered Address:80 Raffles PlaceUOB PlazaSingapore 048624Company Registration No. : 198600120ZTel: 1800 22 22 228

DIRECTORS OF UOB ASSET MANAGEMENTLee Wai FaiEric Tham Kah JinPeh Kian HengThio Boon Kiat

TRUSTEEState Street Trust (SG) Limited168 Robinson Road#33-01, Capital TowerSingapore 068912

CUSTODIAN / ADMINISTRATOR / REGISTRARState Street Bank and Trust Company, acting through its Singapore Branch168 Robinson Road#33-01, Capital TowerSingapore 068912

AUDITORPricewaterhouseCoopers LLP7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

United Asia Pacific Infrastructure Fund(Constituted under a Trust Deed in the Republic of Singapore)

-1-

A) Fund Performance

Fund Performance/Benchmark Returns

3 mth%

Growth

6 mth%

Growth

1 yr%

Growth

3 yrAnn

CompRet

5 yrAnn

CompRet

10 yrAnn

CompRet

SinceInception

17 October2006Ann

CompRet

United Asia PacificInfrastructure Fund 1.80 2.04 7.06 1.75 2.59 -3.47 -0.55

Benchmark 1.46 2.95 6.00 6.00 6.00 6.00 6.00

Source: Lipper, a Thomson Reuters Company.

Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis with dividends and distributionsreinvested, if any.The benchmark of the Fund: The performance of the Fund will be measured against an absolute return benchmark of 6% perannum.

For the year ended 31 December 2017, the net asset value of the Fund increased 7.06% compared with a 6.00% increase inthe absolute return benchmark in Singapore Dollar terms.

The deep cyclical sectors rallied again this year, with MSCI AC Asia Pacific Energy sector rising 24.3% and MSCI AC AsiaPacific Materials sector rising 23.9%. The MSCI AC Asia Pacific Industrials sector also did well, rising 18.2% compareddefensive sectors which unperformed, with the MSCI AC Asia Pacific Telecommunication Services sector rising 3.1% andMSCI AC Asia Pacific Utilities sector that was up 4.3% during the year.

The Fund benefited from holdings such as Airtac, the leading automation player in the world’s largest and fastest growingautomationmarket in China,MaruwaUnyuKikan, one of Japan’s logistics player,Techtronics, a key power tools player basedin Hong Kong that is a key supplier to Home Depot in the US, and Daikin Industries, one of the leading air-conditioner playersglobally. On the other hand, the Fund’s performance detracted slightly due to holdings in Park24, Coal India and Inpex.

Key contributors to performance include: Airtac International (Taiwan), Maruwa Unyu Kikan (Japan), TechtronicIndustries (Hong Kong) and Daikin Industries (Japan).

Key detractors include: Park24 (Japan), Coal India (India) and Inpex Corp (Japan).

As at end 31 December 2017, the Fund had the following regional asset allocation: Japan (18.52%), India (13.23%),Australia(8.33%), Singapore (6.52%), Indonesia (5.56%), Taiwan (4.59%), others (8.18%) and the remainder in cash (35.07%).

Economic and Market Review

The Asia Pacific equity markets rose in Singapore Dollar terms in the period under review, outperforming global equity markets.

Economic data in Asia ex-Japan was strong as growth rode in tandem with the global economic upcycle. The PurchasingManagers’ Index (PMI) in China and India shot to a five-year in the second half of 2017. Chinese manufacturing remained inthe expansionary territory throughout the year, peaking in September at 52.4, while the private sector Caixin manufacturingindex ended the year at 51.6. Manufacturing expansion saw India finishing the year at a high of 54.7. A recovery ofmanufacturing activity in South Korea picked up momentum from September on a cycle of higher orders. With Taiwan,numbers stayed above the 50 mark throughout the year and peaked in December.

North Asia outperformed South-east Asia with technology giants fuelling much of the gains. China was the best performingmarket. Other standouts were Korea, India and Hong Kong. The worst performers were Philippines, Malaysia, Indonesiaand Taiwan.

China emerged as the top performing market despite tightening measures. Better-than-expected economic data and strongearnings growth helped to drive the market higher. Hong Kong, on the other hand, benefitted from strong buying investorinterest from the mainland via the Southbound Stock Connect scheme especially with property stocks on the back of risinghome prices. Korea stocks benefited from the current global technology upcycle but Taiwan markets underperformed asinvestors sold off technology names on profit taking in the later part of the year as they rotated into other sectors.


-2-

A) Fund Performance (continued)

The ASEAN markets underperformed the broader Index. Although Thailand lagged in the earlier part of 2017, it caught uptowards the end of the year on the back of better than expected exports and optimism from increased tourist numbers. On thehand, Indonesia lagged on corporate earnings and weaker economic data. Meanwhile, Singapore saw upward revision ofgross domestic product (GDP) numbers for the year while its neighbourMalaysia also witnessed stronger than expected GDPgrowth and an appreciation of the ringgit ahead of anticipated interest rate hikes in 2018. The Philippines marketunderperformed with a record trade deficit in November and the peso was Southeast Asia’s worst performing currency againstthe US Dollar for 2017.

