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ORBIS EQUITY FUNDS

Reports
ANNUAL

31 DECEMBER 2011

ORBIS GLOBAL
ORBIS ASIA EX-JAPAN
ORBIS JAPAN

ORBIS

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TABLE OF CONTENTS

P age

Orbis Equity Strategies................................................................................................................... 1


President's Letter............................................................................................................................ 2
Bermuda-domiciled Funds on white paper
Orbis Global, Orbis Japan (US$)
Manager's Reports and Statements of Net Assets.................................................3-6,14
Statements of Operations and Changes in Net Assets,
Notes and Independent Auditors' Report........................................................15-19
Luxembourg-domiciled Funds on blue paper
Orbis SICAV - Global, Orbis SICAV - Asia ex-Japan, Orbis SICAV - Japan
Manager's Reports and Statements of Net Assets....................................................7-13
Statements of Operations and Changes in Net Assets,
Notes and Report of the Independent Auditor................................................20-25
Notices..................................................................................................................................26-28

Annual Returns to 31 December*:

Currency 2007 2008 2009 2010 2011

Orbis Global Equity Fund


Orbis SICAV - Global Equity Fund, Investor Shares
Orbis SICAV - Asia ex-Japan Equity Fund, Investor Shares
Orbis SICAV - Japan Equity Fund - Yen Class
Orbis SICAV - Japan Equity Fund - Euro Class
Orbis Japan Equity (US$) Fund

*Regulatory disclosure.

USD
EUR
USD
JPY
EUR
USD

12.7
1.4
24.6
(7.0)
(4.4)
(3.4)

(35.9) 41.5 6.0 (9.3)


(33.8) 39.0 12.9 (6.4)
(44.0) 96.4 5.4 (11.9)
(32.4) 9.8 1.2 (6.1)
(34.9) 7.7 0.2 (5.4)
(32.6) 8.9 0.5 (6.1)

We invite you to visit our website, www.orbisfunds.com, where you may register
online to receive regular reports on our funds automatically by e-mail. We hope
that this enables you to keep in better touch with us and with your investments.

Only Orbis SICAV is admitted for public marketing in Luxembourg.

ORBIS EQUITY STRATEGIES

31 D ecember 2011

at

Ranking within equity fund peer group

200
0
Inception

3 Years

95%

1 Year
55
..
54
54
55

44
..
54
54
55

1 Jan 2006

in US dollars

Orbis
Asia
Orbis
Asiaex-Japan
ex-Japan

Key

MSCI
Asia
ex-Japan
Index
MSCI
Asia
ex-Japan
I

5%

Top Half

120
100
80

25%

60

50%

40
Bottom Half

20
0
(20)
Inception

5 Years

3 Years

95%
55
..
54
54
55

in Japanese yen

1 Jan 1998

Key

Orbis
OrbisJapan
Japan(Yen)
(Yen)

120

75%

1 Year

44
..
54
54
55

33
..
54
54
55

22
..
54
54
55

140

10 Years

11
..
54
54
55

00
..
54
54
55

TOPIX
T
Top Half

100
80
60
40

5%

25%

50%

20
0

Bottom Half

This Fund invests in Japanese equities. The


Benchmark of the Fund's Yen Class is the
Japanese stockmarket, measured by the
Tokyo Stock Price Index, including income
(TOPIX). The Yen Class does not hedge
currencies, and therefore is exposed to the
Japanese yen. This Fund is also available in
euro and US dollars.

5 Years

33
..
54
54
55

140

10 Years

75%

(20)
(40)

75%

(60)
(80)

Inception

10 Years

5 Years

3 Years

95%

1 Year
55
..
54
54
55

44
..
54
54
55

33
..
54
54
55

22
..
54
54
55

11
..
54
54
55

00
..
54
54
55

Chart Data. Orbis Japan Equity Fund is the Yen Class of the Japan Equity Fund of the Orbis
SICAV. The Orbis Japan Equity (US$) Fund and the Euro Class of the Japan Equity Fund of the
Orbis SICAV are based on the same equity portfolio as the Orbis Japan Equity Fund, and therefore
are not shown separately. Total rate of return on each graph is in the Orbis Fund's base currency.

Percent of funds with a higher return

50%

(40)

Orbis Japan Equity Fund

25%

400

22
..
54
54
55

This Fund invests mainly in Asian equities


outside Japan, and seeks to earn higher
returns than the average of the Asia ex-Japan
equity markets. The Fund's Benchmark is
the MSCI All Country Asia ex Japan (Net)
(US$) Index, including income (MSCI
Asia ex-Japan Index). The Fund's currency
exposure is managed relative to that of its
Benchmark.

5%

600

11
..
54
54
55

Equity Fund

World
WorldIndex
Index

800

00
..
54
54
55

ex-Japan

Key

Orbis
OrbisGlobal
Global

1,000

(200)

Orbis Asia

in US dollars

1 Jan 1990

Top Half

This Fund invests in equities globally and


seeks to earn higher returns than world
stockmarkets. The Fund's Benchmark is
the FTSE World Index, including income
(World Index). The Fund's currency
exposure is managed relative to that of the
World Index. This Fund is also available
in euro through the Orbis SICAV - Global
Equity Fund.

1,200

Bottom Half

Orbis Global Equity Fund

% Cumulative

Percent of funds with a higher return

Percent of funds with a higher return

PRESIDENTS LETTER
Dear Member,
We take great pride in adding long-term value for our clients, knowing full well that there will be periods of
short-term underperformance along the way, some of which can be painfully long. We are in the midst of one
of those inevitable periods now. While our stockpicking was strong in Japan and Asia ex-Japan in 2011, it was
not enough to offset weak results in other regions. We see periods like this as the price we must pay if we seek
to deliver pleasing long-term returns on your behalf. Of course, we are also quick to recognise that it doesnt
make poor short-term performance any easier for you to endure. While our analysts are comfortable being
uncomfortable, we dont expect that to hold true for our clients when their investments lag the market.
Relative performance is an unforgiving master. In the short and even medium term, the price of a share often
bears little relationship with its intrinsic value. Investment managers are punished swiftly and severely for failing
to own shares that are performing well, while at the same time getting no immediate credit for decisions which
may ultimately prove to be long-term winners. The market has a nasty way of causing the greatest amount of
pain to the greatest number of people. Thats how markets work. The greatest rewards often accrue to those
who make the most uncomfortable or unpopular investments, and are initially punished for doing so through
poor relative performance.
In order to experience superior long-term investment returns, it is critical both for us as stockpickers and for
our clients to endure these tough times. We are therefore privileged to have clients that have shown such
extraordinary resilience. In our industry, where short-term thinking is all too common, the typical investor
maintains a fund investment for less than four years, while at Orbis that number is close to eight. The past
year was no exception. The Orbis Funds experienced modest net subscriptions, most notably with a gross
redemption rate of only 10%. If sustained, that would result in the average Orbis Fund Member maintaining
their investment for ten years. This extraordinary resilience may simply be the result of our performance being
less poor than many other managers, but we prefer to believe that our clients understand and have confidence
in our investment philosophy, our process, and our people. We are determined to prove any such confidence
to be well placed.
One way to achieve this is to make it easier for you to understand the thinking behind our investment decisions
and the quality of the people making those decisions. To this end, our stockpickers are playing a more active
part in writing each quarterly commentary. Although they have long been involved in the writing process, we
hope that leaving a greater extent of the finished product in their hands will help convey the passion, insight
and in-depth research that goes into each of our stock selections. After reading this quarters commentaries, it
should come across loud and clear that there are compelling stockpicking opportunities to be found, despite
todays challenging stockmarket and macroeconomic environment.
Owning shares on the basis of long-term, fundamental value has been an uncomfortable place to be for a
reasonably long period of time now not just for us, but for many value-oriented managers and it has been
easy to look foolish. Rather than complaining, however, we become more enthusiastic whenever the stockmarket
gives us an opportunity to buy shares like Cisco, Sohu.com or Japan Tobacco at lower prices. Dont get me
wrong, things can always get worse as they did for us when the tech bubble inflated into 2000. But if that
turns out to be the case and the fundamentals remain intact the future reward will be even greater.
That said, our enthusiasm remains tempered by the sobering realisation that governments in most western
markets have gone to extraordinary lengths to support the price of assets, thereby lowering future returns.
Coupled with this, economic uncertainty has caused a stampede into so-called safe investments. As a result,
prospective returns on cash and bonds are extraordinarily low and may well end up being below future inflation,
causing the real value of the investment to erode slowly and painfully over time. As uncomfortable as it may
be to invest in risky assets like shares these days, we believe they present better long-term, fundamental value
than cash and bonds.
Yours sincerely,
Hamilton, Bermuda
31 December 2011

William B Gray

ORBIS GLOBAL EQUITY FUND


From Inception
Total Rate of Return
in US dollars, net of fees: on 1 Jan 1990

Orbis Global Equity


FTSE World Index
Average Global Equity Fund

11.5
5.9
4.5

at

31 D ecember 2011

Latest
20 Years 10 Years 5 Years 3 Years 1 Year

11.5
6.5
4.7

% Annualised

8.0
4.7
2.5

(0.4)
(1.4)
(4.1)

10.8
12.3
8.2

(9.3)
(6.5)
(11.2)

