amp capital china growth fund arsn 122 303 744 sydney … fileamp capital china growth fund general...

AMP Capital China Growth Fund ARSN 122 303 744 Level 12, 50 Bridge Street SYDNEY NSW 2000

www.ampcapital.com.au/china

To: Manager Company Announcements Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

Date: 27 February 2009

ASX Code: AGF

Announcement Number: 06/09

Preliminary Final Report (Appendix 4E) and Annual Financial Report

In accordance with ASX Listing Rule 4.3A and 4.5.1, AMP Capital Investors Limited (AFSL 232 497), the responsible entity of the AMP Capital China Growth Fund (the Fund) presents the Preliminary Final Report (Appendix 4E) and the Annual Financial Report for the Fund in respect of the reporting period 1 January 2008 to 31 December 2008.

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AMP CapitalChina Growth FundGENERAL PURPOSE ANNUAL REPORT

Year ended 31 December 2008

ARSN 122 303 744

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p:03 Chairman’s report

p:04 The Board

p:06 Corporate governance report

p:12 Directors’ report

p:14 Auditor’s independence declaration

p:15 Income statement

p:16 Balance sheet

p:17 Statement of changes in net assets attributable to unitholders

p:18 Cash fl ow statement

p:19 Notes to the fi nancial statements

p:38 Directors’ declaration

p:39 Independent auditor’s report

p:41 Investor information

Backcover

Corporate directory

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AMP Capital Investors Limited ABN 59 001 777 591AFSL 232497

50 Bridge Street, Sydney NSW 2000PO Box R227, Royal Exchange Sydney NSW 1225

T: 02 9257 5000

Issue date: March 2009For

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Dear Investors,

In 2008, the global crisis severely impacted share markets worldwide. Despite low exposure to the core elements of the financial crisis, China felt the impact of the associated global economic slowdown and the Chinese A share market (CITIC S&P 300 Total Return Index – the AMP Capital China Growth Fund benchmark) fell 51.9% in Australian dollar terms. Notwithstanding the significant correction in the Chinese A share market in 2008, the AMP Capital China Growth Fund has delivered an absolute net return (including distributions) of 18.0% from the Initial Public Offering in December 2006 to the end of December 2008.

While 2009 is expected to be a challenging year for global financial markets, we believe China remains relatively well placed to manage through the current turmoil. China has limited exposure to the sub-prime markets and its banking system is not being subjected to the deleveraging process to the extent seen in Western economies. The country entered the financial crisis in a strong fiscal position with both trade and budget surpluses. This has put China in a sound position to ease monetary and extend fiscal policy and they have pro-actively engaged in both. We continue to hold a favourable long-term view of the China A share market.

In 2008, AMP Capital Investors further enhanced the strength and expertise of the AMP Capital Asian Equities team with the appointment of two new Portfolio Managers. The two new appointments now bring the Asian Equities team to six investment professionals located in Sydney and Beijing. AMP Capital continues to invest in sophisticated portfolio construction and risk management tools to deliver investors a world class Asian capability.

We believe the China A share market offers strong investment opportunities over the long-term and we look forward to continuing to deliver unitholders access to this market.

Jack RitchChairmanAMP Capital Investors LimitedResponsible entity of the AMP Capital China Growth Fund

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The Board of AMP Capital Investors Limited (AMP Capital Investors), the responsible entity of the AMP Capital China Growth Fund (the Fund), is responsible for the overall governance and performance of the Fund, and currently consists of the following seven directors:

Jack H. Ritch (Chairman)•

Stephen J.P. Dunne•

J. Brian Clark •

Craig W. Dunn •

Stephen A. Grenville•

Donald R. Luke •

Nora L. Scheinkestel•

Jack H. Ritch BEc, Dip T&CP, FAII, FAPI

Non-executive Chairman

Jack was appointed Non-executive Chairman of AMP Capital Investors, in April 2004. Prior to this, Jack held the role of Managing Director and Chairman of the company from 1999 to 2004. From 1987 to 1999, Jack held the position of Director, Property, during which time he was responsible for managing AMP’s $9 billion property portfolio. Jack has held a variety of other positions within the AMP Group since he joined AMP in 1958.

Jack was appointed Non-executive Chairman of the Principal Healthcare Group in February 2007, and Non-executive Chairman of the Domain Aged Care Group in May 2008. He is a director of Australia Pacific Airports Corporation Limited (owner of Melbourne and Launceston airports), and Chairman of Galileo Japan Funds Management Limited. His other activities include Chairman of the Powerhouse Foundation.

Stephen J.P. Dunne CFA, BBus (Mgt & Mktg), MBA, F Fin

Managing Director, AMP Capital Investors Limited

Stephen Dunne joined AMP Capital Investors in 1994 and was appointed Managing Director in 2004. He has over 21 years experience in investment management both in Australia and in the United Kingdom.

AMP Capital Investors has A$92 billion in funds under management as at 31 December 2008 and manages funds across a range of asset classes including equities, fixed interest, property and infrastructure. AMP Capital Investors has established offices in seven countries with a strong focus on the Asia Pacific.

Stephen is a director of AMP Capital Investors. Prior to being appointed Managing Director, Stephen held a number of roles within AMP Capital Investors, including Director of Client and Marketing for Asia Pacific and Director of AMP Asset Management for Australia and New Zealand.

He is a Chartered Financial Analyst, holds a Master of Business Administration from Monash University and is a Fellow of the Financial Services Institute of Australasia (Finsia). Stephen is also a Member of CFA Strategic Advisory Board and a Member of St James Ethics Centre Advisory Council.

J. Brian Clark DSc Non-executive Director

Brian was appointed to the AMP Limited Board on 1 January 2008. He is a member of the Nomination Committee and has been a director of the AMP Capital Investors Board (the Board) and a member of its Audit Committee since February 2008.

Brian spent ten years in a variety of senior executive roles at Vodafone internationally, most recently in a United Kingdom-based role as group human resources director. He was also chief executive officer of Vodafone’s Australian business as well as CEO of the Asia Pacific region, based in Tokyo. He was a member of the company’s global executive committee throughout his tenure with the company. Before joining Vodafone, Brian spent three years as CEO of Telkom SA Ltd, the state-owned telephone company in South Africa, where he oversaw the partial privatisation of the company and a total reengineering of its operations.

Brian has degrees in physics and mathematics and a PhD, all from the University of Pretoria, and has completed the Advanced Management Program at the Harvard Business School. Brian was a director of National Australia Bank Limited from 2001 to 2004, and of various Vodafone Group PLC subsidiary and separately listed boards. Brian has been a director of Boral Limited since May 2007 and a member of the Advisory Board of Merrill Lynch in Australia since November 2007.

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Craig W. Dunn BCom, FCA

Managing Director and Chief Executive Officer, AMP Limited

Craig was appointed Managing Director and Chief Executive Officer of AMP Limited on 1 January 2008. He was appointed to the Board on 1 January 2008, having previously acted as an Alternate Director to Andrew Mohl. He has been a Director of AMP Life Limited since April 2002.

Prior to becoming CEO, Craig was Managing Director, AMP Financial Services from 2002 to 2007. He joined AMP in January 2000, and has held a number of senior roles, including Managing Director of AMP Banking, and Director, Office of the CEO. Before joining AMP, Craig was CEO of a Malaysia-based insurance company, a joint venture of Colonial Limited. He worked for KPMG throughout Europe and in Indonesia before joining Colonial. Craig is currently an Advisory Board Member with the Government’s Financial Literacy Foundation, a member of the Government’s Financial Services Advisory Committee (FSAC) and a former chairman of the Investment and Financial Services Association (IFSA).

Dr Stephen A. Grenville AO, PhD

Non-executive Director

Stephen has a PhD in Economics and 20 years experience at the Reserve Bank, where he was Deputy Governor and Chair of the Audit Committee. His experience covers the full range of central bank activities, including high-level management of both the international and domestic money market departments. He also worked at the Organisation for Economic Co-operation and Development in Paris, with the International Monetary Fund in Jakarta, and with the Department of Foreign Affairs. Since leaving the Reserve Bank at the end of 2001, Stephen has worked as an economic consultant for the World Bank, the IMF Independent Evaluation Office and AusAID.

Stephen was appointed to the Board as a non-executive director in February 2004.

Donald R. Luke BSc, BA (Econ) Non-executive Director

Donald was appointed as a non-executive director of AMP Capital Investors in July 2007. He is a member of the company’s Audit Committee.

Donald was Chief Executive Officer of the Queensland-based superannuation fund SunSuper for ten years until May 2007. He began his career in financial services with AMP in the early 1970s as a Graduate Recruit, working across a broad range of areas including actuarial, superannuation management and life insurance administration. He is currently the Executive Director of the Community Services Commission for the Anglican Church in South East Queensland. He is also a Director of Splash Aquatics Pty Ltd and the Bible Society.

Dr Nora L. Scheinkestel LLB (Hons), PhD, FAICD

Non-executive Director

Nora was appointed to the AMP Limited Board in September 2003. She is chairman of the Nomination Committee and a member of the Audit Committee. She has been a director of AMP Capital Investors since February 2004 and chairs its Audit Committee.

Nora is an experienced company director having served as chairman and non-executive director of companies in a wide range of industry sectors and in the public, government and private spheres. Previous directorships, in addition to those listed below, include North Limited, IOOF Funds Management, Medical Benefits Fund of Australia Limited and chairman and director of various energy and water utilities.