Japan equities underperformed the broader index despite the economy benefitting from the current global economic upcycle.Retail sales and industrial production were both above expectations during the period under review. Inflation data came in at0.6% which remains below Bank of Japan’s (BOJ) target. Progress on the implementation of structural reforms remains slowamidst headwinds such as an ageing population and declining labour force but incremental improvements are now being seenin corporate governance.

The Australian index underperformed within the region despite the strong rally in the material and energy prices globally. Thedomestic growth transition is still struggling amidst the capital expenditure cliff in the commodities sector. Economic data suchas domestic private demand and industrial production remains mixed. Corporate earnings also disappointed resulting in theregion’s underperformance.

Outlook and Fund Strategy

We believe that the Asia Pacific markets continue to offer exciting investment opportunities for growth investors over the longterm. Valuations for Asia Pacific equities are attractive. The aggregate market performance has been encouraging especiallyin Asia ex-Japan as the region is leveraged to the global economic upcycle. However, we remain mindful that growth within theregion remains uneven and fundamental sector/country and stock selection will remain crucial.

The Fund continues selection with a bottom-up approach. We continue to invest in high quality companies that commandleading market share, have strong balance sheets, generate solid cash flows and enjoy healthy operating margins. We remaindisciplinedwith valuations. The Fund looks at contrarian investments for good quality companies thatmight be facing temporaryde-rating or oversold conditions but are fundamentally strong in the longer term.

Lastly, given that the benchmark of the Fund is on an absolute return basis, the Fund will hold a higher level than normal cashlevels at times when market valuation becomes rich or when markets are volatile. The Fund remains focused on generatingpositive absolute returns, while minimising the downside risk.


-3-

B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 31 December2017 under review classified by

i) Country

Fair Value(S$)

% of NAV

Australia 1,382,122 8.33

China 604,467 3.65

Hong Kong 274,369 1.65

India 2,194,610 13.23

Indonesia 922,220 5.56

Japan 3,071,238 18.52

Singapore 1,080,639 6.52

Taiwan 761,014 4.59

United Kingdom 476,897 2.88

Portfolio of investments 10,767,576 64.93

Other net assets/(liabilities) 5,815,120 35.07

Total 16,582,696 100.00

ii) Industry

Fair Value(S$)

% of NAV

Consumer Discretionary 274,369 1.65

Energy 1,227,979 7.41

Industrials 4,493,292 27.10

Information Technology 449,287 2.71

Real Estate 352,325 2.12

Telecommunication Services 2,086,035 12.58

Utilities 1,884,289 11.36



Total 16,582,696 100.00

iii) Asset Class

Fair Value(S$) % of NAV

Quoted equities 10,767,576 64.93


Total 16,582,696 100.00


-4-

B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 31 December2017 under review classified by (continued)

iv) Credit rating of quoted bonds

N/A

C) Top Ten Holdings

10 largest holdings as at 31 December 2017

Fair Value(S$)

Percentage oftotal net assetsattributable tounitholders

%

POWER GRID CORP OF INDIA LTD 1,299,498 7.83

SINGAPORE TELECOMMUNICATIONS LTD 1,080,639 6.52

PARK24 CO LTD 956,660 5.77

TELEKOMUNIKASI INDONESIA PERSERO TBK PT 922,220 5.56

TAIWAN SECOM CO LTD 761,014 4.59

HOSHIZAKI CORP 722,937 4.36

DAIKIN INDUSTRIES LTD 616,968 3.72

YUEXIU TRANSPORT INFRASTRUCTURE LTD 604,467 3.65

BRAMBLES LTD 589,036 3.55

NTPC LTD 584,791 3.53

10 largest holdings as at 31 December 2016

Fair Value

Percentage oftotal net assetsattributable tounitholders

(S$) %

AIRTAC INTERNATIONAL GROUP 1,232,673 6.62

SINGAPORE TELECOMMUNICATIONS LTD 1,104,855 5.93

TECHTRONIC INDUSTRIES CO LTD 1,025,674 5.51

POWER GRID CORP OF INDIA LTD 976,239 5.24

PT TELKOMUNIKASI INDONESIA 899,969 4.83

HOSHIZAKI CORP 710,366 3.82

SINO GAS & ENERGY HOLDINGS LTD 629,090 3.38

TAIWAN SECOM CO LTD 567,938 3.05

YUEXIU TRANSPORT INFRASTRUCTURE LTD 557,849 3.00

DAIKIN INDUSTRIES LTD 478,689 2.57

D) Exposure to derivatives

i) Fair value of derivative contracts and as a percentage of NAV as at 31 December 2017

N/A


-5-

D) Exposure to derivatives (continued)

ii) There was a net realised gain of SGD 3,982 on derivative contracts during the financial year ended 31 December 2017.

iii) Net gains/(losses) on outstanding derivative contracts marked to market as at 31 December 2017

N/A

E) Amount and percentage of NAV invested in other schemes as at 31 December 2017

Please refer to the Statement of Portfolio.

F) Amount and percentage of borrowings to NAV as at 31 December 2017

N/A

G) Amount of redemptions and subscriptions for the financial year ended 31 December 2017

Total amount of redemptions SGD 3,481,277

Total amount of subscriptions SGD 242,227

H) The amount and terms of related-party transactions for the financial year ended 31December2017

Please refer to Note 9 of the Notes to the Financial Statements.

