SEMI-ANNUAL FINANCIAL STATEMENTS June 30, 2016

Transcription

1 SEMI-ANNUAL FINANCIAL STATEMENTS NOTICE OF NO AUDITOR REVIEW OF THE SEMI-ANNUAL FINANCIAL STATEMENTS BMO Nesbitt Burns Inc., the Administrator of the Fund, appoints independent auditors to audit the Fund s Annual Financial Statements. Under Canadian securities laws (National Instrument ), if an auditor has not reviewed the Semi-Annual Financial Statements, this must be disclosed in an accompanying notice. The Fund s independent auditors have not performed a review of the Semi-Annual Financial Statements in accordance with standards established by the Chartered Professional Accountants of Canada.

2 SEMI-ANNUAL FINANCIAL STATEMENTS (UNAUDITED) STATEMENT OF FINANCIAL POSITION As at December 31, 2015 ASSETS CURRENT ASSETS Cash 409,332 1,245,682 Investments Non-derivative financial assets 12,225,768 14,946,515 Dividends receivable 16,705 15,389 Interest receivable 8,876 Total assets 12,651,805 16,216,462 LIABILITIES CURRENT LIABILITIES Redemptions payable 447, ,591 Distributions payable 154, ,951 Accrued expenses 101, ,251 Service fees payable (note 6) 13,570 17,426 Class S Unit 1 Total liabilities 717, ,220 Net assets representing unitholders' equity 11,934,702 15,354,242 Unitholders' equity (note 5) Units 13,744,334 17,659,117 Contributed surplus 1,681,287 1,159,961 Deficit (3,490,919) (3,464,836) Total unitholders' equity 11,934,702 15,354,242 Net assets representing unitholders' equity per unit (note 5) Units $8.01 $8.02 Class S Unit $ $1.00 The accompanying notes are an intergral part of these financial statements. 2

3 SEMI-ANNUAL FINANCIAL STATEMENTS (UNAUDITED) STATEMENT OF COMPREHENSIVE INCOME For the periods ended June 30, 2015 INCOME Interest income 2,569 39,084 Dividend income 241, ,440 Other changes in fair value of investments and derivatives Net realized gain 587,002 1,169,739 Change in unrealized depreciation (242,304) (852,053) Net gain in fair value of investments and derivatives 588, ,210 Foreign exchange (loss) gain (39,285) 94,031 Total other (loss) income (39,285) 94,031 Total income 549, ,241 EXPENSES Administration and portfolio management fees (note 6) 92, ,895 Foreign withholding taxes 17,018 20,786 Fund administration fees (note 6) 27,229 27,039 Transfer agent fees 7,363 8,044 Audit fees 14,706 13,771 Custodian fees 3,377 3,949 Interest charges (note 6) Service fees (note 6) 28,520 43,698 Legal and filing fees 23,033 12,631 Independent review committee fees 8,261 7,662 Securityholder reporting costs 11,234 10,194 Trustees expenses 4,311 4,140 Commissions and other portfolio transaction costs (note 6) 13,350 30,753 Total expenses 251, ,563 Increase in net assets from operations 297, ,678 Increase in net assets from operations per unit (note 3) Deficit Deficit, beginning of period (3,464,836) (2,568,591) Increase in net assets from operations 297, ,678 Distributions paid to unitholders (323,513) (476,000) Deficit, end of period (3,490,919) (2,728,913) The accompanying notes are an intergral part of these financial statements. 3

4 SEMI-ANNUAL FIANCIAL STATEMENTS (UNAUDITED) STATEMENT OF CHANGES IN EQUITY For the periods ended June 30, 2015 Net assets representing unitholders' equity at beginning of period 15,354,242 22,109,776 Increase in net assets from operations 297, ,678 Distribution from: Return of capital (323,513) (476,000) Total distributions (323,513) (476,000) Units transactions Redemption of units (3,393,457) (3,228,170) Net decrease from units transactions (3,393,457) (3,228,170) Net decrease in net assets from operations (3,419,540) (3,388,492) Net assets representing unitholders' equity at end of period 11,934,702 18,721,284 The accompanying notes are an intergral part of these financial statements. 4

