The following Desjardins Funds Interim Financial Statements have not been subject to a review by the Funds external auditors.

Transcription

1 AS AT MARCH 31, 2017 I N T E R I M F I N A N C I A L S T A T E M E N T S

2 INTERIM FINANCIAL STATEMENTS (UNAUDITED) NOTICE The following Desjardins Funds Interim Financial Statements have not been subject to a review by the Funds external auditors.

3 DESJARDINS OVERSEAS EQUITY VALUE FUND STATEMENT OF FINANCIAL POSITION (Unaudited) As at March $ September $ ASSETS Current Assets Cash 2,229,983 15,451,417 Investments at fair value through profit or loss (FVTPL) 1,047,438, ,433,591 Investments at fair value through profit or loss (FVTPL) provided as collateral 127, ,951 Subscriptions receivable 277, ,569 Receivable for investments sold 22,298,897 Interest, dividends and other receivables 5,509,515 4,201,990 1,077,881, ,637,518 LIABILITIES Current Liabilities Accrued expenses 21,998 24,073 Redemptions payable 789, ,712 Payable for investments purchased 8,538,304 9,349, ,785 Net Assets Attributable to Holders of Redeemable Units 1,068,531, ,971,733 Data per Class (Note b) A-Class Net assets attributable to holders of redeemable units 47,716,087 57,022,132 per unit I-Class Net assets attributable to holders of redeemable units 1,020,784, ,921,664 per unit C-Class Net assets attributable to holders of redeemable units 29,568 26,847 per unit F-Class Net assets attributable to holders of redeemable units 1,158 1,090 per unit Approved on behalf of the Board of Directors of Desjardins Investments Inc. Manager of the Desjardins Funds Éric Landry and Sébastien Vallée, Directors STATEMENT OF COMPREHENSIVE INCOME (Unaudited) six-month Periods Ended March $ 2016 $ Income Interest for distribution purposes 244,970 11,838 Dividends 10,465,239 10,144,574 Revenue from securities lending and repurchase transactions 22,230 70,510 Foreign exchange gain (loss) on cash (923,759) 2,699 Changes in fair value: Net realized gain (loss) on investments 13,079,803 (12,605,221) Net unrealized gain (loss) on investments 49,258,916 3,400,536 72,147,399 1,024,936 Expenses Management fees 638, ,580 Independent Review Committee s fees Administration fees 67,101 86, , ,226 Withholding taxes 145, ,990 Commissions and other portfolio transaction costs (Note f) 441, ,275 1,293,127 2,091,491 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 70,854,272 (1,066,555) Data per Class A-Class Increase (decrease) in net assets attributable to holders of redeemable units 2,326,823 (800,710) per unit 0.44 (0.11) Average Redeemable Units 5,278,101 7,191,222 I-Class Increase (decrease) in net assets attributable to holders of redeemable units 68,524,530 (265,553) per unit 1.19 (0.01) Average Redeemable Units 57,565,146 47,119,030 C-Class Increase (decrease) in net assets attributable to holders of redeemable units 2,851 (286) per unit 0.96 (0.12) Average Redeemable Units 2,980 2,376 F-Class Increase (decrease) in net assets attributable to holders of redeemable units 68 (6) per unit 0.64 (0.06) Average Redeemable Units The accompanying Notes are an integral part of these financial statements.

4 Desjardins Overseas Equity Value Fund STATEMENT OF CHANGES IN FINANCIAL POSITION (Unaudited) A-Class I-Class C-Class F-Class six-month Periods Ended March $ $ $ $ $ $ $ $ Net Assets Attributable to Holders of Redeemable Units, Beginning of Period 57,022,132 68,010, ,921, ,344,925 26,847 21,943 1,090 1,009 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units 2,326,823 (800,710) 68,524,530 (265,553) 2,851 (286) 68 (6) Redeemable Units Transactions Proceeds from sale of redeemable units 1,397,698 2,494, ,773,441 35,780,254 69,821 2,714 Reinvested distributions 502,716 4,990,608 7,429, Amounts paid for redeemable units redeemed (13,030,566) (8,414,767) (36,434,799) (2,288,135) (69,951) (11,632,868) (5,417,097) 236,329,250 40,922,104 (130) 2, Distributions to Holders of Redeemable Units Net investment income (503,878) (4,990,608) (7,429,985) (71) (13) (21) Net Assets Attributable to Holders of Redeemable Units, End of Period 47,716,087 61,288,393 1,020,784, ,571,491 29,568 24,371 1,158 1,003 STATEMENT OF CASH FLOWS (Unaudited) six-month Periods Ended March $ $ Cash Flows from (used in) Operating Activities Increase (decrease) in net assets attributable to holders of redeemable units 70,854,272 (1,066,555) Adjustments for: Foreign exchange gain (loss) on cash 923,759 (2,699) Net realized gain (loss) (13,079,803) 12,605,221 Net unrealized gain (loss) (49,258,916) (3,400,536) Proceeds from sale/maturity of investments 53,083, ,116,079 Investments purchased (279,626,502) (124,802,398) Receivable for investments sold (22,298,897) Interest, dividends and other receivables (1,307,525) (765,636) Accrued expenses (2,075) (40,404) Payable for investments purchased 8,538, ,824 Net Cash Flows from (used in) Operating Activities (232,173,541) (6,772,104) Cash Flows from (used in) Financing Activities Proceeds from sale of redeemable units 269,260,859 38,391,679 Amounts paid for redeemable units redeemed (49,387,491) (10,702,968) Distributions paid to holders of redeemable units net of reinvested distributions (1,162) Net Cash Flows from (used in) Financing Activities 219,873,368 27,687,549 Effect of exchange rate changes on foreign cash (921,261) 5,025 Increase (decrease) in cash/bank overdraft (13,221,434) 20,920,470 Cash (bank overdraft), beginning of period 15,451,417 9,496,886 Cash (Bank Overdraft), End of Period 2,229,983 30,417,356 Supplemental Information on Cash Flows from (used in) Operating Activities Interest received 33,497 41,714 Dividends received, net of withholding taxes 8,877,953 8,636,948 Interest paid 587 1,820 The accompanying Notes are an integral part of these financial statements.