Quarter

% Not Annualised

5.8
7.4
3.9

As fundamentals-driven stockpickers, we have always kept a close eye on economic and political
developments as they relate to the shares that we consider for your Fund. Indeed, the big picture has
been tough to ignore of late. Whether its Europes sovereign debt crisis, political gridlock in Japan, or
government intervention in the US, there is plenty to worry about.
Does that make stockpicking harder? The consensus view and common sense would say thats probably
the case. Not surprisingly, we have a different view. Although we cant say that we enjoy this type of
environment, our experience has shown that periods like this often produce bargains. When correlations
are unusually high between, and within, equity markets as they are now investors are effectively tarring
all companies with the same brush. That creates significant mispricings in individual securities and can
present attractive long-term opportunities to patient investors.
Nowhere is this more apparent than in the technology sector. Technology accounts for 31% of your Fund
although it represents only 10% of the benchmark. It is striking to us that an exceptional company like
Apple now sells for less than 12 times earnings at a time when investors are willing to pay 16 times earnings
for an average US consumer staple stock with considerably less growth potential.
In the lost decade since the technology, media and telecom bust, there has been a prolonged
consolidation in which undisciplined capital allocators and loss-making business models were eliminated
from the sector. What has emerged is a roster of companies that have built world-class, cash generative
franchises with global brands and unmatched scale and distribution, particularly in emerging markets.
Cisco an old friend we have owned off and on since 2006 starkly illustrates the share price
consolidation that has occurred over the last decade. Since 1998, revenue per share is up sixfold, from $1.27
to nearly $8.00 per share. Net cash and investments per share have ballooned from $0.80 to over $5.00 on
an $18 share price, and Cisco generated $9.6 billion ($1.78 per share) in free cash flow over the 12 months
ending October 2011. Yet Ciscos price-to-earnings multiple has steadily declined from a peak of over 100
in 2000 to about 11 today. Cisco now trades at seven times free cash flow after adjusting for its large net
cash position. As our thesis unfolds, we expect shares to converge on our estimate of intrinsic value.
Cisco - Unappreciated

80x

$8

70x

$7

60x

$6

50x

$5

40x

$4

30x

$3

20x

$2

10x

$1

0x

$0
97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

Enterprise Value/Free Cash Flow (lhs) Revenue Per Share (rhs) Net Cash Per Share (rhs)
Fiscal year data ending July Source: Orbis

We are also intrigued with the possibility that Cisco may be in a position to more aggressively return its
prodigious cash flow to investors through share repurchases and dividend hikes. The company holds a
staggering $7.51 per share in cash overseas, equivalent to about 40% of its share price. A payout of just 72
cents per year would support a dividend yield of 4% at current prices. Whether or not US companies will
be allowed to repatriate overseas profits without a hefty tax bill is another story, but many US multinational
companies continue to lobby hard in Washington to make it a reality.
For Cisco, 2011 was a difficult year. The companys enterprise value hit a 14-year low in August as investors
feared Cisco had lost its competitive position and that its margins were in terminal decline. Our view is that
Ciscos core networking franchise is intact, but going through an acute product transition at a time when
the economic backdrop could hardly be worse. Cisco has since reset revenue and margin expectations to
reasonable levels and we believe the company will outperform relative to these new three to five-year targets.
As we look out over the next ten years, the most compelling aspect of investing in technology shares is their
ability to thrive in a wide range of macroeconomic environments. We believe that many investors are also
overlooking their emerging market exposure a crucial source of future growth. Over time it means that
these companies will have a greater ability than most to compound franchise value by selling their products
to billions of new customers.
Just look at Apple. Its success in the US needs no introduction. But Apple also has substantial and rapidly
growing exposure to emerging markets, many of which remain relatively untapped. Revenue in China has
grown from 2% of Apples total revenue in 2009 to over 16% today. Yet the scale of potential in China is
staggering. Only one in ten of Chinas 960+ million mobile subscribers uses a 3G smartphone, and Apples
smartphone market share in China is just 10%. This leaves the company poised to take a growing share
of Chinas growing market.
The story is similar globally: despite the high profile of the iPhone, Apple accounted for just 17% of
smartphones shipped worldwide last quarter, and just 5% of all mobile phones sold. As consumers continue
to ditch traditional mobile phones in favour of smartphones, we believe Apple will become one of two
dominant smartphone platforms along with Googles Android. In addition, we believe the tablet segment
has the potential to be as large as PCs, and Apple has an early lead with its iPad. In our view, these markets
alone should sustain double-digit earnings growth at Apple for the foreseeable future.
At its recent $405 share price, we estimate that Apple offers a 13% free cash flow yield after adjusting
for net cash and investments of $87 per share. This valuation implies that Apple is worth no more than
about seven and a half times its current level of annual cash flow. We view this scenario as unlikely given
Apples strong product pipeline, disciplined culture, and exposure to long-term growth tailwinds behind
smartphones, tablets, cloud-based services, and emerging markets. At its current valuation, investors
effectively pay nothing for a call option on Apples unknowable future product innovations like its
anticipated television product.
The technology behind the scenes that supports iPhones and other devices is every bit as important to
our investment thesis. We expect the sector to enjoy above average revenue growth as emerging market
economies build technological infrastructure to match that of more developed regions. Ultimately, these
investments are an essential ingredient in bringing scalable and cost-effective consumer technology to less
developed nations. We expect both the infrastructure and consumer technology gap between developed
and emerging economies to narrow meaningfully, and your Funds holdings should benefit as it does.
One example of this is Qualcomm, which receives a 3-4% royalty on every 3G/4G phone sold worldwide
(at an average selling price of roughly $200). Qualcomm is also the leading designer of microprocessors for
the mobile phone industry, with a 40% market share. This powerful combination of intellectual property
and semiconductor design makes Qualcomm a good proxy for global smartphone demand, which we
expect to grow from 300 million units sold in 2010 to over one billion in 2015.
Qualcomm also has the potential to disrupt Intels stranglehold on the PC processor market. Beginning
in 2012, Microsofts Windows operating system will be compatible with Qualcomms ARM-based
microprocessors, providing the company with access to a previously untapped $40 billion opportunity.
With Qualcomm, we are able to pay less than 15 times our estimate of 2012 earnings (ten times excluding
net cash) for a company that we believe can deliver organic earnings growth greater than 20% per year a
steep discount to our estimate of intrinsic value.
4

Whenever shares of world-class companies like Cisco, Apple and Qualcomm are severely punished by
the market due to macroeconomic concerns or other factors beyond their control, it often proves to be
an excellent buying opportunity. Today, the stockmarket appears content to pay the same multiple for
excellent, high-quality franchises with true organic growth as it does for those companies with much less
attractive fundamentals. As the table below shows, US technology shares trade at reasonable valuation
multiples despite above-average profitability and financial strength.
Good Valuations, Great Fundamentals
S&P Tech

S&P 500

Price / Earnings

14.0x

13.2x

Enterprise Value / EBITDA*

7.8x

9.1x

Return on Assets

16.1%

9.4%

Return on Equity

33.5%

26.1%

Return on Capital

26.0%

16.2%

Dividend Yield

1.1%

2.1%

Dividend Payout Ratio

17%

36%

Net Debt (Cash) / EBITDA*

(1.0x)
* Earnings Before Interest, Taxes, Depreciation, Amortisation

2.4x

Source: Bloomberg

One explanation for this opportunity is that investors see these results as unsustainable, as technology
companies always face a high risk of obsolescence. While we share the view that the technology landscape
is incredibly dynamic and the investment risks are very real, we believe our holdings as a group are
well-positioned to take advantage of long-term tailwinds.
Thats not to say we wont be wrong about some of our stock selections along the way. But we can take
some degree of comfort in current valuations. After ten years of sideways share prices, the market has turned
a blind eye to many high-quality technology companies and valuations now reflect an overly pessimistic
view of their long-term earnings potential. Most of your Funds technology holdings have strong balance
sheets with operations that are not dependent on short-term funding and are therefore less vulnerable to
capital market whims.
In many ways, we see technology companies as anti-financials a resilient oasis in an era of heavy
government intervention and systemic risk. Unlike financials, which will continue to de-lever, technology
companies have the ability to deliver sustainable long-term profitability that doesnt need to be
turbocharged with debt. In addition to its high earnings quality, the industrys dividend payout ratio
is nearly half that of the S&P 500 Index, as shown in the table above. To us, that suggests there is an
opportunity for meaningful dividend growth within the sector.
Time will tell, but we think our technology stock selections will help insulate your Fund from the worst
of potential macro tail risks while also benefitting from positive long-term trends. While it has become
fashionable to argue that stockpicking is futile in the current environment, we believe it remains as
important as ever. In periods of heightened uncertainty as in periods of relative calm, our investment
process remains the same, with a rigorous focus on determining each companys intrinsic value. It can be
frustrating waiting for the market to recognise that value, but history has shown that contrarian, long-term,
fundamental, value-oriented investors are often well rewarded for their patience.
Commentary contributed by Lance Berger and Christopher Kanand, Orbis Investment Management
(U.S.) LLC, San Francisco

