Globevest Capital Secured Put Writing Fund. Financial Statements. December 31, 2017 and 2016

Transcription

1 Globevest Capital Secured Put Writing Fund Financial Statements December 31, 2017 and 2016 Independent Auditor's Report 2-3 Financial Statements Comprehensive Income 4 Changes in Net Assets Attributable to Holders of Redeemable Units 5 Cash Flows 6 Financial Position 7-8 Investment Portfolio 9-10 Derivative Financial Instruments Put Options Short Position (Table 1) Derivative Financial Instruments Forward Foreign Currency Contracts (Table 2)

2 Independent Auditor's Report To the Unitholders of Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetière Street West Montréal, Quebec H3B 4L8 T We have audited the accompanying financial statements of Globevest Capital Secured Put Writing Fund, which comprise the statements of financial position as at December 31, 2017 and 2016 and the statements of comprehensive income, the statements of changes in net assets attributable to holders of redeemable units and the statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management's responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRS) 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. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and 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 entity'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 entity's 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. Member of Grant Thornton International Ltd rcgt.com

3 3 We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of as at December 31, 2017 and 2016 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS). Montréal March 23, CPA auditor, CA public accountancy permit no. A116823

4 4 Comprehensive Income Years ended December 31, 2017 and $ $ Revenue Interest income 1,880 1,254 Net realized gain on sale of investments and derivative financial instruments 12,677 4,652 Net realized foreign exchange gain (loss) (149) 477 Net change in unrealized depreciation of investments and derivative financial instruments (6,775) (2,350) Other income 89 7,722 4,033 Expenses Management fees Unitholder reporting costs Recordkeeping Custodian fees Audit and accounting fees Commissions and other portfolio transaction costs Interest expenses ,208 Increase in net assets attributable to holders of redeemable units 6,836 2,825 Increase (decrease) in net assets attributable to holders of redeemable units per series Series A 12 (303) Series A3 (1) (10) Series A5 (1) (42) Series F 574 (132) Series O 94 (101) Series AH Series FH Series IH 5,846 3,342 Series OH (14) Series F6H 6 (1) 6,836 2,825 Increase (decrease) in net assets attributable to holders of redeemable units per series per unit Série A 0.05 (0.68) Série A3 (0.02) (0.15) Série A5 (0.03) (0.55) Série F 0.27 (0.04) Série O 0.19 (0.14) Series AH Series FH Series IH Series OH - (1.72) Series F6H 0.57 (0.06) The accompanying notes are an integral part of the financial statements.

5 5 Changes in Net Assets Attributable to Holders of Redeemable Units Years ended December 31, 2017 and 2016 (In thousands of Canadian dollars, except number of units) Series A Series A3 Series A5 Series F Series O Series AH Series FH Series IH Series OH Series F6H $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Balance, beginning of year 3,084 8, ,144 30,179 41,077 7,531 8,048 1,976 2,547 3,329 8,908 69,819 23, Increase (decrease) in net assets attributable to holders of redeemable units 12 (303) (1) (10) (1) (42) 574 (132) 94 (101) ,846 3,342 (14) 6 (1) Capital unit transactions (a) Proceeds from sale of units 200 2, ,884 17, , ,734 20,424 43, Reinvestments of distributions , , Amounts paid on redemptions (1,763) (7,745) (118) (125) (235) (522) (12,628) (28,683) (3,927) (2,938) (562) (1,362) (1,788) (10,349) (1,178) (360) (30) (220) (9) (200) (1,474) (5,448) (86) (34) (193) (372) (7,480) (10,766) (3,486) (416) (334) (602) (715) (5,398) 29,081 43,368 (30) (156) (9) (144) Distributions to holders of redeemable units Net investment income (1) (59) (5) (68) (2) (140) (234) (3,053) (2) (5) (16) Net realized gains on investments (90) (47) (35) (1,320) (209) (104) (146) (6,782) (5) Return on capital 8 Total distributions (91) (47) (35) (1,379) (214) (172) (2) (286) (234) (9,835) (2) (10) (8) Increase (decrease) in net assets attributable to holders of redeemable units for the year (1,553) (5,751) (134) (44) (229) (414) (8,285) (10,898) (3,606) (517) (393) (571) (808) (5,579) 25,092 46,710 (30) (172) (13) (153) Balance, end of year 1,531 3, ,894 30,179 3,925 7,531 1,583 1,976 2,521 3,329 94,911 69, (a) Capital unit transactions (number of units) Units outstanding, beginning of year 274, ,164 68,783 71,944 65, ,091 2,627,918 3,594, , , , , ,203 1,022,779 6,705,121 2,299,406 3,581 21,675 10,734 29,676 Units issued for cash 17, ,167 1,993 8, , ,214 1,666,315 19, ,853 6,456 93,024 92, ,136 1,890,656 4,442,071 7,198 7,128 Units issued on reinvestment of distributions 8, , ,296 19,184 20, ,801 26, , Units redeemed (156,096) (719,306) (10,600) (11,934) (21,181) (50,272) (1,071,425) (2,632,488) (338,562) (274,468) (62,933) (163,082) (210,105) (1,210,825) (109,188) (36,356) (3,581) (25,574) (1,125) (26,290) Units outstanding, end of year 143, ,025 61,012 68,783 48,673 65,866 2,006,003 2,627, , , , , , ,203 9,462,957 6,705,121 3,581 9,609 10,734 The accompanying notes are an integral part of the financial statements.