5 Desjardins Overseas Equity Value Fund SCHEDULE OF INVESTMENT PORTFOLIO (UNAUDITED) AS AT MARCH 31, 2017 NUMBER FAIR OF SHARES COST VALUE $ $ Equities (98.0%) Canadian Equities (2.7%) Materials (1.3%) Potash Corporation of Saskatchewan 607,300 20,313,252 13,797,856 Telecommunication Services (1.4%) TELUS 339,600 11,651,456 14,660,532 Total Canadian Equities 31,964,708 28,458,388 Foreign Equities (95.3%) Australia (1.1%) CSL 90,800 9,006,370 11,562,110 Bermuda (1.0%) Dairy Farm International Holdings 902,000 8,503,846 10,891,684 Brazil (2.5%) Banco Bradesco, ADR 1,155,968 13,734,373 15,741,584 Ultrapar Participacoes, ADR 366,700 9,566,538 11,084,421 23,300,911 26,826,005 France (2.4%) L Oréal 61,600 14,451,174 15,743,524 Total, Series B 154,200 9,521,958 10,372,587 23,973,132 26,116,111 Germany (8.5%) Bayer 134,400 19,433,983 20,602,077 Fresenius Medical Care 232,500 25,454,113 26,074,249 Henkel AG & Co., Preferred 160,800 23,796,061 27,397,821 Linde 72,800 12,904,785 16,122,087 81,588,942 90,196,234 Hong Kong (5.1%) AIA Group 3,876,800 18,877,773 32,506,281 MTR 1,471,000 9,473,299 10,987,395 Swire Pacific, Class A 864,000 11,971,811 11,472,902 40,322,883 54,966,578 India (3.2%) Housing Development Finance 566,800 13,528,315 17,436,226 ITC 2,989,200 14,268,528 17,159,392 27,796,843 34,595,618 Israel (2.5%) Check Point Software Technologies 197,300 21,432,222 26,935,870 Japan (12.6%) Daito Trust Construction Co. 113,100 14,387,547 20,663,436 FANUC 60,600 10,103,121 16,518,808 Japan Tobacco 839,200 31,928,981 36,268,073 Keyence 30,000 12,354,929 15,975,401 Shimano 71,600 14,238,610 13,898,145 Shin-Etsu Chemical Co. 271,800 17,330,525 31,311, ,343, ,634,875 Luxembourg (3.5%) Samsonite International 4,754,700 18,942,209 23,025,409 Tenaris, ADR 323,034 13,946,103 14,666,092 32,888,312 37,691,501 Mexico (2.4%) Fomento Economico Mexicano, ADR 219,400 23,720,014 25,827,400 Philippines (0.9%) Ayala Land 11,109,300 10,737,139 9,731,358 Singapore (7.1%) City Developments 1,790,100 15,489,662 17,358,371 Jardine Matheson Holdings 244,200 16,740,567 20,865,147 Overseas-Chinese Banking 1,171,866 8,773,159 10,828,685 Singapore Telecommunications 7,168,000 19,876,025 26,712,564 60,879,413 75,764,767 NUMBER FAIR OF SHARES COST VALUE $ $ South Africa (1.4%) MTN Group 1,269,800 22,405,205 15,355,596 South Korea (2.5%) Samsung Electronics, Preferred 13,900 16,581,129 26,496,753 Sweden (2.1%) Atlas Copco, A Shares 468,400 13,209,380 21,987,671 Switzerland (11.1%) Nestlé 310,200 18,282,540 31,649,899 Novartis 426,400 30,597,947 42,090,572 Roche Holding 131,900 26,721,120 44,795,253 75,601, ,535,724 Taiwan (1.0%) Taiwan Semiconductor Manufacturing Company 1,269,000 8,331,632 10,511,743 Thailand (1.9%) Kasikornbank Public Company 2,787,900 18,322,429 20,391,863 United Kingdom (22.5%) BHP Billiton 495,000 14,798,583 10,177,439 British American Tobacco 306,300 14,182,602 27,048,364 Experian 775,700 16,209,836 21,040,998 Inmarsat 1,474,200 21,282,266 20,890,501 Prudential 774,200 20,730,539 21,748,478 Rolls-Royce Holdings 1,363,594 21,185,325 17,130,679 Royal Dutch Shell, Class B 801,400 28,563,260 29,168,865 Standard Chartered 1,215,354 26,030,711 15,450,604 Vodafone Group 8,078,800 29,256,843 28,011,546 Weir Group 308,100 8,218,413 9,840,835 Whitbread 395,038 27,043,873 26,051,504 Wood Group (John) 1,067,600 14,235,028 13,527, ,737, ,087,574 Total Foreign Equities 860,682,401 1,019,107,035 Total Investments (98.0%) 892,647,109 1,047,565,423 Other Net Assets (2.0%) 20,966,226 Net Assets (100%) 1,068,531,649 TABLE 1 Securities Lending (Note 2) VALUE OF FAIR VALUE COLLATERAL RECEIVED $ $ Loaned Securities 127, ,803 The accompanying Notes are an integral part of these financial statements.