5 SEMI-ANNUAL FINANCIAL STATEMENTS (UNAUDITED) STATEMENT OF CASH FLOWS For the periods ended June 30, 2015 CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets from operations 297, ,678 Adjustments for: Foreign exchange loss on cash Net realized gain on sale of investments and derivatives (587,002) (1,169,739) Change in unrealized depreciation of investments and derivatives 242, ,053 (Increase) decrease in dividend receivable (1,316) 3,828 Decrease in interest receivable 8,876 24,266 Decrease in accrued interest on money market investments 186 Decrease in accrued expenses (15,389) (54,993) Decrease in service fees payable (3,856) (41,146) Amortization of premium and discount 19,537 Return of capital dividends received 6,876 20,243 Proceeds from sale and maturity of investments 12,033,538 21,075,628 Purchases of investments (8,997,564) (15,458,015) Cash inflows (outflows) on derivatives 3,058 (1,188,194) Net cash flow from operating activities 3,006,495 4,379,996 CASH FLOWS FROM FINANCING ACTIVITIES Amount paid on redemption of Class S Unit (1) Amounts paid on redemption of units (3,475,889) (3,518,319) Distributions paid to unitholders (366,952) (517,120) Net cash flow from financing activities (3,842,842) (4,035,439) Net (decrease) increase in cash (836,347) 344,557 Foreign exchange loss on cash (3) (201) Cash at beginning of period 1,245, ,696 Cash at end of period 409, ,052 Supplementary information Interest received, net of withholding taxes* 30,982 63,536 Dividends received, net of withholding taxes* 229, ,725 Interest expense paid* *These items are from operating activities The accompanying notes are an intergral part of these financial statements. 5

6 SEMI-ANNUAL FINANCIAL STATEMENTS (UNAUDITED) SCHEDULE OF INVESTMENT PORTFOLIO (All amounts in Canadian dollars, unless otherwise noted) As at Number of Shares or Units Description Cost+ Fair Value Canada 30.6% 4,712 Agrium Inc. 548, ,786 18,896 AGT Food and Ingredients Inc. 642, ,619 45,238 Maple Leaf Foods Inc. 983,485 1,248,116 11,991 Ritchie Bros. Auctioneers Incorporated 456, ,527 17,104 Saputo Inc. 588, ,281 3,219,356 3,649,329 Denmark 9.5% 23,317 Bakkafrost P/F 671,160 1,136, ,160 1,136,614 Germany 4.4% 1,242 KWS Saat AG 536, , , ,555 Hong Kong 8.7% 1,017,500 WH Group Limited 1,011,585 1,040,143 1,011,585 1,040,143 India 3.6% 15,795 Mahindra & Mahindra Limited, GDR 411, , , ,833 Japan 8.2% 4,400 Ajinomoto Co., Inc. 118, ,443 14,000 Kikkoman Corp. 366, ,885 4,200 Megmilk Snow Brand Co., Ltd. 124, , , ,837 Mexico 5.4% 10,415 Gruma S.A.B. de C.V. 196, ,564 60,300 Grupo Bimbo, S.A.B. de C.V., Series A 229, ,334 70,100 Grupo Lala S.A.B. de C.V. 211, , , ,580 Netherlands 2.0% 3,164 Koninklijke DSM N.V. 260, , , ,852 Norway 10.5% 17,603 Austevoll Seafood ASA 170, ,998 16,385 Grieg Seafood ASA 132, ,909 3,440 Leroy Seafood Group ASA 187, ,315 5,893 Marine Harvest ASA 130, ,064 15,242 SalMar ASA 448, ,042 1,068,187 1,252,328 Switzerland 2.3% 553 Syngenta AG 298, , , ,617 6

7 SEMI-ANNUAL FINANCIAL STATEMENTS (UNAUDITED) SCHEDULE OF INVESTMENT PORTFOLIO CONTINUED (All amounts in Canadian dollars, unless otherwise noted) As at Number of Shares or Units Description Cost+ Fair Value United Kingdom 2.2% 22,279 Tate & Lyle Public Limited Company 261, , , ,649 United States 15.0% 2,350 Archer Daniels Midland Company 131, ,218 1,582 E.I. du Pont de Nemours and Company 129, ,443 1,937 Ingredion Inc. 254, ,849 2,005 Monsanto Company 258, ,869 9,770 Teucrium Soybean Fund 266, ,361 7,761 Tyson Foods Inc., Class A 667, ,691 1,707,575 1,793,431 Total Investment Portfolio 102.4% 10,692,372 12,225,768 Other Assets Less Liabilities (2.4)% (291,066) NET ASSETS 100.0% 11,934,702 + Where applicable, distributions received from holdings as a return of capital are used to reduce the adjusted cost base of the securities in the portfolio. 7