6 6 Cash Flows Years ended December 31, 2017 and 2016 (In thousands of Canadian dollars) $ $ OPERATING ACTIVITIES Increase in net assets attributable to holders of redeemable units 6,836 2,825 Changes in operating assets and liabilities Net realized foreign exhange loss (gain) 149 (477) Net realized gain on sale of investments and derivative financial investments (12,677) (4,652) Net change in unrealized depreciation of investments and derivative financial instruments 6,775 2,350 Investments purchased (87,585) (134,286) Proceeds from sale of investments 73,566 95,397 Proceeds from sale of derivative financial instruments (5,949) (10,510) Derivative financial instruments purchased 14,000 15,086 Net change in operating assets and liabilities (11,721) (37,092) Changes in non-cash items Margin deposits on put options (624) 9,291 Interest receivable (115) (109) Other assets (220) (213) Management fees payable (10) (24) Other accrued expenses Net change in non-cash items (937) 8,970 Cash flows from operating activities (5,822) (25,297) FINANCING ACTIVITIES Proceeds from units issued for cash 25,689 75,748 Distributions to holders of redeemable units (177) (24) Amounts paid on redemption of units (22,270) (52,531) Cash flows from financing activities 3,242 23,193 Net change in cash and cash equivalents (2,580) (2,104) Foreign exchange gain (loss) on cash and cash equivalents (149) 477 Cash and cash equivalents, beginning of year 10,108 11,735 Cash and cash equivalents, end of year (Note 7) 7,379 10,108 Interest income received included in the operating activities 1,765 1,145 The accompanying notes are an integral part of the financial statements.

7 7 Financial Position (In thousands of Canadian dollars, except number of units and per unit amounts) $ $ ASSETS Current Investments 118, ,914 Cash and cash equivalents 7,379 10,108 Margin deposits on put options 1,897 1,273 Interest receivable Subscriptions of units receivable 69 Other assets , ,845 LIABILITIES Current Unrealized depreciation on derivative financial instruments 1,115 4,149 Management fees payable Redemption of redeemable units payable Other accrued expenses ,278 4,322 Net assets attributable to holders of redeemable units 127, ,523 Net assets attributable to holders of redeemable units per series Series A 1,531 3,084 Series A Series A Series F 21,894 30,179 Series O 3,925 7,531 Series AH 1,583 1,976 Series FH 2,521 3,329 Series IH 94,911 69,819 Series OH 30 Series F6H , ,523 Units outstanding Series A 143, ,025 Series A3 61,012 68,783 Series A5 48,673 65,866 Series F 2,006,003 2,627,918 Series O 361, ,676 Series AH 191, ,289 Series FH 318, ,203 Series IH 9,462,957 6,705,121 Series OH 3,581 Series F6H 9,609 10,734 12,603,039 11,045,196

8 8 Financial Position (In thousands of Canadian dollars, except number of units and per unit amounts) $ $ Net assets attributable to holders of redeemable units per series per unit Series A Series A Series A Series F Series O Series AH Series FH Series IH Series OH 8.47 Series F6H The accompanying notes are an integral part of the financial statements. On behalf of the Board of Directors of Globevest Capital Ltée, Director Director

9 9 Investment Portfolio As at December 31, 2017 (In Canadian dollars) Coupon rate Maturity date Nominal value Cost Fair value Net assets $ $ $ % CANADIAN BONDS Asian Development Bank 1.650% ,000,000 3,638,718 3,765,117 Bank of Montreal 1.450% ,025,000 1,376,853 1,287,794 Bank of Montreal 1.950% ,000,000 1,340,640 1,258,534 Bank of Montreal 1.800% , , ,188 Bank of Nova Scotia 2.155% ,000,000 2,688,657 2,534,363 Caisse Centrale Desjardins du Quebec 2.043% ,600,000 2,236,558 2,011,743 Canadian Imperial Bank of Commerce 2.320% ,000,000 1,335,733 1,265,497 European Investment Bank 1.000% ,000,000 1,274,101 1,252,840 European Investment Bank 1.750% ,000,000 3,815,044 3,756,670 Export Development Canada 0.875% ,420,000 6,633,390 6,771,653 Export Development Canada 1.500% ,000,000 1,248,237 1,253,644 Government of Canada 1.125% , , ,871 Inter-American Development Bank 1.679% ,750,000 2,337,751 2,214,490 Inter-American Development Bank 1.579% ,750,000 2,502,372 2,214,752 Province of Manitoba 1.125% ,513,000 4,408,323 4,404,095 Province of Ontario 1.200% ,000,000 5,398,695 5,024,932 Province of Quebec 1.643% ,700,000 4,862,473 4,660,388 Province of Quebec 1.772% ,500,000 4,268,370 4,351,765 Royal Bank of Canada 2.118% ,114,000 1,388,142 1,404,289 Royal Bank of Canada 2.028% ,299,000 1,693,797 1,642,052 Toronto-Dominion Bank (The) 1.928% , ,269 1,007,189 TOTAL CANADIAN BONDS 54,797,070 53,494, INTERNATIONAL BONDS Australia Australia & New Zealand Banking Group Ltd % ,500,000 2,011,932 1,892,062 Australia & New Zealand Banking Group Ltd % ,000,000 1,306,443 1,257,050 Commonwealth Bank of Australia 2.058% ,500,000 1,958,695 1,891,279 Macquarie Bank Ltd % ,000,000 1,311,768 1,278,174 National Australia Bank Ltd % ,300,000 1,808,530 1,643,839 Westpac Banking Corp % , , ,030 Westpac Banking Corp % ,000,000 1,106,360 1,257,383 10,133,282 9,865, France Societe Generale SA 2.415% ,000,000 1,298,885 1,261,783 Total Capital International SA 1.963% ,000,000 1,316,746 1,260,834 2,615,631 2,522, Germany Federal State of North Rhine-Westphalia 1.830% ,000,000 2,808,961 2,517, Japan Bank of Tokyo-Mitsubishi UFJ Ltd. (The) 2.045% ,000,000 2,657,912 2,517, Netherlands ABN AMRO Bank NV 1.994% ,000,000 2,694,732 2,518,010 ING Bank NV 2.150% ,000,000 1,280,568 1,258,973 ING Bank NV 2.296% ,000,000 1,318,464 1,273,511 5,293,764 5,050, Norway Kommunalbanken AS 1.670% ,000,000 2,774,100 2,506,584 Kommunalbanken AS 1.653% ,000,000 1,276,388 1,259,655 Statoil ASA 1.857% ,250,000 1,651,987 1,572,680 5,702,475 5,338, Sweden Svenska Handelsbanken AB 2.485% ,000,000 1,314,729 1,291, Switzerland UBS AG of Stamford Connecticut 2.053% ,000,000 1,105,285 1,259,263 UBS AG of Stamford Connecticut 2.331% ,000,000 1,227,939 1,271,173 2,333,224 2,530, United Kingdom Santander UK PLC 2.312% , , ,