I) Expense ratios


J) Turnover ratios


K) Any material information that will adversely impact the valuation of the scheme such ascontingent liabilities of open contracts

N/A

L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1

should be disclosed as well

i) Top 10 holdings at fair value and as percentage of NAV as at 31 December 2017 and 31 December 2016

N/A

ii) Expense ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A


-6-

L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1should be disclosed as well (continued)

iii) Turnover ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A

1 Where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has aformal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on theunderlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily availableto the Singapore manager.

M) Soft dollar commissions/arrangements

UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products andservices are received from third parties. The products and services relate essentially to computer hardware and softwareto the extent that they are used to support the investment decision making process, research and advisory services,economic and political analyses, portfolio analyses including performance measurements, market analyses, data andquotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management’s duties toclients. As such services generally benefit all of UOB Asset Management’s clients in terms of input into the investmentdecision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms thattrades were executed on a best execution basis and there was no churning of trades.

N) Where the scheme offers pre-determined payouts, an explanation on the calculation of theactual payouts received by participants and any significant deviation from thepre-determined payouts

N/A


-7-

REPORT OF THE TRUSTEE

The Trustee is under a duty to take into custody and hold the assets of United Asia Pacific Infrastructure Fund (the “Fund”) intrust for the unitholders. In accordance with the Securities and Futures Act (Cap. 289), its subsidiary legislation and the Codeon Collective Investment Schemes, the Trustee shall monitor the activities of the Manager for compliance with the limitationsimposed on the investment and borrowing powers as set out in the Trust Deed in each annual accounting year and reportthereon to unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Fund during the financial yearcovered by these financial statements, set out on pages 12 to 31, in accordance with the limitations imposed on the investmentand borrowing powers set out in the Trust Deed.

For and on behalf of the TrusteeSTATE STREET TRUST (SG) LIMITED

Authorised signatory29 March 2018


-8-

STATEMENT BY THE MANAGER

In the opinion of UOBAssetManagement Ltd, the accompanying financial statements set out on pages 12 to 31, comprising theStatement of Total Return, Statement of Financial Position, Statement of Movements of Unitholders’ Funds, Statement ofPortfolio andNotes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial positionand portfolio holdings of United Asia Pacific Infrastructure Fund (the “Fund”) as at 31 December 2017, and the financialperformance and movements of unitholders’ funds for the year then ended in accordance with the recommendations ofStatement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of SingaporeChartered Accountants. At the date of this statement, there are reasonable grounds to believe that the Fundwill be able tomeetits financial obligations as and when they materialise.

For and on behalf of the ManagerUOB ASSET MANAGEMENT LTD

THIO BOON KIATAuthorised signatory29 March 2018


-9-

INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF UNITED ASIA PACIFICINFRASTRUCTURE FUND

Our Opinion

In our opinion, the accompanying financial statements of United Asia Pacific Infrastructure Fund (the “Fund”), are properlydrawn up in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “ReportingFramework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants, so as to present fairly, in all materialrespects, the financial position and portfolio holdings of the Fund as at 31 December 2017, and of the financial performanceand movements of unitholders’ funds for the financial year ended on that date.

What we have audited

The financial statements of the Fund comprise:

• the Statement of Total Return for the financial year ended 31 December 2017;

• the Statement of Financial Position as at 31 December 2017;

• the Statement of Movements of Unitholders’ Funds for the financial year ended 31 December 2017;

• the Statement of Portfolio as at 31 December 2017; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under thosestandards 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 audit opinion.

Independence

We are independent of the Fund in accordance with the Accounting and Corporate Regulatory Authority Code of ProfessionalConduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements thatare relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ACRA Code.

Other Information

The Fund’s Manager (the “Manager”) is responsible for the other information. The other information comprises all sections ofthe annual report but does not include 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 and will not express any form ofassurance 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 theaudit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, weconclude that there is a material misstatement of this other information, we are required to report that fact. We have nothingto report in this regard.

Responsibilities of the Manager for the Financial Statements

The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with therecommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by theInstitute of Singapore Chartered Accountants and for such internal control as the Manager determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud or error.

-10-


INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF UNITED ASIA PACIFICINFRASTRUCTURE FUND

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessthe Manager either intends to terminate the Fund or to cease the Fund’s operations, or has no realistic alternative but to do so.

The Manager’s responsibilities include overseeing the Fund’s financial reporting process.

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 materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted in accordancewith SSAswill always detect amaterialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Manager.

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

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

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.