8 NOTES TO THE FINANCIAL STATEMENTS 1. The Fund Coxe Global Agribusiness Income Fund ( the Fund ) is a non-redeemable investment fund established under the laws of the Province of Ontario on June 28, BMO Nesbitt Burns Inc. (the Administrator ) is responsible for the management and administration of the Fund. The Fund commenced operations on July 19, Units trade on the Toronto Stock Exchange ( TSX ) under the symbol CAG.UN. The address of the Fund's registered office is 1 First Canadian Place, 100 King Street West, 3rd Floor Podium, Toronto, Ontario, M5X 1H3. The information provided in these unaudited interim financial statements is for the periods ended and June 30, 2015 except for the comparative information in the Statement of Financial Position and the related notes, which is as at December 31, The last close price at was $7.88 (December 31, $7.83). These financial statements were authorized for issues by the Administrator on August 11, These financial statements should be read in conjunction with the annual financial statements for the period ended December 31, 2015 which have been prepared in accordance with International Financial Reporting Standard ( IFRS ). 2. Basis of preparation and presentation These unaudited interim financial statements have been prepared in accordance with IFRS and in accordance with International Accounting Standard ("IAS") 34 - Interim Financial Reporting, as issued by the International Accounting Standards Board ( IASB ). 3. Summary of significant accounting policies Financial instruments The Fund records financial instruments at fair value. Investment transactions are accounted for on the trade date. The Fund s investments are either designated as fair value through profit or loss ( FVTPL ) at inception or classified as held for trading. The changes in the investment fair values and related transaction costs are recorded in the Fund s Statement of Comprehensive Income. Financial assets and financial liabilities held for trading are those acquired or incurred principally for the purpose of selling or repurchasing in the near future, or on initial recognition, are part of a portfolio of identified financial instruments that the Fund manages together and that have a recent actual pattern of short-term profit taking. The Fund classifies all derivatives as held for trading. The Fund does not designate any derivatives as hedges in a hedging relationship. The Fund designates all other investments as FVTPL, as they have reliably measurable fair values and are part of a group of financial assets or financial liabilities that are managed and have their performance evaluated on a fair value basis in accordance with the Fund s investment strategy. The redeemable units of the Fund meet the requirements of International Accounting Standards (IAS) 32, Financial Instruments: Presentation (IAS 32) and have therefore been classified as equity. The Class S Unit of the Fund is not entitled to a pro-rata share of the Fund s assets and as such, has been classified as financial liability. All other financial assets and financial liabilities are measured at amortized cost. Under this method, financial assets and financial liabilities reflect the amount required to be received, paid or discounted, when appropriate, at the contract s effective interest rate. The Fund has determined that it meets the definition of investment entity and as a result, it measures subsidiaries, if any, at FVTPL. Cost of investments The cost of investments represents the amount paid for each security and is determined on an average cost basis. Fair value measurement Investments are recorded at their fair value with the change between this amount and their average cost being recorded as Change in unrealized depreciation in the Statement of Comprehensive Income. For bonds, debentures, asset-backed securities and other debt securities, fair value is represented by bid prices provided by independent security pricing services. Short-term investments, if any, are fair valued, and in certain circumstances are held at amortized cost which approximates fair value. For exchange traded securities, close prices are considered to be fair value if they fall within the bid-ask spread. In circumstances where the close price is not within the bid-ask spread, the Administrator determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances. For securities where market quotes are not available, unreliable or not considered to reflect the current value, the Fund may determine another value which it considers to be fair and reasonable, or use a valuation technique that, to the extent possible, makes maximum use of inputs and assumptions based on observable market data, including volatility, comparable companies and other applicable rates or prices. These estimation techniques include discounted cash 8

9 flows, internal models that utilize observable data, or comparisons with other securities that are substantially similar. In limited circumstances, the Fund may use internal models where the inputs are not based on observable market data. Derivative instruments Derivative instruments are financial contracts that derive their value from changes in the underlying interest rates, foreign exchange rates, or other financial or commodity prices or indices. Derivative instruments are either regulated exchange traded contracts or negotiated over-the-counter contracts. The Fund may use these instruments for trading purposes, as well as to manage the Fund s risk exposures. Derivatives are measured at fair value. Realized and unrealized gains and losses are recorded in the Statement of Comprehensive Income. Forward currency contracts A forward currency contract is an agreement between two parties (the Fund and the counterparty) to purchase or sell a currency against another currency at a set price on a future date. The Fund may enter into forward currency contracts for hedging purposes, which can include an economic hedging of all or a portion of the currency exposure of an investment or group of investments, either directly or indirectly. The Fund may also enter into these contracts for nonhedging purposes, which can include increasing the exposure to a foreign currency, or the shifting exposure to foreign currency fluctuations from one country to another. The value of forward currency contracts entered into by the Fund is recorded as the difference between the value of the contract on the Valuation Date and the value of the contract on the date the contract originated. Option contracts The Fund may engage in option contract transactions by purchasing (long positions) or writing (short positions) call or put option contracts. These contracts have different risk exposures for the Fund; whereas the risk for long positions will be limited to the premium paid to purchase the option contracts, the risk exposure for the short position is potentially unlimited until closed or expired. Purchased option contracts The premium paid for purchasing an option is recorded as an asset in the Statement of Financial Position. The option contract is valued on each Valuation Date at an amount equal to the fair value of the option that would have the effect of closing the position. The change in the difference between the premium and the fair value is shown as Change in unrealized depreciation in the Statement of Comprehensive Income. When a purchased option expires, the Fund will realize a loss equal to the premium paid. When a purchase option is closed, the gain or loss the Fund will realize will be the difference between the proceeds and the premium paid. When a purchased call option is exercised, the premium paid is added to the cost of acquiring the underlying security. When a purchased put option is exercised, the premium paid is subtracted from the proceeds from the sale of the underlying security that had to be sold. Written option contracts The premium received from writing a call or put option is recorded as a liability in the Statement of Financial Position. When a written option expires, the Fund will realize a gain equal to the premium received. When a written option is closed, the Fund will realize a gain or loss equal to the difference between the cost at which the contract was closed and the premium received. When a written call option is exercised, the premium received is added to the proceeds from the sale of the underlying investments to determine the realized gain or loss. When a written put option is exercised, the premium received is subtracted from the cost of the underlying investment the Fund had purchased. The gain or loss that the Fund realized when a purchased or written option is expired or closed is recorded as Net realized gain in the Statement of Comprehensive Income. Income recognition Dividend income is recognized on the ex-dividend date. Interest income from interest bearing investments is recognized in the Statement of Comprehensive Income using the effective interest rate. Interest receivable shown in the Statement of Financial Position is accrued based on the interest bearing investments stated rates of interest. Foreign currency translation The fair value of investments and other assets and liabilities in foreign currencies are translated into the Fund s functional currency, which is Canadian dollars, at the rates of exchange prevailing at the period-end date. Purchases and sales of investments, and income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Foreign exchange gains (losses) on completed transactions are included in Net realized gains and unrealized foreign exchange gains (losses) are included in Change in unrealized depreciation in the Statement of Comprehensive Income. Foreign exchange gains (losses) relating to cash, receivables and payables are included in "Foreign exchange (loss) gain". 9