Directors

Manager

Allan W B Gray, Chairman

Orbis Investment Management Limited

John C R Collis

Geoffrey M Gardner

Investment Advisor

William B Gray

Orbis Investment Advisory Limited

William D Thomson

Custodian

Citibank Canada

ORBIS GLOBAL EQUITY FUND

S tatement

of

N et A ssets

Number
Held
000s Security
North America
25,732 Cisco Systems
6,017 WellPoint
393 Google
40,182 Micron Technology
4,379 QUALCOMM
17,024 Corning
13,872 Weatherford International
3,464 Murphy Oil
5,519 Walgreen
4,191 Aetna
1,931 Goldman Sachs
1,971 Humana
3,960 CVS Caremark
2,122 RenaissanceRe Holdings
6,955 Safeway
10,533 Staples
7,980 NRG Energy
340 Apple
2,809 Motorola Solutions
7,552 Calpine
9,900 New York Community Bancorp
7,101 Nexen
5,520 General Motors
42,301 GenOn Energy
10,594 Petrobank Energy and Resources
Positions less than 1%
Japan
303 Rakuten
28 INPEX
542 Yahoo Japan
1,224 Nintendo
5,488 Sundrug
35 Japan Tobacco
1,776 SBI Holdings
9,636 PARK24
815 Nippon Television Network
5,839 NKSJ Holdings
Positions less than 1%
Europe
5,560 Actelion
59,689 Vodafone Group - Common
844
and ADR
18,141 National Grid
210,752 Cable & Wireless Communications
4,638 Lagardre
13,499 Banco Bilbao Vizcaya Argentaria
10,976 Telefonaktiebolaget LM Ericsson - B
2,072 SAP
Positions less than 1%
Asia ex-Japan
8,939 NetEase.com - ADR
367 Samsung Electronics - Preference
175
and Common
3,277 Sohu.com
6,889 Shanda Interactive Entertainment
599 Samsung Fire & Marine Insurance
44,066 China Life Insurance
Positions less than 1%
Other
10,631 Banco do Brasil
Positions less than 1%
Net Current Assets
Net Assets
Net Asset Value per Share

at

31 D ecember 2011

Fair Value Funds% Exposureto


%of
US$ 000s Equities* Currencies WorldIndex
49
52
51
465,227
4
398,639
4
253,580
2
252,746
2
239,504
2
220,971
2
203,081
2
193,086
2
182,455
2
176,836
2
174,593
2
172,697
2
161,503
2
157,799
2
146,328
1
146,309
1
144,602
1
137,509
1
130,006
1
123,330
1
122,467
1
112,917
1
111,890
1
110,405
1
109,952
1
462,717
4
17
2
8
326,077
3
176,503
2
174,613
2
168,667
2
166,317
2
165,645
2
130,153
1
127,985
1
124,717
1
114,585
1
122,879
1
16
27
26
191,153
2
165,915
2
23,651
176,171
2
125,088
1
122,453
1
116,706
1
112,036
1
109,552
1
519,628
5
15
17
7
400,927
4
211,204
4
159,614
163,871
2
137,817
1
108,963
1
108,936
1
329,572
3
2
2
8
135,223
1
106,857
1
64,145
1
10,498,772
100
100
100
US$ 110.07
95,382,342 shares issued

(At 31 December 2010: US$ 121.38; 90,155,715 shares issued)


* Individual security weightings may not sum to the region totals due to rounding.

See accompanying notes on page 16

ORBIS SICAV

GLOBAL EQUITY FUND

at

Total Rate of Return


in euro, net of fees:

31 D ecember 2011
From Inception
on 1 Jan 2005

5 Years

5.6
4.0
1.7
(0.7)

(0.3)
(1.1)
(3.7)
(0.4)

Global Equity, Investor Shares


FTSE World Index
Average Global Equity Fund
% appreciation of the euro versus the US dollar

% Annualised

Latest
3 Years
1 Year

13.7
14.9
11.0
(2.5)

(6.4)
(3.4)
(8.2)
(3.3)

Quarter

% Not Annualised

9.5
11.0
7.5
(3.4)

The Orbis SICAV - Global Equity Fund was formed to serve investors who are seeking a portfolio that
is fully invested in, and exposed to, global equities at all times and who therefore accept exposure to
trends in world stockmarkets. The financial statements of the Fund are prepared, its shares are priced
and its returns and those of the World Index are presented in euro. However, the Fund adopts exposures
to other currencies as shown in the Statement of Net Assets on the following page. The Fund's equity
exposure, shown in the same table, comprises an approximately equal weighting of securities to that of
the Orbis Global Equity Fund, shown on page 6. Given this, we refer readers to the Orbis Global Equity
Fund Manager's report on page 3. The Orbis SICAV - Global Equity Fund is Luxembourg-domiciled
and regulated. The Orbis Global Equity Fund is Bermuda-domiciled and regulated.
While the Orbis SICAV - Global Equity Fund is modelled after the Orbis Global Equity Fund, the
performance of these Funds may vary.

Directors

Manager

Allan W B Gray, Chairman John C R Collis

Orbis Investment Management Limited

William B Gray

Investment Advisor

Claude Kremer Austin J O'Connor David T Smith

Orbis Investment Advisory Limited

Custodian

Citibank International plc (Lux. Branch)

ORBIS SICAV

GLOBAL EQUITY FUND

S tatement

of

N et A ssets

Number
Held
000s Security
6,432
1,480
99
10,105
1,078
4,036
3,523
863
1,377
496
1,057
1,010
468
535
2,712
1,998
1,686
86
700
1,893
2,441
1,807
1,381
10,557
2,643
77
142
7
9
293
1,161
456
216
1,569
2,291
1,456
14,672
119
4,438
55,753
1,217
604
3,564
2,765
91
53
2,195
817
1,675
11,728
153
2,654

at

31 D ecember 2011
Fair Value
U 000s

North America
Cisco Systems
89,849
WellPoint
75,783
Google
49,261
Micron Technology
49,110
QUALCOMM
45,574
Corning
40,480
Weatherford International
39,850
Murphy Oil
37,179
Walgreen
35,186
Humana
33,610
CVS Caremark
33,291
Aetna
32,936
Goldman Sachs
32,706
RenaissanceRe Holdings
30,769
Staples
29,104
NRG Energy
27,974
Safeway
27,405
Apple
26,843
Motorola Solutions
25,027
Calpine
23,885
New York Community Bancorp
23,336
Nexen
22,207
General Motors
21,631
GenOn Energy
21,290
Petrobank Energy and Resources
21,195
Positions less than 1%
78,364
Japan
Rakuten
63,952
Yahoo Japan
35,340
INPEX
33,102
Japan Tobacco
31,646
Nintendo
31,158
Sundrug
27,191
SBI Holdings
25,808
Nippon Television Network
25,535
NKSJ Holdings
23,790
PARK24
23,508
Positions less than 1%
35,319
Europe
Actelion
38,684
Vodafone Group - Common
31,512
and ADR
2,571
National Grid
33,299
Cable & Wireless Communications
25,569
Lagardre
24,836
SAP
24,687
Banco Bilbao Vizcaya Argentaria
23,805
Telefonaktiebolaget LM Ericsson - B
21,808
Positions less than 1%
94,914
Asia ex-Japan
Samsung Electronics - Preference
40,347
and Common
37,154
NetEase.com - ADR
76,053
Sohu.com
31,580
Shanda Interactive Entertainment
25,892
China Life Insurance
22,402
Samsung Fire & Marine Insurance
21,584
Positions less than 1%
65,550
Other
Banco do Brasil
26,088
Positions less than 1%
15,489
19,696
Net Current Assets
Net Assets (Cost U 2,099,253)
2,033,714
Net Asset Value per Investor Share

Funds% Exposureto
Equities* Currencies
48
4
4
2
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
4
17
3
2
2
2
2
1
1
1
1
1
2
16
2
2
2
1
1
1
1
1
5
16
4
4
2
1
1
1
3
2
1
1
1
100

* Individual security weightings may not sum to the region totals due to rounding.

See accompanying notes on page 20

%of
WorldIndex

52

51

26

26

18

100
U 83.68

100

ositions less than 1

ORBIS SICAV

ASIA EX-JAPAN EQUITY FUND


Total Rate of Return
in US dollars, net of fees:

at

31 D ecember 2011

From Inception
on 1 Jan 2006

Asia ex-Japan Equity, Investor Shares


MSCI Asia ex-Japan Index
Average Asia ex-Japan Equity Fund

8.5
7.2
6.2

5 Years

% Annualised

4.9
2.6
1.9

Latest
3 Years 1 Year

22.2
19.4
17.7

(11.9)
(17.3)
(20.0)

Quarter

% Not Annualised

6.9
3.3
2.9

In your Funds November Fact Sheet, we mentioned the Chinese economys reliance on fixed asset investment
while investments in real estate, infrastructure, and factories have boomed, domestic consumption has
continued to decline as a portion of Chinas gross domestic product. But stockmarket valuations tell a
different story: consumer-oriented stocks have significantly outperformed, and many now trade at 30 times
earnings. At the same time, many cyclical stocks have underperformed and now appear cheap relative to
earnings. So why does your Fund continue to favour consumer-oriented shares?
Importantly, your Funds consumer-oriented holdings are not valued as typical consumer stocks. Here,
Sohu.com, your Funds third-largest holding, is a great example. Founded in 1996, Sohu is an old Chinese
internet company. Its key businesses are online games, search, news, and video. Sohus portal is the thirdmost popular in China, and its 67%-held affiliate, Changyou, is Chinas fifth-largest online game company.
The portal, search, and video businesses make money by selling advertising, and Changyou makes money by
selling virtual items in online games.
Though Sohu is a direct play on the Chinese consumer, its not valued as a consumer stock the company
trades at just 11 times its current earnings, which are depressed due to unusually heavy investment in new
businesses and marketing. Recently, sentiment on the stock has turned particularly negative: from a high
in April, Sohus share price has fallen by more than half. Markets are concerned about slowing growth at
Changyou, losses in the search and video segments, and corporate governance issues with western-listed
Chinese companies. We believe these concerns are overblown.
Sentiment on Changyou has been tied to The Duke of Mount Deer, an online game launched this July.
Though the game has contributed to revenues, it failed to meet lofty pre-launch expectations, fuelling
concerns about Changyous growth. But with a market tailwind, a strong game portfolio, and expansion into
casual and social games, we remain confident in Changyous growth prospects.
Moreover, we believe the market is overlooking Sohus growth potential in search and online video. These
segments are still in the investment phase, and are currently a drag on earnings. Both have posted losses, but
both are growing at impressive rates: in China, Sohu is now ranked #3 in search and #3 in online video.
We believe Sohus rapid growth can continue. All of its businesses will benefit from rising internet penetration
in China (currently half that of the US), but the search and video businesses will also benefit from a continued
shift to online advertising. Smartphone adoption in China (currently approximately a quarter that of the US)
will further drive growth. The company has capitalised on these trends by aggressively reinvesting in its key
businesses, and so far, it has been successful: earnings per share have grown by nearly 27% per year since 2003.
Despite this growth, some investors are wary of US-listed Chinese shares following high-profile scandals at
other companies. Sohu is not immune to these concerns, but we take comfort in the companys relatively long
history, US incorporation, and large management ownership. Sohus chairman and CEO, Charles Zhang,
has been a reliable friend of shareholders. And he should be with 20% of the companys stock, he is Sohus
largest owner. The Orbis Funds are the second largest.
The Funds large stake in the company reflects our high level of conviction. The company is attractively
valued, contrarian, and poised to capitalise on long-term trends. Should our thesis prove wrong, the
companys strong balance sheet and excellent free cash flow should provide a degree of protection against
capital loss. With Sohu, we look forward to participating in an exciting journey in the years ahead.
Commentary contributed by Stefan Magnusson, Orbis Investment Advisory (Hong Kong) Limited, Hong Kong
Directors Allan W B Gray, Chairman John C R Collis William B Gray Claude Kremer