PricewaterhouseCoopers LLPPublic Accountants and Chartered Accountants

Singapore, 2 March 2018

-11-


9

STATEMENT OF TOTAL RETURNFor the financial year ended 31 December 2017

2017 2016

Note $ $

Income

Dividends 338,796 238,004

Interest 27,058 30,695

Total 365,854 268,699

Less: Expenses

Management fee 9 263,708 288,545

Trustee fee 9 6,367 7,695

Audit fee 19,141 17,001

Registrar fee 9 21,865 24,208

Valuation fee 9 21,975 24,046

Custody fee 9 14,393 11,743

Transaction costs 34,592 56,562

Other expenses 78,352 44,961

Total 460,393 474,761

Net income/(losses) (94,539) (206,062)

Net gains/(losses) on value of investments

Net gains/(losses) on investments 1,448,989 1,971,174

Net gains/(losses) on financial derivatives 3,982 -

Net foreign exchange gains/(losses) (125,626) 16,016

1,327,345 1,987,190

Total return/(deficit) for the year before income tax 1,232,806 1,781,128

Less: Income tax 3 (28,633) (19,684)

Less: Capital gains tax refund 3 - 5,127

Total return/(deficit) for the year 1,204,173 1,766,571


The accompanying notes form an integral part of these financial statements.-12-

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2017

2017 2016

Note $ $

Assets

Portfolio of investments 10,767,576 10,636,417

Receivables 4 79,070 55,082

Cash and bank balances 1,634,779 2,434,041

Fixed deposits 6 4,223,706 5,681,282

Total assets 16,705,131 18,806,822

Liabilities

Purchases awaiting settlement - 3,553

Payables 5 122,435 185,696

Total liabilities 122,435 189,249

Equity

Net assets attributable to unitholders 7 16,582,696 18,617,573



STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDSFor the financial year ended 31 December 2017

2017 2016

Note $ $Net assets attributable to unitholders at the beginning of the financialyear 18,617,573 19,960,012

Operations

Change in net assets attributable to unitholders resulting from operations 1,204,173 1,766,571

Unitholders’ contributions/(withdrawals)

Creation of units 242,227 224,820

Cancellation of units (3,481,277) (3,333,830)

Change in net assets attributable to unitholders resulting from net creationand cancellation of units (3,239,050) (3,109,010)

Total increase/(decrease) in net assets attributable to unitholders (2,034,877) (1,342,439)

Net assets attributable to unitholders at the end of the financial year 7 16,582,696 18,617,573



STATEMENT OF PORTFOLIOAs at 31 December 2017

Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary

Quoted Equities

AUSTRALIA

BRAMBLES LTD 55,961 589,036 3.55

SINO GAS & ENERGY HOLDINGS LTD 2,720,476 440,761 2.66

VIVA ENERGY REIT 149,145 352,325 2.12

TOTAL AUSTRALIA 1,382,122 8.33

CHINA

YUEXIU TRANSPORT INFRASTRUCTURE LTD 616,000 604,467 3.65

HONG KONG

TECHTRONIC INDUSTRIES CO LTD 31,500 274,369 1.65

INDIA

COAL INDIA LTD 56,365 310,321 1.87

NTPC LTD 157,797 584,791 3.53

POWER GRID CORP OF INDIA LTD 309,783 1,299,498 7.83

TOTAL INDIA 2,194,610 13.23

INDONESIA

TELEKOMUNIKASI INDONESIA PERSERO TBK PT 2,108,700 922,220 5.56

JAPAN

DAIKIN INDUSTRIES LTD 3,900 616,968 3.72

HOSHIZAKI CORP 6,100 722,937 4.36

KDDI CORP 2,500 83,176 0.50

KEYENCE CORP 600 449,287 2.71

PARK24 CO LTD 29,900 956,660 5.77

SECOM CO LTD 2,400 242,210 1.46

TOTAL JAPAN 3,071,238 18.52

SINGAPORE

SINGAPORE TELECOMMUNICATIONS LTD 302,700 1,080,639 6.52




Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary (continued)

Quoted Equities

TAIWAN

TAIWAN SECOM CO LTD 185,000 761,014 4.59

UNITED KINGDOM

ROYAL DUTCH SHELL PLC A SHARES 10,637 476,897 2.88

Total Equities 10,767,576 64.93



Net assets attributable to unitholders 16,582,696 100.00




Percentage oftotal net assetsattributable tounitholders at31 December

2017%


2016%

By Geography - Primary (Summary)

Quoted Equities

Australia 8.33 6.16

China 3.65 -

Hong Kong 1.65 8.51

India 13.23 7.49

Indonesia 5.56 5.93

Japan 18.52 11.15

Singapore 6.52 5.93

Taiwan 4.59 9.67

United Kingdom 2.88 2.29

Portfolio of investments 64.93 57.13

Other net assets/(liabilities) 35.07 42.87

Net assets attributable to unitholders 100.00 100.00




Fair value at31 December

2017$


2017%


2016%

By Industry - Secondary

Quoted Equities

Consumer Discretionary 274,369 1.65 5.51

Energy 1,227,979 7.41 8.69

Industrials 4,493,292 27.10 21.47

Information Technology 449,287 2.71 -

Materials - - 2.16

Real Estate 352,325 2.12 1.05

Telecommunication Services 2,086,035 12.58 10.76

Utilities 1,884,289 11.36 7.49

Portfolio of investments 10,767,576 64.93 57.13

Other net assets/(liabilities) 5,815,120 35.07 42.87

Net assets attributable to unitholders 16,582,696 100.00 100.00



These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1 General

United Asia Pacific Infrastructure Fund (the “Fund”) is a Singapore-registered trust fund constituted under a Trust Deed dated30 August 2006 between UOB Asset Management Ltd (the “Manager”) and HSBC Institutional Trust Services (Singapore)Limited (the “Retired Trustee”). The Deed is governed by the laws of the Republic of Singapore.