6 Desjardins Overseas Equity Value Fund NOTES TO THE FINANCIAL STATEMENTS SPECIFIC INFORMATION (UNAUDITED) a) Establishment of the Fund The Desjardins Overseas Equity Value Fund (the Fund ) is an unincorporated mutual fund trust established on the following dates: A-Class October 26, 1998 I-Class March 23, 2010 C- and F-Class November 25, 2013 b) Units (Note 4) Issued and outstanding units MARCH 31 NUMBER OF UNITS, BEGINNING OF PERIOD UNITS ISSUED REINVESTED UNITS UNITS REDEEMED NUMBER OF UNITS, END OF PERIOD A-CLASS ,906, ,836 1,361,512 4,689, ,448, ,284 53, ,062 6,852,048 I-CLASS ,598,099 18,614, ,979 2,385,976 66,174, ,543,634 2,564, , ,439 48,471,337 C-CLASS ,591 6,902 6,785 2, , ,539 F-CLASS c) Distributions Net investment income of the Fund is distributed in cash or reinvested in additional units, as follows: A-, C- and F-Class annually I-Class semester Any net capital gains realized are distributed annually in December. d) Management Fees and Other Expenses (Note 5) The total fees ratio is broken down as follows: MANAGEMENT FEES ANNUAL RATE ANNUAL RATE % % FIXED ADMINISTRATION FEES TOTAL FEES MER CAP A- AND C-CLASS F-CLASS In July 2016, the management fees were reduced from 2.23% to 2.19% for A- and C-Class, and from 1.23% to 0.94% for F-Class. I-Class units pay distinct management fees and administration fees, which are negotiated directly with each investor. e) Related Party Transactions (Note 6) Desjardins Global Asset Management Inc. (DGAM) is the portfolio manager of the Fund. DGAM is an entity belonging to the same group as the Manager. DGAM s fees are entirely paid by the Manager. Accrued expenses payable (receivable) to the Manager are: MARCH SEPTEMBER $ $ EXPENSES PAYABLE (RECEIVABLE) 21,998 24,073 f) Other Commissions Paid to Brokers During the period, the amount of soft dollars, which represents the amount paid or payable for goods and services other than order execution, are: $ $ SOFT DOLLARS 9,300 33,446 No other form of compensation was paid to brokers. g) Information on Financial Instruments (Note 7) Strategy in Using Financial Instruments Investment Objective The objective of this Fund is to achieve long-term capital appreciation. The Fund s portfolio consists primarily of equity securities of companies located or operating primarily in Europe, Australasia and the Far East. Financial Instruments Measured at Fair Value Hierarchy of Financial Instruments Measured at Fair Value The following tables categorize the Fund s financial assets fair value measurement according to a three-level hierarchy. The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities. Fair value measurement is described in the Significant Accounting Policies section of Note 2. Investment Measured at Fair Value at the End of the Period, within the Following Levels: MARCH 31, 2017 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL $ $ $ $ FINANCIAL ASSETS AT FVTPL EQUITIES 1,047,565,423 1,047,565,423 TOTAL 1,047,565,423 1,047,565,423 SEPTEMBER 30, 2016 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL $ $ $ $ FINANCIAL ASSETS AT FVTPL EQUITIES 758,686, ,686,542 TOTAL 758,686, ,686,542 Transfers between Levels 1 and 2 During the periods ended March 31, 2017 and September 30, 2016, there were no transfers of securities between Levels 1 and 2.

7 Desjardins Overseas Equity Value Fund NOTES TO THE FINANCIAL STATEMENTS SPECIFIC INFORMATION (UNAUDITED) (CONTINUED) Financial Instruments Risks Currency Risk The following tables indicate the foreign currencies to which the Fund had significant exposure, in Canadian dollar terms, and the notional amounts of foreign exchange forward contracts. The tables also illustrate the potential impact on the Net Assets Attributable to Holders of Redeemable Units if the Canadian dollar had strengthened or weakened by 3% in relation to each of the other currencies, with all other variables held constant. MARCH 31, 2017 IMPACT ON NET ASSETS ATTRIBUTABLE TO HOLDERS SEPTEMBER 30, 2016 IMPACT ON NET ASSETS ATTRIBUTABLE TO HOLDERS FINANCIAL ASSETS FINANCIAL LIABILITIES NET EXPOSURE* OF REDEEMABLE UNITS FINANCIAL ASSETS FINANCIAL LIABILITIES NET EXPOSURE* OF REDEEMABLE UNITS $ $ $ $ $ $ $ $ Pound Sterling 241,761, ,761,292 7,252,839 Pound Sterling 174,251, ,251,665 5,227,550 Japanese Yen 135,790, ,790,177 4,073,705 Japanese Yen 111,741, ,741,857 3,352,256 U.S. Dollar 126,754, ,754,913 3,802,647 Swiss Franc 87,447,087 87,447,087 2,623,413 Swiss Franc 118,535, ,535,724 3,556,072 Euro 81,034,760 81,034,760 2,431,043 Euro 116,420, ,420,608 3,492,618 U.S. Dollar 78,713,246 78,713,246 2,361,397 Hong Kong Dollar 77,991,987 77,991,987 2,339,760 Hong Kong Dollar 57,150,439 57,150,439 1,714,513 Singapore Dollar 54,899,621 54,899,621 1,646,989 Singapore Dollar 44,790,298 44,790,298 1,343,709 Indian Rupee 34,595,618 34,595,618 1,037,869 Indian Rupee 20,969,218 20,969, ,077 South Korean Won 26,496,753 26,496, ,903 South Korean Won 20,639,484 20,639, ,185 Swedish Krona 21,987,671 21,987, ,630 Swedish Krona 16,728,768 16,728, ,863 Thai Baht 20,391,863 20,391, ,756 Thai Baht 12,129,320 12,129, ,880 South African Rand 15,837,031 15,837, ,111 South African Rand 9,860,526 9,860, ,816 Australian Dollar 11,562,110 11,562, ,863 Taiwan Dollar 8,664,561 8,664, ,937 Taiwan Dollar 10,511,743 10,511, ,352 Australian Dollar 8,154,389 