Manager

Investment Advisor

Austin J O'Connor David T Smith

Custodian

Orbis Investment Management (B.V.I.) Limited Orbis Investment Management Limited Citibank International plc (Lux. Branch)

ORBIS SICAV

ASIA EX-JAPAN EQUITY FUND


S tatement

of

at

N et A ssets

Number
Held
000s Security
Greater China
2,841
4,659
1,963
2,766
5,003
170,543
14,308
34,457
17,921
51,680
5,132
2,401

31 D ecember 2011

Fair Value Funds % Exposure to


% of
US$ 000s Equities* Currencies MSCI Index
64
64
51

China
NetEase.com - ADR
127,437
Mindray Medical International - ADR 119,445
Sohu.com
98,132
Shanda Interactive Entertainment
55,338
China Mobile
48,892
China Power International Development 39,964
China Life Insurance
35,372
Guangzhou Automobile Group
28,749
China Oilfield Services
28,289
Huaneng Power International
27,481
E-House (China) Holdings - ADR
21,913
Beijing Enterprises Holdings
14,403
Positions less than 1%
31,184
Hong Kong

53
10
9
8
4
4
3
3
2
2
2
2
1
2

53

25

11

11

15

47,272
27,628
26,287
18,218
16,190

11
4
2
2
1
1
21
6
3
3
2
2
2
1
1
1

21

21

74,461
39,659
38,723
31,623
25,293
20,105
18,980
13,697
9,212

Malaysia
15,419 Genting Berhad
25,390 Genting Malaysia

7
4
2

53,505
30,676

India
15,185 Housing Development and Infrastructure
689 ACC
952 Genpact
Positions less than 1%

4
1
1
1
-

15,281
14,775
14,236
657

Other
18,830 Olam International
36,436 Bank of Ayudhya

4
2
2

15

30,924
25,407
3,482

1,272,890

100

100

100

17,270
13,053
86,346
7,663
7,972
1,578
218
1,235
25
230
22
528
1,006

Taiwan
Hon Hai Precision Industry
Powertech Technology
SinoPac Financial Holdings
Delta Electronics
Nan Ya Printed Circuit Board
Korea
Kiwoom Securities
Samsung Fire & Marine Insurance
Korea Investment Holdings
Lotte Chilsung Beverage
Yuhan
Samsung Electronics
Korea Gas
SK Telecom - ADR
Positions less than 1%

Net Current Assets


Net Assets

(Cost $1,322,523)

Net Asset Value per Investor Share

US$ 15.36

* Individual security weightings may not sum to the region totals due to rounding.

See accompanying notes on page 20

10

ORBIS SICAV

JAPAN EQUITY FUND

at

31 D ecember 2011

Total Rate of Return


in Class Currency, net of fees:
Yen Class (launched 1 Jan 1998)
TOPIX
Average Japan Equity Fund
% appreciation of the yen versus the US dollar

Euro Class (launched 1 Jan 2003)


TOPIX Hedged into euro
% appreciation of the euro versus the US dollar

From
Inception

10 Years

5 Years

Latest
3 Years

1 Year

5.2
(2.1)
(2.5)
3.8

2.0
(2.0)
(3.6)
5.5

(8.1)
(13.8)
(15.2)
9.1

1.4
(3.4)
(3.0)
5.6

(6.1)
(17.0)
(18.1)
5.5

(8.7)
(12.2)
(0.4)

0.7
(2.7)
(2.5)

(5.4)
(16.2)
(3.3)

3.7
2.1
2.4

% Annualised

Quarter

% Not Annualised

(3.9)
(4.2)
(4.2)
0.2
(3.9)
(3.9)
(3.4)

Throughout 2011, we commented on your Funds exposure to consumer-oriented companies. A great


example is Japan Tobacco, the largest tobacco company in Japan and the third-largest international
player globally. For some time, the company has been less popular than its peers, and at first glance,
this pessimism may seem justified. Our research, however, has yielded a more favourable view of the
companys prospects.
Our interest in Japan Tobacco was piqued by the long-term attractive returns that the tobacco industry
has produced for shareholders. Despite tighter regulations, higher taxes and a steady decline in smoking
in the developed world, tobacco has been one of the best performing industries in the stockmarket over
the past three decades.
It has also been one of the most contentious industries for obvious reasons. A brief aside on how we view
our role as investment managers from an ethical standpoint is perhaps in order. Ethics and morals are
highly subjective. We recognise that some clients might consider any investment in a tobacco company
to be reprehensible. Many others personally find smoking to be an objectionable behaviour. But surely
a good number of our clients see no problem at all with owning shares of the companies that make
tobacco products. Is it our role to judge which group of clients is right?
We simply dont believe it makes sense to allow our personal, subjective ethical standards to override
our assessment of which stocks are most attractive. Thats not to say we ignore ethical considerations
when analysing investments. We have always believed it is critical to understand the full range of
factors that might affect a companys business and its stockmarket performance. If something is illegal,
unethical or otherwise unsustainable, its also bad business and we believe it is ultimately likely to be a
poor investment.
In the case of tobacco, we take the view that the industrys interests are increasingly aligned with the
public interest. Governments have widely concluded that making smoking more expensive is a more
effective way to discourage the habit than is prohibition. The tobacco industry, for its part, has come to
accept the shrinking cigarette volumes that governments desire, and responded to waning demand by
raising prices. Both tobacco company profits and government tax revenues from tobacco are far more
sensitive to prices than to volumes. As a result, improved public health through lower smoking incidence
has frequently gone hand in hand with higher tax revenues and rising tobacco company profits.
This alignment of interests ultimately benefits shareholders as well. With declining volume, the
tobacco business has almost no reinvestment needs. With advertising bans, there is no need to spend
on marketing. While tobacco companies once spent heavily to develop other businesses, they have since
divested their non-tobacco operations, leaving earnings free for distribution to shareholders. The result
has been dramatic: we estimate that dividends and share buybacks account for over one-third of the
industrys total shareholder returns.

11

ORBIS SICAV

Given these dynamics, we were surprised to find in 2009 that we could buy Japan Tobaccos earnings,
which we expected to be above 20,000 for the next year, and grow quickly thereafter, for only
290,000. The reason was clear: Japan Tobacco had failed to deliver the strong, stable returns of its
peers, as shown in the chart below. But we believe the companys future will be different than its past.
Relative to its history and its peers, the company is priced very cheaply and the reasons for this discount
are starting to erode. Though many investors remain sceptical on the companys prospects, we believe
Japan Tobacco is close to an inflection point in earnings and possibly also its capital management.
Value of $100 invested on 31 October 1994

Japan Tobacco, Historical Laggard


$2,000
$1,750

$1728

$1,500
$1,250
$1,000

$825

$750
$500

$246

$250

$149

$0
94

95

96

97

98

British American Tobacco

99

00

01

02

Altria (Philip Morris)

03

04

Japan Tobacco

05

06

07

08

09

FTSE World Index

Assumes reinvestment of dividends Source: Orbis

Prior to its 1994 listing, Japan Tobacco was a state-held monopoly. Today, Japans Ministry of Finance
(MoF) owns 50% of the company and is also responsible for regulating it. The MoF must approve
any price increases, and its traditional focus on price stability has made it difficult for the company to
raise prices. But this is starting to change. Pricing in the domestic business is being deregulated, and in
October 2010 the company raised prices significantly for the first time. By global standards, cigarettes
remain very affordable in Japan, leaving plenty of room for prices to rise. For example, after adjusting
for income and pricing differentials, it takes about 15 minutes for the average Japanese worker to earn
enough to buy a pack of cigarettes. In the UK, its closer to 45 minutes.
The model of deregulated pricing is common outside Japan, where the company draws half of its
earnings. Japan Tobacco International (JTI), a subsidiary, is a world-class business, and the third-largest
international player behind Philip Morris International and British American Tobacco. While many
worry about JTIs exposure to a fluctuating yen and regulatory uncertainties both of which have hurt
Japan Tobacco in the past we see a good operator with a long-term plan and perhaps the best potential
for earnings growth among its peers.
Historically, the prospects of both the domestic and the international business have been obscured
by the companys perceived indifference to shareholders. We are encouraged by recent management
actions, including a dividend increase and a likely large share buyback of part of the MoFs stake. A
share buyback would be an excellent opportunity in a number of ways: the MoF would receive a fair
price for its shares, the country could move towards the proven model of a regulated, taxed, and entirely
private tobacco industry, and it would be of great benefit to shareholders.
The future is always uncertain, and there are many areas of our thesis that could fail to develop as we
expect. Still, our research suggests that Japan Tobaccos shares are worth substantially more than their
current price and we expect they will deliver pleasing long-term returns for your Fund.
Commentary contributed by Arthur Kadish, Orbis Investment Advisory Limited, London
Directors Allan W B Gray, Chairman John C R Collis William B Gray Claude Kremer