Nora is also an Associate Professor at the Melbourne Business School at Melbourne University. Nora’s executive background is as a senior banking executive in international and project financing, responsible for the development and financing of major projects in Australasia and South East Asia. Nora’s current consulting practice assists government, corporate and institutional clients in areas such as corporate governance, strategy and finance.

In 2003, she was awarded a centenary medal for services to Australian society in business leadership. Nora has been a director of PaperlinX since 2000 and of Orica Limited since August 2006. Nora was a director of Newcrest Mining (2000 to 2007), Mayne Group Limited (2005) and of Mayne Pharma Limited (2005 to 2007).

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Framework

The Corporations Act, the ASX Listing Rules, the Fund’s Constitution, the Fund’s Compliance Plan and the general law regulate the workings of the Fund and the essential practices, responsibilities and duties of AMP Capital Investors and its officers.

AMP Capital Investors must exercise its functions diligently and in the best interests of investors. AMP Capital Investors and its officers manage the assets of the Fund and are responsible for all investment decisions with absolute discretion as to the exercise of AMP Capital Investors’ powers in accordance with the Fund’s Constitution and the Corporations Act. AMP Capital Investors also undertakes the administrative functions of the Fund including preparing the Fund’s financial statements, preparation of notices and reports to members and monitoring of registry services.

As a wholly-owned subsidiary of AMP Limited, AMP Capital Investors and its management and officers are subject to the AMP Group’s corporate governance practices and policies. For more information on the AMP Group’s corporate governance practices, visit the corporate governance section of its website, www.ampgroup.com.

ASX corporate governance standards

Listed entities are required to disclose in their annual reports the extent of their compliance with the Corporate Governance Principles and Best Practice Recommendations (the Standards), released by the ASX Corporate Governance Council and to explain why they have not adopted a Standard, if they consider it inappropriate in their particular circumstances.

The Standards encompass matters such as board composition, committees and compliance procedures and are designed to maximise corporate performance and accountability in the interests of investors and the broader economy. The corporate governance statement outlining the corporate governance regime that applies to the Fund, is set out below.

Principle 1 – Lay solid foundations for management and oversight

The Board is responsible to investors in the Fund for the overall governance and performance of the Fund and is also responsible for:

overseeing AMP Capital Investors and its various • businesses, including the management of the Fund, approval of AMP Capital Investors’ strategy and management’s performance objectives, consistent with those of the AMP Group;

ensuring effective corporate governance;•

input into, and approval of, the AMP Capital • Investors’ risk management and internal compliance systems, internal controls and codes of conduct and ongoing compliance monitoring;

regulatory and legal compliance;•

monitoring management performance;•

approving financial and other reporting; and•

the AMP Capital Investors’ committee • structures and operations.

The Board meets regularly and additionally as required to carry out its functions. When conducting Board business, directors have a duty to question, request information, raise issues of concern and fully canvass all aspects of relevant issues. Directors are required to monitor and disclose any actual or potential conflicts of interest, which may arise, and any related party transactions.

The Managing Director of AMP Capital Investors is responsible for the overall management and performance of AMP Capital Investors. This includes managing its business and operations in accordance with the strategy, plans and policies approved by the Board and consistent with those of the AMP Group.

The responsibilities of the Board and management have been formalised in a Corporate Governance Charter. In addition, in relation to matters specific to the operation of the Fund, these are largely set out in the Fund’s Constitution and the Compliance Plan.

Each non-executive director, the AMP Capital Investors Managing Director and the AMP Capital Investors Chief Financial Officer have received a letter of appointment, specific to AMP Capital Investors, which sets out the key terms and conditions of their appointment.

All non-executive director appointments and reappointments to the Board are approved by the AMP Limited Nomination Committee following a review by, and on the recommendation of, the AMP Limited Chief Executive Officer.

The senior executives of AMP Capital Investors responsible for managing the Fund are AMP Capital Investors’ employees and are subject to performance review twice annually as part of AMP Capital Investors’ overall employee performance evaluation process. All senior managers of the Fund were evaluated during the year to 31 December 2008 in accordance with this process.

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Principle 2 – Structure the Board to add value

Details of the composition of the Board and profiles of the directors are set out in the section at the start of this statement titled “Board of AMP Capital Investors Limited”. Each of Nora Scheinkestel, Stephen Grenville, Don Luke and Brian Clark has been appointed for a term of three years. Jack Ritch’s appointment for a term of three years in April 2004 has been extended for a further 3 years ending April 2010. None of the other directors has been appointed for a fixed term.

It is important that the Board operates independently of executive management. The Board considers directors to be independent if they do not have any business interest or other relationship that could materially interfere with the exercise of their independent judgement and their ability to act in the best interests of AMP Capital Investors and holders of units in the Fund. Furthermore, recommendation 2.1 of the Standards identifies a number of relationships to be considered by the Board when determining the independent status of its directors.

Having assessed the circumstances of each director, the Board considers Don Luke, Stephen Grenville, Nora Scheinkestel and Brian Clark to be independent. The Board considers Nora and Brian to be independent notwithstanding that they are also non-executive directors of AMP Limited, which (via its wholly owned subsidiary, AMP Life) is a substantial holder of units in the Fund. This is because Nora and Brian are highly qualified, experienced and regarded directors and the relevant business relationship does not materially interfere with their exercise of independent judgement in the best interests of AMP Capital Investors and holders of units in the Fund.

Having regard to the relationships affecting independence set out in Recommendation 2.1 of the Standards, the Board does not consider that the Chairman, Jack Ritch, is an independent director, because he was employed in an executive capacity as Managing Director of AMP Capital Investors immediately prior to being appointed as a non-executive director in April 2004. Nevertheless, the Board considers that Mr Ritch is the best person to be Chairman due to his substantial experience as a director, deep understanding of AMP Capital Investors’ business and strong business relationships.

Craig Dunn is Managing Director and Chief Executive Officer of AMP Limited, the ultimate parent entity of AMP Capital Investors.

The Board is satisfied that the business interests or other relationships described above do not materially interfere with the independent judgement and ability of any of these directors to act in the best interests of AMP Capital Investors or holders of units in the Fund.

Further, AMP Capital Investors is a wholly owned subsidiary of AMP Limited, which is an ASX listed public company, and its Board’s performance in relation to the Fund and otherwise is reviewed periodically both by the Board of AMP Limited and by the Nomination Committee of AMP Limited.

Each director is required to provide AMP Capital Investors with details of their directorships of other entities.

The size of the Board is determined with reference to the AMP Capital Investors Constitution, which states that there will be a minimum of three and a maximum of twelve directors.

The Board does not have a Nomination Committee. The AMP Limited Nomination Committee must approve all non-executive appointments to the AMP Capital Investors Board. The terms of reference of the AMP Limited Nomination Committee are available on the corporate governance section of the AMP Group website, www.ampgroup.com.

Nominations of new directors are considered having regard to the Board’s current composition and the need for independence. Nominated directors are assessed against a range of criteria, including experience, professional skills, personal qualities and their capacity to commit to the Board’s activities.

AMP Capital Investors’ directors are entitled to obtain independent professional advice at the expense of AMP Capital Investors.

The Board undertakes an internal self-evaluation of the performance of the Board and its committees on an annual basis. This process includes consideration of feedback provided by directors and senior executives via a questionnaire. AMP Capital Investors’ directors who are AMP Group employees are subject to performance review twice yearly as part of the AMP Group’s overall employee performance evaluation process. The Board, its committees and directors were evaluated during the year to 31 December 2008 in accordance with these processes.

Non-executive directors receive a range of relevant materials on appointment and are encouraged to access senior executives to request any information relevant to their decision-making. Management maintains regular contact with all members of the Board to ensure directors are kept abreast of developments. As part of the annual programme, non-executive directors participate in regular briefings on aspects of the business as well as updates on strategic initiatives. Non-executive directors are invited to meet with the AMP Limited board each year to gain a further understanding of group wide issues.

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Principle 3 – Promote ethical and responsible decision making

AMP Capital Investors’ directors, officers and employees are subject to the AMP Limited Employee Code of Conduct (Code), which sets out the expected standards of personal and corporate behaviour. It requires employees to report suspected violations of the Code to an appropriate manager. No action is to be taken against any employee who reports a suspected violation in good faith. The Code reinforces an already strong ethical culture for the benefit of all stakeholders. It covers matters relevant to AMP Capital Investors and the Fund’s compliance with their obligations to stakeholders. The Code is available online at www.ampgroup.com.

All AMP Group directors and employees, including those of AMP Capital Investors, are subject to the AMP Limited Trading Policy. This policy aims to ensure that they do not use any information for personal advantage or to the detriment of the AMP Group or its clients. They must also comply with relevant ‘insider trading’ legislation, principally in relation to securities issued by the AMP Group. Trading in Units in the Fund is covered by this policy. The AMP Limited’s Trading Policy is available online at www.ampgroup.com.

Additionally, Australian based employees of AMP Capital Investors (including those involved in the management and operations of the Fund) are subject to the AMP Capital Investors Personal Trading Policy. This policy adopts the AMP Limited Trading Policy and includes provisions specific to AMP Capital Investors’ business. It is designed to place paramount importance on the interests of clients and investors.

AMP Capital Investors is committed to fulfilling its responsibilities to stakeholders. AMP Capital Investors has adopted a Conflicts of Interest Charter to ensure that AMP Capital Investors can meet its responsibilities to clients in an efficient and responsible manner.