With effect from 1 April 2017, the Trustee of the Fund has changed from HSBC Institutional Trust Services (Singapore) Limitedto State Street Trust (SG) Limited (the “Trustee”).

The investment objective of the Fund is to achieve medium to long term capital growth by investing in securities (equities orequity-related securities) issued by companies which carry on infrastructure-related businesses in the Asia-Pacific region.

Subscriptions and redemptions of the units are denominated in theSingaporeDollar and theUnitedStatesDollar. Investorsmaysubscribe in the United States Dollar at the applicable rate of exchange from the Singapore Dollar.

2 Significant accounting policies

(a) Basis of preparation

The financial statements have been prepared under the historical cost convention, modified by the revaluation of financialassets held at fair value through profit or loss, and in accordance with the recommendations of Statement of RecommendedAccounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants.

The Fund has adopted the following Singapore Financial Reporting Standards (“FRS”) and related amendments in accordancewith the recommendations of the RAP 7 issued in March 2017 for annual periods beginning on or after 1 July 2016:

(i) Consolidation and disclosure of interests in other entities

FRS 110 “Consolidated financial statements”FRS 112 “Disclosure of interests in other entities”Amendments to FRS 110, FRS 112 and FRS 27 “Investment entities”

FRS 110 and the amendments define an investment entity and introduce an exception from the consolidation requirements forinvestments entities.

FRS 112 and the amendments require entities to disclose significant judgements and assumptions made in determiningwhether the entity controls, jointly controls, significantly influences or has some interests in other entities. Entities are alsorequired to provide disclosure around certain “structured entities”. The amendments to FRS 112 introduce new disclosurerequirements related to investment entities.

(ii) Offsetting financial assets and liabilities disclosures

Amendments to FRS 32 “Financial instruments: Presentation - Offsetting financial assets and financial liabilities”Amendments to FRS 107 “Disclosures - Offsetting financial assets and financial liabilities”

The amendments to FRS 32 provide clarification on the offsetting criteria in FRS 32 and address inconsistencies in theirapplication.

The amendments to FRS 107 require additional disclosures to enable users of the financial statements to evaluate the effector the potential effects of netting arrangements, including rights of set-off associated with an entity’s recognised financialassets and recognised financial liabilities, on the entity’s financial position.

The adoption of these new or amended FRS impacted the Fund’s level of disclosures in certain of the above noted areas, butdid not result in substantial changes to the accounting policies of the Fund and had no material effect on the amounts reportedfor the current or prior years.


NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2017

-19-

2 Significant accounting policies (continued)

(b) Recognition of income

Dividend income is recognised when the right to receive payment is established. Interest income is recognised on a timeproportion basis using the effective interest method.

(c) Investments

Investments are classified as financial assets at fair value through profit or loss.

(i) Initial recognition

Purchases of investments are recognised on the trade date. Investments are recorded at fair value on initial recognition.

(ii) Subsequent measurement

Investments are subsequently carried at fair value. Net changes in fair value on investments are included in the Statement ofTotal Return in the year in which they arise.

(iii) Derecognition

Investments are derecognised on the trade date of disposal. The resultant realised gains and losses on the sale of investmentsare computed on the basis of the difference between the weighted average cost and selling price gross of transaction costs,and are taken up in the Statement of Total Return.

(d) Basis of valuation of investments

The fair value of financial assets and liabilities traded in active markets is based on quoted market prices at the close of tradingon the financial year end date. The quoted market price used for investments held by the Fund is the last traded market pricefor both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstanceswhere the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread thatis most representative of fair value.

(e) Foreign currency translation

(i) Functional and presentation currency

The Fund’s investors are mainly from Singapore with the subscriptions and redemptions of the units denominated in theSingapore Dollar and the United States Dollar.

The performance of the Fund is measured and reported to the investors in the Singapore Dollar. The Manager considers theSingapore Dollar as the currency of the primary economic environment in which the Fund operate. The financial statements arepresented in the Singapore Dollar, which is the 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 thetransactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation atyear-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statementof Total Return. Translation differences on non-monetary financial assets and liabilities are also recognised in the Statementof Total Return within “Net gains/losses on investments”.




-20-

2 Significant accounting policies (continued)

(f) Expenses charged to the Fund

All direct expenses relating to the Fund are charged directly to the Statement of Total Return. In addition, certain expensesshared by all unit trusts managed by the Manager are allocated to each fund based on the respective fund’s net asset value.

(g) Financial derivatives

Financial derivatives including forwards and swapsmay be entered into for the purposes efficient portfoliomanagement, tacticalasset allocation or specific hedging of financial assets held as determined by theManager and in accordance with the provisionof the Trust Deed and the Code on Collective Investment Schemes.

Financial derivatives outstanding on the financial year end date are valued at the forward rate or at the current market pricesusing the �mark-to-market� method, as applicable, and the resultant gains and losses are taken up in the Statement of TotalReturn.

(h) Distributions

The Manager has the absolute discretion to determine whether a distribution is to be made. In such an event, an appropriateamount will be transferred to a distribution account, to be paid out on the distribution date. The amount shall not be treated aspart of the property of the Fund. Distributions are accrued for at the financial year end date if the necessary approvals havebeen obtained and a legal or constructive obligation has been created.