Manager

Investment Advisor

Austin J O'Connor David T Smith

Custodian

Orbis Investment Management (B.V.I.) Limited Orbis Investment Management Limited Citibank International plc (Lux. Branch)

12

ORBIS SICAV

JAPAN EQUITY FUND


S tatement

of

at

31 D ecember 2011

N et A ssets

Number
Held
000s Security (Ranked by sector)
Consumer Non-Durables
137 Rakuten
4,167 Sundrug
3,312 H.I.S.
19 Japan Tobacco
1,616 Tsuruha
1,288 ABC-MART
1,517 KOMERI
1,244 SUZUKEN
1,127 SUGI Holdings
Positions less than 1%
31
5,187
6,500
125
1,422
265

888
401
537
2,787
873
631
10
355

Fair Value
000s
11,304,436
9,716,919
7,278,815
7,026,058
6,956,450
3,770,269
3,603,933
2,655,336
2,529,886
343,098

% of
TOPIX
21

Cyclicals
INPEX
Toyota Motor
PARK24
NTT Urban Development
Honda Motor
Nintendo
Positions less than 1%

28
8
7
4
4
2
2
1

41

14,870,100
13,305,442
6,643,204
6,536,513
3,337,682
2,808,449
2,450,367

Information and Communications


Nippon Television Network
Yahoo Japan
OBIC
Nomura Research Institute
Nippon Telegraph and Telephone
Obic Business Consultants
Net One Systems
OTSUKA

24
6
6
4
3
2
1
1
1

10,459,851
9,947,756
7,908,699
4,849,890
3,435,255
2,273,040
2,000,977
1,880,970

3
2
2

15

3,908,544
2,706,133

14
5
4
3
1
-

13

8,787,685
7,342,276
5,853,838
2,568,942
499,606

Technology
10,918 Elpida Memory
4,021 Sharp
5,820
1,302
2,730
3,583

% of
Fund*
31
6
5
4
4
4
2
2
1
1
-

Financials
NKSJ Holdings
SBI Holdings
Sumitomo Mitsui Financial
T&D Holdings
Positions less than 1%
Utilities
Net Current Assets
Net Assets

(Cost 192,496,306)

137,658

179,698,077

100

Net Asset Value per Investor Share


Yen Class (Currency exposure 100% yen)
Euro Class (Currency exposure 100% euro)

2,027
E 13.88

* Individual security weightings may not sum to the sector totals due to rounding.

See accompanying notes on page 20

13

100

ORBIS JAPAN EQUITY (US$) FUND


Total Rate of Return
in US dollars, net of fees:

From Inception
on 12 Jun 1998

Orbis Japan Equity (US$)


TOPIX Hedged

5.7
0.6
(4.5)

% appreciation of the US dollar versus the yen

at

31 D ecember 2011

Latest
10 Years 5 Years 3 Years 1 Year
% Annualised

3.3
0.1
(5.2)

(7.7)
(12.5)
(8.4)

0.9
(3.2)
(5.3)

(6.1)
(16.9)
(5.2)

Quarter

% Not Annualised

(3.7)
(4.1)
(0.2)

Orbis Japan Equity (US$) was formed to serve investors who wish to invest in Japanese equities while
remaining exposed to the dollar. As shown in the Statement of Net Assets below, the Fund's entire
equity exposure comprises shares in the Luxembourg-domiciled Orbis SICAV- Japan Equity Fund - Yen
Class. Given this, we refer readers to the Orbis SICAV - Japan Equity Fund Manager's report on page
11. The US$ Fund is Bermuda-domiciled. The Orbis SICAV is Luxembourg-domiciled and regulated.
First-time readers may also find it informative to read the text in italics below.
The Fund's currency hedging reduces or eliminates the effect on its share price of changes in the yen/dollar
exchange rate. Most Japanese equity funds do no currency hedging and therefore their returns are, when
translated into dollars, directly influenced by these exchange rate fluctuations. As the statistics above show, these
currency fluctuations are often large. As a result, this Fund's dollar returns above are not comparable with
those of the Average Japan Equity Fund or those of Orbis SICAV - Japan Equity Fund - Yen Class, when their
returns are likewise expressed in dollars. The returns on Orbis Japan Equity (US$) in dollars approximate
those on the Orbis SICAV - Japan Equity Fund - Yen Class in yen, adjusted for the short-term interest rate
differential between the US and Japan.

S tatement

of

N et A ssets

Number
Held
000s
Security
39,872
Orbis SICAV - Japan Equity Fund - Yen Class
Net Current Liabilities
Net Assets
Net Asset Value per Share

US$ 21.17

Fair Value
US$ 000s
1,050,302
(13,492)
1,036,810

% of
Fund
101
(1)
100

48,978,565 shares issued

(At 31 December 2010: US$ 22.54; 31,317,924 shares issued)

D eployment

% of
Fund

Stockmarket exposure
Currency exposure

Japan

101

US dollar

100

See accompanying notes on page 16

Directors
Manager

Allan W B Gray, Chairman

Orbis Investment Management (B.V.I.) Limited

John C R Collis
Investment Advisor

Orbis Investment Management Limited

14

William B Gray
Custodian

Citibank Canada

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Millions)


Orbis Global
Equity
US$

Reporting Currency:
For the Years Ended 31 December:
Investment Income:
Dividends and Interest

Expenses:
Managers Fees
Custodians Fees and Other
Net Investment Loss
Net (Loss) Gain from
Investments and Currencies:
Realised
Unrealised
(Decrease) Increase in Net Assets
Resulting from Operations

Orbis Japan
Equity (US$)
US$

2011

2010

2011

2010

194

131

194

131

237

210

232
5

206
4

(43)

(79)

(1,037)

759

(47)

(2)

440
(1,477)

649
110

(40)
(7)

(51)
49

(1,080)

680

(47)

(2)

1,163
1,158
154

5
71
401

190
473

(94)
(5)

(63)
(25)

Members Activity During the Year:


Subscriptions:
Orbis Funds
Other Members
Switches Between Funds

1,175
1,121
283

Redemptions:
Orbis Funds
Other Members
Switches Between Funds

(996)
(689)
(258)

(Decrease) Increase in Net Assets

(444)

1,404

331

573

Net Assets at Beginning of Year

10,943

9,539

706

133

Net Assets at End of Year

10,499

10,943

1,037

706

(986)
(579)
(186)

See accompanying notes on page 16

15

NOTES TO THE FINANCIAL STATEMENTS

at

31 December 2011

and

2010

General
The Orbis Equity Funds invest in equities selected from specified geographic regions. Each Fund is
actively managed to outperform a benchmark index of the stockmarkets in its region without greater
risk. Orbis Global Equity Fund Limited ("Orbis Global Equity") and Orbis Japan Equity (US$)
Fund Limited ("Orbis Japan Equity (US$)") (collectively the "Funds") are Bermuda companies.
Significant Accounting Policies
These financial statements have been prepared in accordance with generally accepted accounting
principles in Canada and Bermuda. The Funds significant accounting policies are as follows:
Investments. Investments are recorded as of the trade date and are stated at their fair values.
Investments in Orbis Funds are valued at their year-end Net Asset Value per share, while other
marketable securities and forward currency contracts are valued at their closing and mid prices,
respectively. If these prices are unavailable or considered unrepresentative of fair value, a price
considered fair by the Manager will be used. The amounts realised may differ from these valuations
due to variations in pricing, exchange rates, trading volumes and regulations. At the year-end, the
cost of investments, in millions, was for Orbis Global Equity US$11,163 (2010 - cost US$10,156,
market US$10,910) and for Orbis Japan Equity (US$) US$991 (2010 - cost US$653, market
US$725).
Foreign Currency Translation. Assets, liabilities and forward currency contracts denominated
in foreign currencies are translated into the Reporting Currency shown on page 15 using exchange
rates prevailing at the year-end. Income and expenses in foreign currencies are translated into the
Reporting Currency at the exchange rates prevailing at the dates of the transactions. Translation
exchange gains and losses are included in the Statement of Operations.
Income and Expenses. The accrual basis is used to recognise income and expenses. Dividends
are accrued on the ex-date of the dividend, net of withholding taxes. Realised gains and losses on
investments are based on average cost.
Accounting Estimates. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Net Current Assets or Liabilities. Net current assets or liabilities include primarily unrealised
gains or losses on forward currency contracts, cash, amounts due to or from brokers, due to
shareholders and other miscellaneous accounts receivable and payable, the individual amounts of
which are not significant in relation to the total net assets of the Fund except for certain balances
which will be disclosed elsewhere in these financial statements.
Future Accounting Standards. The Accounting Standards Board of the Canadian Institute
of Chartered Accountants expect that investment companies, which includes the Funds, will be
adopting International Financial Reporting Standards effective 1 January 2014.
Taxes
There are no Bermuda income, profit, capital, capital gains, estate or inheritance taxes payable
by the Funds or their Members in respect of shares in the Funds. The Bermuda Government has
undertaken that in the event that any such Bermuda taxes are levied in Bermuda in the future,
the Funds and their shares will be exempt from such taxes until 31 March 2035. Income and
capital gains on the Funds' investments, however, may be subject to withholding or capital gains
taxes in certain countries.
16

Share Capital
Each Funds authorised share capital at year-end is detailed below and is unchanged from
31 December 2010. Fund shares participate pro rata in their Funds net assets and dividends,
and are redeemable and non-voting. Founders shares do not participate in their Funds portfolio,
are redeemable at par value only after all Fund shares have been redeemed, and carry the right to
vote. If a Fund is wound up or dissolved, the Founders shares will participate only to the extent
of their par value.


