FAQs (Frequently-asked questions)

This section answers some of the key questions that prospective investors may have about MKIF. These answers are intended as a guide only and do not represent a full summary of the Terms of Issue or the other agreements affecting MKIF.

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1. When was MKIF established?

MKIF was established on 12 December 2002. On 11 November 2005, MKIF changed its name from Korean Road Infrastructure Fund to Macquarie Korea Infrastructure Fund.

2. How is MKIF structured?

MKIF is registered as a Financial Investment Service and Capital Market Act (FSCMA), and is established as an infrastructure fund under the Private Participation in Infrastructure Act (PPI Act).

3. Who is MSIAM?

MSIAM is the manager of MKIF. MSIAM is a Korea-based joint venture between Macquarie Capital Funds (Europe) Limited, a U.K. subsidiary of Macquarie Group Limited of Australia, and Korea’s Shinhan Bank and Shinhan Capital Co., Ltd., an affiliate of the Shinhan Financial Group.

MSIAM is a licensed asset management company under the FSCMA. MSIAM has more than 26 full-time employees with infrastructure funds management experience and expertise. MSIAM staff have been drawn from both the Shinhan Financial Group and the Macquarie Group’s worldwide network, as well as local hires recruited directly.

4. What is the relationship between MSIAM and MKIF?

MKIF is managed by MSIAM pursuant to a Management Agreement between these two parties dated 13 December 2002, as amended from time to time. Although MKIF has its own Board of Directors (comprising a majority of supervisory directors and MSIAM as its corporate director), it does not have any executive staff. MKIF’s investment selection and asset management have been "out-sourced" to MSIAM pursuant to the Management Agreement.

5. What are the contractual arrangements by which MSIAM is bound?

MSIAM’s obligations are contained in the Management Agreement. In managing MKIF, MSIAM also needs to manage MKIF in accordance with MKIF’s Articles of Incorporation ("AOI"), the provisions of the PPI Act, FSCMA and other applicable Korean legislation.

6. Who is MKIF’s administrator?

KEB Investor Service Co., Ltd.

7. Who is MKIF’s custodian?

Korea Securities Finance Corp.

8. How do I invest in the MKIF?

As MKIF shares and global depositary shares are listed on the Korea Exchange (KRX) and London Stock Exchange (LSE), respectively trading of shares must be conducted through a KRX registered stockbroker for the common shares and an LSE registered stockbroker for the Global Depository Shares. The KRX website www.krx.co.kr can provide further details on KRX registered stockbrokers. For LSE registered stockbrokers, please visit www.londonstockexchange.com

9. What is MKIF’s KRX code?

088980.KS

10. What is MKIF’s LSE code?

MKIF.LI

11. When was MKIF listed on the KRX & LSE?

MKIF was listed on the LSE and KRX on 14 and 15 March 2006 respectively.

There is a chronological history of MKIF in the Key events section of this website.

12. Will MKIF be holding a General Shareholders Meeting?

In accordance with the Financial Investment Service and Capital Market Act, MKIF will convene General Shareholders Meeting (GSM) only when there is agenda requiring shareholder approval at GSM.

13. What is the difference between distributions and dividends?

Under FSCMA, only the term (distribution) is used for the sum of the amount paid to shareholders within retained earning (dividend under commercial code) and the amount paid to shareholders over retained earning. As MKIF is subject to the FSCMA, MKIF can distribute monies to shareholders up to the amount equal to the Net Asset Value less Minimum Net Asset Value of the company.

14. When are distributions paid?

MKIF intends to declare and make distributions to its shareholders on a semi-annual basis as end of June and December, subject to the MKIF Board of Directors approval. In accordance with the AOI, distributions shall be paid to the shareholders within a month from the Board approval.

15. What is MKIF’s distribution history?

The table below sets forth our distribution for each six-month period starting from the period ended 31 December 2002.

Record date for distribution		Aggregate distribution paid	Per share distribution paid
		(KRW million)	(KRW)
2002.12.31		Nil	Nil
2003.6.30		1,700.00	187.5
2003.12.31		3,221.80	85.5
2004.6.30		13,887.60	212.7
2004.12.31		18,879.30	127.1
2005.6.30		49,241.20	271.4
2005.12.31		53,550.00	223.1
2006.6.30		64,698.00	200
2006.12.31		71,167.84	220
2007.6.30		71,167.84	220
2007.12.31		71,167.84	220
2008.6.30		74,402.70	230
2008.12.31	Cash distribution**	74,413.50	230
	Stock distribution***	39,445.20	122
	Total	113,868.70	352
2009.6.30		76,235.65	230

* Prior MKIF’s distribution records do not guarantee of future returns.
** Aggregate cash distribution paid amount includes cash for the fractional shares of stock distribution
*** KRW230 in cash and KRW122 in newly issued shares (Paid newly issued share distribution of 0.02464 per 1 common share owned.)

16. How does MKIF manage its exposure to interest rate movements?

MKIF has entered into a loan facility with a syndicate of banks on a floating rate basis. Although this interest exposure is not currently hedged, MKIF continues to monitor interest rate movements and may, in appropriate circumstances, enter into hedging arrangements to mitigate perceived interest rate risk.

A major proportion of the senior debt entered into by the concession companies in which MKIF invests either carries a fixed interest rate or is hedged into a fixed interest rate exposure.

17. How does MKIF manage foreign exchange risk?

MKIF can only invest in PPI Act designated Korea-based infrastructure projects and has no foreign exchange exposure at the fund level. Generally, MKIF’s investments receive all of their revenue (dividends and interest payments) in KRW and undertake KRW denominated borrowings and investments and therefore do not have any foreign exchange exposure.

18. How do I contact MSIAM?

Address:

Macquarie Shinhan Infrastructure Asset Management Co., Ltd

4th Floor, Hanwha Building
110 Sokong-Dong, Chung-Ku

Seoul 100-755 Korea

(Telephone: 822-3705-8565 Fax: 822-3705-8596)