3 Income tax

2017 2016

$ $

Overseas income tax 28,633 19,684

Capital gains tax refund - (5,127)

The Fundwas granted the status of Designated Unit Trust (“DUT”) in Singapore. The Trustee of the Fund ensures that the Fundfulfill their reporting obligations under the DUT Scheme.

Under the DUT Scheme, subject to certain conditions and reporting obligations being met, certain income of the DUT Fund isnot taxable in accordance with Sections 35(12) and 35(12A) of the Income Tax Act. Such income includes:

(i) gains or profits derived from Singapore or elsewhere from the disposal of securities;

(ii) interest (other than interest for which tax has been deducted under Section 45 of the Income Tax Act);

(iii) dividends derived from outside Singapore and received in Singapore;

(iv) gains or profits derived from foreign exchange transactions, transactions in futures contracts, transactions in interest rateor currency forwards, swaps or option contracts and transactions in forwards, swaps or option contracts relating to anysecurities or financial index;

(v) discount, prepayment fee, redemption premium and break cost from qualifying debt securities issued during theprescribed period; and

(vi) distributions from foreign unit trusts derived from outside Singapore and received in Singapore.




-21-

3 Income tax (continued)

The overseas income tax represents tax withheld on foreign sourced income. Capital gains tax represents tax on capital gainssourced from India.

The Fund is required to recognise a tax liability when it is probable that the tax laws of foreign countries require a tax liabilityto be assessed on the Fund’s gains on investments sourced from such foreign countries, assuming the relevant taxingauthorities have full knowledge of all the facts and circumstances. The tax liability is then measured at the amount expected tobe paid to the relevant taxation authorities using the tax laws and rates that have been enacted or substantively enacted by theend of the financial year. There is sometimes uncertainty about the way enacted tax law is applied to offshore investment funds.This creates uncertainty about whether or not a tax liability will ultimately be paid by the Fund. Therefore when measuring anyuncertain tax liabilities management considers all of the relevant facts and circumstances available at the time which couldinfluence the likelihood of payment, including any formal or informal practices of the relevant tax authorities.

As at 31 December 2017 and 2016, the Fund has uncertain taxes exposure with respect to gains on investment of which thetax liability is estimated to be nil.While this represents theManager’s best estimate, the estimated value could differ significantlyfrom the amount ultimately payable.

4 Receivables

2017 2016

$ $

Amounts receivable for creation of units - 1,714

Dividends receivable 59,607 25,136

Interests receivable 2,387 -

Other receivables 17,076 28,232

79,070 55,082

5 Payables

2017 2016

$ $

Amount payable for cancellation of units 22,708 83,986

Amount due to the Manager 69,534 76,841

Amount due to Trustee 1,498 1,891

Tax payables 4,626 -

Other creditors and accrued expenses 24,069 22,978

122,435 185,696

6 Fixed deposits

Fixed deposits as at 31 December 2017 have an average maturity of 20 days (2016: 20 days) from the end of the financial yearwith a weighted average effective interest rate of 1.03% (2016: 0.55%).




-22-

7 Units in issue

During the financial year ended 31 December 2017 and 2016, the numbers of units issued, redeemed and outstanding wereas follows:

2017 2016

Units at the beginning of the financial year 23,466,834 27,568,392

Units created 294,022 298,596

Units cancelled (4,232,327) (4,400,154)

Units at the end of the financial year* 19,528,529 23,466,834

*Included above are units denominated in USD 1,479,594 2,265,677

$ $

Net assets attributable to unitholders 16,582,696 18,617,573

Net assets value per unit 0.849 0.793

There is no difference between the net assets attributable to unitholders per unit per financial statements and the net assetsattributable to unitholders per unit for issuing/redeeming of units.

8 Financial risk management

The Fund’s activities expose it to a variety of market risks (including currency risk, interest rate risk and price risk), credit riskand liquidity risk. The Fund’s overall risk management programme seeks to minimise potential adverse effects on the Fund’sfinancial performance. The Fund may use futures contracts, financial options contracts and/or foreign currency contractssubject to the terms of the Trust Deed to moderate certain risk exposures. Specific guidelines on exposures to individualsecurities and certain industries are in place for the Fund at any time as part of the overall financial risk management to reducethe Fund’s risk exposures.

TheFund’s assets principally consist of financial instruments such as equity investments and cash. They are held in accordancewith the published investment policies of the Fund. The allocation of assets between the various types of investments isdetermined by the Manager to achieve its investment objectives.

(a) Market risk

Market risk is the risk of loss arising from uncertainty concerning movements in market prices and rates, including observablevariables such as interest rates, credit spreads, exchange rates, and others that may be only indirectly observable such asvolatilities and correlations. Market risk includes such factors as changes in economic environment, consumption pattern andinvestor’s expectation etc. which may have significant impact on the value of the investments. The Fund’s investments aresubstantially dependent on changes in market prices and are monitored by the Manager on a regular basis so as to assesschanges in fundamentals and valuation. Although the Manager makes reasonable efforts in the choice of investments, eventsbeyond reasonable control of the Manager could affect the prices of the underlying investments and hence the asset value ofthe Fund.Guidelines are set to reduce theFund’s risk exposures tomarket volatility such as diversifying the portfolio by investingacross various geographies, alternatively, the Fund may be hedged using derivative strategies.