8,154, ,632 Philippines Peso 9,731,358 9,731, ,941 Philippines Peso 7,810,597 7,810, ,318 * COMPOSED OF: MONETARY ITEMS 4,161,434 * COMPOSED OF: MONETARY ITEMS 1,588,289 NON-MONETARY ITEMS 1,019,107,035 NON-MONETARY ITEMS 738,497,926 In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant. Interest Rate Risk As at March 31, 2017 and September 30, 2016, the majority of the Fund s financial assets and liabilities are non-interest bearing. As a result, the Fund is not subject to significant amounts of risk arising from fluctuations in the prevailing levels of market interest rates. Concentration Risk The following tables summarize the concentration risk, as a percentage of the Fund s Net Assets Attributable to Holders of Redeemable Units: MARCH 31, 2017 MARKET SEGMENT % Foreign Equities United Kingdom 22.5 Japan 12.6 Switzerland 11.1 Germany 8.5 Singapore 7.1 Hong Kong 5.1 Luxembourg 3.5 India 3.2 Brazil 2.5 South Korea 2.5 Israel 2.5 France 2.4 Mexico 2.4 Sweden 2.1 Other Countries * 7.3 Canadian Equities 2.7 Other Net Assets 2.0 SEPTEMBER 30, 2016 MARKET SEGMENT % Foreign Equities United Kingdom 22.3 Japan 14.3 Switzerland 11.2 Germany 8.2 Singapore 7.9 Hong Kong 5.7 Luxembourg 3.6 India 2.7 South Korea 2.7 Israel 2.4 France 2.2 Sweden 2.1 Other Countries* 9.6 Canadian Equities 2.6 Other Net Assets 2.5 TOTAL 100 TOTAL 100 * This category includes all countries representing less than 2% of the Fund s net asset value.

8 Desjardins Overseas Equity Value Fund NOTES TO THE FINANCIAL STATEMENTS SPECIFIC INFORMATION (UNAUDITED) (CONTINUED) Price Risk The Fund may trade in financial instruments and take positions in traded and over-the-counter instruments. The Manager s estimate of the impact on Net Assets Attributable to Holders of Redeemable Units as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund s return as compared to the return of the Fund s benchmarks, with all other variables held constant, is included in the following table. A 36-month regression analysis has been utilized to estimate the historical beta coefficient. The regression analysis uses data based on the monthly returns of the Fund. CHANGE IN PRICE IMPACT ON NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS BENCHMARKS % MARCH 31, 2017 $ SEPTEMBER 30, 2016 $ MSCI EAFE Index (Total return) ,683,081 17,737,756 When there is more than one benchmark, the effect of each benchmark must be considered individually, as each benchmark might fluctuate independently from the others. In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant. Credit Risk As at March 31, 2017 and September 30, 2016, the Fund had no significant investments in either fixed-income securities, money market securities and derivative financial instruments. As a result, the Fund is not significantly exposed to credit risk. Liquidity Risk For further information on maturities of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 Financial Instruments Disclosures. h) Reconciliation of Income from Securities Lending and Repurchase Transactions (Note 2) The following table shows a reconciliation of the total income generated from securities lending transactions of the Fund and the revenue from securities lending and repurchase transactions disclosed in the Fund s Statement of Comprehensive Income. i) Taxation Loss Carry Forward (Note 8) Capital and non-capital losses determined for tax purposes as at December 15, 2016, which is the fiscal year-end, are as follows: CAPITAL LOSSES NON-CAPITAL LOSSES AMOUNT AMOUNT EXPIRATION $ $ 351,747,858 j) Seed Capital The Manager had the following seed capital investments: SEED CAPITAL PERCENTAGE OWNERSHIP $ % MARCH 31, , SEPTEMBER 30, , MARCH 31, 2017 MARCH 31, 2016 $ % $ % TOTAL INCOME 37, , NET INCOME RECEIVED BY THE FUND 22, , NET INCOME RECEIVED BY DESJARDINS TRUST 14, ,007 40

9 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) Six-month Periods Ended March 31, 2017 and 2016 Throughout the Notes to the Financial Statements, Unitholders refers to Holders of redeemable units or shares. 1. Establishment of the Funds Desjardins Investments Inc. (the Manager ) acts as the Manager of the Desjardins Funds, collectively called the Funds. Its head office is located at 2, complexe Desjardins, P.O. Box 9000, Desjardins Station, Montréal, Québec, Canada H5B 1H5. The financial statements of the Funds are presented in Canadian dollars, the Funds functional and presentation currency. For further information about the establishment of the Funds and their main activities, refer to the section Notes to the Financial Statements Specific Information pertaining to each Fund. 2. Basis of Presentation International Financial Reporting Standards (IFRS) These financial statements have been prepared in compliance with International Financial Reporting Standards (IFRS), applicable to the preparation of financial statements. Statement of Compliance The policies applied in these financial statements are based on IFRS in effect as of May 18, 2017, the date on which the financial statements have been authorized for issue by the Board of Directors of the Manager. Significant Accounting Policies The significant measurement and presentation policies applied to prepare these financial statements are described below. Financial Assets and Liabilities The Funds financial assets consist primarily