Half-yearly Report

LUXEMBOURG--(BUSINESS WIRE)--

THE EGYPT TRUST

Organisation of the Fund

Chairman
ALEXANDER E. ZAGOREOS		Jermain Hill Lane
		U.S.A.-Eagle Bridge, NY 12057
Directors
MICHAEL BECKETT *		Northcroft Dulwich Commons
		U.K.-London SE21 7EW
SHAKER ALBERT KHAYATT *		KHAYATT & COMPANY INC.
		50 Broad Street, Suite 1609
		U.S.A.-New York, NY 10004
MOHAMED KAMAL EL-DIN BARAKAT *		151 Mohamed Farid Street
		EGYPT, Cairo
MICHAEL TAIT *		OXFORD AND EDINBURGH CONSULTANTS
Chairman of the Audit Committee		8 Chalcot Crescent
		U.K.-London NW1 8YD
Advisory Board		HERBERT GULLQUIST
Registered Office		11, rue Aldringen
		L-1118 Luxembourg
Manager		LAZARD ASSET MANAGEMENT LLC
		30 Rockefeller Plaza
		U.S.A.-New York, NY 10112
Investment Adviser		NATIONAL BANK OF EGYPT
		NBE Tower
		1187 Corniche El-Nile
		Boulak
		EGYPT, Cairo
* Member of the Audit Committee

Note : Mr HASSANEIN has resigned from the Board of Directors as of 1st October 2008, but due to an administrative error this had not been correctly reflected in the last annual report.

THE EGYPT TRUST

Organisation of the Fund (continued)

Custodian and Paying Agent			KBL European Private Bankers S.A.
			43, boulevard Royal
			L-2955 Luxembourg
Domiciliary, Registrar, Transfer			KREDIETRUST LUXEMBOURG S.A.
and Administrative Agent			11, rue Aldringen
			L-2960 Luxembourg
Independent Auditor			DELOITTE S.A.
			560, rue de Neudorf
			L-2220 Luxembourg
Financial Adviser and Broker			Arbuthnot Securities Limited
			Arbuthnot House
			20, Ropemaker Street
			U.K.-London EC2Y 9AR

THE EGYPT TRUST

General Information

1. Shareholders will be sent audited annual accounts relating to THE EGYPT TRUST (the “Fund” or the “Corporation”), which will include a report by the Manager, made up to the last day of March in each year. Shareholders will also be sent an unaudited half-yearly report covering the six-month period ending September 30th in each year.
2. The Annual General Meeting of Shareholders is held in Luxembourg each year at 4 p.m. on the third Tuesday of August in each year (or, if such day is not a business day in Luxembourg, on the next following business day). Notices convening each annual general meeting, including agenda, time and place, and details of attendance, quorum and majority requirements under Luxembourg law, will be sent to the registered addresses of Shareholders together with the annual report and accounts not less than 21 days before the date of such meeting.
3. The investment policy of the Corporation is to achieve medium to long-term capital growth through investments principally in the equities of companies listed on the Egyptian Stock Exchange.
4. The Corporation intends to distribute annually to Shareholders substantially all of its income (including dividends and interest) available for distribution after deducting fees and expenses.
5. Dividends will only be paid to the extent that they are covered by income received from underlying investments, shares of profits of associated companies being unavailable for this purpose unless and until distributed to the Corporation. The Fund’s Articles of Incorporation (the “Articles”) provide that dividends shall not be paid out of surpluses arising upon the realisation of investments.
6. A dividend declared but not claimed by a Shareholder after twelve years from the declaration thereof shall lapse and revert to the Corporation.
7. The Net Asset Value per share (the “NAV”) is expressed in US Dollars (“USD”) and is published on a weekly basis in the “Financial Times”.
8. The Shares of the Fund are listed on the London Stock Exchange.