Orbis Global Equity
Orbis Japan Equity (US$)

Par Value
(per share)

Authorised
Fund shares

US$ 1
US$ 1

200 million
100 million

Authorised and Issued


Founders shares
12,000
12,000

Fund share transactions, in thousands of shares, were as follows:


Orbis Global
Equity
2011
2010

Optimal Japan
Equity (US$)
2011
2010

Balance at beginning of year


Subscriptions
Orbis Funds
Other Members
Switches Between Funds
Redemptions
Orbis Funds
Other Members
Switches Between Funds

90,156

83,271

31,318

5,946

9,790
9,127
2,473

10,651
10,301
1,386

252
3,217
18,719

8,480
20,973

(8,290)
(5,798)
(2,076)

(8,648)
(5,174)
(1,631)

(14)
(4,280)
(233)

(17)
(2,972)
(1,092)

Balance at end of year

95,382

90,156

48,979

31,318

During the year, a subscription of US$50 million into Orbis Global Equity was settled partly
through the contribution of equity investments. In 2010, a subscription of US$60 million into
Orbis Global Equity was settled partly through the contribution of equity investments and
subscription switches of US$341 million into Orbis Japan Equity (US$) were settled through the
contribution of Orbis SICAV - Japan Equity Fund - Yen Class shares.
Material Contracts - Forward Currency Contracts
At year-end, the Funds had forward currency contracts settling on 1 June 2012 having net contract
and net market values as set out on the following page. These contracts expose the Funds to
credit risk arising from the potential inability of a counterparty to perform under the terms of a
contract. To limit its risk to the amount of any net unrealised gain, each of the Funds has entered
into agreements whereby all its currency transactions with the counterparty to that agreement
can be netted.

17

Base Currency

Currency

Contract Value
000s

Contract Value
US$ 000s

Market Value
US$ 000s

Unrealised
Gain (Loss)
US$ 000s

198,554
618,620
443,736
(1,609,884)

199,687
602,323
443,278
(1,627,289)

1,133
(16,297)
(458)
(17,405)

(348,974)

(382,001)

(33,027)

(1,039,745)

(1,054,080)

(14,335)

Orbis Global Equity


CNY
EUR
GBP
JPY

1,270,000
464,560
285,726
(124,816,200)

Orbis Japan Equity (US$)


JPY

(80,849,982)

Commitments
Orbis Global Equity along with the Orbis SICAV Funds - Asia ex-Japan Equity, Global Equity
and Japan Equity have entered into an uncommitted multi-currency line of credit which may be
drawn upon for the purpose of paying redemptions. The maximum which may be drawn across
all these funds is US$500 million and for each Fund cannot exceed 10% of its Net Asset Value.
Drawdowns bear interest at market rates and cannot be outstanding for more than seven business
days. The facility expires on 12 July 2012. During 2011 and 2010, no amounts were drawn upon
by the Funds.
Related Party Transactions
The contractually appointed Manager of Orbis Global Equity is Orbis Investment Management
Limited and of Orbis Japan Equity (US$) is Orbis Investment Management (B.V.I.) Limited.
Orbis Global Equity pays a Managers fee which can vary between 0.5% and 2.5% per annum of
weekly net assets, determined by the Funds rate of return versus its benchmark. Orbis Japan Equity
(US$) does not directly pay a fee to its Manager, but, because it remains substantially invested in
Orbis SICAV - Japan Equity Fund, it indirectly bears a portion of that Funds management fee. At
the year-end the management fee payable by Orbis Global Equity was, in thousands, US$19,064
(2010 - US$21,018).
At the year-end, other Orbis funds held, in thousands of shares, 41,132 (2010 - 39,631) in Orbis
Global Equity and 703 (2010 - 465) in Orbis Japan Equity (US$). Other related parties, which
include institutional and other clients managed on a discretionary basis and the Directors and
Officers of the Orbis funds and of their Managers and Investment Advisors, held, in thousands
of shares, 14,740 (2010 - 13,287) in Orbis Global Equity and 44,802 (2010 - 27,871) in Orbis
Japan Equity (US$), excluding their indirect holdings via other Orbis Funds.

18

INDEPENDENT AUDITORS REPORT


To the Board of Directors and the Members of
Orbis Global Equity Fund Limited, and
Orbis Japan Equity (US$) Fund Limited (the Funds):
We have audited the accompanying statements of net assets of the Funds (companies incorporated
with limited liability in Bermuda) on pages 6 and 14 as at 31 December 2011, and the related
statements of operations and changes in net assets on page 15 for the year then ended and a
summary of significant accounting policies and other explanatory information on pages 16, 17
and 18.
Managements 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 Canada and Bermuda and for such
internal control as management determines is necessary to enable the preparation 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 audits.
We conducted our audits in accordance with auditing standards generally accepted in Canada
and Bermuda. Those standards require that we comply with ethical requirements and plan and
perform the audits 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 auditors 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 Funds 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 Funds internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness
of 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, these financial statements present fairly, in all material respects, the financial
positions of the Funds as at 31 December 2011 and the results of their operations and the
changes in their net assets for the year then ended in accordance with accounting principles
generally accepted in Canada and Bermuda.

Hamilton, Bermuda
25 January 2012

Ernst & Young Ltd.


Chartered Accountants
19

ORBIS SICAV

STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (Millions)


Global Equity

Base Currency:
For the Years Ended 31 December:
Investment Income:
Dividends and Interest

Asia ex-Japan
Equity

E
2011

Japan Equity

2010

2011

2010

2011

2010

34
34

27
27

16
16

17
17

3,369
3,369

3,733
3,733

7
6
1

(8)
(9)
1

33
31
2

(9)
(10)
1

4,784
4,612
172

5,098
4,894
204

27

35

(17)

26

(1,415)

(1,365)

(127)

263

(151)

87

(8,626)

2,468

64
(191)

165
98

99
(250)

146
(59)

(12,539)
3,913

(6,331)
8,799

(100)

298

(168)

113

(10,041)

1,103

Subscriptions:
Orbis Funds
Shareholders
Switches Between Funds

83
112

134
96

3
139
189

14
64
119

50,334
8,517
3,097

58,774
31,600
13,402

Redemptions:
Orbis Funds
Shareholders
Switches Between Funds

(251)
(21)

(349)
(3)

(2)
(72)
(167)

(2)
(74)
(85)

(57,228) (35,351)
(15,312) (17,334)
(31,668) (47,720)

(Decrease) Increase in Net Assets

(177)

176

(78)

149

(52,301)

Net Assets at Beginning of Year

2,211

2,035

1,351

1,202

231,999 227,525

Net Assets at End of Year

2,034

2,211

1,273

1,351

179,698 231,999

Expenses:
Managers Fees (Refund)
Administration, Custodians Fees and Other
Net Investment Income (Loss)
Net (Loss) Gain from
Investments and Currencies:
Realised
Unrealised
(Decrease) Increase in Net Assets
Resulting from Operations
Shareholders Activity During the Year:

NOTES TO THE FINANCIAL STATEMENTS

at

4,474

31 D ecember 2011

General
Orbis SICAV (the Company) qualifies as an open-ended investment company with variable capital
(Socit dInvestissement Capital Variable (SICAV)), with limited liability under Part I of the
Luxembourg law of 17 December 2010 on undertakings for collective investment.
The Company is structured as an umbrella fund, providing both individual and institutional investors
with an opportunity to invest in a variety of Funds. The Companys share capital consists of the
Global Equity Fund - Investor, Refundable Reserve Fee and Fee Reserve shares, the Asia ex-Japan
Equity Fund - Investor, Refundable Reserve Fee and Fee Reserve shares, the Japan Equity Fund
Investor - Yen and Euro class, Refundable Reserve Fee and Fee Reserve shares, the Japan Core
Equity Fund Yen shares and the Europe Equity Fund - Investor shares. The Fee Reserve Shares
are issued to the Manager in relation to the performance fee.
A separate pool of assets is maintained for each Fund. A Fund is not a separate legal entity. All of
the Funds together comprise the Orbis SICAV single legal entity. Under Luxembourg law, the rights
of the shareholders and creditors of a Fund which arise in connection with the creation, operation
or liquidation of the Fund are limited to the assets of that Fund and the assets of the Fund are
exclusively available to satisfy such rights.
20

ORBIS SICAV

This abridged version of the annual report of Orbis SICAV - Global Equity Fund, Orbis SICAV Asia ex-Japan Equity Fund and Orbis SICAV - Japan Equity Fund (the Funds) does not contain
certain Luxembourg legal and regulatory disclosure requirements as included in the complete version
of the annual report. A complete version of the annual report is available upon request and free
of charge at the registered office of the Company 15 days prior to the Annual General Meeting of
Shareholders of the Company.
Significant Accounting Policies
These financial statements have been prepared in accordance with Luxembourg legal and regulatory
requirements applicable to investment funds:
Investments. Investments are recorded as of the trade date and are stated at their fair values based
on their closing prices. If the closing prices are unavailable or considered unrepresentative of fair
value, a price considered fair by the Manager will be used. The amounts realised may differ from
these valuations due to variations in pricing, exchange rates, trading volumes and regulations.
Foreign Currency Translation. Assets, liabilities and forward foreign currency contracts denominated
in currencies other than the Base Currency are translated into the Base Currency shown on page
20 using exchange rates prevailing at the year-end. Income and expenses in foreign currencies are
translated into the Base Currency at the exchange rates prevailing at the dates of the transactions.
Translation exchange gains and losses are included in the Statement of Operations. The unrealised
gains or losses on forward currency contracts are included in net current assets or liabilities.
Income and Expenses. The accrual basis is used to recognise income and expenses. Dividends are
accrued on the ex-dividend date, net of withholding taxes. Realised gains and losses on investments
are based on average cost. All income and expenses which can be allocated directly to individual
share classes are charged to those share classes. Income and expenses which do not relate specifically
to a particular share class are allocated between the share classes pro rata to their Net Asset Values.
Accounting Estimates. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual results could differ
from those estimates.
Financial Statements. Financial statements for each Fund are presented in the Base Currency of
that Fund.
Taxes
Under current law and practice, the Company is not liable to Luxembourg taxes on income or capital
gains, nor are dividends paid by the Company liable to any Luxembourg withholding tax. Income
and capital gains on the Companys investments, however, may be subject to withholding or capital
gains taxes in certain countries.
The Company is liable in Luxembourg to a tax (taxe dabonnement) on the net assets attributable
to each Funds Investor shares of 0.05% per annum and to each Funds Refundable Reserve Fee and
Fee Reserve Shares of 0.01% per annum, such tax being payable quarterly and calculated on the net
assets of each share class at the end of each calendar quarter.