of investments in non-derivative financial instruments and derivative financial instruments presented in the schedule of investment portfolio. Financial liabilities consist primarily of derivative financial instruments. Financial assets and liabilities are recognized on the date the Funds become a party to the contractual provisions of the instrument, namely the transaction date. Classification of Financial Instruments The Funds classify their financial assets and liabilities in the following categories: Financial assets at fair value through profit or loss (FVTPL): Held for trading: derivative financial instruments; Designated at FVTPL: all other investments including equity and fixedincome securities. Financial assets at amortized cost: Loans and receivables: cash and all other receivables. Financial liabilities at FVTPL: Held for trading: derivative financial instruments and short positions. Financial liabilities at amortized cost: Bank overdraft and all other payables. A financial instrument is designated at FVTPL if it eliminates or significantly reduces a measurement or a recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing gains or losses on them on different bases. The Funds obligation concerning net assets attributable to holders of redeemable units or shares is recorded at the redemption amount which approximates fair value. The accounting policies used to measure the fair value of investments and derivative financial instruments are identical to those used in measuring the net asset value for transactions with holders of redeemable units or shares, except when the closing price for financial assets and liabilities is not within the bid-ask spread. As at March 31, 2017 and September 30, 2016, there are no differences between the Funds s net asset value per unit or share for transactions and their net assets attributable to holders of redeemable units or shares in accordance with IFRS. Determination of the Fair Value of Financial Instruments Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the valuation date. The fair value of financial assets and liabilities traded in active markets are based on quoted market prices at the close of trading on the valuation date and there is little subjectivity in its determination. The Funds use the closing price for both financial assets and financial liabilities where this price falls within the bid-ask spread. In circumstances when the closing 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. The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter derivative financial instruments, is determined using valuation techniques. The Funds use a variety of methods and make assumptions that are based on market conditions existing at each valuation date. Valuation techniques include the use of comparable recent arm s length transactions, the fair value of other instruments that are substantially the same, discounted cash flow analysis, option pricing models and others commonly used by market participants and which make the maximum use of observable inputs. Refer to Note 7 Financial Instruments Disclosures for further information about the Funds fair value measurements. Liquidity Cash (bank overdraft) is measured at cost, which closely approximates fair value. Money Market Securities Money market securities are recorded at cost together with accrued interest, which closely approximates fair value. Equities and Index-Based Investments Equity securities and index-based investments are recorded at the closing price of the accredited stock exchange on which the corresponding security is principally traded. Unlisted warrants are valued with a recognized valuation model, including Black & Scholes. Bonds, Bank Loans, Mortgage-Backed Securities and Asset-Backed Securities Bonds, bank loans, mortgage-backed securities and asset-backed securities are valued based on prices obtained from recognized securities dealers. Investment Funds The underlying funds units are generally valued based on the net asset value per unit provided by the underlying fund s manager at the end of each valuation day. Derivative Financial Instruments Certain Funds may use an array of derivative financial instruments such as foreign currency forward contracts, forward contracts, futures contracts, swaps, To-Be-Announced and options for hedging purposes or purposes other than hedging, or both. The fair value of derivative financial instruments takes into account the impact of legally binding master netting agreements, if applicable. Refer to the section Offsetting Financial Assets and Financial Liabilities for further information about the Funds offsetting. Foreign Currency Forward Contracts, Forward Contracts, Swaps and To-Be-Announced (TBA) The fair value of these instruments corresponds to the gains or losses that would result from the contract close-out on the valuation date; this value is recorded in Unrealized appreciation (depreciation) on derivatives in the Statement of Financial Position. Standardized Futures Contracts Futures contracts are valued at fair value and are settled daily through brokers acting as intermediaries. Any amounts receivable (payable) from the settlement of futures contracts are recorded in Receivable (payable) on standardized futures contracts in the Statement of Financial Position.