-23-

8 Financial risk management (continued)

(a) Market risk (continued)

(i) Foreign exchange risk

The Fund has monetary financial assets and liabilities denominated in currencies other than the Singapore Dollar and it maybe affected favourably or unfavourably by exchange rate regulations or changes in the exchange rates between the SingaporeDollar and such other currencies. The Manager may at his discretion, implement a currency management strategy either toreduce currency volatility or to hedge the currency exposures of the Fund.

The table below summarises the Fund’s exposure to foreign currencies at the end of the financial year.

As at 31 December 2017SGD IDR HKD AUD INR USD TWD JPY Others Total$ $ $ $ $ $ $ $ $ $

AssetsPortfolio ofinvestments 1,080,639 922,220 878,835 1,382,122 2,194,610 - 761,014 3,071,239 476,897 10,767,576Receivables 49,127 - - - - - - 29,943 - 79,070Cash and bankbalances 575,825 - - - 1,010,124 48,829 - - 1 1,634,779Fixed deposits 4,223,706 - - - - - - - - 4,223,706Total Assets 5,929,297 922,220 878,835 1,382,122 3,204,734 48,829 761,014 3,101,182 476,898 16,705,131

LiabilitiesPayables 117,809 - - - - - - 4,626 - 122,435TotalLiabilities 117,809 - - - - - - 4,626 - 122,435

Net currencyexposure 5,811,488 922,220 878,835 1,382,122 3,204,734 48,829 761,014 3,096,556 476,898




-24-



(i) Foreign exchange risk (continued)

As at 31 December 2016SGD IDR HKD AUD INR USD TWD JPY Others Total$ $ $ $ $ $ $ $ $ $

AssetsPortfolio ofinvestments 1,104,855 1,103,530 1,583,523 1,147,458 1,395,199 - 1,800,610 2,075,423 425,819 10,636,417Receivables 47,959 - - - - 2,571 - 4,552 - 55,082Fixed deposits 3,507,388 - - - - 2,173,894 - - - 5,681,282Cash and bankbalances 1,299,204 - - - 462,939 671,897 - - 1 2,434,041Total Assets 5,959,406 1,103,530 1,583,523 1,147,458 1,858,138 2,848,362 1,800,610 2,079,975 425,820 18,806,822

LiabilitiesPurchasesawaitingsettlement - - 3,553 - - - - - - 3,553Payables 185,183 - 6 - - 507 - - - 185,696TotalLiabilities 185,183 - 3,559 - - 507 - - - 189,249

Net currencyexposure 5,774,223 1,103,530 1,579,964 1,147,458 1,858,138 2,847,855 1,800,610 2,079,975 425,820

Investments, which is the significant item in the Statement of Financial Position is exposed to currency risk and other price risk.The other price risk sensitivity analysis includes the impact of currency risk on non-monetary investments. The Fund’s netfinancial assets comprise significantly non-monetary investments, hence currency risk sensitivity analysis has not beenperformed on the remaining financial assets, except for the following:

Currency

2017Net impact tonet assets

attributable tounitholders



$ % $ %

USD 2,930 6 153,215 5

INR 50,506 5 27,776 6

(ii) Price risk

Price risk is the risk of potential adverse changes to the value of financial investments because of changes inmarket conditionsand volatility in security prices.




-25-



(ii) Price risk (continued)

The table below summarises the impact of increases/decreases from the Fund’s investments in equities on the Fund’s netassets attributable to unitholders at 31 December 2017 and 2016. The analysis is based on the assumption that the indexcomponents within the benchmark increased/decreased by a reasonable possible shift, with all other variables held constantand that the fair value of the Fund’s investments moved according to the historical correlation with the index.

Benchmark component





$ % $ %

80% MSCI Asia Pacificex Japan, 20% MSCI Japan 1,162,898 20 1,233,824 20

(iii) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

Investment funds that invest in equity securities may be subject to interest rate risk as any interest rate change may affect theequity risk premium though at varying degrees. Tomanage this risk, theManager analyses how interest rate changesmay affectdifferent industries and securities and then seeks to adjust the Fund’s portfolio investments accordingly. However, the effectsof changes in interest rates on the Fund’s portfolio may not be quantified as the relationship between the interest rates and thevalue of equity securities is indirect.

Other than the cash and bank balances and fixed deposits which are at short term market interest rates, and therefore subjectto insignificant interest rate risk, the Fund’s financial assets and liabilities are largely non-interest bearing.

Hence, no sensitivity analysis has been presented separately.

(b) Liquidity risk

The Fund is exposed to daily cash redemptions and disbursements for the settlements of purchases. The Manager thereforeensures that the Fund maintains sufficient cash and cash equivalents and that it is able to obtain cash from the sale ofinvestments held to meet its liquidity requirements. Reasonable efforts will be taken to invest in securities which are traded ina relatively active market and which can be readily disposed of.

The Fund’s investments in listed securities are considered to be readily realisable as they are listed on established regionalstock exchanges.




