FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD.

Transcription

1 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. Norrep Premium Growth Class Norrep Core Canadian Norrep Core Global For the year ended October 31, 2017

2 KPMG LLP 205 5th Avenue SW Suite 3100 Calgary AB T2P 4B9 Telephone (403) Fax (403) INDEPENDENT AUDITORS REPORT To the Shareholders of Norrep Core Portfolios Ltd. being: Norrep Premium Growth Class Norrep Core Canadian (formerly Norrep Core Canadian Pool) Norrep Core Global (formerly Norrep Core Global Pool) We have audited the accompanying financial statements of Norrep Core Portfolios Ltd., which comprise the statements of financial position for Norrep Premium Growth Class, Norrep Core Canadian and Norrep Core Global as at October 31, 2017 and October 31, 2016, the statements of comprehensive income, changes in net assets attributable to holders of redeemable shares and cash flows for Norrep Premium Growth Class for the years ended October 31, 2017 and October 31, 2016 and Norrep Core Canadian and Norrep Core Global for the year ended October 31, 2017 and the period from February 17, 2016 to October 31, 2016, and notes, comprising 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, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 our 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, we consider 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. KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. KPMG Canada provides services to KPMG LLP.

3 An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Norrep Premium Growth Class, Norrep Core Canadian and Norrep Core Global as at October 31, 2017 and October 31, 2016, the statements of comprehensive income, changes in net assets attributable to holders of redeemable shares and cash flows for Norrep Premium Growth Class for the years ended October 31, 2017 and October 31, 2016 and Norrep Core Canadian and Norrep Core Global for the year ended October 31, 2017 and the period from February 17, 2016 to October 31, 2016 in accordance with International Financial Reporting Standards. Chartered Professional Accountants December 14, 2017 Calgary, Canada 2

4 NORREP PREMIUM GROWTH CLASS Statements of Financial Position (in Canadian dollars, except shares outstanding) As at October 31 October Assets Cash and cash equivalents 64, ,093 Dividends and interest receivable 44,077 Due from Manager (note 8) 4,500 Shares issued 240 Investments, at fair value through profit or loss 7,904,143 9,474,586 Total assets 8,012,883 9,662,419 Liabilities Accrued expenses (note 8) 32,000 45,000 Dividends payable 15,612 21,623 Portfolio assets purchased 44,077 Shares redeemed 18,368 Total liabilities (excluding net assets attributable to holders of redeemable shares) 91,689 84,991 Net assets attributable to holders of redeemable shares 7,921,194 9,577,428 Net assets attributable to holders of redeemable shares: Series A 2,089,188 2,506,660 Series F 1,086,847 1,374,586 MG Series 4,745,159 5,696,182 Redeemable shares outstanding (note 7): Series A 130, ,783 Series F 64,520 85,951 MG Series 289, ,710 Net assets attributable to holders of redeemable shares per share: Series A Series F MG Series See accompanying notes to financial statements. On behalf of the Board of Directors of Norrep Capital Management Ltd. Alex Sasso Keith Leslie 1 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

5 NORREP PREMIUM GROWTH CLASS Statements of Comprehensive Income Years ended October 31, 2017 and 2016 (in Canadian dollars) Dividend income 208, ,954 Net gain (loss) on investments at fair value through profit or loss Net realized gain (loss) on investments 64,631 (602,393) Net change in unrealized appreciation (depreciation) in fair value of investments 680, ,664 Total investment revenue (loss) 953, ,225 Management fees (note 8) 126, ,740 Custodian and record keeping fees 33,175 33,927 Legal and filing fees 20,514 24,322 Audit and tax fees 12,849 32,786 HST/GST 12,357 19,984 Other 4,983 5,615 Transaction costs 4,435 6,826 Operating expense recovery (note 8) (4,500) Total operating expenses 214, ,700 Increase (decrease) in net assets attributable to holders of redeemable shares 738, ,525 Change in net assets attributable to holders of redeemable shares (note 7): Series A 181,002 71,335 Series F 112,220 59,453 MG Series 445, ,737 Change in net assets attributable to holders of redeemable shares per share (note 7): Series A Series F MG Series See accompanying notes to financial statements. 2 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

6 NORREP PREMIUM GROWTH CLASS Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares Years ended October 31, 2017 and 2016 (in Canadian dollars) All Series Series A Series F MG Series Net assets attributable to holders of redeemable shares, beginning of year 9,577,428 15,219,534 2,506,660 4,182,448 1,374,586 4,227,957 5,696,182 6,809,129 Increase (decrease) in net assets, attributable to holders of redeemable shares 738, , ,002 71, ,220 59, , ,737 Transactions attributable to holders of redeemable shares: Issuance of shares 432, , , , , ,793 3,146 36,693 Reinvestment of dividends 264, ,084 84, ,629 42,553 59, , ,701 Amounts paid on redemptions (2,753,144) (6,497,418) (795,523) (1,973,286) (624,191) (3,208,170) (1,333,430) (1,315,962) (2,055,768) (5,599,502) (511,687) (1,631,311) (351,671) (2,845,623) (1,192,410) (1,122,568) Dividends declared: From dividend income (339,325) (421,129) (86,787) (115,812) (48,288) (67,201) (204,250) (238,116) (339,325) (421,129) (86,787) (115,812) (48,288) (67,201) (204,250) (238,116) Net assets attributable to holders of redeemable shares, end of year 7,921,194 9,577,428 2,089,188 2,506,660 1,086,847 1,374,586 4,745,159 5,696,182 Dividends per share to holders of redeemable shares: From dividend income See accompanying notes to financial statements. 3 FINANCIAL STATEMENTSOF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

7 NORREP PREMIUM GROWTH CLASS Statements of Cash Flows Years ended October 31, 2017 and 2016 (in Canadian dollars) Cash flows from (used in) operating activities Increase (decrease) in net assets attributable to holders of redeemable shares 738, ,525 Adjustments for: Net realized (gain) loss on sale of investments at fair value through profit or loss (64,631) 602,393 Net change in unrealized (appreciation) depreciation of investments at fair value through profit or loss (680,052) (863,664) Purchase of investments (240,101) (2,003,955) Proceeds from the sale and maturity of investments 2,599,304 8,005,123 Dividends and interest receivable (44,077) Due from Manager 4,500 (4,500) Accrued expenses (13,000) Net cash from (used in) operating activities 2,300,802 6,113,922 Cash flows from (used in) financing activities Proceeds from the issuance of redeemable shares 432, ,982 Amounts paid on redemption of redeemable shares (2,771,512) (6,548,996) Dividends to holders of redeemable shares, net of reinvestments (80,344) (101,200) Net cash from (used in) financing activities (2,419,232) (6,080,214) Net increase (decrease) in cash and cash equivalents (118,430) 33,708 Cash and cash equivalents at beginning of year 183, ,385 Cash and cash equivalents at end of year 64, ,093 Dividends received, net of withholding tax paid 164, ,954 See accompanying notes to financial statements. 4 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

8 NORREP PREMIUM GROWTH CLASS Schedule of Investment Portfolio As at October 31, 2017 (in Canadian dollars) Number of Shares Cost ($) Fair Value ($) % of Net Assets Description MUTUAL FUND SHARES Norrep Opportunities Corp. Norrep Energy Class, Series 'I' 54, , ,158 Norrep Entrepreneurs Class, Series 'I' 17, , ,016 Norrep Global Income Growth Class, Series 'I' 124,935 1,591,264 1,994,218 Norrep Income Growth Class, Series 'I' 143,216 2,180,702 2,277,530 Norrep Tactical Opportunities Class, Series 'I' 110,429 1,488,568 1,323,028 Norrep Core Portfolios Ltd. Norrep Core Global, Series 'F' 39,258 1,000,000 1,187,193 TOTAL MUTUAL FUND SHARES 7,481,359 7,904, % Less: Transaction costs included in average cost TOTAL INVESTMENTS 7,481,359 7,904, % Other assets, less liabilities 17, % TOTAL NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES 7,921, % 5 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