AMP Capital Investors takes its responsibilities as an investment manager seriously as a steward of its clients’ assets. In order to exercise these responsibilities and to assist its clients in achieving the returns on their investments that they expect, AMP Capital Investors seeks high standards of transparency, corporate governance and social responsibility from the companies in which its funds invest.

Environmental, social and community relationships will be taken into account in making investment decisions where a company’s activity is found to fall short of appropriate standards, potentially jeopardising share price performance.

Principle 4 – Safeguard integrity in financial reporting

The Board has approved terms of reference setting out the roles and responsibilities of the AMP Capital Investors Audit Committee (the Audit Committee), which are based on the AMP Limited Audit Committee’s terms of reference. The AMP Limited Audit Committee’s terms of reference are available online at www.ampgroup.com.

The functions of the Audit Committee include:

recommending the AMP Capital Investors entity • and registered managed investment scheme financial statements to the Board for approval;

reviewing the AMP Capital Investors group • yearly and half-yearly financial statements;

reporting to the Board on the Committee’s • considerations of non-financial matters, including risk and compliance, audit and tax matters; and

receiving reports from the AMP Group internal • auditor and from the external auditor.

The Audit Committee is supported by the Management Accounts Committee. The Board has adopted terms of reference for the Management Accounts Committee. The objective of these terms of reference is to provide the Board and the Audit Committee with assurance of the objectivity, reliability, integrity and legal compliance of the relevant financial reporting processes.

The Management Accounts Committee will report to the Audit Committee on the financial reports of the Fund. The Audit Committee will then recommend to the Board the adoption of the financial reports of the Fund as representing a true and fair view of its financial position and operational results and in accordance with relevant accounting standards.

As a subsidiary of AMP Limited, AMP Capital Investors’ activities are also monitored by the AMP Limited Audit Committee. AMP Capital Investors is required to report at least quarterly to this committee.

The Audit Committee is constituted by external, non-executive members and currently comprises:

Nora L. Scheinkestel (Chairman);•

Donald R. Luke;•

J. Brian Clark;•

Stephen A. Grenville; and•

Richard Grellman (also Chairman of the • AMP Limited Audit Committee).

For the reasons outlined above, the Board considers all members of the Audit Committee to be independent. The Board considers Richard Grellmen to be independent notwithstanding

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that he is a director of AMP Limited for the same reasons as were provided for Nora L. Scheinkestel and J. Brian Clark.

There were eight Audit Committee meetings held from 1 January 2008 to the date of this annual report. The following table sets out the attendance of Audit Committee members at meetings held during that period whilst they were a member of the Audit Committee:

Member Meetings held

Meetings attended

Nora L. Scheinkestel 8 8

Donald R. Luke 8 8

Stephen A. Grenville 8 8

Richard Grellman 8 7

J. Brian Clark* 7 7

* J. Brian Clark was appointed to the Audit Committee in February 2008, after the date of the fi rst Audit Committee meeting during the relevant period.

The Management Accounts Committee includes an AMP Limited executive, and currently comprises:

Paul Leaming (Chairman of the Committee • and Chief Financial Officer, AMP Limited);

Gerald Naughton (Head of AMP Funds Team, • AMP Capital Investors); and

Henry Capra (Chief Financial Officer, • AMP Capital Investors).

Paul Leaming has appointed Simon Hoole (Group Finance Director, AMP Group) as an alternate and Henry Capra has appointed Jim Dawson (Deputy Chief Financial Officer, AMP Capital Investors) as an alternate.

The Board appoints the external auditors of the Fund who report into the Audit Committee.

Principle 5 – Make timely and balanced disclosure

The Board’s policy is to ensure that announcements are made in a timely manner, are factual and are expressed in a clear and objective manner allowing investors to assess the impact of the information when making investment decisions, and do not omit material information.

The Board has adopted the AMP Capital China Growth Fund Market Disclosure Policy for the Fund in relation to compliance with the ASX Listing Rules having regard to the recommendations in the Standards. As a wholly-owned subsidiary of AMP Limited, AMP Capital Investors is also subject to the AMP Limited Market Disclosure Policy, which is available online at www.ampgroup.com.

Principle 6 – Respect the rights of investors

The cornerstone of AMP Capital Investors’ external communications policy is the delivery of timely and relevant information to investors and the investment community generally. AMP Capital Investors seeks to effectively manage its clients’ assets to enhance returns to investors. AMP Capital Investors believes that this approach will be positive for its business and therefore benefit AMP Limited’s shareholders.

AMP Capital Investors manages assets on behalf of a number of clients and in a range of investment vehicles. The potential exists for AMP Capital Investors to be in a position where it might have a conflict of interest when dealing with various clients that invest in these different vehicles. Any such conflict is dealt with strictly in accordance with the Conflicts of Interest Charter (see Principle 3).

Principle 7 – Recognise and manage risk

The Board is responsible for ensuring appropriate measures are in place to manage material business risk in relation to all its operations and business including the Fund, in line with AMP Limited’s overall risk strategy and the Fund’s Compliance Plan. AMP Capital Investors has a risk policy in place, which enables the identification of risks, development of appropriate responses, and the monitoring of risks and controls. AMP Capital Investors has established management committees that regularly report risk and compliance information to the Audit Committee and/or the Board.

The main categories of risk that AMP Capital Investors takes into consideration are:

Strategic risk;•

Operational risk (including compliance risk);•

Financial and market risk (including financial • reporting); and

Product and insurance risk.•

Management engages in a regular process to review risks and how they are being managed.

Material business risks are a subset of the main risks that could have a significant impact on the Fund’s ability to meet its objectives. On a half yearly basis, management reports to the Board on whether material business risks are being managed effectively. The information provided by management to the Board (including its committees) enables the Board to assess whether the system for managing material business risks is effective.

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This reporting helps to achieve an enhanced discipline of ‘top-down’ review and discussion between the Board and management of the material business risks. It also helps to ensure accountability by management who have the expertise and are primarily responsible for managing the risk, to do so effectively and be able to demonstrate this to the Board.

The Board has received and considered management’s reports on material business risks for the year ended 31 December 2008.

The Board has received and considered the annual certification from the AMP Capital Investors’ Managing Director and Chief Financial Officer in accordance with Recommendation 7.3 of the Standards and s.295A of the Corporations Act stating that:

the Fund’s financial statement presents a • true and fair view of its financial position and performance and is in accordance with Australian Accounting Standards, and

the risk management and internal control • systems are sound, appropriate and operating effectively in all material respects in relation to financial reporting risks.

Principle 8 – Remunerate fairly and responsibly

The Fund is not responsible for the remuneration of AMP Capital Investors’ directors, officers or employees. Executive directors on the Board are remunerated by the AMP Group in accordance with its remuneration policies and procedures. Non-executive directors’ fees are set by the AMP Limited Nomination Committee, are payable by AMP Capital Investors in its personal capacity and are not payable by the Fund.

Nora Scheinkestel’s and Brian Clark’s fees for acting as non-executive directors of AMP Capital Investors are payable in addition to the fees they are entitled to receive as non-executive directors of AMP Limited.

Any fees and expenses associated with the Board carrying out the functions which would otherwise be carried out by a compliance committee, including any fees paid to, or insurance premiums in respect of, external directors appointed to satisfy the requirements of Chapter 5C of the Corporations Act, are paid by AMP Capital Investors and are not be reimbursed out of the Fund.

Neither AMP Capital Investors’ non-executive directors nor any AMP Group employee is entitled to receive any securities of the Fund or options over such securities as part of their remuneration.

The remuneration policies of AMP Capital Investors are approved by the AMP Limited Remuneration Committee, and administered by the AMP Capital Investors Remuneration Committee, which reports to the AMP Limited Remuneration Committee.

Compliance Plan

As required by the Corporations Act, a Compliance Plan for the Fund is prepared and lodged with the Australian Securities and Investments Commission. The Compliance Plan sets out the measures that AMP Capital Investors must apply to ensure compliance with the Corporations Act and the Fund’s Constitution.

As more than 50% of AMP Capital Investors’ directors are external, the Corporations Act does not require, and the Board does not currently propose, to appoint a separate Compliance Committee. In the absence of a Compliance Committee, it is the Board’s responsibility to ensure the adequacy of, and AMP Capital Investors’ compliance with, the Compliance Plan. The Audit Committee assists the Board by monitoring the extent to which AMP Capital Investors complies with the Compliance Plan and reporting its findings to the Board.

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The Directors of AMP Capital Investors Limited (ABN 59 001 777 591), the Responsible Entity of the AMP Capital China Growth Fund (the Fund), present their report together with the financial report of the Fund and its Controlled Entity (Consolidated Entity) for the year ended 31 December 2008.

Directors

The Directors of the Responsible Entity who, unless otherwise stated, have been in office at all times during and since the end of the year, and the period for which they are a director are:

Jack H. Ritch •

Stephen J. P. Dunne•

J. Brian Clark• (Appointed 8 February 2008)

Craig W. Dunn•

Stephen A. Grenville•

Donald R. Luke•

Nora L. Scheinkestel •

Fund information

The Fund is an Australian registered scheme. AMP Capital Investors Limited, the Responsible Entity of the Fund, is incorporated and domiciled in Australia.

The registered office of the Responsible Entity is located at Level 24, 33 Alfred St, Sydney Cove, Sydney, NSW, 2000.