Responsibility Statement

We, the Directors of the Egypt Trust, confirm to the best of our knowledge that:

a) the financial statements which have been prepared in accordance with the applicable set of accounting standards (being the legal and regulatory requirements in Luxembourg relating to investment funds) give a true and fair view of the assets, liabilities, financial position and profit or loss of the Fund;

b) the Manager’s Review includes a fair review of the development and performance of the business and the position of the Fund together with a description of the principal risks and uncertainties that it faces; and

c) the notes to the financial statements include a fair review of related party transactions which have taken place in the first six months of the financial year and any related changes.

By order of the Board

Alexander E. Zagoreos

Chairman

November 2009

Investment Policy

Asset Allocation

• The Fund invests primarily in equity securities of Egyptian companies listed on Cairo and Alexandria Stock Exchanges as well as other exchanges.
• We use a bottom-up, fundamental company analysis to identify companies that have strong earnings-generation ability but are inexpensively priced.
• We continuously monitor potential and existing holdings in the Fund, in addition to the overall macro-economic environment in Egypt. The asset allocation and security selection changes accordingly.

Risk Diversification:

• The Fund will run a fairly concentrated portfolio subject to exposure limits detailed below; but in the meanwhile aims to provide broad exposure to the market through holding a diversified portfolio.
• The liquidity of the Egyptian market is fairly limited compared to developed markets. When making an investment decision, liquidity concerns weigh in. We aim to keep 90 percent of the Fund’s NAV in highly liquid securities and cash. The remaining 10 percent would provide the flexibility to invest in attractively priced securities with low liquidity or in pre-IPO companies.
• We seek to invest in undervalued assets trading at a discount (absolute and/or relative). Such discounts could limit the portfolio’s downside risk, and add more value during rising markets

Exposure Limits:

• Maximum weighting in any single security should not exceed 10 percent of NAV - Passive breaches should be brought back in line with the policy in manner consistent with the best interest of the shareholders, and
• Maximum weighting in any single sector should not exceed 25 percent of NAV. The Fund treats Real Estate & Property Development as a separate sector and not part of financials.

Gearing:

• The Fund’s Manager is not allowed to use gearing.

THE EGYPT TRUST

Manager’s Review

Portfolio Performance & Market Overview:

(Price Only - Net of Fees)		Q ending SEP 30		Q ending JUN 30		6 Months to SEP30		1 Year to SEP 30
Egypt Trust Fund NAV ($)		32.37		27.15
Egypt Trust Fund NAV Return		27.89%		19.23%		52.47%		2.02%
Egypt Trust Fund Price ($)		30.38		24.0
Egypt Trust Fund Price Return		26.58%		44.32%		82.68%		-20.75%
IFC Egypt Investable USD (value)		251.78		210.30
IFC Egypt Investable USD Return		35.09%		19.72%		61.73%		-3.57%

Following its two worst quarterly returns back-to-back, the Egyptian exchange enjoyed a strong recovery in the six months April - September 2009 following in the footsteps of world equity markets. This global recovery in equity markets were driven mainly by improved credit conditions , historically low interest rates in most major economies and more importantly a major shift in investors’ sentiment from being overly bearish during Q4-08 and Q1-09 to being optimistic the following two quarters.

In line with the soaring market, the Egypt Trust NAV gained 52.47% in the six months to September 30th, 2009. Two factors caused the Trust to underperform the index. First the composition of the index which remains highly concentrated with Orascom Construction and Orascom Telecom representing around 40% while the trust is more broadly diversified. The second factor is the lower risk approach we adopted with higher focus on defensive stocks and a relatively large cash position.

Portfolio Structure

The Egypt Trust’s portfolio concentration was reduced as the collapse in equity prices earlier in the year created attractive investment opportunities in more shares enabling us to increase the diversity of the portfolio. As of September 30th, 2009, the Egypt Trust held 30 names.

The top 10 holdings in the portfolio now constitute 53.48% of NAV, down from 61.6% at the end of March 2009. Details of the top 10 holdings could be found in the table below.