10 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) Six-month Periods Ended March 31, 2017 and 2016 Options Options listed on a stock exchange are valued according to fair value based on the closing price of the accredited stock exchange on which the option is being traded for long positions and the ask price for short positions. Unlisted options are valued with a recognized valuation model, including Black & Scholes. Valuation of Unlisted Securities and Other Investments When the valuation principles of the aforementioned investments are not appropriate, fair value is determined according to the Manager s best estimates, based on established valuation procedures and on prevailing market conditions on each valuation date. These procedures cover, among others, securities no longer traded, securities issued by private corporations and illiquid securities. For further information, refer to Note 3 Critical Accounting Judgments, Estimates and Assumptions. Investment Transactions Investment transactions are accounted for on the trade date. Cost is determined on an average cost basis except for money market securities, for which the cost is determined using the First-In, First-Out method. The average cost does not include amortization of premiums or discounts on fixed-income securities with the exception of stripped bonds. Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities by the Funds are recognized in the Statement of Comprehensive Income. The difference between the unrealized appreciation (depreciation) of investments at the beginning and at the end of the period is included in Net unrealized gain (loss) on investments in the Statement of Comprehensive Income. On disposal of an investment, the difference between the fair value and the cost of the investment is included in Net realized gain (loss) on investments in the Statement of Comprehensive Income. Securities Lending and Repurchase Transactions Certain Funds may enter into securities lending and repurchase transactions through the securities lending program of the Funds custodian, Desjardins Trust Inc. (Trust). The securities loaned and repurchase transactions are not derecognized in the Statement of Financial Position as substantially all the risks and rewards of ownership of these securities is kept. To limit the risk that the counterparty fails to fulfill its obligations, the Funds obtain collateral, representing at least 102% of the contract amount, determined daily based on the fair value of the previous business day s securities loaned or repurchase transactions. Securities received as collateral in securities lending transactions are not recognized in the Statement of Financial Position as substantially all the risks and rewards of ownership of these securities have not been transferred to the Funds. Cash guarantees received for securities lending and repurchase transactions are recognized as financial assets in the Statement of Financial Position, in Cash guarantee received for securities lending and/or Cash guarantee received for repurchase transactions, as appropriate. A liability representing the obligation to return the securities is recognized in Commitments related to securities lending and Commitments related to repurchase transactions, as appropriate. Trust, as the funds custodian, may use those amounts to buy investments. Revenue generated through the Trust s securities lending program is shared by the Fund and the Trust at the rate presented in the section Notes to the Financial Statements Specific Information pertaining to each Fund. This revenue is included in Revenue from securities lending and repurchase transactions in the Statement of Comprehensive Income. Offsetting Financial Assets and Financial Liabilities Financial assets and liabilities are offset in the Statement of Financial Position for the Fund if and only if a Fund has: a legally enforceable and unconditional right to offset the recognized amounts and an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Funds have a legally enforceable and unconditional right to offset a financial asset and liability when they meet the following criteria: the right is enforceable in the normal course of business, and the right is enforceable in the event of default, insolvency or bankruptcy. Over-the-counter derivative financial instruments, securities lending and repurchase agreements, receivable for investments sold and payable for investments purchased are subject to master netting or similar agreements that do not meet the criteria for offsetting in the Statement of Financial Position as they give a right to an offset that is enforceable only in the event of default, insolvency or bankruptcy. The table presenting financial assets and liabilities that are offset or not offset in the Statement of Financial Position and subject to a master netting agreement or similar agreement is presented in the section Notes to the Financial Statements Specific Information pertaining to each Fund, if applicable. Other Assets and Liabilities Margin deposited on derivatives, receivable on standardized futures contracts, subscriptions receivable, receivable for investments sold, cash guarantee received for securities lending and repurchase transactions as well as interest, dividends and other receivables are classified as loans and receivables and are recorded at cost. Similarly, accrued expenses, collateral payable, payable on standardized futures contracts, redemptions payable, payable for investments purchased, commitments related to securities lending and repurchase transactions, interest, dividends and other payables as well as distributions payable are classified as financial liabilities and recorded at cost. Given the short-term nature of these financial instruments, their carrying amount closely approximates their fair value. Income Interest income for distribution purposes from investments in debt securities presented in the Statement of Comprehensive Income is recognized as it is earned. The Funds do not amortize premiums paid or discounts received on the purchase of debt securities except for stripped bonds. Dividends are recognized as income on the ex-dividend date. Foreign interest and dividend income are accounted for on a gross basis and is included in the income section of the Statement of Comprehensive Income. Distributions received from underlying funds are recorded at the date of distribution. Distributions are included in Distributions from underlying funds and are presented as a separate line item in the Statement of Comprehensive Income. Previously, those amounts were split between the different types of revenues. For the purposes of presentation, the comparative information has been reclassified accordingly. Distributions received in the form of units from underlying funds are presented as a separate line item called Non-cash distribution from investments on the Statement of Cash Flows and its equivalent has been removed from the Investments purchased line item. For the purposes of presentation, the comparative information has been revised accordingly. On derivative financial instruments contract close-out, the gains and losses from derivative financial instruments held for hedging purposes are included in Net realized gain (loss) on derivatives in the Statement of Comprehensive Income. Gains and losses from derivative financial instruments held for purposes other than hedging are included in Net income (loss) from derivatives in the Statement of Comprehensive Income. Foreign Currency Translation The Funds subscriptions and redemptions are denominated in Canadian dollars. Foreign currency assets and liabilities denominated in a foreign currency are translated into the functional currency at the exchange rate on each valuation date. Purchases and sales of securities, as well as income and expenses denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing on the transaction dates. Foreign exchange gains and losses relating to cash are presented as Foreign exchange gain (loss) on cash and those relating to other financial assets and liabilities are presented within Net realized gain (loss) on investments and Net unrealized gain (loss) on investments in the Statement of Comprehensive Income.