10 Cash Cash is comprised of cash and deposits with banks, which include bankers acceptances and overnight demand deposits. Cash is recorded at fair value. Other assets and other liabilities Dividends receivable are initially recorded at fair value and subsequently measured at amortized cost. Similarly, redemptions payable, distributions payable, accrued expenses and accrued are measured at amortized cost. Other assets and liabilities are short-term in nature, and are carried at cost or amortized cost. Increase or decrease in net assets from operations Increase (decrease) in net assets from operations per unit of a class in the Statement of Comprehensive Income represents the increase (decrease) in net assets from operations of the class divided by the weighted average number of units outstanding of the class during the period. The increase (decrease) in net assets from operations per unit for the period ended and June 30, 2015 is calculated as follows: For the periods ended June 30, 2015 Increase in net assets attributable to holders of redeemable units 297, ,678 Weighted average units outstanding during the period 1,691,170 2,442,306 Increase in net assets attributable to holders of redeemable units per unit Reconciliation of NAV to Net Assets As at and December 31, 2015, there were no differences between the Fund s NAV per unit and its Net Assets per unit calculated in accordance with IFRS. Taxation The Fund qualifies as a mutual fund trust under the provisions of the Income Tax Act (Canada). Distributions of all net taxable income and sufficient amounts of net realized capital gains for each taxation year will be paid to unitholders so that the Fund will not be subject to income tax. As a result, the Fund has determined that it is in substance not taxable and therefore, does not record income taxes in the Statement of Comprehensive Income nor does it recognize any deferred tax assets or liabilities in the Statement of Financial Position. The Fund may incur withholding taxes imposed by certain countries on investment income and capital gains. Such income and capital gains are recorded on a gross basis with the related withholding taxes shown as a separate expense in the Statement of Comprehensive Income. Non-capital losses are available to be carried forward for twenty years. Capital losses for income tax purposes may be carried forward indefinitely and applied against capital gains realized in future years. As at December 2015, the Fund had capital losses of $1,596,958 and non-capital losses of $1,468,560 carried forward, which will expire between 2031 and Investments in subsidiaries, joint ventures and associates Subsidiaries are entities over which the Fund has control through its exposure or rights to variable returns from its investment and has the ability to affect those returns through its power over the entity. The Fund has determined that it is an investment entity and as such, it accounts for subsidiaries, if any, at fair value. Joint ventures are those where the Fund exercises joint control through an agreement with other shareholders and associates are investments in which the Fund exerts significant influence over operating, investing, and financing decisions (such as entities in which the Fund owns 20% - 50% of voting shares), all of which, have been designated at FVTPL. Unconsolidated structured entities During the periods, the Fund had no sponsored unconsolidated structured entities. The Fund may invest in securitizations, asset-backed securities and mortgage-backed securities. The Fund has determined that its investment in investment trusts are unconsolidated structured entities. The determination is based on the fact that decision making about the investment funds, securitizations, asset-backed securities and mortgage-backed securities is not governed by the voting right or other similar right held by the Fund. Similarly, investments in securitizations, asset-backed securities and mortgage-backed securities are determined to be interest in unconsolidated structured entities. Investment funds investment objectives range from achieving short-term to long-term income and capital growth potential. Investment funds may use leverage in a manner consistent with their respective investment objectives and as permuted by Canadian securities regulatory authorities. Investment funds finance their operations by issuing redeemable units which are puttable at the holders option and entities the holder to a proportionate stake in the respective fund s net assets. The change in fair value of each of the investment funds during the period is included in Change in unrealized depreciation in the Statement of Comprehensive Income. Mortgage-related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. Asset-backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans. 10