9 NORREP CORE CANADIAN Statements of Financial Position (in Canadian dollars, except shares outstanding) As at October 31 October Assets Cash and cash equivalents 1,986,829 1,707,668 Dividends and interest receivable 25,980 32,415 Due from Manager (note 8) 63,800 57,500 Shares issued 49,000 29,000 Investments, at fair value through profit or loss 13,397,558 11,175,694 Total assets 15,523,167 13,002,277 Liabilities Accrued expenses (note 8) 51,300 48,499 Dividends payable 20,712 3,108 Dividends payable on investments sold short 1,635 2,432 Shares redeemed 3,046 10,612 Investments - short, at fair value through profit or loss 1,154,050 1,087,511 Total liabilities (excluding net assets attributable to holders of redeemable shares) 1,230,743 1,152,162 Net assets attributable to holders of redeemable shares 14,292,424 11,850,115 Net assets attributable to holders of redeemable shares: Series A 8,357,007 8,917,558 Series F 4,884,431 2,932,557 Series Z 1,050,986 Redeemable shares outstanding (note 7): Series A 263, ,422 Series F 151, ,051 Series Z 32,482 Net assets attributable to holders of redeemable shares per share: Series A Series F Series Z See accompanying notes to financial statements. On behalf of the Board of Directors of Norrep Capital Management Ltd. Alex Sasso Keith Leslie 6 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

10 NORREP CORE CANADIAN Statements of Comprehensive Income Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) Dividend income 324, ,507 Interest for distribution purposes 14,435 11,083 Net gain (loss) on investments at fair value through profit or loss Net realized gain (loss) on investments 719, ,626 Net change in unrealized appreciation (depreciation) in fair value of investments 928, ,426 Total investment revenue (loss) 1,986, ,642 Management fees (note 8) 178,684 81,180 Custodian and record keeping fees 28,102 12,091 Audit and tax fees 22,768 23,517 Legal and filing fees 20,109 23,140 Dividend expense on investments sold short 18,775 11,570 HST/GST 18,105 7,431 Administrative fees (note 8) 16,512 6,745 Transaction costs 15,169 11,756 Risk management fees 8,974 4,215 Other 4,407 3,167 Computer services 4,034 1,692 Independent review committee 1, Operating expense recovery (note 8) (63,800) (57,500) Total operating expenses 273, ,518 Increase in net assets attributable to holders of redeemable shares before tax 1,713, ,124 Withholding tax expense 118 Increase (decrease) in net assets attributable to holders of redeemable shares 1,713, ,124 Change in net assets attributable to holders of redeemable shares (note7): Series A 1,138, ,553 Series F 510, ,571 Series Z 64,000 Change in net assets attributable to holders of redeemable shares per share (note 7): Series A Series F Series Z 3.09 See accompanying notes to financial statements. 7 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

11 NORREP CORE CANADIAN Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) All Series Series A Series F Series Z Net assets attributable to holders of redeemable shares, beginning of period 11,850,115 8,917,558 2,932,557 Increase (decrease) in net assets, attributable to holders of redeemable shares 1,713, ,124 1,138, , , ,571 64,000 Transactions attributable to holders of redeemable shares: Issuance of redeemable shares in exchange for net assets held by Norrep Canadian Equity Class of Norrep Opportunities Corp.(note 4) 7,745,150 5,629,070 2,116,080 Issuance of shares 3,509,044 4,022, ,654 3,374,370 1,909, , ,417 Reinvestment of dividends 197, , ,733 85,612 66,070 29,179 9,724 Amounts paid on redemptions (2,759,448) (668,706) (2,297,776) (641,327) (459,718) (27,379) (1,954) 947,123 11,213,890 (1,572,389) 8,447,725 1,516,325 2,766,165 1,003,187 Dividends declared: From dividend income (218,259) (117,899) (127,135) (88,720) (74,923) (29,179) (16,201) (218,259) (117,899) (127,135) (88,720) (74,923) (29,179) (16,201) Net assets attributable to holders of redeemable shares, end of period 14,292,424 11,850,115 8,357,007 8,917,558 4,884,431 2,932,557 1,050,986 Dividends per share to holders of redeemable shares: From dividend income See accompanying notes to financial statements. 8 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

12 NORREP CORE CANADIAN Statements of Cash Flows Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) Cash flows from (used in) operating activities Increase (decrease) in net assets attributable to holders of redeemable shares 1,713, ,124 Adjustments for: Net realized (gain) loss on sale of investments at fair value through profit or loss (719,961) (298,626) Net change in unrealized (appreciation) depreciation of investments at fair value through profit or loss (928,158) (417,426) Purchase of investments (17,763,824) (11,489,424) Proceeds from the sale of investments 17,256,583 8,805,618 Dividends and interest receivable 6,435 (20,272) Due from Manager (6,300) (57,500) Accrued expenses 2,801 24,999 Dividends payable on investments sold short (797) 2,432 Net cash from (used in) operating activities (439,776) (2,696,075) Cash flows from (used in) financing activities Proceeds from the asset transferred in (note 4) 1,068,182 Proceeds from the issuance of redeemable shares 3,489,044 3,993,655 Amounts paid on redemption of redeemable shares (2,767,014) (658,094) Dividends to holders of redeemable shares, net of reinvestments (3,128) Net cash from (used in) financing activities 718,902 4,403,743 Net increase (decrease) in cash and cash equivalents 279,126 1,707,668 Effect of exchange rates on cash and cash equivalents 35 Cash and cash equivalents at beginning of period 1,707,668 Cash and cash equivalents at end of period 1,986,829 1,707,668 Dividends received, net of withholding tax paid 330, ,092 Interest received 14,435 11,083 Dividend expenses on investments sold short 19,572 9,138 See accompanying notes to financial statements. 9 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

13 NORREP CORE CANADIAN Schedule of Investment Portfolio As at October 31, 2017 (in Canadian dollars) Number of Shares Cost ($) Fair Value ($) % of Net Assets Description CANADIAN EQUITIES - Long Consumer Discretionary Canadian Tire Corp. Ltd., Class 'A' 1, , ,960 Dollarama Inc. 1, , ,859 Gildan Activewear Inc. 5, , ,296 Leon's Furniture Ltd. 11, , ,184 Magna International Inc. 3, , ,178 Quebecor Inc., Class 'B' 5, , ,476 1,174,489 1,382, % Consumer Staples Alimentation Couche-Tard Inc., Class 'B' 5, , ,597 Maple Leaf Foods Inc. 8, , ,794 North West Co. Inc. (The) 6, , ,028 Premium Brands Holdings Corp. 1, , , , , % Energy Enbridge Inc. 8, , ,346 TransCanada Corp. 7, , , , , % Financials Bank of Montreal 7, , ,810 Canadian Imperial Bank of Commerce 7, , ,768 CI Financial Corp. 9, , ,932 Manulife Financial Corp. 16, , ,040 National Bank of Canada 5, , ,355 Power Corp. of Canada 7, , ,332 Royal Bank of Canada 7, , ,351 Sun Life Financial Inc. 5, , ,400 Thomson Reuters Corp. 3, , ,120 3,553,360 4,111, % Industrials Canadian National Railway Co. 5, , ,955 Chorus Aviation Inc. 14,000 91, ,820 Hardwoods Distribution Inc. 9, , ,763 New Flyer Industries Inc. 3, , ,486 SNC-Lavalin Group Inc. 3, , ,044 Transcontinental Inc., Class 'A' 10, , ,448 Waste Connections Inc. 3, , ,450 WSP Global Inc. 5, , ,010 1,849,143 2,228, % Information Technology Constellation Software Inc , ,592 Open Text Corp. 8, , , , , % Materials CCL Industries Inc., Class 'B' 4, , , , , % 10 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