Principal activity

The principal activity of the Fund during the year was the investment in China A-shares, which are shares in companies listed on China’s Shanghai or Shenzhen security markets. The funds are invested by the wholly-owned subsidiary, a company incorporated in Mauritius.

Distributions

Under the provisions of the Fund Constitution, the Fund has recognised a distribution of $11,867,977 during the year ended 31 December 2008 (2007:$37,919,857). $1,671,334 will be paid as a cash distribution, the remaining $10,196,643 will be reinvested into additional units in the Fund under the distribution reinvestment plan. The distribution will be paid by 30 April 2009.

Review and results of operations

The performance of the Fund, as represented by the result of its operations, was as follows:

Consolidated For the

year ended 31 Dec 2008

$’000

Consolidated For the period 3 Nov 2006 to 31 Dec 2007

$’000

Total investment income from ordinary activities

(57,893) 63,035

Changes in net assets attributable to unitholders

(80,606) 15,176

Significant changes in state of affairs

There were no significant changes in the state of affairs during the year.

Significant events after the balance date

Since 31 December 2008, there have been no matters or circumstances not otherwise dealt with in the Financial Report by the Responsible Entity that have significantly or may significantly affect the Fund, its operations, results of operations or state of affairs in future years.

Likely developments and expected results

Currently, there are no significant developments expected in respect of the Fund. The performance of the Fund in the future will be subject to movements in the underlying investment markets over time.

Environmental regulation and performance

The operations of the Fund are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law.

Relevant information

Following is a list of relevant information required under the Corporations Act 2001:

Fees paid to the Responsible Entity – Refer to • Note 14 to the Financial Statements

Units held by the Responsible Entity in the Fund • – Refer to Note 14 to the Financial Statements

Interests in the Fund issued during the year – • Refer to Note 9 to the Financial Statements

Withdrawals from the Fund during the year – • Refer to Note 9 to the Financial Statements

The value of Fund assets and basis of valuation • – Refer to balance sheet and Note 1 respectively

The number of interests in the Fund as at • 31 December 2008 – Refer to Note 9 to the Financial Statements

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These notes have been prepared in accordance with ASIC Class Order 98/2395.

Indemnification and insurance of directors, officers and auditors

Under its Constitution, AMP Capital Investors Limited will indemnify all directors, secretaries and executive officers of the company for certain liabilities for which they may be held personally liable. The Constitution provides for AMP Capital Investors Limited to pay an amount where:

a) the liability does not arise out of conduct involving lack of good faith; or

b) the liability is for reasonable legal costs and reasonable expenses incurred by the Director or officer in defending proceedings in which judgement is given in their favour or in which they are acquitted.

Directors and officers of AMP Capital Investors Limited are covered by insurance policies of AMP Limited, as AMP Capital Investors Limited is a subsidiary of the AMP Group.

No indemnity is given by any member of the AMP Group to present or former employees (other than directors and officers) against liability incurred in their capacity as an employee unless the giving of the indemnity has been approved by the Board of AMP Limited. During or since the year ending 31 December 2008, no indemnities have been provided (other than directors and officers).

Directors and officers of AMP Capital Investors Limited are not indemnified out of the assets of the Fund.

During or since the end of the year, AMP Group has paid or agreed to pay premiums in respect of a contract insuring all the Directors, secretaries and executive officers against certain liabilities as permitted by the Corporations Act. The insurance policy prohibits disclosure of the nature of the liability, the amount of the premium and the limit of liability.

The auditor of the AMP Capital China Growth Fund is in no way indemnified out of the assets of the AMP Capital China Growth Fund.

Directors’ interests

Stephen J.P. Dunne has significant influence over an entity which has an interest in the Fund, details of which are disclosed in Note 14(b) of the financial statements.

Rounding of amounts

The Fund is a registered scheme of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission relating to the “rounding off” of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

Auditors’ Independence Declaration

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 14.

Signed in accordance with a resolution of the Directors of AMP Capital Investors Limited.

Director

Dated this 27th day of February 2009, Sydney

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FOR THE YEAR ENDED 31 DECEMBER 2008

Consolidated entity Parent entity

Notes

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000)

INVESTMENT INCOME

Changes in fair value of investments held for trading (5,333) 7,343 (5,333) 7,343

Realised gains/(losses) on available for sale investments 42,850 52,116 – –

Dividend income 4,514 3,841 32,120 146

Interest income 161 524 10,910 8,888

Foreign exchange gains/(losses) 3,903 (789) 28,494 (10,842)

Impairment loss on available for sale investments 4(b) (103,988) – – –

Impairment loss on investment in subsidiary – – (15,468) –

Total investment income (57,893) 63,035 50,723 5,535

EXPENSES

Management fees 14(c) 6,557 7,859 215 258

Administration expenses 173 100 101 14

Trading fees 159 191 – –

Other expenses 489 876 391 553

Total operating expenses 7,378 9,026 707 825

Net profit/(loss) attributable to unitholders before financing costs and tax expenses (65,271) 54,009 50,016 4,710

Tax expense 8 3,467 913 – –

Net profit/(loss) attributable to unitholders after tax expenses and before financing costs (68,738) 53,096 50,016 4,710

FINANCING COSTS

Distribution to unitholders 11,868 37,920 11,868 37,920

Change in net assets attributable to unitholders (80,606) 15,176 38,148 (33,210)

EARNINGS PER UNIT (EPU)

EPU based on the weighted average number of ordinary units

– Basic earnings per unit 10 ($0.230) $0.212

– Diluted earnings per unit 10 ($0.230) $0.212

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AS AT 31 DECEMBER 2008


Notes

2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

ASSETS

Cash assets 15(a) 18,832 13,131 4,148 452

Receivables 3 13 7 3,224 2,196

Investments

– Held for trading 4(a) 28,901 14,382 28,901 14,382

– Available for sale 4(b) 279,189 582,239 – –

Loan to subsidiary 14(d) – – 140,490 96,758

Investment in subsidiary 5 – – 144,329 159,797

Total assets 326,935 609,759 321,092 273,585

LIABILITIES

Payables 6 1,473 2,489 226 75

Distribution payable 7 11,868 37,920 11,868 37,920

Current tax 8 – 69 – –

Deferred tax 8 4,596 7,547 – –

Total liabilities excluding net assets attributable to unitholders 17,937 48,025 12,094 37,995

Net assets attributable to unitholders 9 308,998 561,734 308,998 235,590

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Notes

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000)

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

Opening balance 561,734 – 235,590 –

Investment revaluation movement 9(a) (295,448) 306,005 – –

Foreign currency translation movement 9(c) 88,058 (28,247) – –

Net income recognised directly in net assets attributable to unitholders (207,390) 277,758 – –

Net profit attributable to unitholders after tax expenses and before financing costs (68,738) 53,096 50,016 4,710

Total income and expenses for the period (276,128) 330,854 50,016 4,710

Units issued during the period 35,260 280,000 35,260 280,000

Costs of issue of units – (11,200) – (11,200)

Distribution to unitholders (11,868) (37,920) (11,868) (37,920)

23,392 230,880 23,392 230,880

Closing balance 308,998 561,734 308,998 235,590

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Notes

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000

For the year ended

31 Dec 2008

($’000)

For the period

3 Nov 2006 to 31 Dec 2007

($’000)

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 162 521 2,372 405

Dividends received 4,514 3,841 32,120 146

Premium paid – (330) – (330)

Payments to suppliers (737) (498) (435) (234)

Management fees (7,664) (5,418) (7,664) (5,418)

Payments for purchases of financial instruments held for trading (29,132) (20,074) (29,132) (20,074)

Proceeds from sales of financial instruments held for trading 9,280 11,912 9,280 11,912

Net cash inflow/(outflow) from operating activities 15(b) (23,577) (10,046) 6,541 (13,593)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for acquisition of subsidiary – – – (159,797)

Payments for purchases of financial instruments available for sale (222,120) (531,540) – –

Proceeds from sales of financial instruments available for sale 253,254 286,214 – –

Net cash inflow from investing activities 31,134 (245,326) – (159,797)

CASH FLOWS FROM FINANCING ACTIVITIES

Interest paid – (359) – (7)

Proceeds from issue of units – 280,000 – 280,000

Costs of issue of units – (11,200) – (11,200)

Distribution paid (2,660) – (2,660) –

Loan to subsidiary – – (201) (94,951)

Net cash inflow/(outflow) from financing activities (2,660) 268,441 (2,861) 173,842

Net (decrease)/increase in cash assets held 4,897 13,069 3,680 452

Foreign exchange gain/(loss) 804 62 16 –

Cash assets at the beginning of the period 13,131 – 452 –

Cash assets at the end of the year/period 18,832 13,131 4,148 452

Non-cash financing and operating activities 15(c) 35,260 – 35,260 –

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated in the following text.

The Fund was established on 3 November 2006 and the comparative reporting period ran from this date to 31 December 2007.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with the Fund Constitution and the requirements of the Corporations Act 2001, which includes Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and Australian Accounting Interpretations.

The financial report should be read in conjunction with any public announcement in respect of the Fund during the reporting period.

The financial report has been prepared on the basis of fair value measurement of assets and liabilities, except where otherwise stated.

The balance sheet presents assets and liabilities in decreasing order of liquidity and does not distinguish between current and non current items.

All of the Fund’s assets and liabilities are held for the purpose of being traded or are expected to be realised within one year, except for investments classified as available for sale which are expected to be held for periods longer than one year. Certain assets and liabilities may not be settled within 12 months, in particular trading securities and unitholder liabilities. Given the nature of the Fund, a reasonable estimate cannot be made of the amount of the balances, if any, that are unlikely to be settled within 12 months.