11 The Fund does not provide and has not committed to providing any additional significant financial or other support to the unconsolidated structured entities other than its investments in the unconsolidated structured entities. Offsetting of financial assets and financial liabilities Financial instruments are presented at net or gross amounts on the Statement of Financial Position depending on the existence of intention and legal right to offset opposite positions of such instruments held with the same counterparties. Amounts offset in the Statement of Financial Position are transactions for which the Fund has legally enforceable rights to offset and intends to settle the positions on a net basis. Amounts not offset in the Statement of Financial Position relate to transactions where a master netting arrangement or similar agreement is in place with a right of offset only in the event of default, insolvency or bankruptcy, or where the Fund has no intention of settling on a net basis. There were no master netting arrangements during the periods. Accounting standards issued but not yet adopted Below are accounting standards issued or amended but not yet effective and not yet adopted. The Administrator does not expect the adoption of these standards or amendments to have a significant impact to the Fund s financial statements. In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments, which addresses classification and measurement, impairment and hedge accounting. The new standard requires assets to be carried at amortized cost, FVTPL or fair value through other comprehensive income based on the entity s business model for managing financial assets and the contractual cash flow characteristics of the financial asset. The classification and measurement of liabilities remains generally unchanged with the exception of liabilities recorded at FVTPL. For these liabilities, fair value changes attributable to changes in the entity s own credit risk are to be presented in other comprehensive income unless they affect amounts recorded in income. The new standard also addresses impairment of financial assets. It also introduced a new hedge accounting model that expands the scope of eligible hedged items and risks eligible for hedge accounting, and aligns hedge accounting more closely with risk management. The new standard is effective for the Fund for its fiscal year beginning January 1, The Fund is evaluating the impact of this standard on its financial statements. Collateral Cash collateral provided by the Fund is identified in the Statement of Financial Position as margin cash and is not included as a component of cash. For collateral other than cash, if the party to whom the collateral is provided has the right by contract or custom to sell or re-pledge the collateral, the Fund classifies that asset in its Statement of Financial Position separately from other assets and identifies the asset as pledged collateral. Where the party to whom the collateral is provided does not have the right to sell or re-pledge the collateral, a disclosure of the collateral provided is made in the notes to the financial statements. See Note 7 for details. 4. Critical accounting judgments and estimates The preparation of financial statements requires the use of judgement in applying the Fund s accounting policies and to make estimates and assumptions about the future. The following discusses the most significant accounting judgements and estimates that the Fund has made in preparing its financial statements: Accounting judgements: Functional and presentation currency The Fund s unitholders are mainly Canadian residents, with the subscriptions and redemptions of the redeemable units denominated in Canadian dollars. The performance of the Fund is measured and reported to the investors in Canadian dollars. The Administrator considers the Canadian dollar as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Canadian dollars, which is the Fund s functional and presentation currency. Classification and measurement of financial instruments and application of fair value option In classifying and measuring financial instruments held by the Fund, the Administrator is required to make significant judgements about whether or not the business of the Fund is to invest on a total return basis for the purpose of applying the fair value options for financial assets. Accounting estimates: Fair value measurement of securities not quoted in an active market The Fund has established policies and control procedures that are intended to ensure these judgements are well controlled, independently reviewed, and consistently applied from period to period. The estimates of the value of the Fund s assets and liabilities are believed to be appropriate as at the reporting date. 11