Top 10 Holdings		Portfolio (%)
Orascom Construction Industries		7.10%
Egyptian Intl Pharma Industries Co		7.03%
National Société Générale Bank		6.46%
Orascom Telecom Holding		5.94%
Telecom Egypt		5.80%
EFG-Hermes Holding		4.53%
Talaat Moustafa Group Holding		4.45%
Commercial Intl Bank Ltd		4.33%
EFIC		3.97%
Alexandria Mineral Oils Co		3.87%
TOTAL		53.48%

Currently, no stock exceeds the 10% single issuer limit.

Sector allocation witnessed some changes as Telecom for the first time wasn’t one of our two top sectors. This was largely the result of selling down our position in Mobinil which, in our opinion, became fully valued as France Telecom’s desire to acquire the company became public earlier in the year. Telecom was replaced by real estate which we increased our investment in as stock prices reached what we believed was deeply undervalued levels.

Sector Allocation		MAR 09		SEP 09
Financial		20.95		21.71
Telecom		18.48		11.74
Real Estate		11.16		14.23
Material		10.57		13.34
Industrial		9.64		9.57
Petrochemicals		9.08		6.80
Healthcare		8.29		7.93
Consumer Discretionary		5.57		6.59
Net Current Assets		6.26		8.09
TOTAL		100.00%		100.00%

Economic Overview:

Egypt’s GDP managed to grow at annualized rate of 4.5% during the first half of 2009; while a significant drop from the almost 8% achieved during the same period last year, this is one of the highest growth rates for that period globally and particularly in investable emerging markets. We believe this highlights the strength and resilience of the local demand.

Source: IMF World Outlook Database (Financial Tables Not Included)

Similarly resilient was the headline inflation (CPI) which more than halved from a high of around 24% in mid 2008 to around 10% by September 2009 but, similar to GDP growth, remains one of the highest inflation figures in global markets. We believe this supports our belief that inflation in Egypt is more related to market inefficiencies than traditional supply and demand factors and as a result, monetary policy tools would be less effective in fighting inflation. Nevertheless, we view positively the Central Bank’s decision to reduce rates for the sixth consecutive time to 8.25% as an attempt to stimulate the economy.

On the fiscal side, the global slow down has caused government revenues to fall short of forecast while forcing the government to increase expenditures through a stimulus package; the result was a widening budget deficit to EGP 71.9 billion representing 6.9% of GDP; we forecast the budget deficit to continue to widen in fy 2009/2010 to around 7.5%

Outlook

We now have better visibility than six month ago and a stronger conviction that the Egyptian economy will continue to grow albeit at a slower rate; we forecast that the GDP growth in Egypt will range between 5-6% over the next couple of years. Supporting this forecast is a healthy and liquid banking system that is able to finance growth. On the other side, we identify two major risks to our forecast:

• The first is the ability of Egyptian producers to compete in a world of global excess capacity;
• The second is budget deficit spiraling out of control, putting more upward pressure on inflation eventually causing the Central Bank to significantly raise rates putting the brakes on the economy.

In terms of equity valuation, we view the current valuations as reasonable within the context of global emerging market; we believe further gains for Egyptian equities would come from positive earnings surprises rather than multiple expansion. Supporting this, is the ability of many corporates to maintain their margins during the past two quarters through aggressive cost cutting which would cause any top line improvement to be reflected positively in the bottom line.

In light of the developments, we have shifted the Egypt’s Trust portfolio from a conservative to a neutral bias as we are still not ready to completely adopt an aggressive portfolio until we have a strong conviction about the economy and our investments

Principal Risks and Uncertainties

The success of the Fund may be affected by general economic and market conditions, such as widening discounts, interest rate changes, availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political circumstances. These factors may affect the level and volatility of securities that the Fund invests in. The Manager actively monitors these factors and, to the degree possible, attempts to mitigate their negative impact on the Fund.