Australian Accounting Standards issued but not yet effective

Australian Accounting Standards that have recently been issued or amended but are not yet effective have not been adopted for the reporting period ending 31 December 2008. When applied in future periods, these recently issued or amended standards are not expected to have a material impact on the Fund’s results or financial performance; however they may impact financial report disclosures.

Changes in accounting policy

Since 1 January 2008, the Fund has adopted a number of Australian Accounting Standards and Interpretations which were mandatory for annual reporting periods beginning on or after 1 January 2008. Adoption of these Standards and Interpretations has not had any effect on the financial position or performance of the Fund.

(b) Statement of compliance

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board. The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

(c) Financial instruments

The Fund’s investments are classified as financial instruments.

Financial instruments held for trading are initially recognised at cost, being the fair value of the consideration given.

Financial instruments available for sale are initially recognised at cost, being the fair value of the consideration given, plus transaction costs.

Financial instruments held for trading, after initial recognition, are subsequently measured at fair value through the income statement. Financial instruments classified as held for trading are H Shares listed on the Hong Kong Stock Exchange which are held for working capital.

Financial instruments available for sale are measured at fair value with gains or losses being recognised as a separate component of the statement of changes in net assets attributable to unitholders until the investment is realised, at which time the cumulative gain or loss previously reported in net assets attributable to unitholders is recognised in the income statement. Financial instruments available for sale are A Shares listed on the Shanghai and Shenzhen Stock Exchanges. See note on impairment of available for sale investments below.

Listed equity securities

The fair value of a listed equity security is determined by reference to the “bid” price of the security, as quoted on its primary exchange at balance date.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of available for sale investments

At each reporting date, the Fund conducts an internal review of available for sale investments, to assess whether there is any objective evidence of impairment. A significant or prolonged decline in the fair value of an equity investment below its cost is objective evidence of impairment. When a decline in the fair value of an available for sale financial asset has been recognised directly in net assets attributable to unitholders and there is objective evidence that the asset is impaired, the cumulative loss that has been recognised directly in net assets attributable to unitholders is removed and recognised in the income statement. The amount of the cumulative loss that is removed from net assets attributable to unitholders and recognised in the income statement is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the income statement. Impairment losses recognised in the income statement for an investment in an equity instrument classified as available for sale are not reversed through the income statement.

(d) Use of estimates

The Fund may make estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial period. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(e) Investment income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the income can be reliably measured. The following specific recognition criteria must also be met before income is recognised:

Dividend income

Dividends are recognised as income on the date the share is quoted ex-dividend.

Interest income

Interest income is recognised for all debt instruments using the effective interest rate method. This is the rate that discounts estimated future cash receipts through the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying value of the amount of the financial instrument.

Changes in the fair value of investments

Changes in the value of held for trading investments are recognised through the income statement. Changes in the fair value of available for sale investments are recognised through the statement of changes in net assets attributable to unitholders until the investment is realised at which time the cumulative gain or loss previously reported in net assets attributable to unitholders is recognised in the income statement. Changes in fair value are determined as the difference between the fair value at period end or consideration received if sold during the period, and the fair value as at the prior period end or cost if the investment was acquired during the period. See note on impairment of available for sale investments above.

(f) Expenses

All expenses are recognised in the income statement on an accruals basis.

Performance fee

A performance fee of 20% of outperformance above the benchmark may be payable quarterly in arrears on the final day of each quarter as a cash payment or by way of an issue of units in the Fund to the Responsible Entity. These (if any) are accounted for on an accruals basis.

(g) Derecognition of financial instruments

Financial instruments are derecognised when the rights to receive cash flows from the financial assets have expired or been transferred and substantially all the risks and rewards of ownership have been transferred.

(h) Loan to related parties

Loans to related parties are carried at cost. Interest is payable at 9% per annum.

(i) Cash and cash equivalents

For the purposes of the Cash Flow Statement, cash and cash equivalents include deposits held at call with a bank or financial institution with an original maturity date of three months or less. Cash and cash equivalents also include highly liquid investments which are readily convertible to cash on hand at the Responsible Entity’s option and which the Responsible Entity uses in its day to day management of the Fund’s cash requirements.

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( j) Receivables

Receivables include amounts where settlement has not yet occurred, and include outstanding settlements on the sale of investments. Receivables are recognised and carried at their original amounts. Amounts are generally received within 30 days of being recorded as receivables. Amounts receivable that are outstanding at the balance date that are denominated in foreign currencies have been converted to local currency using the rates of exchange prevailing at the end of the period.

(k) Payables

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Fund, and include outstanding settlements on the purchase of investments. Amounts are generally paid within 30 days of being recorded as payables. Amounts payable that are outstanding at the balance date that are denominated in foreign currencies have been converted to presentation currency using the rates of exchange prevailing at the end of the period.

(l) Income tax

Under current legislation, the Fund is not subject to income tax in Australia since, under the terms of the Fund Constitution, the unitholders are presently entitled to the taxable income of the Fund. However, the consolidated entity is subject to withholding tax in China at 10% on interest, 5% on dividends and 10% on capital gains on ‘land rich’ investments under National People’s Congress law. The subsidiary entity is subject to income tax at 3% in Mauritius on taxable income.

The current tax liability for the period is measured at the amount expected to be paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised.

The deferred tax liabilities are recognised at the tax rates expected to apply to the year when the liabilities are settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(m) Distributable income

In accordance with the Fund Constitution, the Fund fully distributes its distributable income to unitholders each tax year. Distributions are payable at the end of each year. Such distributions are determined by reference to the taxable income of the Fund.

Distributions are recognised in the income statement as finance costs attributable to unitholders.

Distributable income includes capital gains arising from the disposal of assets.

Distributable income does not include unrealised gains and losses on the net value of investments, accrued income not yet assessable and expenses provided for or accrued but not yet deductible, tax free or deferred income and realised capital losses which are retained to offset future realised capital gains.

(n) Foreign currency translation

(i) Functional and presentation currency

Items included in the Fund’s financial statements are measured using the currency of the primary economic environment in which it operates (the “functional currency”). For the subsidiary of the Fund this is the US dollar, which reflects the currency of the economy in which the subsidiary operates for capital and is regulated. The Fund’s presentation and functional currency is the Australian dollar.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the income statement. Foreign exchange gains and losses resulting from the translations at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies on the balance sheet are recognised in the foreign currency translation reserve.

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(o) Unit prices

Unit prices are determined in accordance with the Fund Constitution and are quoted on the Australian Securities Exchange (ASX).

(p) Terms and conditions on units

Each unit issued confers upon the unitholder an equal interest in the Fund, and is of equal value. A unit does not confer any interest in any particular asset or investment of the Fund. Unitholders have various rights under the Constitution and the Corporations Act 2001, including the right to:

receive income distributions;•

attend and vote at meetings of unitholders; • and

participate in the termination and winding • up of the Fund.

The rights, obligations and restrictions attached to each unit are identical in all respects.

(q) Goods and services tax

Responsible Entity fees and other expenses incurred by the Fund are recognised net of the amount of goods and services tax (GST) recoverable from the taxation authority as a reduced input tax credit (RITC). Payables and accruals are stated with the amount of GST included. The net amount of GST recoverable/payable from/to the Australian Taxation Office (ATO) is included as a receivable or payable in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis. The GST components of cash flows arising from investing and financing activities which is recoverable from, or payable to, the ATO are classified as operating cash flows.

(r) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of the subsidiary of the Fund (parent entity) as at reporting date and the results of the subsidiary for the period. The Fund and its subsidiary are referred to in the Financial Report as the Consolidated Entity.

Subsidiaries are all those entities (including special purpose entities) over which the Fund has the power to govern the financial and operating policies so as to obtain benefits from their activities.

The purchase method of accounting is used to account for the acquisition of the subsidiary by the parent entity. The subsidiary is fully consolidated from the date on which control is transferred.

All transactions (including gains and losses) and balances between the parent entity and subsidiary are eliminated. Accordingly policies of the subsidiary are consistent with the policies adopted by the consolidated entity.

(s) Investment in subsidiary

The investment in the subsidiary is recognised at the lower of cost or recoverable amount.

(t) Rounding

The Fund is a registered scheme of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission relating to the “rounding off” of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

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2. AUDITOR’S REMUNERATION


2008 ($) 2007 ($) 2008 ($) 2007 ($)

Amounts paid or payable to Ernst & Young, the auditor of the Fund, for:

– Audit and review of the financial statements of the Fund 72,305 43,078 54,500 35,000

– Other services – 10,000 – 10,000

Total 72,305 53,078 54,500 45,000

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3. RECEIVABLES


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Interest receivable – – 3,216 2,192

Other receivables 13 7 8 4

Total 13 7 3,224 2,196

4. INVESTMENTS

(a) Held for trading


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

H Shares – listed equities on Hong Kong Stock Exchange 28,901 14,382 28,901 14,382

Total 28,901 14,382 28,901 14,382

(b) Available for sale


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

A Shares – listed equities on Shanghai and Shenzhen Stock Exchanges 279,189 582,239 – –

Total 279,189 582,239 – –

The accounting treatment for available for sale investments is set out in note 1(c). Due to the fall in the Chinese share markets during 2008, an impairment loss of $103,987,585 has been recognised in the income statement for 2008.