14 NORREP CORE CANADIAN Schedule of Investments Portfolio (Continued) As at October 31, 2017 (in Canadian dollars) Number of Shares Cost ($) Fair Value ($) % of Net Assets Description Real Estate BTB REIT 53, , ,708 Choice Properties REIT 14, , ,552 Canadian REIT 4, , ,360 Northview Apartment REIT 10, , ,440 NorthWest Healthcare Properties REIT 17, , ,975 1,050,352 1,097, % Telecommunication Services BCE Inc. 8, , , , , % Utilities Capital Power Corp. 10, , ,958 Fortis Inc. 7, , ,325 Northland Power Inc. 12, , ,040 Valener Inc. 15, , ,540 1,175,870 1,256, % TOTAL CANADIAN EQUITIES - Long 11,984,786 13,397, % TOTAL EQUITIES - Long 11,984,786 13,397, % Number of Shares Proceeds ($) Fair Value ($) % of Net Assets Description CANADIAN EQUITIES - Short Consumer Discretionary Canada Goose Holdings Inc. (2,700) (64,252) (74,628) Cara Operations Ltd. (2,700) (62,023) (71,307) (126,275) (145,935) -1.0% Consumer Staples Cott Corp. (3,100) (61,183) (59,954) (61,183) (59,954) -0.4% Financials Brookfield Asset Management Inc., Class 'A' (1,400) (68,630) (75,768) (68,630) (75,768) -0.6% Industrials Héroux-Devtek Inc. (5,300) (72,828) (78,016) Savaria Corp. (5,000) (71,060) (79,600) Student Transportation Inc. (9,900) (68,841) (74,745) (212,729) (232,361) -1.6% Information Technology Enghouse Systems Ltd. (1,200) (62,417) (65,424) (62,417) (65,424) -0.5% Real Estate Canadian Apartment Properties REIT (1,700) (48,218) (57,919) Cominar REIT (4,600) (61,954) (63,664) Crombie REIT (4,500) (60,477) (60,210) Dream Unlimited Corp., Class 'A' (9,300) (61,372) (68,355) First Capital Realty Inc. (3,500) (70,237) (71,610) Morguard North American Residential REIT (4,100) (62,192) (63,755) (364,450) (385,513) -2.7% 11 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

15 NORREP CORE CANADIAN Schedule of Investment Portfolio (Continued) As at October 31, 2017 (in Canadian dollars) Number of Shares Proceeds ($) Fair Value ($) % of Net Assets Description Utilities Boralex Inc., Class 'A' (2,900) (64,017) (66,468) Hydro One Ltd. (2,700) (61,347) (61,587) TransAlta Corp. (8,000) (61,639) (61,040) (187,003) (189,095) -1.3% TOTAL CANADIAN EQUITIES - Short (1,082,687) (1,154,050) -8.1% Less: Transaction costs included in average cost (4,174) TOTAL INVESTMENTS 10,897,925 12,243, % Other assets, less liabilities 2,048, % TOTAL NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES 14,292, % 12 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

16 NORREP CORE GLOBAL Statements of Financial Position (in Canadian dollars, except shares outstanding) As at October 31 October Assets Cash and cash equivalents 404, ,886 Dividends and interest receivable 6,850 3,108 Due from Manager (note 8) 62,100 41,100 Portfolio assets sold 27,713 Shares issued 516,722 Unrealized gain on derivative instruments ,474 Investments, at fair value through profit or loss 9,142,308 2,485,071 Total assets 10,160,130 2,670,639 Liabilities Accrued expenses (note 8) 32,100 14,900 Portfolio assets purchased 70,318 Shares redeemed 25,790 Unrealized loss on derivative instruments 226,386 27,127 Total liabilities (excluding net assets attributable to holders of redeemable shares) 354,594 42,027 Net assets attributable to holders of redeemable shares 9,805,536 2,628,612 Net assets attributable to holders of redeemable shares: Series A 1,328, ,809 Series F 6,152,821 1,714,803 Series Z 2,324,397 Redeemable shares outstanding (note 7): Series A 44,736 35,693 Series F 203,460 66,459 Series Z 76,720 Net assets attributable to holders of redeemable shares per share: Series A Series F Series Z See accompanying notes to financial statements. On behalf of the Board of Directors of Norrep Capital Management Ltd. Alex Sasso Keith Leslie 13 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

17 NORREP CORE GLOBAL Statements of Comprehensive Income (Loss) Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) Dividend income 69,799 51,260 Interest for distribution purposes Net gain (loss) on investments at fair value through profit or loss Net realized gain (loss) on investments (68,831) 22,855 Net realized gain (loss) on derivative instruments 123,334 18,570 Net change in unrealized appreciation (depreciation) in fair value of investments 858,518 3,789 Net change in unrealized appreciation (depreciation) on derivative instruments (212,537) (13,653) Total investment revenue (loss) 770,310 83,077 Management fees (note 8) 39,383 19,583 Custodian and record keeping fees 23,641 10,468 Legal and filing fees 19,612 19,119 Audit and tax fees 17,165 8,017 Transaction costs 13,801 19,105 HST/GST 6,348 3,949 Administrative fees (note 8) 4,630 2,101 Other 2,855 2,835 Computer services 1, Independent review committee Operating expense recovery (note 8) (62,100) (41,100) Total operating expenses 66,757 44,771 Increase (decrease) in net assets attributable to holders of redeemable shares before tax 703,553 38,306 Withholding tax expense 8,961 4,742 Increase (decrease) in net assets attributable to holders of redeemable shares 694,592 33,564 Change in net assets attributable to holders of redeemable shares (note 7): Series A 152,893 4,671 Series F 472,247 28,893 Series Z 69,452 Change in net assets attributable to holders of redeemable shares per share (note 7): Series A Series F Series Z 1.86 See accompanying notes to financial statements. 14 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

18 NORREP CORE GLOBAL Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) All Series Series A Series F Series Z Net assets attributable to holders of redeemable shares, beginning of period 2,628, ,809 1,714,803 Increase (decrease) in net assets, attributable to holders of redeemable shares 694,592 33, ,893 4, ,247 28,893 69,452 Transactions attributable to holders of redeemable shares: Issuance of shares 7,098,686 2,595, , ,138 4,463,005 1,685,910 2,274,502 Amounts paid on redemptions (616,354) (99,563) (497,234) (19,557) 6,482,332 2,595, , ,138 3,965,771 1,685,910 2,254,945 Net assets attributable to holders of redeemable shares, end of period 9,805,536 2,628,612 1,328, ,809 6,152,821 1,714,803 2,324,397 See accompanying notes to financial statements. 15 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

19 NORREP CORE GLOBAL Statements of Cash Flows Year ended October 31, 2017 and Period from February 17 to October 31, 2016 (in Canadian dollars) Cash flows from (used in) operating activities Increase (decrease) in net assets attributable to holders of redeemable shares 694,592 33,564 Adjustments for: Net realized (gain) loss on sale of investments at fair value through profit or loss 68,831 (22,855) Net change in unrealized (appreciation) depreciation of investments at fair value through profit or loss (858,518) (3,789) Net change in unrealized (appreciation) depreciation on derivative instruments 212,537 13,653 Purchase of investments (6,026,196) (2,689,221) Proceeds from the sale of investments 233, ,456 Dividends and interest receivable (3,742) (3,108) Due from Manager (21,000) (41,100) Accrued expenses 17,200 14,900 Net cash from (used in) operating activities (5,683,233) (2,481,500) Cash flows from (used in) financing activities Proceeds from the issuance of redeemable shares 6,581,964 2,595,048 Amounts paid on redemption of redeemable shares (590,564) Net cash from (used in) financing activities 5,991,400 2,595,048 Net increase (decrease) in cash and cash equivalents 308, ,548 Effect of exchange rates on cash and cash equivalents (31,812) 14,338 Cash and cash equivalents at beginning of period 127,886 Cash and cash equivalents at end of period 404, ,886 Dividends received, net of withholding tax paid 57,096 43,410 Interest received See accompanying notes to financial statements. 16 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