12 The Fund may hold financial instruments that are not quoted in active markets. Note 3 discusses the policies used by the Fund for the estimates used in determining fair value. 5. Units and unit transactions The units of the Fund are classified as equities. Class S Unit One Class S Unit was issued for $1.00 on December 22, The Class S Unit is not entitled to vote at any unitholders meetings and is not entitled to any distributions. On June 27, 2016, the Class S Units was redeemed at a price of $1.00 and subsequently cancelled. Units The units have no par value and are entitled to distributions, if any. Upon redemption, a unit is entitled to a proportionate share of the Fund s NAV. The relevant movements in redeemable units are shown on the Statement of Changes in Equity. In accordance with its investment objectives and strategies, and the risk management practices outlined in Note 7, the Fund endeavours to maintain sufficient liquidity to meet redemptions, with such liquidity being augmented by short-term borrowing or disposal of investments where necessary. The NAV of the Fund is calculated on each Valuation Date. The NAV per unit is computed by dividing the NAV of the Fund (that is, the total fair value of the assets less the liabilities) by the total number of units of the Fund outstanding at such time. Monthly redemptions Units may be surrendered for redemption in any month. Units properly surrendered for redemption by a unitholder on any business day during the period from the first day of the month until 4:00 p.m. (Toronto time) on the last business day of the month prior to the 16th day of such month will be redeemed on the last business day of that month ( Redemption Date ) and the unitholder will receive payment on or before the 15th business day following such Redemption Date, subject to the Fund s right to suspend redemptions in certain circumstances. A unitholder who properly surrenders units for redemption will receive the amount equal to the applicable NAV per unit determined as of the Redemption Date, less any costs and expenses incurred by the Fund in connection with funding the redemption. Pursuant to the monthly redemption option, 368,400 units were redeemed at an average price of $8.00 per unit for a total redemption amount of $2,946,299. In the prior period, 377,677 units were redeemed at an average price of $8.55 per unit for a total redemption amount of $3,228,170. Resale of units tendered for redemption The Fund has entered into a recirculation agreement with the Administrator. Under the agreement the Fund may request the Administrator to use commercially reasonable efforts to find purchasers for any units tendered for redemption prior to the relevant Redemption Date. The amount paid to the unitholder on the Redemption Date will be an amount equal to the proceeds of the sale of the units, less any applicable commission payable to the Administrator. The amount of the proceeds will not be less than the amount that the unitholder would have been otherwise entitled to receive. The unitholder is not obliged to have their units recirculated. Contributed surplus As at the period ended, the Fund had accumulated contributed surplus of $1,681,287 (December 31, 2015 $1,159,961). Contributed surplus, if any, is recorded when the Units are redeemed or repurchased at prices per unit which are below the average book price per unit of unitholders capital. The number of units that have been issued and are outstanding are disclosed in the table below. Units Number of Units Units For the period ended Class S Unit Contributed Surplus Units Number of Units Contributed Surplus Amounts Amounts Beginning of period 1,913,515 17,659,117 1,159, Units redeemed (424,200) (3,914,784) 521,326 (1) (1) End of period 1,489,315 13,744,333 1,681,287 12

13 Units Number of Units Units For the period ended December 31, 2015 Contributed Surplus Units Number of Units Class S Unit Contributed Surplus Amounts Amounts Beginning of period 2,611,500 24,100, , Units redeemed (697,985) (6,441,444) 582,155 End of period 1,913,515 17,659,117 1,159, Related party transactions Administration, portfolio management and service fees The Administrator is responsible for providing or arranging for the day-to-day management, administration and compliance services of the Fund. The Administrator monitors and evaluates the performance of the Fund, pays for the services provided by the Investment Manager and Portfolio Consultant out of its management fees and provides all administrative services required by the Fund. As compensation for its services the Administrator is paid an administration fee of 1.25% per annum of the NAV of the Fund, accrued daily and calculated on each Valuation Date and paid monthly in arrears. These fees are included in Administration and portfolio management fees in the Statement of Comprehensive Income and for the period ended, amounted to $92,920 (June 30, 2015 $141,895). Affiliates of the Administrator provide the Fund with certain facilities and services such as accounting, record keeping, issuing financial statements, and for general administrative support. Fees for these services are included in Fund administration fees in the Statement of Comprehensive Income and for the period ended, amounted to $27,229 (June 30, 2015 $27,039). The Fund pays a service fee equal to 0.40%, plus applicable taxes, of the NAV per unit to the Administrator which will in turn pay registered dealers, including BMO Nesbitt Burns Inc. and/or affiliates of the Administrator. This amount that is payable to registered dealers that are related to the Administrator is included in Service fees in the Statement of Comprehensive Income and for the period ended amounted to $16,738 (June 30, 2015 $25,795). Other related party transactions The Administrator is a member of BMO Financial Group. From time to time, the Administrator may, on behalf of the Fund enter into transaction arrangements with, or involving other members of BMO Financial Group, or certain other persons or companies that are related or connected to the Administrator of the Fund. The terms of such transactions will be at market at the relevant times. Brokerage commissions and soft dollars Brokerage commissions (excluding other transaction costs) paid on security transactions and amounts paid to the Administrator for brokerage services provided to the Fund for the periods are as follows: For the periods ended June 30, 2015 Total brokerage amounts paid 13,333 22,020 Total brokerage amounts paid to related parties The ascertainable soft dollar value of services received as a percentage of total brokerage commissions paid under the soft dollar arrangement entered into by the investment manager for the periods ended is as follows: For the periods ended June 30, 2015 Total soft dollars 2,014 2,674 Total soft dollars as a percentage of total commissions (%) Financial instruments risks The Fund s activities expose it to a variety of risks associated with the financial instruments, as follows: market risk (including currency risk, interest rate risk and other market risk), credit risk and liquidity risk. The concentration table groups securities by geographic location. The Fund s risk management practices outline the monitoring of compliance to investment guidelines. The Administrator manages the potential effects of these financial risks on the Fund s performance by employing and overseeing professional and experienced portfolio advisors that regularly monitor the Fund s positions, market events and diversify investment portfolios within the constraints of the investment guidelines. 13