21

ORBIS SICAV

Share Capital
At 31 December 2011, the following shares were issued and outstanding:
Number of
Shares
Global Equity Fund

Net Asset
Value per Share
E

Investor Shares
Class A-4 Refundable Reserve Fee Shares
Class C-1 Refundable Reserve Fee Shares
Class C-8 Refundable Reserve Fee Shares
Class E-2 Refundable Reserve Fee Shares
Class F-1 Refundable Reserve Fee Shares
Class F-2 Refundable Reserve Fee Shares
Class G-2 Refundable Reserve Fee Shares
Class J-1 Refundable Reserve Fee Shares
Class M-3 Refundable Reserve Fee Shares
Class O-1 Refundable Reserve Fee Shares
Class O-2 Refundable Reserve Fee Shares
Class O-7 Refundable Reserve Fee Shares
Class P-3 Refundable Reserve Fee Shares
Class R-3 Refundable Reserve Fee Shares
Class S-6 Refundable Reserve Fee Shares
Class S-7 Refundable Reserve Fee Shares
Class U-1 Refundable Reserve Fee Shares
Fee Reserve Shares

2,189,174
681,747
355,733
183,775
864,481
698,484
482,887
287,787
231,721
556,704
940,966
8,638,954
999,557
799,214
153,294
346,888
2,880,032
1,237,300
314,290

83.68
88.01
88.74
88.68
90.39
87.00
85.65
89.60
89.58
88.49
87.95
90.86
88.17
86.61
85.82
88.46
88.84
90.20
97.17

18,534,669
3,681,542
39,275,149
7,803,915
5,608,313
192,133
1,300,115

15.36
15.50
17.19
17.07
17.04
17.05
18.59

76,021,723
4,401,622
4,222,962
268,413

2,027
2,012
1,981
2,092
E

5,642,477

13.88

US$

Asia ex-Japan Equity Fund


Investor Shares
Class A-9 Refundable Reserve Fee Shares
Class O-1 Refundable Reserve Fee Shares
Class P-3 Refundable Reserve Fee Shares
Class R-2 Refundable Reserve Fee Shares
Class R-4 Refundable Reserve Fee Shares
Fee Reserve Shares

Japan Equity Fund


Investor Shares - Yen Class
Class A-9 Refundable Reserve Fee Shares
Class U-2 Refundable Reserve Fee Shares
Fee Reserve Shares
Investor Shares - Euro Class

Material Contracts - Forward Currency Contracts


At 31 December 2011, the following Funds held open forward currency contracts settling on 1 June
2012 having net contract and net fair values as set out on the following page. These contracts expose
these Funds to credit risk arising from the potential inability of a counterparty to perform under the
terms of a contract. To limit their risk to the amount of any net unrealised gain, these Funds have
entered into agreements whereby all their currency transactions with the counterparty to that agreement
can be netted. The Funds use the commitment approach to determine their global exposure related
to derivative instruments.

22

ORBIS SICAV
Base Currency
Currency

Contract Value

Global Equity Fund


CNY
GBP
JPY
USD

318,500,000
71,901,632
(32,040,200,000)
(149,071,413)

Japan Equity Fund


EUR

78,460,104

Contract Value

Fair Value

Unrealised
Gain (Loss)

38,466,027
86,237,333
(319,460,940)
(111,990,000)

38,694,653
86,191,374
(322,754,656)
(114,975,948)

228,626
(45,959)
(3,293,716)
(2,985,948)

(306,747,580)

(312,844,577)

(6,096,997)

7,951,392,982

7,802,658,767

(148,734,215)

Commitments
Orbis SICAV - Global Equity, Asia ex-Japan Equity and Japan Equity Funds along with Orbis Global
Equity Fund Limited have entered into an uncommitted multi-currency line of credit which may
be drawn upon for the purpose of paying redemptions. The maximum which may be drawn across
all these funds is US$500 million and for each Fund cannot exceed 10% of its Net Asset Value.
Drawdowns bear interest at market rates and cannot be outstanding for more than seven business
days. The facility expires on 12 July 2012. During 2011 no amounts were drawn upon by the Funds.
Custodian and Administrator Fees
Fees due in respect of custody, administration and other related services for the year for the Global
Equity Fund amounted to 790,963 of which 178,986 was payable at year-end, for the Japan
Equity Fund amounted to 70,616,524 of which 14,785,003 was payable at year-end and for the
Asia ex-Japan Equity Fund amounted to US$993,667 of which US$99,216 was payable at year-end.
Transaction Costs
Transaction costs, which include brokerage and other costs incurred in connection with the purchase and
sale of investments, for the year amounted to 2,966,607 for the Global Equity Fund, 221,216,576
for the Japan Equity Fund and US$3,119,633 for the Asia ex-Japan Equity Fund.
Directors Fees and Expenses
There are no existing or proposed service contracts between any of the Directors and the Company.
The Shareholders have approved Directors fees to each of Messrs Collis, Smith, Kremer and OConnor
of US$40,000 for 2011 before withholding tax. No other Directors have received any remuneration
or other direct benefit material to them.
Related Party Transactions
The Manager of the Global Equity Fund is Orbis Investment Management Limited and of the Japan
Equity Fund and Asia ex-Japan Equity Fund is Orbis Investment Management (B.V.I.) Limited.
The Investor shares pay the Manager a fee which can vary between 0.5% and 2.5% per annum of weekly
net assets, determined by that share class rate of return versus its Benchmark and for the Japan Equity
Fund by its Investor - Yen class rate of return versus its Benchmark. Each class of Refundable Reserve
Fee shares pays a base fee of between 0.30% and 0.75% per annum of net assets and a performance
related fee of 25% of that share class rate of return versus its benchmark since the last Dealing Day.
At each Dealing Day, the Manager is issued Fee Reserve shares to the extent of any performance fee
accrued. For each class of Refundable Reserve Fee shares, when the value of the related Fee Reserve
shares in issue exceeds 3% and 7% of the Net Asset Value of that class of Refundable Reserve Fee
shares, the Manager is paid in cash at the rate of 1% and 2% per annum, respectively, of the total
Net Asset Value of the Refundable Reserve Fee shares. The performance fee is partially refundable
in the event of future underperformance with the refund limited to the value of the outstanding Fee
Reserve shares and the fee subject to a high water mark should the available refund be exhausted.
23

ORBIS SICAV

At 31 December 2011, the value of the Fee Reserve shares in issue with respect to the following
Refundable Reserve Fee share classes was, for the Global Equity Fund: A-4 927,941, C-1 782,347,
C-8 254,097, E-2 1,518,628, F-2 18,785, G-2 399,419, J-1 396,171, M-3 938,422,
O-2 16,127,157, O-7 589,510, P-3 1,812,229, S-6 572,942, S-7 3,264,616, and
U-1 2,652,571, for the Asia ex-Japan Equity Fund: A-9 US$351,627, O-1 US$18,542,832,
P-3 US$3,364,083 and R-2 US$1,890,335 and for the Japan Equity Fund: A-9 234,156,180
and U-2 327,155,886.
Performance fees (refunds) for the year amounted to, for the Global Equity Fund: A-4 (204,295),
C-1 (118,377), C-8 (49,170), E-2 (173,354), F-1 (101,504), F-2 (155,958),
G-2 (98,315), J-1 (80,873), M-3 (157,286), O-2 (2,407,290), O-7 (270,045),
P-3 (515,648), S-1 291,532, S-6 (115,308), S-7 (824,606), T-2 (41,543) and
U-1 (222,221), of which 2,761,515 were receivable at year-end, for the Asia ex-Japan Equity
Fund: A-9 US$325,361, O-1 US$15,199,216, P-3 US$1,516,197, R-2 US$1,648,362, and
R-4 US$30,346, of which US$312,794 were receivable at year-end and for the Japan Equity Fund:
A-9 292,388,800 and U-2 315,225,637, of which 77,723,051 were payable at year-end. The
Fee Reserve shares bear no fee.
The Managers have agreed that for the year ended 31 December 2011 the operating expenses, excluding
the Managers fee, brokerage and transaction costs and interest, attributable to the Investor shares
of the Global Equity Fund and the Japan Equity Fund will be capped at 0.20% per annum and to
the Refundable Reserve Fee and Fee Reserve shares of the Global Equity Fund and the Japan Equity
Fund will be capped at 0.15% per annum.
At the year-end, other Orbis funds held 1,293,369 Investor shares in the Asia ex-Japan Equity Fund
and 54,889,474 Investor - Yen shares in the Japan Equity Fund. Other related parties, which include
institutional and other clients managed on a discretionary basis and the Directors and Officers of the
Orbis funds and of their Managers and Investment Advisors, held 52,719 Investor and all the O-1,
O-7, P-3 and R-3 Refundable Reserve Fee shares of the Global Equity Fund, 1,629,909 Investor
and all the O-1, P-3, R-2 and R-4 Refundable Reserve Fee shares of the Asia ex-Japan Equity Fund
and 12,597,277 Investor - Yen shares and 62,827 Investor - Euro shares in the Japan Equity Fund
excluding their indirect holdings via other Orbis funds.
The Investment Managers hold all the Fee Reserve shares.
Certain of the Companys Directors also act as executives and directors of related companies.