20 NORREP CORE GLOBAL Schedule of Investment Portfolio As at October 31, 2017 (in Canadian dollars) Number of Shares Cost ($) Fair Value ($) % of Net Assets Description CANADIAN EQUITIES Financials Royal Bank of Canada 1, , ,653 Toronto-Dominion Bank (The) 3, , , , , % TOTAL CANADIAN EQUITIES 367, , % UNITED STATES EQUITIES Consumer Discretionary Home Depot Inc. 1, , ,231 McDonald's Corp. 1, , ,512 Nike Inc., Class 'B' 2, , ,766 Starbucks Corp. 2, , , , , % Consumer Staples Altria Group Inc. 2, , ,321 Anheuser-Busch InBev NV, ADR 1, , ,953 Costco Wholesale Corp. 1, , ,959 Estée Lauder Cos. Inc., Class 'A' 1, , ,409 General Mills Inc. 2, , , ,766 1,001, % Energy Chevron Corp. 1, , , , , % Financials First Republic Bank 2, , ,896 Wells Fargo & Co. 5, , , , , % Health Care Danaher Corp. 1, , ,532 Eli Lilly and Co. 1, , ,639 Johnson & Johnson 1, , ,621 PerkinElmer Inc. 1, , , , , % Industrials Fortive Corp ,957 57,939 Lockheed Martin Corp , , , , % Information Technology Alphabet Inc., Class 'A' , ,031 Microsoft Corp. 3, , ,210 Oracle Corp. 3, , ,393 Visa Inc., Class 'A' 1, , , ,614 1,129, % Materials Monsanto Co , ,741 Sherwin-Williams Co , , , , % 17 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

21 NORREP CORE GLOBAL Schedule of Investment Portfolio (Continued) As at October 31, 2017 (in Canadian dollars) Number of Shares Cost ($) Fair Value ($) % of Net Assets Description Telecommunication Services Verizon Communications Inc. 1,489 92,838 91,885 92,838 91, % TOTAL UNITED STATES EQUITIES 4,719,283 5,257, % INTERNATIONAL EQUITIES Denmark Alm. Brand AS 2,300 25,874 30,635 Danske Bank AS 4, , ,908 DSV AS 3, , ,349 Novo Nordisk AS, Series 'B' 1, , ,631 Topdanmark AS 3, , , , , % Finland Kone OYJ, Class 'B' 1, , , , , % Indonesia PT Bank Central Asia TBK 175, , , , , % Japan Bridgestone Corp. 3, , ,559 Suntory Beverage & Food Ltd. 2, , , , , % Netherlands Grandvision NV 4, , ,395 Hal Trust 1, , ,453 Heineken NV 2, , ,271 Koninklijke KPN NV 40, , , , , % Norway Atea ASA 7, , , , , % Portugal Galp Energia, Class 'B' 8, , , , , % Sweden Cloetta AB 19,300 86,333 84,103 Svenska Handelsbanken AB, Class 'A' 8, , , , , % Switzerland Givaudan SA, Registered 15 38,644 43,220 38,644 43, % United Kingdom British American Tobacco PLC 1, , ,846 Unilever PLC 2, , , , , % TOTAL INTERNATIONAL EQUITIES 3,201,271 3,465, % TOTAL EQUITIES 8,288,410 9,142, % 18 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

22 NORREP CORE GLOBAL Schedule of Investment Portfolio (Continued) As at October 31, 2017 (in Canadian dollars) Description Number of Shares Cost ($) Fair Value ($) % of Net Assets Less: Transaction costs included in average cost (8,409) TOTAL INVESTMENTS 8,280,001 9,142, % Derivative Assets % Derivative Liabilities (226,386) -2.3% Other assets, less liabilities 889, % TOTAL NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES 9,805, % 19 FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

23 NORREP CORE GLOBAL Schedule of Derivative Investments - Forward Foreign Currency Contracts As at October 31, 2017 Counterparty Credit Rating Settlement Date Currency to be Delivered Fair Value in Cdn Dollars Currency to be Received Contract Price Unrealized Loss Bank of Nova Scotia A-1 December 15, ,800 CHF 41,235 40,567 CAD (668) Bank of Nova Scotia A-1 December 15, ,817,800 DKK 796, ,151 CAD (19,347) Bank of Nova Scotia A-1 December 15, ,100 EUR 1,077,649 1,047,163 CAD (30,486) Bank of Nova Scotia A-1 December 15, ,500 GBP 301, ,111 CAD (18,946) Bank of Nova Scotia A-1 December 15, ,050,500 JPY 318, ,436 CAD (8,342) Bank of Nova Scotia A-1 December 15, ,600 NOK 99,330 99,137 CAD (193) Bank of Nova Scotia A-1 November 15, ,470,400 USD 4,473,211 4,336,022 CAD (1.2494) (137,189) Bank of Nova Scotia A-1 December 15, ,600 USD 407, ,741 CAD (1.2531) (11,215) Net Unrealized Loss (226,386) Counterparty Credit Rating Settlement Date Currency to be Delivered Fair Value in Cdn Dollars Currency to be Received Contract Price Unrealized Gain Bank of Nova Scotia A-1 December 15, ,006,100 SEK 222, ,035 CAD Net Unrealized Gain FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

24 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Reporting Entity: On January 9, 2014, Norrep MG Fund Ltd. changed its name to Norrep Premium Portfolios Ltd. In addition, on that same date, Norrep MG Opportunity Class changed its name to Norrep Premium Growth Class. Then on February 17, 2016 Norrep Premium Portfolios Ltd. changed its name to Norrep Core Portfolios Ltd. Norrep Core Portfolios Ltd. (the Corporation ) consists of Norrep Premium Growth Class, Norrep Core Canadian, and Norrep Core Global (the Funds ). Norrep Premium Growth Class began operations on March 28, On January 22, 2014 it started two new Series, MF Series and Series F. The old MF Series changed its name to MG Series. Norrep Core Canadian and Norrep Core Global began operations on February 17, On June 29, 2017, MF Series was renamed as Series A. Additionally, Norrep Core Canadian Pool was renamed as Norrep Core Canadian and Norrep Core Global Pool will be renamed as Norrep Core Global. The Corporation is authorized to issue 100 Classes of special shares, each Class being issuable in series (collectively the Special Shares ) and an unlimited number of common shares. At October 31, 2017, there were 100 common shares issued as well as three Classes of Special Shares with Norrep Premium Growth Class, Norrep Core Canadian, and Norrep Core Global all issued in three series. Each special share represents an equal undivided interest in the net assets of its Fund. CIBC Mellon Trust Company is the custodian of the Funds, Scotia Capital Inc. is the Prime Broker, and Norrep Capital Management Ltd. is the Manager and Portfolio Manager of the Fund. Norrep Premium Growth Class (in this context, the Top Fund ) may invest in securities of other funds within the Norrep Group of Funds (in this context, each an Underlying Fund ). 2. Basis of preparation: (a) Statement of compliance: These financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). The Fund s significant accounting policies under IFRS are presented in note 3. These policies have been applied consistently to all periods presented. The financial statements of the Funds were approved and were authorized for issue by the Manager s Board of Directors on December 14, (b) Basis of measurement: The financial statements have been prepared on the historical cost basis, except for investments at fair value through profit or loss and derivative instruments which are measured at fair value. (c) Functional and presentation currency: The financial statements are presented in Canadian dollars, which is the Funds functional currency, and all values are rounded to the nearest dollar except where otherwise indicated. (d) Use of judgements and estimates: These financial statements include estimates and assumptions made by management that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and gains and losses during the reporting period. Actual results could differ from those estimates. 1 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