-26-


(b) Liquidity risk (continued)

The table below analyses the Fund’s financial liabilities into relevant maturity groupings based on the remaining period at thefinancial year end 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 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2017

Payables 122,435 - -

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2016

Purchases awaiting settlement 3,553 - -

Payables 185,696 - -

(c) Credit risk

The Fund takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due.The Fund’s credit risk is concentrated on cash and bank balances, and amounts or securities receivable on the sale andpurchase of investments respectively. In order to mitigate exposure to credit risk, all transactions in listed securities aresettled/paid for upon delivery and transacted with approved counterparties using an approved list of brokers that are regularlyassessed and updated by the Manager.




-27-


(c) Credit risk (continued)

The table below summarises the credit rating of banks and custodians in which the Fund’s assets are held as at 31 December2017 and 2016.

The credit ratings are based on the Viability ratings published by Fitch.

Credit ratingas at 31December2017

Credit ratingas at 31December2016

Bank and custodian

State Street Bank and Trust Company aa- aa-

Bank

DBS Group Holdings Ltd n/a aa-

United Overseas Bank Limited n/a aa-

Fixed deposits

Overseas-Chinese Banking Corporation aa- aa-

United Overseas Bank Limited aa- aa-

The maximum exposure to credit risk at the financial year end date is the carrying amount of the portfolio of investments, cashand bank balances and fixed deposits as presented in Statement of Financial Position.

(d) Capital management

The Fund’s capital is represented by the net assets attributable to unitholders. The Fund strives to invest the subscriptions ofredeemable participating units in investments that meet the Fund’s investment objectives while maintaining sufficient liquidityto meet unitholder redemptions.

(e) Fair value estimation

The Fund classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used inmaking 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).




-28-


(e) Fair value estimation (continued)

The following table analyses within the fair value hierarchy, the Fund’s financial assets and liabilities (by class) measured at fairvalue at 31 December 2017 and 2016:

Level 1 Level 2 Level 3 Total$ $ $ $

As at 31 December 2017Assets

Portfolio of investments

- Quoted equities 10,767,576 - - 10,767,576

Total 10,767,576 - - 10,767,576

Level 1 Level 2 Level 3 Total

$ $ $ $As at 31 December 2016Assets

Portfolio of investments

- Quoted equities 10,636,417 - - 10,636,417

Total 10,636,417 - - 10,636,417

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1,comprise listed equities. The Fund does not adjust the quoted price for these instruments.

Except for cash and bank balances and fixed deposits which are classified as Level 1, the Fund’s assets and liabilities notmeasured at fair value at 31 December 2017 and 2016 have been classified as Level 2. The carrying amounts of these assetsand liabilities approximate their fair values as at the financial year end date.




-29-

9 Related party transactions

(a) TheManager and the Trustee of the Fund areUOBAssetManagement Ltd andState Street Trust (SG) Limited respectively.State Street Trust (SG) Limited replaced HSBC Institutional Trust Services (Singapore) Limited as the Trustee with effect from1 April 2017. The Manager is a subsidiary of United Overseas Bank Limited while the Trustee is a subsidiary of State StreetBank and Trust Company.

Management fee and valuation fee are paid to the Manager for the financial year. Trustee fee and registrar fee were paid to theRetired Trustee for the period from 1 January 2017 to 31 March 2017. With effect from 1 April 2017, trustee fee is paid to theTrustee while registrar fee and custody fee are paid to State Street Bank and Trust Company, Singapore Branch.

These fees paid or payable by the Fund shown in the Statement of Total Return and in the respective Notes to the FinancialStatements are on terms set out in the Trust Deed. All other related party transactions are shown elsewhere in the financialstatements.

(b) As at the end of the financial year, the Fund maintained the following accounts with the related parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Cash and bank balances 1,634,779 -

United Overseas Bank Limited

Cash and bank balances - 159,473

Fixed deposits 2,205,112 1,001,840

(c) The following transactions took place during the financial year between the Fund and related parties at terms agreedbetween the parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Bank charges 2,373 -

United Overseas Bank Limited

Bank charges 155 150

The Hongkong and Shanghai Banking Corporation Limited

Bank charges 961 -




-30-

10 Financial ratios

2017 2016$ $

Total operating expenses 424,090 412,616Average daily net asset value 17,576,687 19,183,058Expense ratio1 2.41% 2.15%

Lower of total value of purchases or sales 5,362,813 8,105,464Average daily net assets value 17,576,687 19,183,058Turnover ratio2 30.51% 42.25%

1 The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore

(“IMAS”). The calculation of the Fund’s expense ratio at financial year end was based on total operating expenses divided by the

average net asset value respectively for the financial year. The total operating expenses do not include (where applicable) brokerage

and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses,

front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received.

The Fund does not pay any performance fee. The average net asset value is based on the daily balances.2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The

calculation of the portfolio turnover ratiowas based on the lower of the total value of purchases or sales of the underlying investments

divided by the average daily net asset value.




-31-

This page has been intentionally left blank


-32-

Documents

United Asia Pacific Infrastructure Fund · State Street Bank and Trust Company, acting through its Singapore Branch 168 Robinson Road #33-01, Capital Tower Singapore 068912 AUDITOR