10 10 Investment Portfolio As at December 31, 2017 (In Canadian dollars) Coupon rate Maturity date Nominal value Cost Fair value Net assets $ $ $ % United States Apple Inc % ,400,000 1,585,365 1,764,191 Apple Inc % ,000 1,109,227 1,136,071 Bank of New York Mellon Corp % ,260,000 1,546,933 1,591,577 Berkshire Hathaway Finance Corp % ,000,000 2,654,367 2,514,087 Chevron Corp % ,500,000 1,705,873 1,909,749 Cisco Systems Inc % ,000,000 1,141,331 1,263,342 Export Development Canada 1.807% ,000,000 3,906,883 3,797,801 Exxon Mobil Corp % ,000,000 1,331,477 1,266,425 General Electric Capital Corp % , , ,363 General Electric Capital Corp % ,000,000 1,092,799 1,272,374 Inter-American Development Bank 1.592% ,000,000 1,333,200 1,257,679 JPMorgan Chase Bank NA 2.092% ,000,000 2,648,968 2,519,119 Merck & Co. Inc % ,028,000 1,221,304 1,293,294 Oracle Corp % ,500,000 1,853,126 1,895,586 Oracle Corp % , , ,589 QUALCOMM Inc % ,165,000 1,540,753 1,465,138 Roche Holdings Inc % ,000,000 1,324,054 1,261,642 Toyota Motor Credit Corp % ,000,000 1,185,020 1,257,067 Toyota Motor Credit Corp % , , ,362 Toyota Motor Credit Corp % ,000,000 1,316,213 1,261,896 Wells Fargo & Co % , , ,950 Wells Fargo & Co % ,400,000 1,741,479 1,774,897 32,661,858 33,116, TOTAL INTERNATIONAL BONDS 66,059,940 65,254,928 Transaction costs (151,150) Total investments 120,705, ,749, Derivative financial instruments Total of put options short position (Table 1) (2,736,272) (2.15) Total of forward foreign currency contracts (Table 2) 1,620, Unrealized depreciation on derivative financial instruments (1,115,381) (0.87) Margin deposits on put options 1,897, Other net assets 8,032, Total net assets attributable to holders of redeemable units 127,563, The accompanying notes are an integral part of the financial statements.