25 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Basis of preparation (continued): (d) Use of judgements and estimates (continued): Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. Significant estimates include the valuation of investments and the unrealized gains/losses from investments. 3. Significant accounting policies: The Funds have consistently applied the following accounting policies to all periods presented in these financial statements. (a) Financial assets and financial liabilities: (i) Recognition and initial measurement Financial assets and financial liabilities at fair value through profit or loss are initially recognized on the trade date, which is the date on which the Fund becomes a party to the contractual provisions of the instrument. Other financial assets and financial liabilities are recognized on the date on which they are originated. Financial assets and financial liabilities at fair value through profit or loss are initially recognized at fair value, with transaction costs recognized in profit or loss. (ii) Classification The Funds classify financial assets and financial liabilities into the following categories. Financial assets at fair value through profit or loss: Held for trading: derivatives Designated at fair value through profit and loss: all investments Financial assets at amortized cost: Loans and receivables: cash and receivables Financial Liabilities at amortised cost: Other liabilities: all liabilities and redeemable shares A financial instrument is classified as held for trading if: it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; on initial recognition, it is part of a portfolio that is managed together and for which there is evidence of a recent pattern of short-term profit taking; or it is a derivative, other than a designated and effective hedging instrument. The Funds designate all debt and equity investments at fair value through profit or loss on initial recognition because it manages these securities on a fair value basis in accordance with its 2 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

26 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Significant accounting policies (continued): (a) Financial assets and financial liabilities (continued): (ii) Classification (continued) documented investment strategy. Internal reporting and performance measurement of these securities is on a fair value basis. (iii) 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 in the principal or, in its absence, the most advantageous market to which the Fund has access at that date. The fair value of a liability reflects its non-performance risk. Fair value of investments in the Underlying Funds is valued at the net asset value per share of each Underlying Fund as of the close of regular trading on the Toronto Stock Exchange. There is no difference between pricing NAV and accounting NAV. (iv) Amortized cost measurement The amortized cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at recognition, minus principal repayments (if applicable), plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount (if applicable), minus any reduction for impairment (if applicable). (v) Specific instruments Cash and cash equivalents Cash and cash equivalents comprise deposits with banks and highly liquid financial assets with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value and are used by the Funds in the management of short-term commitments, other than cash collateral provided in respect of derivatives and securities borrowing transactions. Redeemable shares The Funds classify financial instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. The Funds have multiple classes of redeemable shares that do not have identical features and therefore, do not qualify as equity under IAS 32, Financial Instruments: Presentation. The redeemable shares, which are classified as financial liabilities and measured at redemption amount, provide investors with the right to require redemption, subject to available liquidity, for cash at a share price based on the Fund s valuation policies at each redemption date. The shares represent the residual interest in the Fund. The value at which mutual fund shares are issued or redeemed is determined by dividing the net assets of the Fund at fair value based on last traded price by the total number of mutual fund shares 3 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

27 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Significant accounting policies (continued): (a) Financial assets and financial liabilities (continued): (v) Special Instruments (continued) outstanding on the valuation date. Amounts received on the issuance of mutual fund shares and amounts paid on the redemption of mutual fund shares are added to, or deducted from net assets. (b) Dividend income: Dividend income is recognized in profit or loss on the date on which the right to receive payment is established. This is usually the ex-dividend date. (c) Dividends to holders of redeemable shares: Any dividends paid will be in proportion to the number of shares held by each shareholder. Dividends per share to shareholders is calculated as the total amount of dividends attributable to a series divided by the number of shares of the series at the date of distribution. (d) Net gain (loss) from financial instruments at fair value through profit or loss: Net unrealized/realized gain (loss) from financial instruments at fair value through profit or loss is calculated using the average cost method. Average cost does not include amortization of premiums or discounts on fixed income securities. (e) Income tax: The Corporation is qualified as a mutual fund corporation for the purposes of the Income Tax Act (Canada) and the Alberta Corporate Tax Act. Interest and foreign dividends received, less applicable expenses, are taxed at Federal and Provincial corporate rates less applicable credits for any foreign taxes paid. Taxable dividends received from taxable Canadian corporations are subject to taxes that are fully refundable upon payment of sufficient taxable dividends to shareholders. The Corporation is also subject to tax at full corporate rates on 50% of capital gains realized, less allowable capital losses claimed. This tax is generally refundable to the extent that the Corporation distributes its capital gains to shareholders by way of a capital gains dividend, or through the redemption of its shares. Temporary differences between the tax basis of assets and liabilities and their carrying amounts may be either taxable or deductible. Taxable temporary differences give rise to deferred income tax liabilities and deductible temporary differences give rise to deferred income tax assets. When the fair value of investments is greater than the related tax basis, a deferred income tax liability arises and the deferred tax liability is offset by refundable taxes generated by future payments of capital gains dividends. When the fair value of investments is less than the related tax basis, a deferred income tax asset arises and due to the uncertainty of such deferred income tax assets ultimately being realized, a full valuation allowance 4 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

28 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Significant accounting policies (continued): (e) Income tax (continued): is applied to offset the asset. Any unused capital and non-capital losses represent deferred tax assets to the Corporation for which a full valuation allowance has been established such that no net benefit has been recorded by the Corporation. Income that would give rise to deferred income tax liabilities or assets are distributed out to shareholders. (f) Increase (decrease) in net assets attributable to holders of redeemable shares: Increase (decrease) in net assets attributable to shareholders per share is calculated as increase (decrease) in net assets attributable to shareholders, divided by the weighted average shares outstanding during the period. (g) Translation of foreign currency: Foreign currency amounts are expressed in Canadian dollars as follows: (i) fair value of investments and accrued receivables and payables and other assets and liabilities at the rate of exchange at the end of the period; and (ii) purchases and sales of investments and dividend and interest income at the rate of exchange prevailing on the respective dates of such transactions. Foreign currency differences are recognized as a component of net gain/loss from financial instruments at fair value through profit or loss. (h) Derivative financial instruments: The Funds may use derivative financial instruments to reduce their exposure to fluctuations in foreign currency exchange rates. Derivative financial instruments are recorded at mark to market with changes in fair value recorded in the statement of comprehensive income. Options are contracts entitling the holder to purchase or sell a specified item at a specified price, during a specified period or on a specified date. Options purchased are recorded as investments; options written (sold) are recorded as liabilities. Any gain or loss resulting from revaluation is included in change in unrealized gain (loss) on derivative instruments on the statements of comprehensive income. Upon closing of an option, other than by exercise, which results in a cash settlement, the difference between the premium (original option value) and the settlement proceeds is included in net realized gain (loss) on derivative instruments on the statements of comprehensive income. When securities are acquired or delivered upon exercise of an option, the acquisition cost or sale proceeds are adjusted by the amount of the premium. When an option is closed, the difference between the premium and the cost to close the position is included in net realized gain (loss) on derivatives on the statements of comprehensive income. When an option expires, the premium for options written or purchased is reflected in the statements of operations as net realized gain (loss) on derivative instruments. 5 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

29 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Significant accounting policies (continued): (h) Derivative financial instruments (continued): The risks include the possibility there may be an illiquid options market or the inability of the counterparties to fulfill their obligations under the contract. Writing options involves, to varying degrees, elements of market risk in excess of the amount recognized in the statements of financial position. (i) Future accounting pronouncements: IFRS 9 Financial Instruments introduces new requirements for the classification and measurement of financial assets. The standard contains two primary measurement categories for financial assets: amortized cost and fair value. IFRS 9 also introduces new requirements to address the impairment of financial assets. The mandatory effective date of IFRS 9 for the Fund is for the fiscal year beginning November 1, The Manager has reviewed the standard and does not anticipate a material impact on the Funds. 4. Asset transfers: On June 17, 2016, Norrep Canadian Equity Class of Norrep Opportunities Corp. transferred its net assets, at fair market value, of the Fund to Norrep Core Canadian of Norrep Core Portfolios Ltd. in exchange for 208,183 Norrep Core Canadian Series A shares and 77,995 Norrep Core Canadian Series F shares. The assets transferred were as follows: (in Canadian dollars) June 17, 2016 Cash and cash equivalents 1,068,182 Other Assets - net of liabilities (11,357) Investments, at fair value 6,688,325 Value of assets received and mutual fund shares issued 7,745, Fair value measurement: (a) Investments: The fair values of financial assets and financial liabilities that are traded on active markets are based on quoted market prices. For all other financial instruments, the Funds determine fair values using other valuation techniques. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument. A three-tier hierarchy is used as a framework for disclosing fair value based on inputs used to value the Fund s investments. The hierarchy of inputs is summarized below: Inputs that are quoted prices (unadjusted) in active markets for identical instruments (Level 1); 6 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