11 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) Six-month Periods Ended March 31, 2017 and 2016 Increase (Decrease) in Net Assets Attributable to Holders of Redeemable Units or Shares per Unit or Share The increase (decrease) in net assets attributable to holders of redeemable units or shares per unit or share is calculated by dividing the increase (decrease) in net assets attributable to holders of redeemable units or shares by the average number of units or shares outstanding during the period. Income taxes Trust Funds Under the Income Tax Act (Canada), each Fund, except the corporate class funds and Funds below, is defined as a mutual fund trust. The following Funds are considered unincorporated unit trusts: Desjardins IBrix Global Bond Fund Desjardins SocieTerra Environmental Bond Fund Desjardins Canadian Equity Fund Desjardins SocieTerra American Equity Fund When the Fund reaches 150 or more investors in a Class units, until the fiscal year end date, the Fund may qualify as a mutual fund trust. Funds are taxed on income and net capital gains not distributed to unitholders. Corporate Funds The Corporation groups together the following Funds: Desjardins Money Market Corporate Class Desjardins Dividend Growth Corporate Class Desjardins Canadian Equity Income Corporate Class Desjardins IBrix Canadian High Dividend Equity Corporate Class Desjardins IBrix Canadian Equity Focus Corporate Class Desjardins Canadian Equity Value Corporate Class Desjardins Canadian Equity Growth Corporate Class Desjardins American Equity Growth Corporate Class Desjardins Overseas Equity Growth Corporate Class Desjardins Global Equity Growth Corporate Class Desjardins Global Small Cap Equity Corporate Class Desjardins Emerging Markets Opportunities Corporate Class Desjardins Canadian Preferred Shares Corporate Class Desjardins American Equity Growth Currency Neutral Corporate Class Chorus II Corporate Class Conservative Low Volatility Portfolio Chorus II Corporate Class Moderate Low Volatility Portfolio Chorus II Corporate Class Balanced Low Volatility Portfolio Chorus II Corporate Class Growth Portfolio Chorus II Corporate Class Dynamic Growth Portfolio Chorus II Corporate Class Maximum Growth Portfolio The Corporation constitutes a single legal entity for tax purposes and qualifies as a public corporation under the Income Tax Act (Canada). As such, the Corporation computes its net income (net loss) and net capital gains (net capital losses) for income tax purposes as a single entity. The Corporation is subject to Part IV pertaining to tax on dividends received from other Canadian corporations to the extent that they are not declared and paid to its shareholders. It is the intention of the Corporation to pay out all Canadian dividends it receives to its shareholders, such that Part IV tax would not be paid. Dividends distributed on September 28, 2016 were designated eligible dividends. The Funds are taxable on net income and net capital gains not distributed to holders of redeemable units or shares. All the Funds investment income and sufficient net capital gains realized in any year are required to be distributed to holders of redeemable units or shares to ensure no income tax is payable by the Funds. As a result, the Funds do not record income taxes. Since the Funds do not record income taxes, the tax benefit of capital and non-capital losses has not been reflected in the Statement of Financial Position as a deferred income tax asset. The Funds currently incur 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 are shown as a separate expense in the Statement of Comprehensive Income. Year End Date The year end for tax purposes is December 31 for the following Funds: Desjardins Money Market Fund Desjardins IBrix Global Bond Fund Desjardins SocieTerra Environmental Bond Fund Desjardins Canadian Equity Fund Desjardins SocieTerra American Equity Fund The Corporation has a year end for tax purposes of September 30. All other Funds have a year end for tax purposes of December 15. Investments in Entities The Funds meet the definition in IFRS 10, Consolidated Financial Statements, for investment entities and account for their investments in underlying funds at FVTPL. According to IFRS 12, Disclosure of Interests in Other Entities, the Funds have to disclose specific information on their investments in other entities, such as subsidiaries, associates and structured entities. Subsidiaries An entity is considered as a subsidiary when it is controlled by another entity. The Fund controls an entity when it has the right to variable returns from its involvement with the entity and through its power over the entity. Associates Associates are investments in entities over which the Fund exercises significant influence without, however exercising control. Structured Entities Structured Entities are conceived in a way that the right to vote and other similar rights are not determining factors in exercising control. The Manager has determined that its investments in underlying funds (including limited partnerships), index-based investments, mortgage-backed securities, asset-backed securities and master asset vehicles (included in the bonds category) are structured entities, unless the specified relationship is different. Refer to the section Notes to the financial statements Specific information pertaining to each Fund for more information on Investments in Entities. Accounting Standards Issued but not yet Applied In July 2014, the International Accounting Standards Board (IASB) issued the complete and final version of IFRS 9, Financial Instruments (IFRS 9), which will replace IAS 39, Financial Instruments: Recognition and Measurement (IAS 39). IFRS 9 includes, among others, the requirements for the classification and measurement of financial assets and liabilities. IFRS 9 sets out a new classification and measurement model for financial assets to determine whether a financial asset should be classified at amortized cost, at FVTPL or at fair value through other comprehensive income. This model is based on the contractual cash flow characteristics of the financial asset and the business model under which the financial asset is held. The valuation basis of financial assets, namely amortized cost or fair value, may need to be changed, as well as the recognition of unrealized gains and losses arising from changes in fair value. For the classification and measurement of financial liabilities, the new standard essentially carries forward the current requirements under IAS 39. The Funds will have to adopt IFRS 9 retrospectively for annual periods beginning on or afterjanuary 1, However, the restatement of comparative periods is not mandatory as an exemption from applying the standard allows comparative periods to be presented in accordance with the previous GAAP under certain conditions. A team has been assigned to the project to highlight the following: the changes in disclosure and financial reporting as well as in systems and processes, disclosures and training. The project is progressing according to the proposed implementation schedule. The assessment of the impacts for the Funds is finalized. There is only a change of wording versus the classification in IAS 39. There is no impact on recognition and measurement for the Funds.