11 11 Derivative Financial Instruments Put Options Short Position (Table 1) As at December 31, 2017 (In Canadian dollars) Number Expiry date of contracts Book value Fair value Net assets $ $ % Put options short position Canadian put options Agrium Inc (100) (42,609) (5,028) Canadian National Railway Co (100) (32,809) (943) Canadian Natural Resources Ltd (250) (42,790) (10,999) Canopy Growth Corp (145) (19,327) (7,975) Teck Resources Ltd. Class 'B' (140) (23,340) (264) (160,875) (25,209) (0.02) American put options AbbVie Inc (30) (10,356) (57) AbbVie Inc (100) (33,307) (4,148) ABIOMED Inc (15) (11,850) (15,367) ABIOMED Inc (40) (57,047) (64,106) Alcoa Inc (200) (52,288) (17,598) Alexion Pharmaceuticals Inc (60) (40,552) (20,363) Alibaba Group Holding Ltd (30) (32,060) (10,974) Alibaba Group Holding Ltd (20) (17,952) (13,827) Align Technology Inc (50) (58,390) (32,996) Alphabet Inc. Class 'C' (8) (44,248) (27,805) Amazon.com Inc (8) (43,427) (17,799) Amgen Inc (30) (15,898) (7,297) Apple Inc (25) (12,947) (440) Apple Inc (30) (19,883) (18,666) Applied Materials Inc (100) (25,122) (943) Arista Networks Inc (60) (55,317) (377) ASML Holding NV (50) (30,694) (29,225) AT&T Inc (240) (26,322) (2,715) Bank of America Corp (300) (26,790) (5,468) Bank of America Corp (70) (7,221) (1,760) Bank of New York Mellon Corp. (The) (100) (15,580) (16,152) Biogen Inc (16) (25,204) (3,872) Biogen Inc (10) (9,709) (3,582) Biogen Inc (36) (66,543) (54,302) Blackstone Group L.P. (The) (150) (19,965) (17,158) Bristol-Myers Squibb Co (100) (22,569) (11,816) Broadcom Ltd (50) (53,322) (16,655) Brookfield Infrastructure Partners L.P (150) (15,239) (6,128) Caterpillar Inc (40) (11,861) (754) Caterpillar Inc (40) (14,653) (4,626) Celgene Corp (60) (29,286) (18,025) Celgene Corp (70) (44,946) (31,896) CF Industries Holdings Inc (200) (53,727) (2,891) Charles Schwab Corp. (The) (200) (35,313) (1,886) Chemours Co. (The) (140) (55,340) (440) Chemours Co. (The) (110) (35,919) (691) Chemours Co. (The) (60) (22,984) (32,054) Chevron Corp (85) (33,256) (10,471) Children's Place Inc. (The) (40) (30,709) (1,383) China Lodging Group Ltd. ADR (40) (40,457) (10,056) China Lodging Group Ltd. ADR (20) (27,568) (11,187) China Lodging Group Ltd. ADR (30) (29,191) (20,929) Citigroup Inc (140) (22,135) (792) Cognex Corp (200) (56,241) (5,028) Comerica Inc (140) (56,747) (37,836) Corning Inc (250) (22,408) (10,527)

12 12 Derivative Financial Instruments Put Options Short Position (Table 1) As at December 31, 2017 (In Canadian dollars) Number Expiry date of contracts Book value Fair value Net assets $ $ % Put options short position (Continued) American put options (Continued) Cree Inc (250) (68,363) (77,463) CSX Corp (120) (26,336) (3,922) CSX Corp (120) (38,998) (13,274) Cummins Inc (40) (23,526) (12,821) CVS Health Corp (60) (11,244) (31,299) CVS Health Corp (60) (21,630) (61,279) Cypress Semiconductor Corp (200) (16,364) (20,741) Cypress Semiconductor Corp (200) (17,598) (32,054) D.R. Horton Inc (160) (28,189) (17,497) Darden Restaurants Inc (100) (47,378) (6,914) Delta Air Lines Inc (100) (22,803) (1,446) Devon Energy Corp (200) (39,170) (629) Discover Financial Services (300) (86,418) (67,878) Domino's Pizza Inc (40) (33,757) (7,668) Domino's Pizza Inc (20) (20,912) (20,866) E*TRADE Financial Corp (300) (56,508) (16,970) ebay Inc (200) (27,148) (14,078) Ecolab Inc (60) (18,186) (18,855) Electronic Arts Inc (50) (16,207) (13,890) EOG Resources Inc (100) (40,272) (377) Express Scripts Holding Co (100) (23,417) (3,143) Facebook Inc (20) (14,182) (8,548) FedEx Corp (50) (32,939) (8,862) Ferrari NV (35) (19,269) (18,698) Ferrari NV (80) (46,810) (49,274) Fitbit Inc (600) (25,136) (12,444) Freeport-McMoRan Inc. Class 'B' (230) (19,249) (1,156) General Motors Co (250) (45,397) (56,722) Gilead Sciences Inc (80) (25,116) (18,402) Goldman Sachs Group Inc. (The) (50) (40,479) (13,576) Hain Celestial Group Inc (100) (27,239) (5,028) Hain Celestial Group Inc (200) (45,108) (37,082) Hess Corp (100) (22,469) (9,428) Hess Corp (150) (51,492) (22,437) HollyFrontier Corp (200) (43,310) (1,886) Illumina Inc (30) (37,130) (1,980) Intuitive Surgical Inc (5) (7,044) (7,888) Intuitive Surgical Inc (15) (25,845) (30,828) Invesco Ltd (300) (53,445) (50,909) Johnson Controls Inc (130) (30,032) (22,469) KeyCorp (300) (27,443) (2,263) KeyCorp (300) (19,182) (4,337) Lam Research Corp (60) (82,343) (87,863) Lincoln National Corp (100) (26,153) (629) Lincoln National Corp (100) (38,705) (27,277) Lululemon Athletica Inc (100) (22,234) (14,958) LyondellBasell Industries NV (120) (35,912) (2,263) Marathon Petroleum Corp (100) (22,171) (4,148) Marathon Petroleum Corp (100) (31,650) (6,411) McKesson Corp (40) (29,177) (34,442) Melco Resorts & Entertainment Ltd. ADR (400) (47,494) (5,028) MetLife Inc (200) (42,943) (47,138) Micron Technology Inc (300) (76,133) (33,562) Microsoft Corp (100) (35,174) (21,809)