30 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Fair value measurement (continued): (a) Investments (continued): Inputs other than quoted prices included in Level 1 that are observable for instruments, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (Level 2). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data; and Inputs for the instruments that are not based on observable market data (unobservable inputs) (Level 3). This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument s valuation. This category includes instruments that are valued based on the quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments. Changes in valuation methods may result in transfers into or out of an investment s assigned level. The Funds recognise transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change occurred. (b) Fair value hierarchy Financial instruments measured at fair value: The tables below analyze investments measured at fair value at October 31, 2017 and October 31, 2016 by the level in the fair value hierarchy into which the fair value measurement is categorized. The amounts are based on the values recognized in the statement of financial position. (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Premium Growth Class October 31, 2017 Public securities Underlying Funds 7,904,143 7,904,143 Total Investments 7,904,143 7,904,143 (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Premium Growth Class October 31, 2016 Public securities Underlying Funds 9,474,586 9,474,586 Total Investments 9,474,586 9,474,586 7 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

31 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Fair value measurement (continued): (b) Fair value hierarchy Financial instruments measured at fair value (continued): (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Core Canadian - October 31, 2017 Public securities Equities - long 13,397,558 13,397,558 Equities - short (1,154,050) (1,154,050) Total Investments 12,243,508 12,243,508 (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Core Canadian - October 31, 2016 Public securities Equities - long 11,175,694 11,175,694 Equities - short (1,087,511) (1,087,511) Total Investments 10,088,183 10,088,183 (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Core Global - October 31, 2017 Public securities Equities - long 9,142,308 9,142,308 Unrealized gain on derivative instruments forward contracts Unrealized loss on derivative instruments forward contracts (226,386) (226,386) Total Investments 9,142,308 (226,190) 8,916,118 (in Canadian dollars) Level 1 Level 2 Level 3 Total Norrep Core Global - October 31, 2016 Public securities Equities - long 2,485,071 2,485,071 Unrealized gain on derivative instruments forward contracts 13,474 13,474 Unrealized loss on derivative instruments forward contracts (27,127) (27,127) Total Investments 2,485,071 (13,653) 2,471,418 There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. (c) Financial instruments not measured at fair value: The carrying values of cash, dividends and interest receivable, accrued expenses, and other receivables and payables approximate their fair values due to their short term nature. 8 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

32 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks: The Funds activities expose it to a variety of risks associated with financial instruments as follows: credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). The Funds overall risk management program seeks to maximize the returns for the level of risk to which the Funds are exposed and seeks to minimize potential adverse effects on the Fund s financial performance. All investments result in a risk of loss of capital. Credit risk: Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Funds. The fair value of debt securities includes consideration of the credit worthiness of the debt issuer. The carrying amount of bonds and secured loans in the Underlying Funds represents the maximum credit risk exposure as at October 31, 2017 and October 31, The carrying amount of cash and cash equivalents and receivables also represents their maximum credit risk. A portion of each Fund s Underlying Funds may consist of instruments that have a credit quality rated below investment grade by internationally recognized credit rating organizations or may be unrated. These securities involve significant risk exposure as there is uncertainty regarding the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligations. Low rated and unrated debt instruments generally offer a higher current yield than that available from higher grade issuers, but typically involve greater risk. Credit risk arising on transactions for units purchased and portfolio assets sold relates to transactions awaiting settlement, also known as settlement risk. Settlement risk is the risk of loss due to the failure of an entity to honour its obligations to deliver cash, securities or other assets as contractually agreed. Credit risk relating to unsettled transactions is considered small due to the short settlement period involved and the high credit quality of the brokers used. For the majority of the transactions, the Funds mitigate this risk by conducting settlements through a broker to ensure that a trade is settled only when both parties have fulfilled their contractual settlement obligations. Also, legal entitlement will not pass until all monies have been received for the units purchased or the portfolio assets sold. If either party does not meet its obligation then the transaction will fail. Substantially all of the assets of the Funds are held by CIBC Mellon Trust Company, the custodian and the Prime Broker. Bankruptcy or insolvency of the custodian may cause the Funds rights with respect to securities held by the custodian to be delayed or limited. The Funds monitor risk by monitoring the credit quality, credit rating and financial position of the custodian the Funds use. If the credit quality or the financial position deteriorates significantly then the Portfolio Manager will move the cash holdings to another financial institution. The Portfolio Manager analyses credit concentration based on the counterparty, industry and geographical location of the financial assets that each Fund holds. Other than outlined above there were no significant concentrations of credit risk to counterparties at October 31, 2017 and October 31, NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

33 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks (continued): Liquidity risk: Liquidity risk is the risk that the Funds will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or other financial assets. The Funds and their Underlying Funds are exposed to daily cash redemptions of redeemable shares. Investments in small, mid-capitalization and micro-capitalization companies may involve greater risks than in larger, more established companies since such companies may have more limited markets and financial resources and their securities may be more sensitive to market changes. As well, the liquidity of the securities may be limited. Consequently, in order to fund redemptions, the Underlying Funds may have to liquidate shareholdings in the more liquid large and medium-sized companies. To the extent that the liquidity is limited, the Funds ability to realize profits and/or minimize losses may be limited, which could adversely affect the net asset value of the Funds. Also, the Underlying Funds investments may include unlisted equity and debt instruments, which are not traded on an organized public market and which may be illiquid. As a result, the Underlying Funds may not be able to quickly liquidate some of its investments in these instruments at an amount close to their fair value in order to meet their liquidity requirements. The Funds believe they maintain sufficient cash and cash equivalent positions to maintain liquidity. The Funds liquidity risk is managed on a daily basis by the Portfolio Manager. Minimum cash balances may be required to be maintained in each Fund at the discretion of the Portfolio Manager to allow for monies to cover redemptions. The Funds redemption policy allows for redemptions at any time during any given month. The Funds are subject to regulatory requirements whereby the Funds shall not purchase an illiquid asset if, immediately after the purchase, more than ten percent of the net assets of each Fund, taken at market value at the time of purchase, would consist of illiquid assets. Residual contractual maturities of financial liabilities are all due on demand. Market risk: Market risk embodies the potential for both losses and gains and includes currency risk, interest rate risk and price risk. The Funds strategies on the management of investment risk are driven by the Funds investment objectives. Norrep Premium Growth is designed to provide holders of the shares with dividend income and the potential for long term capital appreciation. Norrep Core Canadian is designed to achieve long-term capital appreciation by investing primarily in equity securities of large capitalization issuers. Norrep Core Global will seek to achieve long-term capital appreciation by investing primarily in global equity securities. Norrep Premium Growth Class may invest up to all of its assets in other funds within the Norrep Group of Funds, as well as investing in equity and debt securities of Canadian, U.S. and International companies of all capitalization that may or may not be listed for trading upon the facilities of stock exchanges or other organized and regulated trading facilities. 10 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