The Fund invests in securities issued primarily by companies located in Egypt. The Egyptian securities markets can be extremely volatile. The Fund’s performance will be influenced by political, social and economic factors affecting companies in Egypt. As an emerging market country, Egypt can generally have an economic structure that is less diverse and mature, and a political system that is less stable, than those of developed countries. Further, a fund, such as the Fund, that invests substantially all of its assets in securities of issuers in one country may experience significantly greater volatility that a fund that invests in a more geographically diverse portfolio.

November 2009 Lazard Asset Management

Note: The information in this report represents historical data and is not an indication of future results.

THE EGYPT TRUST Statement of Net Assets (in USD)
ASSETS		September 30th, 2009		March 31st, 2009
Securities' portfolio at market value		66,491,597		48,338,381
Cash at bank		14,162,158		5,086,232
Receivable on sales of securities				787,033
Income receivable on portfolio		159,613		286,741
Interest receivable on bank accounts		433		198
Prepaid expenses		3,252		1,038
Total assets		80,817,053		54,499,623
LIABILITIES
Bank liabilities		1,346,082		2,631,048
Payable on purchases of securities		818,686		-
Payable on repurchases of Shares		5,898,311		-
Expenses payable		418,491		300,654
Total liabilities		8,481,570		2,931,702
Net Assets at the End of the Period/Year		72,335,483		51,567,921
Number of Shares outstanding		2,234,809		2,429,483
Net Asset Value per Share		32.37		21.23

Shareholders’ Equity represented by (in USD)
		September 30th, 2009		March 31st, 2009
Capital: 8,513,347 Shares at USD 2.00		17,026,694		17,026,694
Share Premium		73,633,306		73,633,306
Legal Reserve		1,702,669		1,702,669
Profit brought forward		68,699,528		61,553,644
Cost of 1,663,837 Shares held in Treasury		-15,939,917		-15,939,917
Repurchase of 4,605,402 Shares at the request of Shareholders		-67,520,678		-61,125,930
Total Capital and Reserves		77,601,602		76,850,466
Net realised gain for the period/year		2,264,069		7,145,884
Unrealised depreciation on securities		-7,530,188		-32,428,429
Total Shareholders’ Equity		72,335,483		51,567,921
The accompanying notes are an integral part of these financial statements

Statement of Operations (in USD)
		From April 1st, 2009		From April 1st, 2008
INCOME		to September 30th, 2009		to September 30th, 2008
Dividends, net		2,266,510		3,465,172
Interest on bank accounts		7,315		72,370
Received commissions		318,969		-
Total income		2,592,794		3,537,542
EXPENSES
Management fees		346,205		507,955
Advisory fees		86,551		126,989
Custodian fees		13,169		19,833
Bank and financial services		88,987		215,072
Central administration costs		35,068		41,181
Audit and supervisory fees		30,574		34,377
Printing and publication expenses		10,741		26,358
Subscription duty (“taxe d’abonnement”)		17,187		23,134
Directors’ fees and expenses		155,991		201,834
Other expenses		49,468		103,086
Total expenses		833,941		1,299,819
NET INVESTMENT INCOME		1,758,853		2,237,723
NET REALISED GAIN/LOSS
- on sale of securities (-1 year)		-60,309		4,847,367
- on sale of securities (+1 year)		599,427		398,272
- on foreign exchange		-33,902		-78,519
REALISED GAIN		2,264,069		7,404,843
CHANGE IN NET UNREALISED APPRECIATION/DEPRECIATION
- on securities		24,898,241		-45,445,736
INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS		27,162,310		-38,040,893
The accompanying notes are an integral part of these financial statements.