13 13 Derivative Financial Instruments Put Options Short Position (Table 1) As at December 31, 2017 (In Canadian dollars) Number Expiry date of contracts Book value Fair value Net assets $ $ % Put options short position (Continued) American put options (Continued) Microsoft Corp (50) (23,022) (15,241) Monster Beverage Corp (130) (20,055) (4,085) Morgan Stanley (200) (41,855) (16,467) Murphy Oil Corp (250) (69,206) (50,280) National-Oilwell Varco Inc (200) (33,536) (9,302) NetEase Inc. ADR (10) (15,590) (283) Netflix Inc (50) (56,027) (42,738) Newmont Mining Corp (160) (27,131) (13,173) NVIDIA Corp (60) (83,134) (21,306) PayPal Holdings Inc (100) (40,240) (45,252) Pilgrim's Pride Corp (200) (52,217) (105,587) Procter & Gamble Co. (The) (20) (4,951) (1,948) Procter & Gamble Co. (The) (80) (26,324) (12,419) Prudential Financial Inc (50) (15,457) (20,395) Prudential Financial Inc (50) (24,929) (29,697) Ralph Lauren Corp (100) (35,451) (314) Regeneron Pharmaceuticals Inc (15) (46,030) (119,917) Regeneron Pharmaceuticals Inc (15) (26,750) (18,572) Royal Caribbean Cruises Ltd (70) (38,729) (13,330) Skechers U.S.A. Inc (200) (44,536) (629) Snap-On Inc (60) (28,007) (3,017) State Street Corp (100) (33,292) (16,215) STMicroelectronics NV (400) (37,897) (50,280) T. Rowe Price Group Inc (60) (19,271) (566) Take-Two Interactive Software Inc (100) (56,194) (10,999) Take-Two Interactive Software Inc (30) (24,102) (28,848) Tata Motors Ltd. ADR (270) (33,792) (2,545) Tesla Motors Inc (15) (29,811) (42,848) Tesla Motors Inc (10) (14,383) (10,810) Textron Inc (100) (15,749) (14,958) T-Mobile US Inc (80) (13,846) (804) Toll Brothers Inc (250) (49,345) (42,424) Tyson Foods Inc (100) (32,750) (13,827) Union Pacific Corp (30) (13,206) (2,149) United Rentals Inc (50) (25,694) (157) Valero Energy Corp (100) (32,137) (3,268) VanEck Vectors Gold Miners ETF (400) (54,810) (47,515) VMware Inc. Class 'A' (35) (15,402) (3,080) Walgreens Boots Alliance Inc (100) (30,624) (7,856) Wal-Mart Stores Inc (60) (20,450) (19,458) Weibo Corp. ADR (100) (60,324) (2,514) Weibo Corp. ADR (30) (21,570) (1,226) WellCare Health Plans Inc (40) (41,239) (37,961) WellCare Health Plans Inc (15) (15,979) (17,441) Western Digital Corp (75) (11,977) (754) Western Union Co (200) (12,484) (15,084) YY Inc. ADR (30) (30,048) (22,437) Zions Bancorp (220) (40,387) (15,210) (4,845,312) (2,711,063) (2.13) Total derivative financial instruments - put options short position (5,006,187) (2,736,272) (2.15) The accompanying notes are an integral part of the financial statements.

14 14 Derivative Financial Instruments Forward Foreign Currency Contracts (Table 2) As at December 31, 2017 (In Canadian dollars) Settlement date Currency buys Book value Currency sells Book value Fair value Net assets $ $ $ % Bank of New York Mellon USD (1,243,900) CAD 1,593,000 29,956 Bank of New York Mellon USD (1,961,504) CAD 2,512,000 47,238 Bank of New York Mellon USD (63,753,563) CAD 81,646,000 1,535,356 Bank of New York Mellon USD (470,727) CAD 599,000 7,500 Bank of New York Mellon USD (57,783) CAD 74,000 1,392 Bank of New York Mellon CAD (25,000) USD 24,687 (313) Bank of New York Mellon CAD (14,000) USD 13,825 (175) Bank of New York Mellon CAD (5,000) USD 4,937 (63) Total derivative financial instruments - forward foreign currency contracts 1,620, The accompanying notes are an integral part of the financial statements.

15 THE FUND The (hereafter the "Fund") was established under laws of the Province of Quebec by a trust agreement dated December 18, 2013 (hereafter the the "Trust Agreement"). The Fund is authorized to issue an unlimited number of series "A" units, series "A3" units, series "A5" units, series "F" units, series "O" units, series "AH" units, series "FH" units, series "IH" units, series "OH" units, and series "F6H" units (collectively, the "Units"). Globevest Capital Ltée (the "Manager") manages the Fund and is responsible for the investment management of the Fund. National Bank Trust Inc. (the "Trustee") is the trustee of the Fund. National Bank Correspondent Network (the "Custodian") is the custodian of the Fund. The address of the Fund's registered office and its principal place of business is 1005 Lionel-Daunais #104 Street, Boucherville, Quebec, J4B 0B1. The Fund seeks to maximize returns and provide long-term growth by primarily writing cash secured put options on Canadian, U.S. and global equities and collecting premiums related to such secured put options. The Fund may also invest in money market securities and debt securities. The positions taken under the put options will be secured with cash cover as defined in NI These financial statements were approved and authorized for publication by the Board of Directors of the Manager on March 23, SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These financial statements are presented in Canadian dollars and have been prepared in compliance with International Financial Reporting Standards (IFRS) as well as the standards governed by Regulation respecting Investment Fund Continuous Disclosure. Valuation of investments The Fund recognizes financial instruments at fair value upon initial recognition, plus transaction costs in the case of financial instruments measured at amortized cost. Derivative financial instruments are measured at fair value through profit or loss (FVTPL). Investments have been designated at FVTPL. A financial instrument can be designated at FVTPL if it is managed and if its yield is valued under the fair value method. All other financial assets and liabilities are measured at amortized cost. Fair value of investments and derivative financial instruments are measured using the same accounting policies as those used to measure the net asset value (NAV) transactions with unitholders.