34 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks (continued): Market risk (continued): No material change in the investment objectives, policies or restrictions of a Fund may be made without the approval of a two-thirds majority of the votes cast by shareholders at a meeting of the Fund duly called for that purpose. The Funds market risk is managed on a daily basis by the Portfolio Manager in accordance with the policies and procedures in place. Details of the nature of the Funds investment portfolio at October 31, 2017 are disclosed in the schedule of investment portfolio. (a) Currency risk: The Funds may invest in financial instruments and enter into transactions denominated in currencies other than the Canadian dollar. Consequently, the Funds are exposed to risks that the exchange rate of the Canadian dollar to other foreign currencies may fluctuate. The Funds may use derivatives to hedge the foreign currency exposure or the Underlying Fund s foreign currency exposure. Such permitted derivatives may include exchange-traded options, futures contracts, and options on futures, over-the-counter options and forward contracts. Although all of Norrep Premium Growth Class investments are in Canadian dollars, some of the Underlying Funds hold investments in global currencies. If the foreign exchange rates fluctuate in these foreign currencies then the prices of the Underlying Funds will fluctuate. To date, Norrep Premium Growth Class has not hedged this exposure. At October 31, 2017, Norrep Core Global had the following foreign currency exposure as a percentage of the net asset value, including the impact of outstanding derivatives. Norrep Core Global U.S. Dollar 3.9% (0.1)% Indonesian Rupiah 3.5% 3.3% Euro 0.9% (0.2)% Danish Kroner 0.9% Japanese Yen 0.4% 0.2% British Pound 0.2% Norwegian Krone 0.2% Swedish Kroner 0.1% 0.1% Swiss Franc (0.2)% Sensitivity Analysis: At October 31, 2017, had the Canadian dollar strengthened or weakened by 1% in relation to all currencies, with all other variables held constant, including the impact of outstanding derivative instruments, net assets attributable to the holders of redeemable shares and the change in net assets 11 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

35 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks (continued): Market risk (continued): (a) Currency risk (continued): attributable to holders of redeemable shares would have increased or decreased by the amounts shown below. In practice, the actual trading results may differ from this sensitivity analysis and the difference could be material. Norrep Core Global (in Canadian dollars) Indonesian Rupiah 3, U.S. Dollar 3,796 (28) Euro 885 (59) Danish Kroner 848 (7) Japanese Yen British Pound 236 (8) Norwegian Krone 176 Swedish Kroner Swiss Franc 22 (17) Total 9, (b) Interest rate risk: Interest rate risk arises on interest-bearing financial instruments. Some of the Underlying Funds have interest-bearing assets and are exposed to the risk that the value of interest-bearing financial instruments will fluctuate due to changes in the prevailing market interest rates. High yield corporate bond prices are impacted by the credit metrics, liquidity and business fundamentals of the corporate entity with a minimal correlation to interest rates. Thus, the high yield corporate bonds held in the Underlying Funds are empirically correlated with the related stock indices for those corporate investments. (c) Other price risk: Other price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment or its issuer, or factors affecting all instruments traded in the market. All securities present a risk of loss of capital. Price risk is managed by the Fund s Portfolio Manager through construction of diversified portfolios. The price of a security is affected by individual company developments and by general economic and financial conditions in those countries where the issuer of the security is located, does business or where the security is listed for trading. In addition, certain securities are not listed on any prescribed stock exchange and thus a liquid market for resale may not exist. The Portfolio Manager will monitor these factors daily and make decisions regarding the portfolio based on its knowledge of the market conditions and diversify the portfolio of investments accordingly. The maximum price risk resulting from financial instruments is equivalent to their fair value. 12 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

36 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks (continued): Market risk (continued): (c) Other price risk (continued): Sensitivity analysis: Management s estimate of the impact of a 1% increase or decrease on the following indices at October 31, 2017 and October 31, 2016, is an increase or decrease in the net assets attributable to holders of redeemable shares of approximately: Norrep Premium Growth Class Total Return Index Change in (In Canadian dollars) Net Assets ($) Underlying Funds Norrep Income Growth Class 75% S&P/TSX; 25% FTSE TMX Canada Universe Bond Index 22,775 27,298 Norrep Global Income Growth 75% MSCI World Index (net); 25% FTSE TMX Canada Universe Bond Index 19,942 25,210 Norrep Tactical Opportunities Class 60% S&P/TSX; 20% Russell 3000 Index in USD; 20% FTSE TMX Canada Universe Bond Index 13,230 16,227 Norrep Core Global MSCI World Net Total Return Index 11,872 10,129 Norrep Entrepreneurs Class 100% BMO Small Cap Equity Only Weighted 6,220 6,692 Norrep Energy Plus Class S&P/TSX Capped Energy 5,002 9,190 Total 79,041 94,746 Total Return Index (In Canadian dollars) Change in Net Assets ($) Norrep Core Canadian S&P TSX Composite Total Return Index 122, ,882 Norrep Core Global MSCI World Net Total Return Index 91,423 24,851 In practice, the actual trading results may differ from this estimate and the difference could be material. The Norrep Premium Growth Class financial assets exposed to other price risk were concentrated 100% in Canadian mutual funds; however, the securities held in these mutual funds were concentrated in various sectors. The other Funds financial assets exposed to other price risk are concentrated in the following industries at October NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

37 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Financial instruments and associated risks (continued): Market risk (continued): (c) Other price risk (continued): Norrep Core Canadian Energy 7.1% 7.8% Basic Materials 2.3% 5.1% Industrials 16.3% 9.4% Consumer Discretionary 10.1% 12.4% Consumer Staples 7.6% 8.5% Financials 33.0% 29.4% Information Technology 4.9% 4.2% Telecommunication Services 4.1% 8.5% Utilities 8.8% 6.4% Real Estate 5.8% 8.3% Total 100.0% 100.0% Norrep Core Global Energy 4.6% 4.1% Basic Materials 2.9% 2.6% Industrials 7.1% 13.4% Consumer Discretionary 12.6% 14.0% Consumer Staples 20.0% 16.1% Health Care 10.8% 9.3% Financials 25.5% 21.1% Information Technology 13.5% 10.9% Telecommunication Services 3.0% 3.0% Other 5.5% Total 100.0% 100.0% 7. Redeemable shares: The Corporation is authorized to issue an unlimited number of special shares of up to 100 classes with each class representing a separate fund with its own investment objective and investment portfolio (referred to collectively as the special shares ). Each class can be divided into 26 series, each series being comprised of an unlimited number of shares. Currently, within the Norrep Premium Growth Class, there are three series outstanding, Series A, Series F and MG Series. There are three series outstanding, Series A, Series F and Series Z within Norrep Core Canadian and Norrep Core Global. Each series ranks equally with respect to dividends and return of capital in the event of liquidation, dissolution or winding up based on their respective series net asset values. Each series pays its own fees and expenses. Series A and the MG Series shares are sold through the front end sales charge option. Under the front end sales charge option, a commission ranging from 0% to 5% is paid by the investor to the dealer with a 2% redemption fee being charged if the shares are redeemed in the first 90 days. Series F and Series Z are sold without commission provided the purchaser is enrolled in a fee-forservice or wrap program with the dealer. A 2% redemption fee is charged if the Series F and Series Z shares are redeemed in the first 90 days. In addition, the Corporation is authorized to issue an unlimited number of common shares. The special shares have priority over the common shares with respect to the payment of dividends and the distribution of 14 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

38 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Redeemable shares (continued): assets or return of capital in the event of liquidation or dissolution on winding up of the Corporation. 100 common shares were issued on incorporation for $1. The rights attached to the redeemable shares are as follows: the shares may be redeemed daily at the net asset value per share of the respective series; redeemable shares carry a right to receive notice of, attend and vote at meetings; and the holders of redeemable shares are entitled to receive all dividends declared by the Fund. Each series will rank equally with respect to the distributions based on their respective series net asset values. Distributions paid in cash will be paid in the currency in which the investor bought the shares. The analysis of movements in the number of redeemable shares was as follows: Norrep Premium Growth Class Series A Series F MG Series Balance, October 31, ,783 85, ,710 Issued for cash 12,803 13, Issued on reinvestment of distributions 5,363 2,580 8,567 Redeemed for cash (50,509) (38,001) (82,776) Balance, October 31, ,440 64, ,699 Norrep Premium Growth Class Series A Series F MG Series Balance, October 31, , , ,541 Issued for cash 15,129 19,108 2,417 Issued on reinvestment of distributions 7,386 3,836 10,202 Redeemed for cash (130,828) (204,313) (85,449) Balance, October 31, ,783 85, ,711 Norrep Core Canadian Series A Series F Series Z Balance, October 31, , ,051 Issued for cash 20,088 61,090 32,242 Issued on reinvestment of distributions 3,835 2, Redeemed for cash (76,049) (14,891) (61) Balance, October 31, , ,296 32, NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