From April 1st, 2009 From April 1st, 2008

to September 30th, 2009 to September 30th, 2008

Statement of Changes in Net Assets (in USD)
	From April 1st, 2009	From April 1st, 2008
	to September 30th, 2009	to September 30th, 2008
Net Assets at the Beginning of the Period	51,567,921	115,445,281
Net investment income	1,758,853	2,237,723
Net realised loss on foreign exchange	-33,902	-78,519
Net realised gain/loss on sale of securities (-1 year)	-60,309	4,847,367
Net realised gain on sale of securities (+1 year)	599,427	398,272
Net realised gain for the period	2,264,069	7,404,843
Repurchases of Shares at the request of Shareholders	-6,394,748	-
Change in unrealised appreciation/depreciation on securities	24,898,241	-45,445,736
Net Assets at the End of the Period	72,335,483	77,404,388

		Statistical Information about the Fund (in USD)
		September 30th, 2009		March 31st, 2009		March 31st, 2008
Net Assets		72,335,483		51,567,921		115,445,281
Net Asset Value per Share		32.37		21.23		47.34

Statement of Changes in Shares Outstanding For the period ended September 30th, 2009
Number of Shares Outstanding at the Beginning of the Period		2,429,483
Number of Shares repurchased held in Treasury		-
Number of Shares repurchased at the request of Shareholders		-194,674
Number of Shares Outstanding at the End of the Period		2,234,809

Statement of Investments and other Net Assets September 30th, 2009 (in USD)
Currency		Number / nominal value		Description		Cost		Market value		% of total net assets
INVESTMENTS IN SECURITIES
TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING
Shares
Banks
EGP		300,000		Commercial Intl Bank Ltd		704,366		3,128,680		4.33
EGP		750,000		Credit Agricole Egypt		1,424,669		1,746,183		2.41
EGP		900,000		National Société Générale Bank Reg		1,303,374		4,671,756		6.46
						3,432,409		9,546,619		13.20
Capital goods
EGP		125,000		El Sewedy Cables Hg Co		2,311,249		1,788,441		2.47
EGP		120,000		Orascom Construction Industrie Reg		5,364,803		5,135,224		7.10
						7,676,052		6,923,665		9.57
Consumer durables and apparel
EGP		250,000		Olympic Group Fin Inv Co SAE		1,629,534		1,496,728		2.07
EGP		300,000		Oriental Weavers Co		2,585,004		1,847,328		2.55
						4,214,538		3,344,056		4.62
Diversified financial services
EGP		600,000		EFG-Hermes		5,619,301		3,275,900		4.53
EGP		1,500,000		Pioneers Holding		2,087,724		1,826,609		2.52
						7,707,025		5,102,509		7.05
Energy
EGP		350,000		Alexandria Mineral Oils Co		5,001,061		2,800,891		3.87
Hotels, restaurants and leisure
EGP		2,750,000		Talaat Moustafa Group Holding		5,096,343		3,218,830		4.45
Insurance
EGP		312,500		Delta Insurance		875,713		1,052,458		1.45
Investment companies
USD		1,500,000		Al Arafa Inv & Consulting		1,629,275		1,275,000		1.76
Materials
GBP		500,000		Centamin Egypt Ltd		759,640		767,256		1.06
EGP		650,000		Egyptian Financial & Indust Co Reg		1,453,051		2,868,411		3.97
EGP		450,000		El Ezz Steel Rebars SAE		1,767,715		1,250,545		1.73
EGP		200,000		Paint and Chemical Ind		1,282,264		1,509,633		2.09
EGP		1,000,000		Sidi Kerir Petrochemicals		3,557,373		2,117,412		2.93
EGP		200,000		Suez Cement Co		1,915,604		1,494,002		2.07
EGP		225,000		Tourah Cement Co		1,865,343		1,760,087		2.43
						12,600,990		11,767,346		16.28
Pharmaceuticals and biotechnology
EGP		800,000		Egyptian Intl Pharm Industr Co		1,910,414		5,081,788		7.03
EGP		50,845		Memphis Pharmaceutic Chem Ind		527,052		657,788		0.91
						2,437,466		5,739,576		7.94
Real estate
EGP		300,000		Heliopolis Housing & Dev SA		4,639,377		2,176,118		3.01
EGP		125,000		Namaa Dév Real Estate InvestCo		292,053		385,541		0.53
EGP		150,000		Nasr City Housing & Dev SA		919,534		976,281		1.35
EGP		750,000		Palm Hills Devlopments SAE		1,267,340		1,207,743		1.67
EGP		150,000		Sixth of Octob Dev & Inv Co SA		4,537,735		2,327,154		3.22
						11,656,039		7,072,837		9.78
Retailing
EGP		100,000		B-Tech		61,514		153,944		0.21
Telecommunication services
EGP		675,000		Orascom Telecom Holding		7,259,437		4,297,574		5.94
EGP		1,300,000		Telecom Egypt		4,373,923		4,196,292		5.80
						11,633,360		8,493,866		11.74
TOTAL INVESTMENTS IN SECURITIES						74,021,785		66,491,597		91.92
CASH AT BANKS								14,162,158		19.58
BANK LIABILITIES								-1,346,082		-1.86
OTHER NET ASSETS AND LIABILITIES								-6,972,189		-9.64
TOTAL NET ASSETS								72,335,483		100.00