24

ORBIS SICAV

REPORT OF THE INDEPENDENT AUDITOR


To the Shareholders of
Orbis SICAV - Global Equity Fund,
Orbis SICAV - Asia ex-Japan Equity Fund, and
Orbis SICAV - Japan Equity Fund
Luxembourg
We have audited the financial statements (the full financial statements) of Orbis SICAV and
of each of its Funds (the Company) for the year ended 31 December 2011 from which the
accompanying abridged financial statements were derived, in accordance with International
Standards on Auditing as adopted for Luxembourg by the "Commission de Surveillance du Secteur
Financier". In our report dated 25 January 2012 we expressed an unqualified opinion on the full
financial statements. These abridged financial statements on pages 8, 10, 13 and 20 - 24 comprise
the statements of net assets of Orbis SICAV - Global Equity Fund, Orbis SICAV Asia ex-Japan
Equity Fund and Orbis SICAV Japan Equity Fund as at 31 December 2011 and the statements
of operations and changes in net assets for the year then ended, and a summary of significant
accounting policies and other explanatory notes to the financial statements.
In our opinion, the accompanying abridged financial statements are consistent, in all material
respects, with the full financial statements from which they were derived.
For a complete understanding of the scope of our audit and of the Companys and of each of
its Funds financial position as at 31 December 2011 and of the results of their operations and
changes in their net assets for the year then ended, the abridged financial statements should be
read in conjunction with the full financial statements and our audit report thereon.
Supplementary information included in the abridged financial statements has been reviewed in
the context of our mandate but has not been subject to specific audit procedures carried out in
accordance with the standards described above. Consequently, we express no opinion on such
information. However, we have no observation to make concerning such information in the
context of the abridged financial statements taken as a whole.
ERNST & YOUNG
Socit Anonyme
Cabinet de rvision agr

Luxembourg
25 January 2012

K Nichol

25

NOTICES
Annual General Meetings
Notice is hereby given that the Annual General Meetings of Orbis Global Equity Fund Limited and
Orbis Japan Equity (US$) Fund Limited (the Orbis Funds) will be held at the offices of Orbis
Investment Management Limited, Orbis House, 25 Front Street, Hamilton HM 11, Bermuda
on 30 March 2012 at 10:30 am. Members are invited to attend and address these meetings. The
Agendas comprise the following:
Review of Minutes of the Annual General Meetings of Members of the Orbis Funds held on
31 March 2011
Review of audited financial statements in the 2011 Annual Reports
Proposed re-appointment of Allan W B Gray, John C R Collis and William B Gray as Directors
of the Orbis Funds and William D Thomson as a Director of Orbis Global Equity Fund
Approval of proposed Directors fees for the year to 31 December 2012 of US$30,000 to
Mr Thomson for Orbis Global Equity Fund Limited and US$30,000 and US$1,000 to Mr Collis
for Orbis Global Equity Fund Limited and Orbis Japan Equity (US$) Fund Limited, respectively
Proposed re-appointment of Ernst & Young as Auditors for the year to 31 December 2012

By Order of the Boards, James J Dorr, Secretary

In accordance with Luxembourg law, notice of the Annual General Meeting for the Orbis SICAV will
be sent to Shareholders shortly prior to the scheduled date of the meeting on 30 April 2012.

Notice

to

Current

and

Prospective Orbis Investors

The Orbis Global Equity Strategy and the Orbis Optimal Strategy are open to new investors. New
investors must be qualified, non-US and subscribe at least US$50 million to the Orbis Funds. Current
Orbis Funds investors and those persons to whom we have existing commitments are not affected and
may continue to make additional investments in the Orbis Funds, other than the Orbis Leveraged
Funds which remain closed.
We intend to accept new subscriptions into the Funds from a wider audience when we consider it
appropriate to do so, and will issue notice of such change on our website, and via our automated e-mail
services facility.
If you have any questions regarding our opening, please contact the Investor Services Team at Orbis, at
+1 441 296 3000, by e-mail at clientservice@orbisfunds.com or by mail to: The Investor Services Team,
Orbis Group, Orbis House, 25 Front Street, Hamilton HM 11, Bermuda. Residents of Australia or
New Zealand should contact Orbis in Australia at +61 (0)2 8224 8604 or clientservices@orbisfunds.
com.au. South African residents should contact Allan Gray Unit Trust Management Limited at
+27 86 000 0654 (toll free from within South Africa) or clientservice@orbisfunds.co.za.

Sources
Orbis Fund Returns: Orbis Investment Management Limited using single pricing; FTSE World
Index: FTSE International Limited; TOPIX Total Return Index: Tokyo Stock Exchange; TOPIX
hedged into US$ and euro are calculated by Orbis using an industry-standard methodology
using the TOPIX Total Return Index which is in yen; MSCI Asia ex-Japan Index: MSCI Inc.;
and Average Fund: Morningstar, Inc. All rights reserved. FTSE is a trademark of the London
Stock Exchange Limited and is used by FTSE International Limited under licence. "MSCI" is a
trademark of MSCI Inc. and is used by Orbis Investment Management Limited under licence.
Average Fund data (1) is proprietary to Morningstar and/or its content providers; (2) may not
be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses arising from the
use of this information.
26

EU Savings Directive
Orbis' assessment is that all of the Orbis Funds are effectively exempt from the application of the
European Union Savings Directive 2003/48/EC of 3 June 2003 on taxation of savings income
in the form of interest payments. Payments from the Orbis Funds, including dividends and
redemption proceeds to residents of the European Union, should not be subject to having tax
withheld by paying agents under the Directive.

Reporting Fund Status


The United Kingdom HM Revenue & Customs has approved each of the Orbis Global Equity
Fund, Orbis SICAV - Global Equity Fund - Investor Class, Orbis SICAV - Asia ex-Japan Equity
Fund - Investor Class, Orbis SICAV - Japan Equity Fund - Yen and Euro Investor Classes and the
Orbis Japan Equity (US$) Fund as a Reporting Fund with effect from 1 January 2011. Prior to
that date and from their inception, each of the Funds had received certification as a distributing
fund from HM Revenue & Customs (Distributor Status).
As Reporting Funds, investors will no longer receive annual distributions from the Funds and
UK investors may be liable to tax annually on their share of Fund income, without receiving a
distribution of that income from the Fund. Within six months of their respective year-ends, the
Funds will make available, on the website www.orbisfunds.com, a report providing relevant fund
income information for UK investors tax purposes.
Unlike Distributor Status, which was subject to a retrospective application and certification
process at the end of each year, a Fund will continue to qualify as a Reporting Fund unless and
until it fails to comply with the relevant requirements. The Directors intend to manage the Funds
in such a way that under existing United Kingdom legislation they should continue to qualify as
Reporting Funds. However, there can be no assurance that a Fund will continue to qualify as a
Reporting Fund.

Supplemental Disclosure under the Distance Marketing of Financial Services Directive


Disclosure requirements arising from the European Council Distance Marketing Directive (No.
2002/65/EC) apply to financial services supplied at a distance to consumers in the European
Union. The Orbis Funds have determined that for the purposes only of meeting the Directive
requirements, the Luxembourg Distance Marketing of Consumer Financial Services Law of 2006
shall apply to the establishment of relations with prospective and current Members entitled to
the benefit of the Directive. The Orbis Funds are required to provide specified information to
prospective and current Members. This specified information, which is provided in English, is
contained in the Orbis Funds Prospectuses, Application Form and (for Members who sign up for
Orbis online portfolio services facility at www.orbisfunds.com) the Orbis Funds Portfolio Services
Agreement. These services are not a type of financial service to which cancellation rights apply.

Risk Warnings
Past performance is not a reliable indicator of future results. The Orbis Funds do not guarantee the
preservation of capital or any rate of return and when making an investment in any of the Orbis
Funds, your capital is at risk. This Report provides general information only and not financial
product or investment advice. You should consider the relevant Prospectus in deciding whether
to acquire, or to continue to hold, your investment. Where Fund prices are based in a currency
other than the currency of your country of residence, exchange rate fluctuations may impact the
Funds returns when converting back to your base currency.

27

Other
The discussion topics for this report were selected, and the report was finalised and approved, by
the Funds Manager (Orbis Investment Management Limited or Orbis Investment Management
(B.V.I.) Limited, as the case may be). Information in this Report is based on sources believed to
be accurate and reliable and provided as is and in good faith. While we have endeavoured to
ensure the accuracy of the information herein, such information is not guaranteed as to accuracy
or completeness. Neither Orbis, its affiliates, directors and employees (together Orbis Group)
make any representation or warranty as to accuracy, reliability, timeliness or completeness of the
information in this Report. The Orbis Group disclaims all liability (whether arising in contract,
tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect,
consequential or otherwise) in connection with the information in this Report.
This Report does not constitute a financial promotion, a recommendation, an offer to sell or a
solicitation to buy shares or units of the Orbis Funds. Subscriptions are only valid if made on
the basis of the current Prospectus of an Orbis Fund. Certain capitalised terms are defined in the
Glossary section of the Orbis Funds General Information document, copies of which are available
upon request from the Manager. Orbis Investment Management Limited and Orbis Investment
Management (B.V.I.) Limited are licensed to conduct investment business by the Bermuda
Monetary Authority. Approved for issue in the United Kingdom by Orbis Investment Advisory
Limited, Orbis House, 5 Mansfield Street, London England W1G 9NG; a firm authorised and
regulated by the Financial Services Authority.

28

ORBIS

ORBIS INVESTMENT MANAGEMENT LIMITED ORBIS HOUSE, 25 FRONT STREET, HAMILTON HM 11, BERMUDA
TELEPHONE: +1 (441) 296 3000 FACSIMILE: +1 (441) 296 3001 E-MAIL: clientservice@orbisfunds.com WEBSITE: www.orbisfunds.com