EFTA00295614.pdf

CCM Small Cap Value Fund, L.P. (A Delaware Limited Partnership) Financial Statements as of and for the Year Ended December 31, 2012, and Independent Auditors' Report EFTA00295614 CCM SMALL CAP VALUE FUND, M. (A Delaware Limited Partnership) TABLE OF CONTENTS Page INDEPENDENT AUDITORS' REPORT I FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31,2012: Statement of Financial Condition 2 Statement of Operations 3 Statement of Changes in Partners' Capital 4 Statement of Cash Flows 5 Notes to Financial Statements 6-9 EFTA00295615 Deloitte Debate Er Touche LLP III S. Wacker Drive Chicago, IL 60606-4301 USA Tel: +1 312 486 1000 Fax: +I 312 486 1486 www.clekitte.com INDEPENDENT AUDITORS' REPORT To the Partners of CCM Small Cap Value Fund, We have audited the accompanying financial statements of CCM Small Cap Value Fund, M. (a Delaware Limited Partnership) (the "Partnership"), which comprise the statement of financial condition as of December 31, 2012, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended (expressed in United States dollars), and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Partnership's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CCM Small Cap Value Fund, M. as of December 31, 2012, and the results of its operations, changes in its partners' capital, and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Nneeci.ttL E Tokeit, LLP March 14, 2013 member of Delos°. Touch.. Tohniattu lerstod EFTA00295616 CCM SMALL CAP VALUE FUND, W. (A Delaware Limited Partnership) STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2012 (Expressed in United States dollars) ASSETS Investment in CCM Master Qualified Fund, Ltd. $ 11,771,026 Due from CCM Master Qualified Fund, Ltd. 840,511 Cash and cash equivalents 200,000 Total assets $ 12,811,537 LIABILITIES Advance contributions 200,000 Withdrawals payable to limited partners 840,511 Due to General Partner 31,171 Accrued operating expenses 44,901 Total liabilities I 116 583 PARTNERS' CAPITAL General Partner 130,370 Limited partners 11,564,584 Total partners' capital 11,694,954 TOTAL LIABILITIES AND PARTNERS' CAPITAL S 12.811.537 See notes to financial statements. EFTA00295617 CCM SMALL CAP VALUE FUND, (A Delaware Limited Partnership) STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) NET INVESTMENT LOSS Net investment loss allocated from CCM Master Qualified Fund, Ltd.: Interest income 54,298 Dividend income (net of withholding taxes of $5,725) 147,613 Interest expense (22,032) Stock loan fees (194,781) Dividend expense (10,357) Operating expenses (77,575) Net investment loss allocated from CCM Master Qualified Fund, Ltd. (102,834) Partnership expenses: Management foes (137,787) Professional fees (65,185) Other expenses (1,673) Total Partnership expenses (204,645) NET INVESTMENT LOSS (307,479) REALIZED AND CHANGE IN UNREALIZED GAINS/(LOSSES) ON INVESTMENTS IN SECURITIES, SECURITIES SOLD, NOT YET PURCHASED, DERIVATIVE CONTRACTS, AND FOREIGN CURRENCY TRANSACTIONS ALLOCATED FROM CCM MASTER QUALIFIED FUND, LTD. Net realized gains on investments in securities, securities sold, not yet purchased, derivative contracts, and foreign currency transactions 501,432 Net change in unrealized appreciation/depreciation on investments in securities, securities sold, not yet purchased, and derivative contracts 848,817 Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies 275,775 Net realized and change in unrealized gains on investments in securities, securities sold, not yet purchased, derivative contracts and foreign currency transactions allocated from CCM Master Qualified Fund, Ltd. 1,626,024 NET INCREASE IN PARTNERS' CAPITAL RESULTING FROM OPERATIONS $ 1,318,545 See notes to financial statements. EFTA00295618 CCM SMALL CAP VALUE FUND, M. (A Delaware Limited Partnership) STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) Limited General partners Partner Total PARTNERS' CAPITAL —January 1, 2012 $ 13,568,155 $ 1,150,654 $ 14,718,809 Capital contributions 200,000 200,000 Capital withdrawals (3,442,400) (1,100,000) (4,542,400) Allocation ofnet income: General Partner incentive allocation (4,152) 4,152 Net increase in partners' capital resulting from operations 1,242,981 75,564 1,318,545 PARTNERS' CAPITAL — December 31, 2012 S 11.564.584 S 130.370 S 11.694,954 See notes to financial statements. EFTA00295619 CCM SMALL CAP VALUE FUND, M. (A Delaware Limited Partnership) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) OPERATING ACTIVITIES Net increase in partners' capital resulting from operations $ 1,318,545 Adjustments to reconcile net increase in partners' capital resulting from operations to net cash provided by operating activities: Net appreciation of investment in CCM Master Qualified Fund, Ltd. (1,523,190) Changes in operating assets: Proceeds from redemptions in CCM Master Qualified Fund, Ltd. 7,700,089 Subscriptions to CCM Master Qualified Fund, Ltd. (200,000) Increase in: Due to General Partner (865,156) Accrued operating expenses 651 Net cash provided by operating activities 6,430,939 FINANCING ACTIVITIES Capital contributions 200,000 Capital withdrawals (6,630,939) Net cash used in financing activities (6,430,939) NET CHANGE IN CASH CASH AND CASH EQUIVALENTS — Beginning of year 200,000 CASH AND CASH EQUIVALENTS — End of year S 200.000 See notes to financial statements. EFTA00295620 CCM SMALL CAP VALUE FUND, M. (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) 1. ORGANIZATION AND NATURE OF BUSINESS CCM Small Cap Value Fund, M. (the "Partnership"), a Delaware Limited Partnership organized in August 1999, commenced operations on October 1, 1999. The Partnership is a feeder fund in a "master-feeder" structure whereby the Partnership invests substantially all of its assets in CCM Master Qualified Fund, Ltd. (the "Master Fund"), an exempted company organized under the laws of the Cayman Islands. Attached are the audited financial statements of the Master Fund, including the condensed schedule of investments and significant accounting policies, which are an integral part of these financial statements. The Partnership's general partner is Coghill Capital Management, L.L.C. (the "General Partner"), a Delaware limited liability company. The General Partner has the general supervisory responsibility and authority for all aspects of the Partnership's business and operations. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and are expressed in United States dollars. Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures in the accompanying notes. Actual results could differ from those estimates. The following are the significant accounting policies adopted by the Partnership: Investment Transactions and Valuation — Investment transactions are accounted for on a trade date basis. Realized and change in unrealized gains/(losses) on investments allocated from the Master Fund are recorded in the statement of operations. The Partnership's investment in the Master Fund is valued at fair value, which is the Partnership's proportionate interest in the net assets of the respective share class in the Master Fund. The Master Fund's investments are carried at fair value. The performance of the Partnership is directly related to the performance of the Master Fund. As of December 31, 2012, the Partnership owned approximately 13% of the Class A shares of the Master Fund, with a net asset value of $11,771,026. The valuation of investments and related disclosures held by the Master Fund is discussed in the notes to the Master Fund's financial statements. Cash and Cash Equivalents — Cash and cash equivalents include amounts held in banks. The Partnership defines cash and cash equivalents in the statement of financial condition as funds held in liquid investments with original maturities of 90 days or less. Investment Income and Expense — Interest income and expense are recorded on an accrual basis. Expenses — The Partnership pays its direct operating expenses, including a management fee, specific legal fees, and other expenses, as well as incurs its proportionate share of the expenses of the Master Fund, which includes other legal, accounting, auditing, administrative, and professional fees. The Partnership has retained Morgan Stanley Fund Services USA LLC as the administrator to the Partnership. The General Partner pays its own overhead expenses. EFTA00295621  Indemnifications — Under the Partnership's organizational documents, the General Partner of the Partnership is indemnified against certain liabilities arising out of the performance of its duties for the Partnership. In addition, in the normal course of business, the Partnership enters into contracts with vendors and others that provide for general indemnifications. The Partnership's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Partnership. However, the Partnership has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss to be remote. Recent Accounting Pronouncement — In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update 2011.11, Disclosures about Offsetting Assets and Liabilities ("ASU"). The ASU requires enhanced disclosures about financial instruments and derivative instruments that are either offset when rights of setoff exist or subject to an enforceable master netting agreement or similar agreement. These additional disclosures include the following quantitative information about such instruments: (i) the gross amounts of those recognized assets and liabilities, (ii) the amounts offset to determine the net amounts presented in the statement of financial condition, (iii) the net amounts presented in the statement of financial condition, (iv) the amounts subject to a master netting arrangement or similar agreement, (v) the amounts related to financial collateral (including cash collateral), and (vi) the net amount after deducting the amounts in (iv) from the amounts in (iii). The disclosures are effective for fiscal years beginning on or after January I, 2013. The Partnership is currently evaluating the impact of these disclosures on its financial statements. 