12 NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) Six-month Periods Ended March 31, 2017 and Critical Accounting Judgments, Estimates and Assumptions The preparation of financial statements requires management to use judgment in applying its accounting policies and to make estimates and assumptions about the future. Actual results may differ from these estimates. The following paragraphs discuss the most significant accounting judgments and estimates that the Funds have made in preparing the financial statements. Fair Value Measurement of Derivative Financial Instruments and Securities not Quoted in an Active Market The Funds may hold financial instruments that are not quoted in active markets, including derivative financial instruments. Fair value is determined based on models that make maximum use of observable inputs and rely as little as possible on unobservable inputs. The Funds consider the data observable if that market data is readily available, distributed or updated on a regular basis, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market. The models used to determine fair values are validated and periodically reviewed by experienced personnel of the Manager. When no quoted prices are available, the fair value is estimated using present value and other valuation methods, which are influenced by the assumptions used concerning the amount and timing of estimated future cash flows and discount rates, which reflect varying degrees of risk, including liquidity risk, credit risk, risks related to interest rates, exchange rates, and price and rate volatility. The calculation of the fair values may differ given the role that judgment plays in applying the valuation techniques and acceptable estimation. Estimated fair value reflects market conditions at a given date and, for this reason, it may not be representative of future fair values. Refer to Note 7 Financial Instruments Disclosures for further information on fair value measurement of financial instruments. Classification and Measurement of Investments and Application of the Fair Value Option In classifying and measuring financial instruments held by the Funds, the Manager is required to make significant judgment about whether or not the business of the Funds is to invest on a total return basis for the purpose of applying the fair value option for financial assets under IAS 39. The most significant judgment lies in determining if certain investments are held-fortrading and if the fair value option can be applied to those which are not. For further information on financial instruments, refer to Note 2 Basis of Presentation. 4. Net Assets Attributable to Holders of Redeemable Units or Shares Trust Funds Authorized units The unitholders equity of the Fund is composed of: An unlimited number of A-Class units, offered to all investors. An unlimited number of Series T, T4, T5, T6, T7 and T8 Class units offered to investors who wish to have additional tax-advantaged income to complement their income from other sources and that are not offered under registered plans. An unlimited number of I-Class units offered to large investors who negotiate and pay reduced management fees directly to the Manager. An unlimited number of C-Class units, offered to investors who purchase units using an initial sales charge option, a deferred sales charge option or a low-load sales charge option. Offered only if the investor s representative s firm has reached a security agreement with the Manager. An unlimited number of R-, R4-, R5-, R6-, R7- and R8-Class units offered to investors who purchase units on an initial sales charge option, a deferred sales charge option or a low-load sales charge option.these investors wish to have additional tax-advantaged income to complement their income from other sources, and that are not offered under registered plans. Offered only if the investor s representative s firm has reached a security agreement with the Manager. An unlimited number of F-Class units, offered to investors who compensate their representative on a fee for service basis, who have a representative s firm-sponsored wrap account or who pay their representative s firm an annual fee and where the representative s firm does not receive trailing commissions from the Manager. These annual fees can be negociated between the investor and his representative s firm. Offered only if the investor s representative s firm has reached a security agreement with the Manager. An unlimited number of S-, S4-, S5-, S6-, S7- and S8-Class units offered to investors who compensate their representative on a fee for service basis, who have a representative s firm-sponsored wrap account or who pay their representative s firm an annual fee and where the representative s firm does not receive trailing commissions from the Manager. These annual fees can be negociated between the investor and his representative s firm. These investors wish to have additional tax-advantaged income to complement their income from other sources, and that are not offerered under registered plans. Offered only if the investor s representative s firm has reached a security agreement with the Manager. An unlimited number of Z4- and Z5 offered to cerain investors who have entered into an agreement with the Manager. Not offered under registered plans. Structure of Redeemable Units Each Fund, except the corporate class funds, is authorized to issue an unlimited number of class of redeemable units (the units ) and an unlimited number of units of each class. Each class unit entitles the holder thereof to participate equally in the distributions of the Fund made to that class. Fractions of units may be issued. The units of a Fund are of the same class and confer the same rights and privileges except that in respect of a Fund with more than one class of units, each class of units may have a different management fee, dealer compensation structure or distribution structure. As a result, each unit entitles its holder to one vote and to participate equally in distributions made in respect of the class of units by the subject Fund and, on liquidation, in the net assets of the class of units remaining after satisfaction of outstanding liabilities. A fraction of a unit will entitle the holder to similar proportionate participation and to vote. Units and fractions of units may be issued by a Fund only as fully paid and non-assessable. A unitholder will be entitled to redeem units in the manner described under Redemptions of Securities in the Annual Information Form. The Declaration of Trust does not impose any restrictions on the transfer of units. The rights and conditions attached to the units of each Fund may be modified only in accordance with the provisions of the securities legislation applicable to such units and the provisions of the Declaration of Trust. The Manager manages the capital of the Funds in accordance with their investment objectives (refer to Note 7). Also, in accordance with securities regulations, the Funds seek to invest subscriptions received in appropriate investments while maintaining sufficient liquidity to meet redemptions. Corporate Funds Authorized shares The shareholders equity of the Fund is composed of: An unlimited number of Series A shares, offered to all investors and that are not offered under registered plans. An unlimited number of Series T, T4, T5, T6, T7 and T8 shares offered to investors who wish to have additional tax-advantaged income to complement their income from other sources and that are not offered under registered plans. An unlimited number of Series C shares offered to investors who purchase shares using an initial sales charge option, a deferred sales charge option or a low-load sales charge option and that are not offered under registered plans. Offered only if the investor s representative s firm has reached a security agreement with the Manager. An unlimited number of Series R, R4, R5, R6, R7 and R8 shares offered to investors who purchase units on an initial sales charge option, a deferred sales charge option or a low-load sales charge option.these investors wish to have additional tax-advantaged income to complement their income from other sources, and that are not offered under registered plans. Offered only if the investor s representative s firm has reached a security agreement with the Manager.