39 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Redeemable shares (continued): Norrep Core Canadian Series A Series F Balance, February 17, 2016 Issued for cash 126,577 25,001 Issued, in exchange for assets transferred in (note 4) 208,183 77,995 Issued on reinvestment of distributions 3,428 1,025 Redeemed for cash (22,766) (970) Balance, October 31, , ,051 Norrep Core Global Series A Series F Series Z Balance, October 31, ,693 66,459 Issued for cash 12, ,239 77,371 Redeemed for cash (3,593) (17,238) (651) Balance, October 31, , ,460 76,720 Norrep Core Global Series A Series F Balance, February 17, 2016 Issued for cash 35,693 66,459 Balance, October 31, ,693 66,459 Increase (decrease) in net assets attributable to holders of redeemable shares per share is calculated as follows: Norrep Premium Growth Class - October 31, 2017 Series A Series F MG Series Increase in net assets attributable to holders of redeemable shares $181,002 $112,220 $445,637 Average shares outstanding during the year 142,944 75, ,076 Increase in net assets attributable to holders of redeemable shares per share $1.27 $1.49 $1.37 Norrep Premium Growth Class - October 31, 2016 Series A Series F MG Series Increase in net assets attributable to holders of redeemable shares $71,335 $59,453 $247,737 Average shares outstanding during the year 203, , ,554 Increase in net assets attributable to holders of redeemable shares per share $0.35 $0.45 $0.63 Norrep Core Canadian - October 31, 2017 Series A Series F Series Z Increase in net assets attributable to holders of redeemable shares $1,138,973 $510,472 $64,000 Average shares outstanding during the year 289, ,624 20,741 Increase in net assets attributable to holders of redeemable shares per share $3.93 $4.49 $3.09 Norrep Core Canadian - October 31, 2016 Series A Series F Increase in net assets attributable to holders of redeemable shares $558,553 $195,571 Average shares outstanding during the period 209,110 62,886 Increase in net assets attributable to holders of redeemable shares per share $2.67 $ NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

40 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Redeemable shares (continued): Norrep Core Global - October 31, 2017 Series A Series F Series Z Increase in net assets attributable to holders of redeemable shares $152,893 $472,247 $69,452 Average shares outstanding during the year 36,451 85,282 37,334 Increase in net assets attributable to holders of redeemable shares per share $4.19 $5.54 $1.86 Norrep Core Global - October 31, 2016 Series A Series F Increase in net assets attributable to holders of redeemable shares $4,671 $28,893 Average shares outstanding during the period 30,538 59,159 Increase in net assets attributable to holders of redeemable shares per share $0.15 $ Management fees, expenses and key contracts: (a) Manager and management fees: The Norrep Premium Growth Class paid an annual management fee to the Manager of 2% for the Series A, Norrep Core Canadian paid an annual management fee to the Manager of 1.75% for the Series A, of the net asset value of the series. Norrep Core Global paid an annual management fee to the Manager of 1.85% for the Series A, of the net asset value of the series. The Norrep Premium Growth Class paid an annual management fee of 0.8% for the Series F, and 1.55% for the MG Series, of the net asset value of each series. The Norrep Core Canadian paid an annual management fee of 0.75% for the Series F, of the net asset value the series. The Norrep Core Global paid an annual management fee of 0.85% for the Series F, of the net asset value of the series. The management fee is calculated and paid monthly. No management fees were charged to Series Z; instead, the investors pay an annual flat management fee of $1,000 per account, directly to the Manager. The Funds may invest in securities of other funds within the Norrep Group of Funds, called the Underlying Funds; however, the Funds will not pay duplicate management fees on the portion of its assets invested in the Underlying Funds, as no management fees are charged in the applicable series of the Underlying Funds. Accrued expenses include management fees payable as follows: (in Canadian dollars) October 31, 2017 October 31, 2016 Norrep Premium Growth Class 9,481 12,755 Norrep Core Canadian 14,987 14,937 Norrep Core Global 6,098 2,655 (b) Expenses: All fees and expenses applicable to the administration and operation of each series, including record keeping and communication costs, custodian fees, legal and filing fees, audit, applicable taxes and bank charges, are payable by the Funds. Brokerage costs are expensed as incurred and included in transaction costs. Accrued expenses include administration services payable to Norrep as follows: 17 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

41 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Management fees, expenses and key contracts (continued): (b) Expenses (continued): (in Canadian dollars) October 31, 2017 October 31, 2016 Norrep Premium Growth Class Norrep Core Canadian 1,407 1,248 Norrep Core Global (c) Operating expense recoveries: Norrep has agreed to absorb certain expenses associated with some of the Funds. Such absorptions may be terminated at any time without notice. Included in accounts receivable are the following related to these items: October 31, 2017 October 31, 2016 Norrep Premium Growth Class 4,500 Norrep Core Canadian 63,800 57,500 Norrep Core Global 62,100 41, Involvement with unconsolidated structured entities: Norrep Premium Growth Class holds interests in structured entities that it does not consolidate. The purpose of the investment is to manage assets on behalf of third party investors and generate fees for the investment manager. These vehicles are financed through the issue of shares to investors. The table below sets out interests held by the Fund in unconsolidated structured entities. The maximum exposure to loss is the carrying amount of the financial assets held. Norrep Premium Growth Class Total net assets Carrying amount included in financial assets at fair value through profit or loss October 31, 2017 Norrep Opportunities Corp.: Norrep Energy Class Series I 26,571, ,158 Norrep Entrepreneurs Fund Series I 69,863, ,016 Norrep Global Income Growth Series I 148,180,988 1,994,218 Norrep Income Growth Class Series I 98,418,945 2,277,530 Norrep Tactical Opportunities Class Series I 13,768,888 1,323,028 Norrep Core Portfolios Ltd: Norrep Core Global Series F 9,805,536 1,187,193 Total 366,609,586 7,904, NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

42 NORREP CORE PORTFOLIOS LTD. Notes to Financial Statements Years ended October 31, 2017 and Involvement with unconsolidated structured entities (continued): Norrep Premium Growth Class Total net assets Carrying amount included in financial assets at fair value through profit or loss October 31, 2016 Norrep Opportunities Corp.: Norrep Energy Class Series I 43,902, ,970 Norrep Entrepreneurs Fund Series I 38,243, ,183 Norrep Global Income Growth Series I 148,979,005 2,520,986 Norrep Income Growth Class Series I 110,523,902 2,729,793 Norrep Tactical Opportunities Class Series I 24,335,126 1,622,706 Norrep Core Portfolios Ltd: Norrep Core Global Series F 2,628,612 1,012,948 Total 368,612,597 9,474,586 During the years ended October 31, 2017 and year ended October 31, 2016 (where applicable), the Funds did not provide financial support to unconsolidated structured entities and had no intention of providing financial or other support. The Funds can redeem shares in the above investment funds daily at the net asset value per share of the respective series. 10. Brokerage commissions on securities transactions: The Funds paid brokerage commissions in connection with portfolio transactions during the periods ended October 31, 2017 and 2016 amounting to: October 31, 2017 October 31, 2016 Norrep Premium Growth Class Norrep Core Canadian 11,568 6,674 Norrep Core Global 6,470 2, Comparative Figures: Certain 2016 comparative figures have been reclassified to conform with the financial statement presentation adopted for the current year. 19 NOTES TO FINANCIAL STATEMENTS OF NORREP CORE PORTFOLIOS LTD. OCTOBER 31, 2017

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