14 The Fund s objective is to provide investors with long-term capital growth, quarterly distributions and lower overall volatility of portfolio returns than would be experienced by owning securities of Agribusiness issuers directly. No changes affecting the overall level of risk of investing in the Fund were made during the period. (a) Currency risk Currency risk is the risk that the value of financial instruments denominated in currencies, other than the functional currency of the Fund, will fluctuate due to changes in foreign exchange rates. Investments in foreign markets are exposed to currency risk as the prices denominated in foreign currencies are converted to the Fund s functional currency in determining fair value. The Fund may enter into forward currency contracts for hedging purposes to reduce foreign currency exposure or to establish exposure to foreign currencies. The Fund s exposure to currency risk is summarized in the tables below. Amounts shown are based on the carrying value of monetary and non-monetary assets (including derivatives and the underlying principle (notional) amounts of forward currency contracts, if any). As at Currency Cash and other current receivables & payables Investments and options (monetary & non-monetary) Forward currency contracts Net currency exposure As a % of Net Assets (%) Euro 767, , Hong Kong Dollar 1,040,143 1,040, Japanese Yen 983, , Mexican Peso 637, , Norwegian Krone 2,388,942 2,388, Pound Sterling 7, , , Swiss Franc 274, , U.S. Dollar 7,590 2,227,264 2,234, Total 15,177 8,576,439 8,591, All amounts in Canadian dollars As at December 31, 2015 Currency Cash and other current receivables & payables Investments and options (monetary & non-monetary) Forward currency contracts Net currency exposure As a % of Net Assets (%) Australian Dollar 663, , Danish Krone 503, , Euro 593, , Japanese Yen 6,005 3,807,110 3,813, Mexican Peso 1,198,465 1,198, Norwegian Krone 3,509,307 3,509, Swiss Franc 632, , U.S. Dollar 9, , , Total 15,274 11,701,478 11,716, All amounts in Canadian dollars As at and December 31, 2015, if the Canadian dollar had strengthened or weakened by 5% in relation to all foreign currencies, with all other variables remaining constant, the Net Assets of the Fund could possibly have increased or decreased, respectively, by approximately $429,581 (December 31, 2015 $585,838). In practice, actual results may differ from this sensitivity analysis and the difference could be material. 14

15 (b) Interest rate risk Interest rate risk is the risk that the fair value of the Fund's interest bearing investments will fluctuate due to changes in market interest rates. The Fund's exposure to interest rate risk is concentrated in its investment in debt securities (such as bonds, money market investments, short-term investments and debentures) and interest rate derivative instruments, if any. Other assets and liabilities are short-term in nature and/or non-interest bearing. The Fund s exposure to interest rate risk, by remaining term to maturity, is summarized in the following table: Interest Rate Exposure as at Number of Years December 31, 2015 Less than one year One to three years Three to five years 638,331 Five to ten years 587,584 Greater than ten years Total 1,225,915 All amounts in Canadian dollars As at, the Fund did not have any significant exposure to interest rate risk. As at December 31, 2015, if the prevailing interest rates had been raised or lowered by 1%, assuming a parallel shift in the yield curve, with all other variables held constant, the Net Assets of the Fund could have possibly decreased or increased, respectively, by approximately $46,261. The Fund s interest rate sensitivity was determined based on portfolio weighted duration. In practice, actual results may differ from this sensitivity analysis and the difference could be material. (c) Other market risk Other market risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in a market. Other assets and liabilities are monetary items that are short-term in nature, and as such they are not subject to other market risk. The Fund has a significant exposure to other market risk arising from its investment in equity securities. Using historical correlation between the Fund s return and the return of its benchmark, if the benchmark, S&P Global Agribusiness Equity Index, had increased or decreased by 10%, with all other variables held constant, the Net Assets of the Fund would have increased or decreased, respectively, by $832,232 (December 31, 2015 $971,561). Historical correlation may not be representative of future correlation, and accordingly actual results may differ and the difference could be material. (d) Credit risk Credit risk is the risk that a loss could arise from a security issuer or counterparty to a financial instrument not being able to meet its financial obligations. The fair value of debt securities includes consideration of the credit worthiness of the debt issuer. Credit risk exposure for over-the-counter derivative instruments is based on the Fund's unrealized gain of the contractual obligations with the counterparty as at the reporting date. The credit exposure of other assets is represented by its carrying amount. The Fund s credit risk exposure grouped by credit ratings, is listed in the following table: As a % of Net Assets as at Credit Rating December 31, 2015 A 8.0 Total 8.0 As at, the Fund did not have any significant exposure to credit risk. As at and December 31, 2015, the Fund did not have any collateral pledged with a major Canadian financial institution in respect of derivative transactions. (e) Liquidity risk The Fund s exposure to liquidity risk is concentrated in the redemptions of units. The Fund primarily invests in securities that are traded in active markets and can be readily disposed. In addition, the Fund retains sufficient cash and cash equivalent positions to maintain liquidity. The Fund may, from time to time, enter into over-the-counter derivative contracts or invest in unlisted securities, which are not traded in an organized market and may be illiquid. Securities 15