16 SIGNIFICANT ACCOUNTING POLICIES (Continued) The change in appreciation or depreciation of the fair value of investments and derivative financial instruments (including unrealized foreign exchange gains and losses) and their average cost are included in the net assets attributable to holders of redeemable units and in the statements of comprehensive income under the caption Net change in unrealized depreciation of investments and derivative financial instruments. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and marketable securities) are based on quoted market prices at the close of trading at the reporting date. The Fund uses the last traded market price for both financial assets and financial liabilities where the last traded price falls within that day's bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. Furthermore, the Manager exercises its judgment in selecting the appropriate valuation technique for financial instruments that are not listed on an active market. The valuation techniques used are those that are currently applied by market participants. These methods and procedures may include, but are not limited to, performing comparisons with prices of comparable or similar securities, discounted cash flow analysis, obtaining valuation related information from issuers and/or other analytical data relating to the investment and using other available indicators of value. These values are independently assessed internally to ensure that they are reasonable. However, because of the inherent uncertainty of valuation, the estimated fair value of the aforementioned securities and interests may be materially different from the value that would have been used had a ready market for the investment existed. The fair value of such securities is affected by the perceived credit risks of the issuer, predictability of cash flows and the length of time to maturity. Derivative financial instruments Derivative financial instruments are deemed to be held for trading and therefore are recorded at fair value. Derivative financial instruments consist of option contracts and forward foreign currency contracts, which are valued at their last traded market price where the last traded market price falls within the day's bid-ask spread. Derivative financial instruments that are not traded in an active market are valued based on the results of valuation techniques using observable market inputs where possible, on such basis and in such manner established by the Manager. The premium received or paid on options written or purchased is recorded at cost. The unrealized gain is reflected in the statements of comprehensive income as part of net change in unrealized depreciation of investments and derivative financial instruments. The gain or loss on sale or expiry of options is reflected in the statements of comprehensive income as part of the net realized gain on sale of investments and derivative financial instruments.

17 SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial instruments short positions The Fund can enter into short positions by borrowing securities and selling them on an active market. The value of the short positions is recorded as liabilities in the statements of financial position. The Fund may experience a loss if the price of the security sold short increases between the date that the short position is initiated and the date that it is settled. The Fund will realize a gain if the price of the security for which the Fund has taken a short position decreases between the date that the short position is initiated and the date that it is settled. The unrealized gain is the difference between the proceeds received and the value of the financial instruments short positions as at the date of evaluation and is recorded in the Net change in unrealized depreciation of investments and derivative financial instruments in the statements of comprehensive income and in the Unrealized depreciation on derivative financial instruments in the statement of financial position. The Fund records a realized gain when short positions are closed out. Securities and cash and cash equivalents may be segregated and used as collateral for the value of the Fund's obligation under short positions. Interest on securities borrowed is accrued on a daily basis on outstanding short positions. Investment transactions, transaction costs, and income and expenses Investment transactions are accounted for as of the trade date the date on which the Fund commits to purchase or sell the investment. The cost of investments represents the amount paid for each security and is determined using the average cost basis. The realized gain on investment transactions and the unrealized depreciation on investments are computed using the average cost basis which excludes transaction costs. Income and expenses are recorded using the accrual basis of accounting. The interest income for distribution purposes presented in the statements of comprehensive income is the nominal interest amount received by the Fund. Except for zero coupon bonds which are amortized on a straight-line basis, the Fund does not amortize the premiums paid or discounts received upon the purchase of fixed income securities. Commission costs incurred in the purchase and sale of securities by the Fund and the other portfolio transaction costs are recognized in the statements of comprehensive income. Other financial assets and liabilities Cash and cash equivalents, margin deposits on put options, interest receivable and subscriptions of units receivable are classified as loans and receivables and recorded at amortized cost. Similarly, management fees payable and redemption of redeemable units payable are classified as other financial liabilities and are recorded at amortized cost. Cost or amortized cost approximates fair value for these assets and liabilities due to their short-term maturity. Units outstanding are classified as financial liabilities since they meet criteria for that classification.