Currency, Geographical and Industrial Classification of the Fund
September 30th, 2009
(in percentage of net assets)

Currency Classification
Egyptian Pound		89.10 %
US Dollar		1.76 %
Pound Sterling		1.06 %
TOTAL INVESTMENTS IN SECURITIES		91.92 %
Egyptian Pound		0.72 %
US Dollar		18.86 %
TOTAL CASH AT BANKS		19.58 %
US Dollar		-1.86 %
BANK LIABILITIES		-1.86 %
OTHER NET ASSETS AND LIABILITIES		-9.64 %
TOTAL NET ASSETS		100.00 %
Geographical Classification
Egypt		90.86 %
Australia		1.06 %
TOTAL INVESTMENTS IN SECURITIES		91.92 %
OTHER NET ASSETS AND LIABILITIES		8.08 %
TOTAL NET ASSETS		100.00 %
Industrial Classification
Materials		16.28 %
Banks		13.20 %
Telecommunication services		11.74 %
Real estate		9.78 %
Capital goods		9.57 %
Pharmaceuticals and biotechnology		7.94 %
Diversified financial services		7.05 %
Consumer durables and apparel		4.62 %
Hotels, restaurants and leisure		4.45 %
Energy		3.87 %
Investment companies		1.76 %
Insurance		1.45 %
Retailing		0.21 %
TOTAL INVESTMENTS IN SECURITIES		91.92 %
OTHER NET ASSETS AND LIABILITIES		8.08 %
TOTAL NET ASSETS		100.00 %
The accompanying notes are an integral part of these financial statements

Notes to the Financial Statements
September 30th, 2009

NOTE 1 - GENERAL

THE EGYPT TRUST (the “Fund” or the “Corporation”) is a closed-end investment corporation incorporated as an investment corporation under the laws of the Grand Duchy of Luxembourg and qualifies as a “société d’investissement à capital fixe” under the amended law of December 20th, 2002 (the “2002 Law”) regarding undertakings for collective investments and the law of August 10th, 1915, as amended regarding commercial companies. The Fund is governed by Part II of the Luxembourg 2002 Law.

The Fund was incorporated in Luxembourg on July 23rd, 1996 for an indefinite period.

The Articles have been published in the “Mémorial, Recueil des Sociétés et Associations” and they have been filed with the Registrar of the Luxembourg District Court, where copies thereof may be obtained. In addition, a legal notice concerning the issue of the Shares is on file with the Registrar of the Luxembourg District Court.

The Fund’s investment policy is to achieve medium to long-term capital growth through investments principally in the equities of companies listed on the Egyptian Stock Exchange.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

a) Presentation of Accounts

The financial statements are presented in conformity with Luxembourg legal and regulatory requirements relating to investment funds. The Fund keeps its books and records in USD.

b) Valuation

1. The NAV is calculated in accordance with Article 22 of the Fund’s Articles on each Valuation Date (as defined in the Articles). “Valuation Date” means the date fixed by the Board of Directors (the “Board”) for the valuation of the Shares being Friday of each week (or, if that day is not a business day in Luxembourg, on the next business day).
   