16 for which a market quotation could not be obtained and may be illiquid are identified on the Schedule of Investment Portfolio. The proportion of illiquid securities to the NAV of the Fund is monitored by the Administrator to ensure it does not exceed the regulatory limit and does not significantly affect the liquidity required to meet the Fund s financial obligations. There were no such illiquid securities held by the Fund as at and December 31, (f) Concentration risk The Fund s concentration risk is summarized in the following table: As at December 31, 2015 Money Markets Investments Canada % 3.8% United States % 4.2% Equities Australia % 4.3% Canada 30.6% 13.2% Denmark 9.5% 13.8% Germany 4.4% % Hong Kong 8.7% % India 3.6% 2.0% Ireland % 3.9% Japan 8.2% 24.7% Mexico 5.4% 7.9% Netherlands 2.0% % Norway 10.5% 12.3% Switzerland 2.3% 4.1% United Kingdom 2.2% % United States 15.0% 3.1% Other Assets Less Liabilities (2.4)% 2.7% 100.0% 100.0% 8. Financial assets and financial liabilities Categories of financial assets and financial liabilities The table below shows the categories of financial assets and financial liabilities: As at December 31, 2015 Financial assets designated at FVTPL 12,225,768 14,946,515 Loans and receivables 16,705 24,265 Financial liabilities measured at amortized cost 717, ,220 16

17 Net gains and losses on financial assets and financial liabilities at fair value For the periods ended June 30, 2015 Net realized gains (losses) on financial assets Designated at FVTPL 827,947 2,586, ,947 2,586,457 Net realized gains (losses) on financial liabilities Held for trading 3,058 (1,188,194) 3,058 (1,188,194) Total net realized gains (losses) on financial assets and financial liabilities 831,005 1,398,263 Change in unrealized gains (losses) on financial assets Held for trading 4,122 Designated at FVTPL (242,304) (856,175) (242,304) (852,053) Total change in unrealized gains (losses) on financial assets and financial liabilities (242,304) (852,053) 9. Fair value hierarchy The Fund classifies its financial instruments into three levels based on the inputs used to value the financial instruments. Level 1 securities are valued based on quoted prices in active markets for identical securities. Level 2 securities are valued based on significant observable market inputs, such as quoted prices from similar securities and quoted prices in inactive markets or based on observable inputs to models. Level 3 securities are valued based on significant unobservable inputs that reflect the Administrator's determination of assumptions that market participants might reasonably use in valuing the securities. The tables below show the relevant disclosure. As at Financial Assets Level 1 Level 2 Level 3 Total Equity Securities 6,080,340 6,145,428 12,225,768 Total 6,080,340 6,145,428 12,225,768 As at December 31, 2015 Financial Assets Level 1 Level 2 Level 3 Total Debt Securities 1,225,915 1,225,915 Equity Securities 3,699,903 10,020,697 13,720,600 Total 3,699,903 11,246,612 14,946,515 Transfers between levels There were no transfers between the levels during the periods. 17

18 Unconsolidated structured entities Information on the carrying amount and the size of the investments in structured entities is shown in the following table: As at Jun. 30, 2016 Carrying amount Carrying amount as a % of the underlying fund's Net Assets Securities Teucrium Soybean Fund 269, Total 269,361 There were no unconsolidated structured entities held as at December 31, Collateral pledged The Fund maintains collateral with a major Canadian financial institution in respect of derivative transactions. This collateral is based on the fair value of open derivative positions. As at and December 31, 2015, the Fund did not maintain any collateral. 10. Subsequent event On, the Manager announced that it intends to merge the Fund and Coxe Commodity Strategy Fund into Global Water Solutions Fund, resulting in Global Water Solutions Fund being the continuing fund and the Fund and Coxe Global Agribusiness Income Fund being terminated. The proposed merger is subject to regulatory and unitholder approval. Separate special unitholder meetings of each of the funds are expected to be held concurrently on or about August 30, The record date for such meetings is July 29, Upon receipt of all necessary approvals, it is expected that the merger will be implemented on or about October 7, The Fund will be wound up as soon as reasonably practicable following the merger. 18

19 Coxe Global Agribusiness Income Fund Administrative Office 250 Yonge Street, 9th Floor Toronto, ON M5B 2M Independent Auditor PricewaterhouseCoopers LLP PwC Tower 18 York Street, Suite 2600 Toronto, Ontario M5J 0B2 under Closed-End Funds