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5. INVESTMENT IN SUBSIDIARY


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Investment in subsidiary – – 144,329 159,797

AMP Capital China Growth Fund has 100% ownership of AMP Capital China Growth Fund Limited, a company domiciled and incorporated in Mauritius.

Where carrying value exceeds the recoverable amount, a writedown is made to the income statement. The recoverable amount is determined as the net asset value of the subsidiary. During the period to 31 December 2008, a writedown was made for $15,468,435.

6. PAYABLES


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Management fees payable to the Responsible Entity 1,334 2,441 164 75

Other payables 139 48 62 –

Total 1,473 2,489 226 75

7. DISTRIBUTION PAYABLE


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Distribution payable 11,868 37,920 11,868 37,920

Total 11,868 37,920 11,868 37,920

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8. INCOME TAX

(a) Income tax expense


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

The major components of income tax expense are:

INCOME STATEMENT

Current income tax

– Current income tax charge – 69 – –

Deferred income tax

– Relating to the origination and reversal of temporary differences

3,467 844 – –

Income tax expense as reported in the income statement 3,467 913 – –

(b) Amounts charged directly or indirectly to net assets attributable to unitholders

Consolidated entity

2008 ($’000)

2007 ($’000)

Deferred income tax related to items charged directly to net assets attributable to unitholders

Unrealised gain on available for sale investments 48 6,703

(c) Numerical reconciliation between aggregate tax expense recognised in the income statement and tax expense calculated per the statutory income tax rate

Consolidated entity

2008 ($’000)

2007 ($’000)

A reconciliation between tax expense and the product of accounting profit/(loss) before income tax multiplied by the Consolidated entity’s applicable income tax rate is as follows:

Accounting profit/(loss) before income tax and financing costs (65,271) 54,009

At the statutory income tax rate of 30% (19,581) 16,203

Tax rate adjustment on realised CGT on land rich companies in PRC 10% (646) (1,301)

Tax rate adjustment on tax on interest in PRC 10% (25) (24)

Tax rate adjustment on dividend income in PRC 5% (1,068) (924)

Tax rate adjustment on profit on disposal of non-land rich companies in PRC – (13,121)

Non deductible impairment losses 19,027 –

Foreign tax adjustment – Mauritius expenses 1,801 2,215

Adjustment for Australian income not (taxable)/deductible 1,728 (2,121)

Foreign exchange adjustment 2,231 (14)

23,048 (15,290)

3,467 913

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8. INCOME TAX (continued)

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Consolidated entity

2008 ($’000)

2007 ($’000)

Provision for tax on interest and dividends in PRC 333 197

Provision for realised capital gains in PRC 3,371 647

Mauritius company taxation – 69

Foreign exchange adjustment (237) –

3,467 913

The parent entity is not subject to tax in Australia, since under the terms of the Fund Constitution, the unitholders are presently entitled to the taxable income of the Fund.

(d) Recognised deferred tax assets and liabilities

Balance sheet Consolidated entity

Income statement Consolidated entity

2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

DEFERRED TAX LIABILITIES

Unrealised gain on investments available for sale in PRC

48 6,703 – –

Interest and dividends in PRC 530 197 333 197

Realised capital gains in PRC 4,018 647 3,371 647

Total deferred tax liabilities 4,596 7,547 3,704 844

9. NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

(a) Reconciliation of units


2008 2007 2008 2007

Units (’000) ($’000)

Units (’000) ($’000)

Units (’000) ($’000)

Units (’000) ($’000)

Opening balance 280,000 280,000 – – 280,000 280,000 – –

Units issued 24,182 35,260 280,000 280,000 24,182 35,260 280,000 280,000

Closing balance 304,182 315,260 280,000 280,000 304,182 315,260 280,000 280,000

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9. NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (continued)

The movement in net assets attributable to unitholders in the Fund during the period is as set out below:


2008($’000)

2007($’000)

2008($’000)

2007($’000)

Opening balance 561,734 – 235,590 –

Applications 35,260 280,000 35,260 280,000

Revaluation of investments (295,448) 306,005 – –

Foreign currency translation reserve 88,058 (28,247) – –

Cost of issue of units – (11,200) – (11,200)


Closing balance 308,998 561,734 308,998 235,590

(b) Investment revaluation reserve


2008($’000)

2007($’000)

2008($’000)

2007($’000)

Opening balance 306,005 – – –

Revaluation of available for sale assets (356,538) 364,824 – –

Transfers to income statement:

– Realised gains on sale of available for sale assets (42,850) (52,116) – –

– Impairment loss on available for sale assets 103,988 – – –

Deferred tax (48) (6,703) – –

Closing balance 10,557 306,005 – –

(c) Foreign currency translation reserve


2008($’000)

2007($’000)

2008($’000)

2007($’000)

Opening balance (28,247) – – –

Foreign currency translation 88,058 (28,247) – –

Closing balance 59,811 (28,247) – –

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10. ASSET BACKING AND EARNINGS PER UNIT

Consolidated entity

2008 2007

Net tangible asset backing per unit $1.02 $2.01

Earnings used in calculation of earnings per unit ($68,737,890) $53,095,512

Weighted average number of units on issue for earnings per unit 298,367,939 250,212,766

11. SEGMENT INFORMATION

The AMP Capital China Growth Fund operates solely in the business of investing and is controlled from and is domiciled in Australia. Investments in the People’s Republic of China are facilitated through the holding of a wholly owned company in Mauritius.

12. COMMITMENTS AND CONTINGENCIES

As at 31 December 2008, the Fund had no commitments or contingencies (2007: nil).

13. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

Since 31 December 2008 there have been no matters or circumstances not otherwise dealt with in the Financial Report that have significantly affected or may significantly affect the Fund.

14. RELATED PARTY TRANSACTIONS

(a) General information

The Responsible Entity of the Fund is AMP Capital Investors Limited, a wholly owned subsidiary of AMP Limited. The ultimate parent entity is AMP Capital China Growth Fund.

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14. RELATED PARTY TRANSACTIONS (continued)

(b) Investments

Related party investors in the Fund

Details of related party investors in the Fund, including the Responsible Entity, entities in the same wholly owned group as the Responsible Entity, and other Funds managed by the Responsible Entity, are set out below:

2008 Number of units held at period end

Interest held(%)

Number of units acquired during period

Number of units disposed

of during period

Distributions paid or payable during period

($)

AMP Life Limited 105,350,329 34.63 15,398,450 396,001 4,109,880

Pageant Limited AMP Investments Global Equities Fund

2 – 1,300,338 15,300,336 –

Cogent Nominees Pty Limited

10,928,811 3.59 928,811 – 426,060

NZGT Nominees Limited AMP Capital Balanced Fund

7,548,383 2.48 7,548,383 – 294,326

NZGT Nominees Limited AMP Capital Growth Fund

6,895,980 2.27 6,895,980 – 269,403

NZGT Nominees Limited AMP Capital Conservative Fund

855,973 0.28 855,973 – 33,230

Entity over which S.J.P. Dunne has significant influence

52,485 0.02 2,485 – 2,374

2007 Number of units held at period end

Interest held(%)

Number of units acquired during period

Number of units disposed

of during period

Distributions paid or payable during period

($)

AMP Life Limited 90,347,880 32.27 106,082,880 15,735,000 12,648,703

Pageant Limited AMP Investments Global Equities Fund

14,000,000 5.00 14,535,886 535,886 1,959,824

Cogent Nominees Pty Limited

10,000,000 3.57 17,035,887 7,035,887 1,354,299

Entity over which S.J.P. Dunne has significant influence

50,000 0.02 50,000 – 7,000

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(c) Transactions with the Responsible Entity

All transactions between the Fund and related parties have been at market value on normal commercial terms and conditions. This includes applications and redemptions of units.

In accordance with the Fund Constitution, the Responsible Entity is entitled to receive fees for the provision of services to the Fund and to be reimbursed for certain expenditure incurred in the administration of the Fund.


2008 ($)

2007 ($)

2008 ($)

2007 ($)

Responsible Entity fees expensed during the year 6,557,135 7,859,234 214,667 257,533

Responsible Entity fees expensed during the year are calculated as 1.65% on the Fund assets as at the last day of each month and are payable quarterly in arrears. Responsible Entity fees are calculated in USD for the subsidiary and AUD for the parent.

During the year the Responsible Entity has incurred certain expenses of $3,699,757 (2007: $5,693,692) on behalf of the Fund. As per the Fund’s PDS it is the Responsible Entity’s intention not to seek reimbursement of these expenses from the Fund.

(d) Loan to related parties

During the year the parent entity lent a further amount of USD160,467 (2007: USD75 million) to its subsidiary.

The term of the loan to the subsidiary by the parent company will continue until the earlier of:

a) demand by the parent for repayment of the loan; or

b) the tenth (10th) anniversary of the Advance Date (15 December 2006), unless both parties agree in writing no less than one month prior to this date to extend the term of the Loan Facility.

Interest is payable at 9% p.a. Interest and management fees payable by the subsidiary to the parent are capitalised into the loan on a quarterly basis. Interest of $10,874,423 was incurred on the loan during the year. Management fees payable by the subsidiary are paid by the parent, and upon payment they are capitalised into the loan. The total amount outstanding at 31 December 2008 is A$140,489,552 (2007: A$96,758,076).