3. MANAGEMENT FEE For all capital contributions in the Partnership made prior to September 1, 2006 ("Series One"), the General Partner earns a quarterly management fee, payable after the last day of each calendar quarter, calculated at an annual rate of 1% of each limited partner's capital account balance as of the end of each month during the quarter adjusted for contributions and withdrawals made during the month. Capital contributions made after September I, 2006 ("Series Two") are charged a management fee at an annual rate of 1.5% pursuant to the Amended and Restated Limited Partnership Agreement. The General Partner may waive or reduce the management fee for certain affiliated limited partners. 4. ALLOCATION OF NET INCOME OR LOSS Net income or loss, before management fees, is allocated to all partners in proportion to each partner's capital account balance. Management fees are charged to each limited partner's capital account, as applicable. The General Partner earns an incentive allocation of net profits, as defined in the Amended and Restated Limited Partnership Agreement, equal to 5% of net profits attributable to capital contributions made before April 1, 2009, provided that such allocation shall increase to 15% at such time as the limited partner has recouped any outstanding loss carryforward amounts otherwise attributable to such capital account balance as of November 30, 2008. For capital contributions made on or after April 1, 2009, the General Partner earns an incentive allocation equal to 20% of net profits. Each limited partner's capital account is subject to a loss carryforward provision such that no deduction from a limited partner's capital account is made with respect to a fiscal year until any net loss previously allocated to the capital account has been offset by subsequent net profits. Any such loss carryforward will also be proportionately reduced for any limited partner's withdrawal. The General Partner may waive or reduce the incentive allocation for certain affiliated limited partners. For the year ended December 31, 2012, the General Partner earned an incentive allocation of $4,152. 5. INVESTMENTS Fair Value Measurements — The Partnership invests substantially all of its assets in the Master Fund. The classification of the Master Fund's investments in the fair value levels is discussed in the notes to the financial statements of the Master Fund. Derivative FinancialInstruments — During the year ended December 31, 2012, the Partnership did not directly invest in any derivative financial instruments. Investments are made via the Master Fund which may EFTA00295622  utilize derivative financial instruments with off-balance sheet risks. Disclosures related to the Master Fund's investment in derivative financial instruments are discussed in the notes to the financial statements of the Master Fund. Leverage may also be used by the General Partner. However, the Partnership's exposure to such risks is limited to the amounts of its investment in and due from the Master Fund. 6. TAXATION Each partner is individually responsible for reporting income or loss, to the extent required by the federal and state income tax laws and regulations, based upon its respective share of the Partnership's income and expense as reported for income tax purposes. The Partnership reviews and evaluates tax positions in its major jurisdictions and determines whether or not there are uncertain tax positions that require financial statement recognition. Based on this review, the Partnership has determined the major tax jurisdictions as where the Partnership is organized and where the Partnership makes investments; however, no provisions for uncertain tax positions were required to have been recorded for any of the Partnership's open tax years. As a result, no income tax liability or expense has been recorded in the accompanying financial statements. The Partnership's tax returns remain open for examination by tax authorities for a period of three years from when they are filed. 