   The NAV is determined by dividing the Net Assets of the Fund, being the value of its assets less liabilities, by the number of Shares then outstanding.
2. In calculating the NAV, income and expenses are treated as accruing from day to day and the Fund’s Articles provide, inter alias, that:
   
   (i) unquoted investments will initially be valued at cost price, which will include any expenses relating to their acquisition;
   
   (iii) a revaluation of unquoted investments to a value in excess of or below cost may be made where, in the opinion of the Board, or in the opinion of the Fund’s Manager (where the Board has delegated its powers), it is justified. Factors affecting such revaluations may include: the prices at which further issues of capital or dealings between third parties take place, the market value of comparable companies (making appropriate adjustments for such factors as limitation of marketability) or the price at which any agreement has been entered into, or is reasonably contemplated, for the sale of the investments; securities which are listed on an official stock exchange or traded on any other regulated market will be valued at the last available price on the principal market on which such securities are traded, or by a pricing service approved by the Board;
   
   (iv) assets or liabilities expressed in terms of currencies other than USD will be translated into USD at the prevailing market rate for such currencies at the Valuation Date.
3. First-in first-out method: Purchases of securities are recorded at cost. Realized gains and losses on securities sold are computed on the first-in first-out basis.
4. The value of cash in hand or on deposit, bills and notes payable on presentation, accounts due, prepaid expenses and dividends and interest declared and fallen due but not yet received consists of the nominal value of such assets, except, however, in the event that it seems improbable that such value can be realized, in which event the value is determined by deducting a sum which the Board considers appropriate to reflect the realizable value of such assets.
5. Foreign currencies monetary assets and liabilities denominated in foreign currencies in the Statement of Net Assets are translated into USD at the exchange rates ruling at the date of the report. Transactions in foreign currencies are recorded in USD based on the exchange rates in effect at the date of transactions. The following significant exchange rates have been applied for the conversion as at the date of the report:

						USD
1		EGP		Egyptian Pound		0.1817521
1		EUR		Euro		1.4619000
1		GBP		Pound Sterling		1.5984500

c) Income Recognition

Interest is recorded on an accrual basis, net of any withholding taxes in the relevant country. Dividend income is recorded on the ex-date, net of any withholding taxes in the relevant country.

d) Net Realised Gain/Loss

The net realised gain/loss on sale of securities is split between two accounts depending on the fact that the securities have been owned during more than one year or not.

NOTE 3 - MANAGEMENT AND ADVISORY FEES

The Fund pays Lazard Asset Management LLC, the Manager, annual management fees of 1.00%, of the value of the gross assets of the Corporation, payable monthly in arrears and to National Bank of Egypt, the Investment Adviser, 0.25%, per annum, of the value of the gross assets of the Corporation, payable monthly in arrears.

NOTE 4 - TAXES

As a Luxembourg investment company, under present laws the Fund is not subject to income taxes in Luxembourg. Taxes may be withheld at the source on dividends and interest received on investment securities.

According to the Luxembourg 2002 Law, the Fund is subject to Luxembourg subscription duty (“taxe d’abonnement”) at the rate of 0.05% per annum of its Net Assets, such tax being payable quarterly on the basis of the Total Net Assets of the Fund at the end of the relevant quarter.

NOTE 5 - REPURCHASES OF SHARES HELD IN TREASURY

The Fund is not obliged to repurchase Shares at the request of Shareholders.

The maximum price at which Shares can be repurchased will be the NAV. Under Luxembourg law, repurchases may only be made to the extent that the Corporation has distributable reserves available for the purpose, being Share premium or accumulated reserves.