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(e) Key management personnel

AASB 124 “Related Party Disclosures” defines key management personnel (KMP) as including all non-executive directors, executive directors and any other persons having authority or responsibility for planning, directing and controlling the activities of the entity. The Fund has no direct employees, however, the non-executive directors and the executive directors of the Responsible Entity have been deemed to be directors of the Fund. These individuals and the Responsible Entity comprise the KMP of the Fund.

The names of each person holding the position of Director of the Responsible Entity at any time during the period and until the date of this report are as follows:

Name Position

Jack H. Ritch Chairman and Non-executive Director

Stephen J. P. Dunne Executive Director

J. Brian Clark Non-executive Director Appointed 8 February 2008

Craig W. Dunn Managing Director and CEO of AMP Limited

Stephen A. Grenville Non-executive Director

Donald R. Luke Non-executive Director

Nora L. Scheinkestel Non-executive Director

Remuneration paid to the Responsible Entity is detailed in note 14(c) above. No director of the Responsible Entity was paid any remuneration by the Fund during the period and their compensation paid by the Responsible Entity or related entities of the Responsible Entity is not related to services they render to the Fund.

15. CASH AND CASH EQUIVALENTS

(a) Reconciliation of cash and cash equivalents

Cash and cash equivalents at the end of the period as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Domestic 273 262 273 262

Foreign

– United States Dollar 82 22 7 1

– Hong Kong Dollar 3,868 189 3,868 189

– Renminbi 14,609 12,658 – –

18,559 12,869 3,875 190

Total 18,832 13,131 4,148 452

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15. CASH AND CASH EQUIVALENTS (continued)

(b) Reconciliation of change in net assets attributable to unitholders to net cash inflow/(outflow) from operating activities


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)


Proceeds from sales of financial instruments held for trading

9,280 11,912 9,280 11,912

Payments for purchases of financial instruments held for trading

(29,132) (20,074) (29,132) (20,074)

Foreign exchange (gains)/losses (3,903) 725 (29,483) 10,842

Interest expense paid – 359 – 6

Changes in the fair value of held for trading investments

5,333 (59,459) 5,333 (7,343)

Realised (gains)/losses on available for sale investments

(42,850) (52,116) – –

Impairment losses 103,988 – 15,468 –

Distributions to unitholders 11,868 37,920 11,868 37,920

Tax expense 3,467 913 – –

Interest income capitalised – – (6,525) (6,290)

Management fees capitalised – – (7,539) (5,235)

Changes in assets and liabilities:

– (Increase)/Decrease in receivables (6) (7) (1,028) (2,196)

– Increase/(Decrease) in payables/provisions (1,016) 2,489 151 75

Net cash and cash equivalents inflow from operating activities (23,577) (10,046) 6,541 (13,593)

(c) Non-cash financing and operating activities

Non-cash financing and operating activities carried out during the year on normal commercial terms and conditions included:


2008 ($’000)

2007 ($’000)

2008 ($’000)

2007 ($’000)

Participation in reinvestment plan 35,260 – 35,260 –

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16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Financial risk management objectives and policiesRisks arising from holding financial instruments are inherent in the Fund’s activities, and are managed through a process of ongoing identification, measurement and monitoring. The Fund is exposed to credit risk, liquidity risk and market risk.

The Fund’s principal financial instruments consist of investments in overseas listed securities. The main purpose of these financial assets is to generate a return on the investment made by the unitholders.

The Fund’s financial assets included in the balance sheet are carried at their fair value.

Where it assists the Fund in meeting its investment objectives, and is consistent with the Fund’s investment strategy, AMP Capital Investors, the Responsible Entity, will actively manage the capital of the Fund. This may include:

a buy back of Units•

management of the distribution reinvestment • plan, and

the issue of Units through Unit purchase plans, • bonus or rights issues to investors.

The Responsible Entity’s objectives when managing capital are to safeguard the Fund’s ability to continue as a going concern, so it can continue to provide returns for unitholders and benefits for other stakeholders and to maintain an optimal capital structure.

The Responsible Entity is also responsible for identifying and controlling the risks that arise from the financial instruments.

The risks are measured using a method that reflects the expected impact on the results and net assets attributable to unitholders of the Fund from reasonably possible changes in the relevant risk variables. Information about these risk exposures at the reporting date, measured on this basis, is disclosed below. Information about the total fair value of financial instruments exposed to risk, as well as compliance with established investment mandate limits, is also monitored by the Responsible Entity. These mandate limits reflect the investment strategy and market environment of the Fund, as well as the level of risk that the Fund is willing to accept, with additional emphasis on selected industries.

This information is prepared and reported to relevant parties within the Responsible Entity on a regular basis as deemed appropriate, including

the fund manager, compliance manager, other key management, Risk and Investment Committees.

As part of its risk management strategy, the Fund may, outside of China, use derivatives to manage certain risk exposures. Within China currently, with the exception of listed warrants, QFII Licence Holders are not permitted to invest in derivatives traded in China.

Concentrations of risk arise when a number of financial instruments or contracts are entered into with the same counterparty, or where a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions.

In order to avoid excessive concentration of risk, the Fund monitors its exposure to ensure concentrations of risk remain within acceptable levels and either reduces exposure or uses derivative instruments to manage the excessive risk concentrations when they arise.

(b) Credit risk exposure

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Concentrations of credit risk are minimised primarily by the investment manager/custodian carrying out all market transactions through recognised and creditworthy brokers and the monitoring of receivable balances. The Fund’s business activities do not necessitate the requirement for collateral as a means of mitigating the risk of financial loss from defaults.

Market prices of listed financial instruments generally incorporate credit assessments into valuations and risk of loss is implicitly provided for in the carrying value of such assets in the financial statements as they are marked to market at balance date. The total credit risk for on-balance sheet items including securities is therefore limited to the amount carried in the balance sheet.

The Fund holds no collateral as security or any other credit enhancements. There are no financial assets that are past due or impaired, or would otherwise be past due or impaired except for the terms having been renegotiated.

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16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

Credit risk is not considered to be significant to the Fund except in relation to investments in debt securities.

(c) Liquidity and cash flow risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities. Cash flow risk is the risk that future cash flows associated with financial instruments will fluctuate in amount.

The risk is controlled through the Fund’s investment in financial instruments, which under normal market conditions are readily convertible to cash. In addition, the Fund maintains sufficient cash and cash equivalents to meet normal operating requirements.

The Fund’s objective is to maintain a balance between continuity of funding and flexibility. In the future this may include the use of bank loans and bank overdrafts.

Maturity analysis for financial liabilities

Financial liabilities of the Fund comprise trade and other payables, distributions payable and net assets attributable to unitholders. Trade and other payables have no contractual maturities but are typically settled within 30 days. Distributions are expected to be paid yearly in April, although there may be times when no distribution is payable on the scheduled distribution date.

(d) Market risk

Accounting standards require the disclosure of sensitivity to changes in market risk variables such as equity prices, exchange rates and interest rates. This sensitivity is not intended to show the impact on the profit for the entire period, just an illustrative example of the direct impact of a change in the value of the financial assets held at the period end as a result of the change in market rate.

The sensitivity is required to show the impact of a reasonably possible change in market rate (it is not intended to illustrate a remote, worst case or stress test scenario) over the period to the subsequent reporting date.

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates, and equity prices.

The Fund is exposed to market risks influencing investment valuations.

Market risk is controlled through ensuring that all investment activities are undertaken in accordance with established mandate limits and investment strategies.

Interest rate risk

Interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates. The Fund’s exposure to interest rate risk is on cash and cash equivalents only. The weighted average effective interest rate on cash and cash equivalents is 6.63% at 31 December 2008 (2007: 5.6%).

The loan from the parent entity to the subsidiary is at a fixed rate and is therefore not exposed to interest rate risk.

Foreign exchange risk

The Fund holds monetary and non-monetary assets denominated in currencies other than the Australian dollar. The foreign exchange risk relating to non-monetary assets and liabilities is a component of price risk. Foreign exchange risk arises as the value of monetary securities denominated in other currencies will fluctuate due to changes in exchange rates.

The analysis below demonstrates the impact of a 10% movement of currency rates against the Australian dollar with all other variables held constant, on the Net Assets Attributable to Unitholders. It is assumed that the relevant change occurs at the reporting date.

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2008 Consolidated entity

Change in currency rate

Currency AUD equivalent in exposure by currency

($’000)

Effect on net assets attributable to unitholders

+10%($’000)


-10%($’000)

US Dollars 82 8 (8)

Renminbi 14,609 1,461 (1,461)

Hong Kong Dollars 3,868 387 (387)



Currency

AUD equivalent in exposure by currency

($’000)


+10%($’000)


-10%($’000)

US Dollars 22 2 (2)

Renminbi 12,658 1,266 (1,266)

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2008 Parent entity


Currency


($’000)


+10%($’000)


-10%($’000)

US Dollars 7 – –

Hong Kong Dollars 3,868 387 (387)

2007 Parent entity


Currency


($’000)


+10%($’000)


-10%($’000)

US Dollars – – –

Hong Kong Dollars 189 19 (19)

The effect on net assets attributable to unitholders shown in the table above is based on income prior to any distributions to unitholders.

Price risk

Price risk is the risk that the fair value of equities decreases as a result of changes in the market prices, whether those changes are caused by factors specific to the individual stock or factors affecting all instruments in the market. Equity price exposure arises from the Fund’s investment portfolio.

Where non-monetary financial instruments are denominated in currencies other than the Australian dollar, the price in the future will also fluctuate because of changes in foreign exchange rates. All securities present a risk of loss of capital. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments.