18 SIGNIFICANT ACCOUNTING POLICIES (Continued) Derecognition Financial assets are derecognized when the contractual rights to the cash flows from the investments have expired or when the Fund has significantly transferred the financial risk and reward of their participation (ownership). Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expired. Realized gains and losses are recognized using the average cost method and included in the statements of comprehensive income of the year in which they occur. Impairment of financial assets At each reporting date, the Fund assesses whether there is objective evidence that financial assets at amortized cost are impaired. If such evidence exists, the Fund recognizes an impairment loss as the difference between the amortized cost of the financial asset and the present value of the estimated future cash flows, discounted using the instrument's original effective interest rate. Impairment losses on financial assets at amortized cost are reversed in subsequent years if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. Foreign currency translation The reporting currency of the Fund is the Canadian dollar. The fair value of investments and other assets and liabilities denominated in a foreign currency is translated into Canadian dollars at the rate of exchange prevailing on each valuation date. The Fund's investment portfolio may consist of securities that are traded in foreign markets. The proceeds from the sale of such securities will be realized in the respective currency. Unhedged foreign currency positions are subject to gains and losses due to fluctuations in the respective exchange rates. Purchases and sales of investments denominated in foreign currency and interest income are translated into the reporting currency at the rate of exchange prevailing on the respective date of the transaction. Foreign exchange gains and losses on the sale of investments are included in the statements of comprehensive income. Unrealized foreign exchange gains and losses on investments are included in Net change in unrealized depreciation of investments and derivative financial instruments in the statements of comprehensive income. Valuation of redeemable units The NAV per unit is calculated at 4:00 p.m. (Eastern time) on each valuation date by dividing net asset value attributable to each series by the number of units outstanding for the corresponding series. The "valuation date" means (i) the last business day in each calendar month; (ii) such other business days on which the Manager calculates or causes to be calculated the NAV; (iii) such other business days on which the Manager determines that NAV is required to be calculated for any purpose; and (iv) December 31 of each year.

19 SIGNIFICANT ACCOUNTING POLICIES (Continued) Increase in net assets attributable to holders of redeemable units per series per unit The increase in net assets attributable to holders of redeemable units per series per unit reported in the statements of comprehensive income is calculated as the increase in net assets attributable to holders of redeemable units divided by the weighted average number of units outstanding during the year. Taxation Under the Income Tax Act (Canada), the Fund is defined as a unit trust. All of the Fund's net assets for tax purposes and a sufficient portion of the net capital gains realized in any period must be distributed to holders of redeemable units to ensure no income tax is payable by the Fund. The Fund does not record income taxes. Hence, the tax benefit of capital and non-capital losses has not been reflected in the statements of financial position as a deferred income tax asset. The Fund currently incurs withholding taxes imposed by certain countries on investment income and capital gains. Such income and gains are recorded on a gross basis, and the related withholding taxes, if any, are shown as a separate expense in the statements of comprehensive income. 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements requires management to use judgment and to make estimates and assumptions about the recognition and measurement of the Fund's assets and liablities and its income and expenses. The following discusses the most significant accounting judgments and estimates that management has made in preparing the Fund's financial statements. Significant judgments The following are significant management judgments in applying the accounting policies of the Fund that have the most significant effect on the financial statements. Functional currency The Manager considers the Canadian dollar to be the functional currency in which the Fund operates, because it is the currency which, in its opinion, most faithfully represents the economic effects of the underlying transactions, events and conditions of the Fund. Moreover, the Canadian dollar is the currency in which the Fund assesses its performance. The Fund issues and redeems its units in Canadian dollars.

20 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued) Classification of units According to IAS 32 Financial Instruments: Presentation, units must be classified as liabilities in the Fund s statements of financial position, unless all conditions enabling their classification as equity are met. Because the conditions described hereafter are not met, all the Fund's units are presented as liabilities. Except for the issuer s contractual obligation to repurchase or to redeem the units in cash or another financial asset, the unit characteristics do not include a contractual obligation to deliver cash or any other financial assets to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Fund. Furthermore, the unit characteristics do not include a contractual obligation that may be and that will be equity-settled by the Fund itself. Investment entity It was determined that the Fund meets the definition of an investment entity in accordance with IFRS 10 Consolidated Financial Statements and, as a result, investments in structured entities are valued at FVTPL. An investment entity is an entity that: obtains funds from one or more investors, for the purpose of providing those investor(s) with investment management services; commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation or investment income; and measures and evaluates the performance of substantially all of its investments on a fair-value basis. The most important judgment used to determine that the Fund meets the aforementioned definition is that fair value is used as the principal measurement criteria to assess the performance of substantially all of the Fund s investments. Estimation uncertainties Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Fair value of financial instruments IFRS stipulate that the Manager must determine the traded market price by considering the characteristic that is most representative of fair value based on the specific facts and circumstances. The Manager has taken the position that when the last traded market price does not fall within that day's bid-ask spread, investments are measured at the point within the bid-ask spread which is the most representative of fair value based on the specific facts and circumstances. Furthermore, the Manager exercises its judgment in selecting the appropriate valuation technique for financial instruments that are not listed on an active market. The valuation techniques used are those that are commonly used by market participants.