Any Shares so repurchased will be held in treasury or will be cancelled by way of reduction of issued capital. The Shares held in treasury may be resold at any time, at the discretion of the Board, if a premium to the NAV may be obtained. Details of such repurchases and sales will be communicated to all Shareholders as well as to the London and the Luxembourg Stock Exchanges and to the Egyptian Stock Exchange if the Shares are listed there.

The Fund did not repurchase any Shares during the period ended September 30th, 2009 and at this date, a total of 1,663,837 Shares are held in treasury for an amount of USD 15,939,917.

NOTE 6 - REPURCHASES AT THE REQUEST OF SHAREHOLDERS

Following to the Extraordinary General Meeting on November 17th, 2003 and to the circular resolution on December 24th, 2003 Shareholders may request the Corporation from December 29th, 2003 to redeem all or part of their Shares quarterly at a redemption price equal to the NAV of the applicable Valuation Date, reduced by a redemption fee of up to 5% for the benefit of the Corporation to cover dealing charges. As of September 30th, 2009, such redemption fee amounts to USD 318,969 and is registered under the caption “received commissions” in the Statement of Operations. The Corporation shall redeem such Shares within the sole limitations set forth by law, the Fund’s Articles and the prospectus and subject to any event giving rise to suspension as referred in the prospectus.

If the total value of requests for redemption of Shares received on any specific redemption date exceeds 10% of the Total Net Asset Values of Shares in issue, the redemption requests will be reduced pro rata to the holdings of the Shareholders who applied for redemption.

NOTE 7 - CAPITAL

The authorized Share capital of the Corporation on incorporation of the Fund was USD 40,000,000 divided into 20,000,000 Shares with a par value of USD 2.00 each.

On December 12th, 1997, a capital increase of 8,490,847 Shares has been registered with a par value of USD 2.00 each.

The Fund is required by Luxembourg law to transfer at least 5% of its yearly net profits to a non-distributable legal reserve until such reserve amounts to 10% of the Fund’s nominal Share capital. This reserve is not available for dividend distribution.

According to the Fund’s Annual General Meeting Minutes on August 18th, 2009, no dividend has been distributed.

NOTE 8 - CUSTODIAN FEES

The Custodian receives, under the terms of the Custodian Agreement, fees for its services at rates to be agreed from time to time between the Fund and the Custodian in accordance with Luxembourg practice.

NOTE 9 - DIRECTORS FEES

Each of the Directors shall be paid a fee at such a rate as the Board shall determine provided that the aggregate of such fees shall not exceed USD 200,000 per annum or such higher amount as may from time to time be decided by resolution of the Corporation.

The Directors shall also be entitled to reimbursement of all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings or otherwise in connection with the business of the Corporation.

NOTE 10 - BENEFICIAL AND NON-BENEFICIAL INTEREST OF DIRECTORS IN THE SHARE CAPITAL

As of September 30th, 2009 the beneficial and non-beneficial interests of the Directors in the Share capital are the following:

Alexander E. Zagoreos 2,500 Shares

NOTE 11 - DIRECTORS’ INTEREST IN SIGNIFICANT CONTRACTS

Alexander E. Zagoreos was a Managing Director of Lazard Asset Management LLC through December 31st, 2005 and became a Limited Managing Director effective January 1st, 2006. He became a Senior Advisor on January 1st, 2008.

NOTE 12 - SUBSTANTIAL SHAREHOLDING

All issued Shares of the Fund are on deposit with a registered clearinghouse and, accordingly, the Directors are not in a position to state the exact size of any Shareholdings in the Fund.

NOTE 13 - CHANGES OF THE INVESTMENT PORTFOLIO

The changes of the investment portfolio referring to the period of the report are available free of charge at the registered office of the Fund.

NOTE 14 - ADDENDUM TO THE PLACING MEMORANDUM

The Board has resolved to amend the prospectus with a consolidated addendum to the prospectus dated August 2nd, 1996. The prospectus may not be distributed without the consolidated addendum dated December 2003.