The analysis below demonstrates the impact of a 10% movement in international equities. This sensitivity analysis has been performed to assess the direct risk of holding equity instruments with all other variables held constant. It is assumed that the relevant change occurs as at the reporting date.

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Change in equity price

Market Index


+10%($’000)


-10%($’000)

S&P / Citic 300 Total Return Index 30,809 (30,809)



Market Index


+10%($’000)


-10%($’000)


2008 Parent entity


Market Index


+10%($’000)


-10%($’000)


2007 Parent entity


Market Index


+10%($’000)


-10%($’000)


17. AUTHORISATION OF FINANCIAL REPORT

The financial report of the AMP Capital China Growth Fund for the year ended 31 December 2008 was authorised for issue in accordance with a resolution of the directors of AMP Capital Investors Limited on the 27th February 2009.

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In accordance with a resolution of the Directors of AMP Capital Investors Limited, I state that:

In the opinion of the Directors of the Responsible Entity, at the date of this Declaration:

(a) The financial statements and notes of the Fund and consolidated entity are in accordance with the requirements of the Fund Constitution and the Corporations Act 2001, and:

(i) are properly drawn up so as to present a true and fair view of the financial position of the Fund and consolidated entity as at 31 December 2008 and of their performance for the year ended on that date: and

(ii) comply with Accounting Standards, the Corporations Regulations 2001 and mandatory professional reporting requirements.

(b) There are reasonable grounds to believe that the Fund and the consolidated entity will be able to pay their debts as and when they become due and payable.

(c) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending 31 December 2008.

Signed in accordance with a resolution of the Directors of AMP Capital Investors Limited.

Director

Dated this 27th day of February 2009, Sydney

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AS AT 31 JANUARY 2009

The following information presented on pages 41-44 is current as at 31 January 2009.

Number of unitholders and unitholders’ rights

There were 304,182,250 ordinary units on issue held by 8,418 unitholders. On a show of hands at any unitholder meeting, every member present in person or represented by a proxy or representative shall have one vote and on a poll every member who is present in person or represented by a proxy or representative shall have one vote for every dollar of the value of the total interest they have in the Fund.

Distribution of units

Investor ranges Number of holders

Total units % issued capital

1 – 1,000 637 344,227 0.11

1,001 – 5,000 2,309 6,365,419 2.09

5,001 – 10,000 1,718 11,765,892 3.87

10,001 – 100,000 3,540 87,766,311 28.85

100,001 and over 214 197,940,401 65.07

Rounding 0.01

Total 8,418 304,182,250 100

There are 403 unitholders holding less than the marketable parcel of ordinary units in the Fund.

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Twenty largest investors

Rank Investor Number of units

% issued capital

1 AMP Life Limited 105,350,329 34.63

2 Cogent Nominees Pty Limited 10,928,811 3.59

3 NZGT Nominees Ltd AMP Capital Balanced Fund 7,548,383 2.48

4 NZGT Nominees Ltd AMP Capital Growth Fund 6,895,980 2.27

5 UBS Wealth Management Australia Nominees Pty Ltd 6,618,282 2.18

6 Citicorp Nominees Pty Limited 4,138,561 1.36

7 RBC Dexia Investor Services Australia Nominees Pty Limited 4,134,841 1.36

8 Masfen Securities Limited 3,278,612 1.08

9 National Nominees Limited 2,751,357 0.90

10 Vigor Door Corporation Pty Ltd 1,630,315 0.54

11 Capital Nominees Ltd 1,500,000 0.49

12 Ms Feng-Chu Lin 1,356,700 0.45

13 Invia Custodian Pty Limited 1,300,000 0.43

14 Serioso Pty Limited 1,092,881 0.36

15 Deadline Group Pty Ltd 930,920 0.31

16 Australian Executor Trustees Limited 900,987 0.30

17 Investment Custodial Services Limited 889,237 0.29

18 Kevson Pty Limited 869,721 0.29

19 NZGT Nominees Limited AMP Capital Conservative Fund 855,973 0.28

20 Custodial Services Limited 711,407 0.23

Total 163,683,297 53.82

Substantial holders

AMP Limited and its associates have a relevant interest in the AMP Capital China Growth Fund which equates to 43% of the fund.

Restricted securities

There are no restricted securities on issue.

Buy-back

There is no current on-market buy-back.

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Management Agreement

AMP Capital Investors has been appointed investment manager by the Fund’s wholly owned subsidiary AMP Capital China Growth Fund (‘Subsidiary Company’) under the Investment Management Agreement dated 9 November 2006 to invest and manage the investment portfolio for an initial term of 10 years.

Services

AMP Capital Investors performs investment management services including reviewing the investment portfolio, arranging for the acquisition and disposal of assets within the portfolio (within certain investment parameters) and preparing reports on the investment portfolio.

AMP Capital Investors also procures the appointment of a custodian for the assets and agrees to provide certain information in relation to that custody arrangement.

Indemnities

AMP Capital Investors is indemnified against any loses or liabilities it reasonably incurs in acting under the agreement except to the extent that any loss, liability, cost, charge or expense is caused by the negligence, fraud or dishonesty of AMP Capital Investors or its officers or agents. This obligation continues after the termination of the agreement and the Subsidiary Company is not otherwise liable to AMP Capital Investors for any loss or liability.

AMP Capital Investors indemnifies the Subsidiary Company against any losses or liabilities reasonably incurred arising out of, or in connection with, any negligence, fraud or dishonesty of AMP Capital Investors or its officers or agents.

This obligation continues after the termination of the agreement and AMP Capital Investors is not otherwise liable to the Subsidiary Company for any loss or liability.

Fees

The Subsidiary Company pays AMP Capital Investors base and performance fees for the provision of the investment management services under the agreement.

The base fee of 1.652% per annum is calculated on the Fund’s assets as at the last day of each month and is payable quarterly in arrears on the final day of each quarter. Ongoing expenses associated with operating the Fund and the Subsidiary Company will be paid or reimbursed from the Fund and the Subsidiary Company when incurred. These expenses include custody, accounting, auditing, administration, registry, ASX and ASIC fees.

The performance fee of 20% of outperformance above the benchmark (if any) is payable quarterly in arrears on the final day of each quarter.

Termination

The agreement may be terminated by AMP Capital Investors giving 60 business days notice in writing to the Subsidiary Company.

The Subsidiary Company may terminate the agreement immediately if a receiver (or similar person) is appointed with respect to the assets and undertakings of AMP Capital Investors, AMP Capital Investors goes into liquidation, AMP Capital Investors ceases to carry on its normal business, AMP Capital Investors breaches any material provision of the agreement and fails to correct it within certain timeframes, AMP Capital Investors’ QFII Licence is not renewed, or the performance is more than 20% less than the benchmark return in any two consecutive years.

This agreement will continue for a further 10 year term if the investors in the Fund pass an ordinary resolution to approve such an extension. The investors in the Fund may resolve to terminate the agreement.

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Investment portfolio

CHINA

Aisino Co Ltd Industrial & Commercial Bank of China

Angang Steel Co Ltd Industrial Bank Co Ltd

Anhui Conch Cement Co Ltd Kweichow Moutai Co Ltd

Bank of Communications Co Ltd Luzhou Laojiao Co Ltd

Baoshan Iron & Steel Co Ltd Offshore Oil Engineering Co Ltd

Changsha Zoomlion Heavy Industry Science and Technology Development Co Ltd

Ping An Insurance Group Co of China Ltd

China Coal Energy Co Qinghai Salt Lake Potash Co

China Construction Bank Corp Sany Heavy Industry Co Ltd

China Merchants Bank Co Ltd Shandong Expressway Co Ltd

China Petroleum & Chemical Corp Shandong Gold Mining Co Ltd

China Shenhua Energy Co Ltd Shanghai Pudong Development Bank

China Shipping Development Co Ltd Shanghai Zhenhua Port Machinery Co

China United Telecommunications Corp Ltd Shenzhen Development Bank Co

China Vanke Co Ltd Suning Appliance Co Ltd

China Yangtze Power Co Ltd TBEA Co Ltd

Citic Securities Co Ltd/China Tianjin Port Co Ltd

Daqin Railway Co Ltd Wuhan Iron & Steel Co Ltd

GD Power Development Co Ltd Yantai Changyu Pioneer Wine Co

Gemdale Corp Yantai Wanhua Polyurethanes Co Ltd

Gree Electric Appliances Inc ZTE Corp

Henan Shuanghui Investment & Development Co Ltd

HONG KONG

China Mobile Ltd iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker

China Petroleum & Chemical Corp ZTE Corp

China Resources Power Holdings Co Ltd

MAURITIUS

AMP Capital China Growth Fund

Brokerage costs and investment transactions

During the year the Fund paid approximately $825,000 in brokerage costs relating to 237 transactions.

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CORPORATE DIRECTORY

AMP Capital China Growth Fund

ABN 59 597 237 72550 Bridge Street, Sydney NSW 2000T: 02 9257 5000

Responsible Entity and Investment Manager

AMP Capital Investors Limited ABN 59 001 777 591

Secretary of the Responsible Entity

Todd Stanley

Registry

Computershare Investor Services Pty LimitedLevel 2, 60 Carrington Street, Sydney NSW 2000T: 1300 787 272

Auditors

Ernst & Young680 George Street, Sydney NSW 2000

NS3

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amp capital china growth fund arsn 122 303 744 sydney … fileamp capital china growth fund general...

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