7. PARTNERS' CAPITAL The partnership interests are divided into Series One interests and Series Two interests. Except with respect to participation in new issues, all limited partners generally will participate in all investments of the Partnership in the same manner. The only distinction between Series One and Series Two is the annual rate charged for management fees. Capital Contributions — The General Partner will generally admit additional limited partners or accept additional capital contributions from existing limited partners on the first day of each month and at such other times selected by the General Partner. Advance contributions consist of cash received prior to December 31 for which partner interests of the Partnership will be issued on the subsequent January 1. Advanced contributions do not participate in the earnings of the Partnership until the related partner interests are issued. There were $200,000 of advance contributions as of December 31, 2012. Capital Withdrawals— Limited partners may withdraw all or a portion of their capital accounts attributable to a particular capital contribution as of the last day of any calendar quarter pursuant to written notice that must actually be received by the Partnership at least 120 days' prior to the withdrawal date (i.e., 120 days' prior to the relevant calendar quarter end); provided, however, that during the period beginning as of the date of a particular capital contribution and ending on the second anniversary of such capital contribution, withdrawals relating to any particular capital contribution will be subject to a withdrawal fee in accordance with the following schedule and payable to the Partnership: • 3% for withdrawals made during the first 12 months a capital contribution is invested; • 2% for withdrawals made during the next 6 months a capital contribution is invested; • 1% for withdrawals made during the next 6 months a capital contribution is invested; • no withdrawals fee for withdrawals made thereafter. There were no redemption fees charged in the current year. Certain limited partners are employees or related to employees of the General Partner and represent approximately 6% of total partners' capital as of December 31, 2012. EFTA00295623 8. FINANCIAL HIGHLIGHTS The ratios to average limited partners' capital and other supplemental information for the year ended December 31, 2012, are represented by the following: Ratios to average limited partners' capital Total expenses 3.91 % Incentive allocation 0.03 Total expenses and incentive allocation 3.94% Net investment loss (2.38)% The net investment loss and total expenses ratios are computed based upon the monthly average limited partners' capital. Total expenses include the Partnership's prorated investment expenses and operating expenses from the Master Fund and total Partnership expenses. The total expenses ratio, excluding investment expenses, is 2.19%. Net investment loss ratio includes the Partnership's prorated net investment loss allocated from the Master Fund and total Partemship expenses and excludes the incentive allocation. Total return: Total return before incentive allocation 8.82% Incentive allocation (0.03) Total return after incentive allocation 8.79 % Total return is calculated for all limited partners taken as a whole, subject to management fees and incentive allocation arrangements (as applicable), and utilizes geometrically linked returns based on cash flows that consider the timing of capital contributions or withdrawals during the year. An individual partner's return and ratios may vary from these returns and ratios based on different management fees and incentive allocation arrangements (as applicable) and the timing of capital transactions. 9. SUBSEQUENT EVENTS Subsequent events through March 14, 2013, the date these financial statements were available to be issued, have been evaluated, and it has been determined there were no subsequent events requiring disclosure or recognition in the financial statements. EFTA00295624 CCM Master Qualified Fund, Ltd. (A Cayman Islands Exempted Company) Consolidated Financial Statements as of and for the Year Ended December 31, 2012, and Independent Auditors' Report EFTA00295625 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) TABLE OF CONTENTS Page INDEPENDENT AUDITORS' REPORT CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2012: Consolidated Statement of Assets and Liabilities Consolidated Condensed Schedule of Investments 3-6 Consolidated Statement of Operations 7 Consolidated Statement of Changes in Net Assets Consolidated Statement of Cash Flows 9 Notes to Consolidated Financial Statements 10-19 EFTA00295626 Deloitte Deb uts & Touche Capital Place Box 1787 rand Cayman KY1-1109 CAYMAN ISLANDS Tel: +1 345 949 7500 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of CCM Master Qualified Fund, Ltd.: We have audited the accompanying consolidated financial statements of CCM Master Qualified Fund, Ltd. (a Cayman Islands exempted company) (the "Company"), and its subsidiaries, which comprise the consolidated statement of assets and liabilities, including the consolidated condensed schedule of investments, as of December 31, 2012, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (expressed in United States dollars). and the related notes to the consolidated financial statements. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America: this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management. as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly. in all material respects, the financial position of CCM Master Qualified Fund, Ltd., and its subsidiaries, as of December 31. 2012, and the results of their operations. changes in their net assets, and their cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in note 3, the consolidated financial statements include investments in securities valued at $6,436,915 (7.26% of net assets), whose values have been estimated by the Investment Manager in the absence of readily ascertainable fair values. Our opinion is not modified with respect to this matter. pattstkei- jottaw March 14. 2013 Member firm of Deloitte Touche Tohmatsu Limited EFTA00295627 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2012 (Expressed in United States dollars) ASSETS Investments in securities — at fair value (cost: $132.449,421) $ 82,758,640 Investment in CCM Asian Small Cap Value Fund, at fair value (cost: 56,850,000) 7,070,959 - Unrealized gains on derivative assets 299,769 Cash and cash equivalents 102,880 Due from broker 31,194,630 Interest receivable 19,944 Dividends receivable 16,524 Other assets 11,503 Total assets 121,474,849 LIABILITIES Securities sold, not yet purchased — at fair value (proceeds: $27,475,529) 26,332,407 Due to broker 402,185 Interest payable 23,018 Stock loan fees payable 98,427 Redemptions payable 5,760,492 Accrued operating expenses 196,524 Total liabilities 32,813,053 NET ASSETS S 88.661.796 NET ASSETS PER CLASS A SHARE: (614,593 shares outstanding) S 144.26 See notes to consolidated financial statements. EFTA00295628 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED CONDENSED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2012 (Expressed in United States dollars) The following table categorizes the aggregate fair value of investment and derivative assets, in which the underlying of the derivative is a security, by type: Cost Fair Value °I, Net Assets Investment assets: Common stocks $ 120,786,300 $ 75,548,891 85.21 % Preferred stocks 3,167,393 537,195 0.61 Corporate bonds 3,091,210 2,737,412 3.09 Options 3,207,604 3,559,610 4.01 Warrants and rights 540,485 237,954 0.27 Limited partnership interest 1,656,429 137,578 0.15 Total investment assets $ 132,449,421 $ 82,758,640 93.34 % Fair Value °A, Net Assets Derivative assets: Equity swaps 299,769 0.34 % Total derivative assets 299,769 0.34 % Total $ 132.449.421 S 83.058.409 93.68 % The following table categorizes the aggregate fair value of investment liabilities by type: Proceeds Fair Value % Net Assets Investment liabilities: Common stocks $ (24,410,268) $ (23,367,572) (26.36) % Government bonds (3,034,964) (2,899,260) (3.27) Options (30,297) (65,575) (0.07) Total $ (27.475.529) $ (26,332,407) (29.70) % (continued) See notes to consolidated financial statements. EFTA00295629 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED CONDENSED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2012 (Expressed in United States dollars) The following table categorizes the aggregate fair value of investment and derivative assets, in which the underlying of the derivative is a security, by country: Cost Fair Value % Net Assets Canada $ 43,596,809 $ 14,550,915 16.41 % Israel 3,640,957 5,074,487 5.72 Japan 12,282,945 11,863,145 13.38 United States of America 72,928,710 51,569,862 58.17 Total $ 132.449.421 S 83.058,409 93.68 % The following table categorizes the aggregate fair value of investment liabilities by country: Proceeds Fair Value % Net Assets Canada $ (602,104) $ (505,323) (0.57) % Japan (3,034,965) (2,899,260) (3.27) United States of America (23,838,460) (22,927,824) (25.86) Total $ (27,475,529) $ (26,332,407) (29.70) To (continued) See notes to consolidated financial statements. EFTA00295630 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED CONDENSED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2012 (Expressed in United States dollars) The following table categorizes the aggregate fair value of investment and derivative assets, in which the underlying of the derivative is a security, by industry: Cost Fair Value % Net Assets Basic materials $ 28,095,070 $ 25,695,166 28.98 To Communications 43,920,109 9,771,865 11.02 Consumer, cyclical 1,009,400 798,725 0.90 Energy 29,522,650 9,515,578 10.73 Index 142,730 55,900 0.06 Industrial 5,651,239 10,150,968 11.45 Technology 24,108,223 27,070,207 30.54 Total $ 132,449,421 $ 83,058,409 93.68 % The following table categorizes the aggregate fair value of investment liabilities by industry: Proceeds Falr Value % Net Assets Basic materials $ (602,104) $ (505,323) (0.57) % Communications (10,221,099) (8,027,549) (9.06) Consumer, non-cyclical (2,225,488) (2,064,990) (2.33) Consumer, cyclical (7,132,532) (8,320,206) (9.38) Energy (323,826) (121,790) (0.14) Government (3,034,964) (2,899,260) (3.27) Industrial (1,718,631) (1,774,186) (2.00) Technology (2,216,885) (2,619,103) (2.95) Total $ (27.475.529) S (26.33/.407) (29.70) To (continued) See notes to consolidated financial statements. EFTA00295631 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED CONDENSED SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2012 (Expressed in United States dollars) The following table eategorizes the fair value of investment and derivative assets and liabilities by issucr that are greater titan 5% of net assets: Shares Contracts Fair Value %Net Assets Common stocks—United States of America Autobytel Inc. 1,468,337 $ 5,843,981 6.59 % Boston Beer Co. Inc. (40,423) (5,434,872) (6.13) General Moly, Inc. 3,730,754 14,960,324 16.87 Kulicke and Soffa Industries. lite. 318,370 3,817,256 4.31 Rentech. Inc. 2,581,100 6,788,293 7.66 Zillow, Inc. (251,187) (6,970,439) (7.86) Common Stocks-Israel Perion Networks Ltd 567,616 5,074,487 5.72 Common stocks—Japan Zuken Inc. 902,000 6,009,173 6.78 Options-United States of America Boston Beer Co. Inc. Puls @ 105 - 130 exp 01/19/2013 - 06/22/2013 991 328,520 0.38 Kulicke and Soffa Industries, Inc. Calls @ 9 - 13 exp 01/19/2013 - 04/20/2013 17,310 2,229,060 2.52 Zillow, Inc. Puls @ 20 - 35 exp 01/19/2013 - 05/18/2013 2,172 482,525 0.53 Warrants—United States of America General Moly, Inc. - $5.00 strike - contingent expiration 500,000 13,044 0.01 Equity swaps—United States of America Autobytel Inc. - 65,865 ref quantity, maturing 05/06/2015 USD-FED-EFFECTIVE based spread on notional (35,574) (0.04) (concluded) See notes to consolidated financial slalcmcnts. EFTA00295632 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) NET INVESTMENT LOSS Investment income: Interest income $ 375,877 Dividend income (net of withholding taxes of $129,842) 962,592 Total investment income 1,338,469 Investment expenses: Interest expense (161,617) Stock loan fees (1,391,492) Dividend expense (71,463) Total investment expenses (1,624,572) Operating expenses: Administrative fees (125,748) Professional fees (434,885) Other operating expenses (1,721) Total operating expenses (562,354) NET INVESTMENT LOSS (848,457) REALIZED AND CHANGE IN UNREALIZED GAINS/(LOSSES) ON INVESTMENTS IN SECURITIES, SECURITIES SOLD, NOT YET PURCHASED, DERIVATIVE CONTRACTS, AND FOREIGN CURRENCY TRANSACTIONS Net realized gains on investments in securities, securities sold, not yet purchased, derivative contracts, and foreign currency transactions 3,681,307 Net change in unrealized appreciation/depreciation on investments in securities, securities sold, not yet purchased, and derivative contracts 4,048,246 Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies 1,806,714 Net realized and change in unrealized gains on investments in securities, securities sold, not yet purchased. derivative contracts, and foreign currency transactions 9,536,267 NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENT IN CCM ASIAN SMALL CAP VALUE FUND, 331,991 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS S 9,019.801 See notes to consolidated financial statements. EFTA00295633 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) Class A Per Share Shares Net Assets Value BALANCE — January I, 2012 712,858 $ 93,158,745 $ 130.68 Subscriptions 31,286 4,550,000 Redemptions (129,551) (18,066,750) Net increase in net assets resulting from operations 9,019,801 BALANCE — December 31, 2012 614,593 $ 88,661,796 $ 144.26 See notes to consolidated financial statements. EFTA00295634 CCM MASTER QUALIFIED FUND, LTD. (A Cayman Islands Exempted Company) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 (Expressed in United States dollars) OPERATING ACTIVITIES Net increase in net assets resulting from operations