21 CHANGES IN ACCOUNTING STANDARDS THAT ARE NOT YET IN EFFECT At the date of authorization of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the International Accounting Standards Board (IASB) but are not yet effective, and have not been early adopted by the Fund. Information on the new standard that could be relevant for the Fund's financial statements is presented below. Other new standards and interpretations have been published, but the Fund does not expect them to have a significant impact on the financial statements of the Fund. IFRS 9 Financial Instruments (IFRS 9) In July 2014, the IASB published the full and final version of IFRS 9, which will replace IAS 39 Financial Instruments: Recognition and Measurement (IAS 39). IFRS 9 introduces significant changes to the IAS 39 guidance on the classification and measurement of financial assets and liabilities and introduces a new model for expected credit losses for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting. IFRS 9 requires the classification, based on the characteristics of the contractual cash flows and business model of the Fund, of the financial instruments into one of the three following categories: amortized cost, fair value through profit or loss and faire value to other comprehensive income. The Fund will adopt IFRS 9 for the years beginning on or after January 1, The primary impact of the adoption of IFRS 9 for the Fund will be a change in the wording from IAS 39 and will not have a significant impact on the valuation and accounting for the Fund. 5 - REDEEMABLE UNITS Units of the Fund, which are redeemable at the option of the unitholder in accordance with the provisions of the Declaration of Trust, do not have any nominal or par value and the number of units which may be issued is unlimited. The NAV per unit of each series of units of the Fund is calculated as at the close of trading of the Toronto Stock Exchange (the "TSX") (normally 4:00 p.m. Toronto time) on each day the TSX is open for trading. If the TSX closes early on any day, the NAV per unit of each series of units of the Fund will be calculated as at that earlier closing time at the NAV per unit determined after the purchase order or redemption request is received by the Manager. Units issued and outstanding represent the capital of the Fund. The Fund does not have any specific capital requirements on the subscription and redemption of units, other than minimum subscription requirements. Changes in the Fund's capital during the year are reflected in the statements of changes in net assets attributable to holders of redeemable units. The Manager is responsible for managing the capital of the Fund in accordance with its investment objectives and for managing its liquidity needs in order to meet redemption requests as discussed in Note 8.

22 REDEEMABLE UNITS (Continued) At the end of each quarter, income distributions are reinvested in additional units and recorded to the account of the unitholders pro rata to the number of units held by them. 6 - MANAGEMENT FEES AND TRAILER FEES Management fees The Manager of the Fund provides investment and administrative services. In exchange for these services, each series of the Fund pays monthly management fees to the Manager based on a percentage of the NAV. The annual management fees charged are indicated in the following table: Series A 0.85 Series A Series A Series F 0.85 Series O 1.35 Series AH 0.85 Series FH 0.85 Series OH 1.35 Series F6H 0.85 To encourage larger purchases, particularly by group plans, and to achieve effective management fees which are competitive, the Manager authorizes a reduction in the management fee rates borne by the Fund's investors. To effect such a reduction, the Manager reduces the management fee that it charges to the Fund with respect to the particular investor's units and the Manager distributes the amount of such reduction to that investor as a special distribution ("Management Fee Distribution"). The Manager will calculate and accrue Management Fee Distributions, where applicable, on a daily basis, and such amounts will be distributed at such intervals as the Manager determines from time to time. Generally, Management Fee Distributions are first paid out of net income and net realized capital gains and then out of capital. Management Fee Distributions will automatically be reinvested in additional units of the Fund, as applicable. %

23 MANAGEMENT FEES AND TRAILER FEES (Continued) Trailer fees The Manager of the Fund pays a trailer fees to the brokers according to the rates listed below: Series A 1.15 Series A Series A Series F None Series O None Series AH 1.15 Series FH None Series OH None Series F6H None Trailer fees incurred during 2017 and 2016 amounts to nil and $90 respectively. 7 - CASH AND CASH EQUIVALENTS $ $ Cash with bank Bank deposit 7,295 10, FINANCIAL RISK MANAGEMENT Financial risk factors Risk management % 7,379 10,108 The Fund faces various financial risks: credit risk, market risk, liquidity risk and concentration risk. The Fund may use derivative instruments to achieve its investment objectives, moderate certain risk exposures or increase potential returns and risks. The Manager monitors all risks on a daily basis using a database system. The system gives the risk profile of the Fund by giving metrics for the asset mix, industry diversification, option delta, foreign exchange exposure, as well as the maturity profile of fixed income securities. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

24 FINANCIAL RISK MANAGEMENT (Continued) The Fund's credit risk is derived primarily from bond investments. Generally, the carrying amount of the Fund's financial assets exposed to credit risk represents the maximum amount exposed to credit risk. Bond investments: The Fund manages the credit risk by investing mostly in bonds having a credit rating of BBB or better and by diversifying across many issuers. Also, the exposure of any particular corporate issuer is less than 5% of the Fund's assets. The Fund invested in financial instruments having the following credit rating: Percentage of the Fund's total assets Credit rating % % AAA AA A BBB 1.14 Additionally, credit risk with respect to cash and cash equivalents and margin deposits on put options is considered to be negligible because these financial instruments are held by a reputable financial institution with a quality external credit rating. The credit risk with respect to interest receivable and subscriptions of units receivable is considered to be negligible. All transactions are done through approved brokers. The risk of default is considered minimal as securities sold are delivered only once the broker has made payment, whereas payment on a purchase is made to the broker only once the securities have been delivered. The trade will fail if either party defaults on its obligation. Market risk Interest rate risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The bond investments bear interest at a fixed rate and the Fund is, therefore, exposed to the risk of changes in fair value resulting from interest rate fluctuations. The Fund's bond investments are diversified across different maturities. The interest rate risk is therefore reduced.