NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS

Transcription

1 NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017 see money differently

2 CONTENTS 3 Directory 3-6 Directors Report 7 Depositary s Report 8-9 Investment Managers Report Independent Auditor s Report to the Shareholders Schedule of Investments Financial Statements Statement of Comprehensive Income Statement of Financial Position Statements of Changes in Net Assets Attributable to Redeemable Participating Shareholders 26 Statement of Cash Flows Notes to the Financial Statements Significant Purchases and Sales (unaudited) Additional Information (unaudited) Nedgroup Investments s PLC An open-ended variable capital umbrella investment company with limited liability and segregated liability between Sub-Funds incorporated under the laws of Ireland as a public limited company with registered number and authorised as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as amended (the UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the Central Bank UCITS Regulations ). NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 1

3 DIRECTORY Board of Directors John Skelly (Chairman) (Irish)* Yvonne Connolly (Irish)* Lorcan Murphy (Irish)*** Tracey Wiltcher (British resident)** Andrew Lodge (British resident)** Depositary Citi Depositary Services Ireland Designated Activity Company, 1 1 North Wall Quay, Dublin 1, Ireland. Administrator and Registrar Citibank Europe plc, 1 North Wall Quay, Dublin 1, Ireland. Company Secretary Carne Global Financial Services Limited, 2nd Floor Block E, Iveagh Court, Harcourt Road, Dublin 2, Ireland. Investment Manager and Distributor Nedgroup Investments (IOM) Limited, First Floor, Samuel Harris House, 5 11 St. George s Street, Douglas, Isle of Man IM1 1AJ, British Isles. Legal Advisers A&L Goodbody, International Financial Services Centre, North Wall Quay, Dublin 1, Ireland. Registered Office 2nd Floor Block E, Iveagh Court, Harcourt Road, Dublin 2, Ireland. Auditors KPMG, Chartered Accountants, Statutory Audit Firm, 1 Harbourmaster Place, International Financial Services Centre, Dublin 1, Ireland. *Non-Executive Director, Independent of the Investment Manager. **Non-Executive Director. ***Independent, Non-Executive Director. 1 Effective 28 November 2016, Citi Depositary Services Ireland Limited (CDSIL) underwent a change of company name to Citi Depositary Services Ireland Designated Activity Company (CDSIDAC). NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 2

4 DIRECTORS REPORT Directors Report The Directors submit their report together with the audited financial statements for the financial year ended 30 June Statement of Directors Responsibilities The Directors are responsible for preparing the annual report and financial statements in accordance with International Financial Reporting Standards ( IFRS ) as adopted by the European Union (the EU ), interpretations adopted by the International Accounting Standards Board ( IASB ), the provisions of the Companies Act 2014, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as amended (the UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the Central Bank UCITS Regulations ). them to ensure that its financial statements are prepared in accordance with IFRS as adopted by the EU and comply with the Companies Act 2014, the UCITS Regulations and the Central Bank UCITS Regulations. In this regard, Citibank Europe plc has been appointed for the purposes of maintaining adequate accounting records. Accordingly, the accounting records are kept at the following address: 1 North Wall Quay, Dublin 1, Ireland. The Directors have general responsibilities for taking such steps as are reasonably open to them to safeguard the assets of the Company. In this regard, the Directors have appointed Citi Depositary Services Ireland Designated Activity Company as Depositary pursuant to the terms of the depositary services agreement. Irish company law requires the Directors to prepare financial statements for each financial year. Under that law, they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applicable law. The Directors have general responsibility for taking such steps as are reasonably open to them to prevent and detect fraud and other irregularities. The Directors are also responsible for preparing a Directors Report that complies with the requirements of the Companies Act Under Company Law, the Directors must not approve the financial statements until they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company and of its change in net assets attributable to holders of redeemable participating shares for that year. In preparing the financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been prepared in accordance with IFRS as adopted by the EU; and prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss for the Company and enable The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Investment Manager s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Corporate Governance Code The Board of Directors has assessed the measures included in the voluntary Corporate Governance Code for Investment Funds and Management Companies as published by the Irish Funds Industry Association ( Irish Funds ) the text of which is available from the Irish Funds website, The Directors have adopted all corporate governance practices and procedures in the Corporate Code for Investment Funds with effect from 31 December Statement of Compliance The Company was in compliance with the Corporate Governance Code during the financial year ended 30 June 2017 and no exceptions were noted. NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 3

5 DIRECTORS REPORT (continued) Review of Business and Future Development The business of the Company is reviewed in detail in the Investment Managers Report on pages 8 to 9. The Company intends to continue promoting and generating interest in its business in the future. Share Capital The net assets under management were 349,430,863 (2016: 295,257,124). Full details of the Company s share capital and changes during the year are disclosed in Note 7. The Net Asset Value per Share of the Growth, the Balanced and the Income (the Funds ) is set out in Note 8 to the financial statements. Results The results of the operations for the financial year are set out in the Statement of Comprehensive Income. A review of the activities of the Funds is contained in the Investment Manager s Report. Key Performance Indicators The Directors consider that the change in net asset value ( NAV ) per share is a key indicator of the performance of the Company. Key performance indicators ( KPI s ) monitored by the Directors for each Sub-Fund include: the month to month movement in the NAV per share; the share capital movements; and performance of the relevant Sub-Fund against the benchmark it follows, where relevant. Segregated Liability The Company is an umbrella Fund with segregated liability between sub-funds. Principal Risks Details of the principal risks and uncertainties, which the Company faces, are listed in Note 13 to the financial statements. Distribution Policy The Directors decide the dividend policy and arrangements relating to each Sub-Fund and where applicable, details are set out in the relevant Supplements to the Prospectus. Dividends were paid during the financial year relating to Class A Distributing, Class B Distributing and Class C Distributing of the Nedgroup Investments Income. Further details are set out in Note 12 to the financial statements. The Company is not subject to the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations Connected Person Transactions Regulation 41 of the Central Bank UCITS Regulations restrictions of transactions with connected persons states that a responsible person shall ensure that any transaction between a UCITS and a connected person is conducted a) at arm s length; and b) in the best interest of the unitholders of the UCITS. As required under UCITS Regulation 78.4, the Directors, as responsible persons are satisfied that there are in place arrangements, evidenced by written procedures, to ensure that the obligations that are prescribed by UCITS Regulation 41(1) are applied to all transactions with a connected person; and all transactions with a connected persons that were entered into during the financial year to which the report relates complied with the obligations that are prescribed by UCITS Regulation 41(1). Directors The Directors who held office during the financial year from 1 July 2016 to 30 June 2017 were: John Skelly Yvonne Connolly Lorcan Murphy Tracey Wiltcher Andrew Lodge The Directors, who held office at 30 June 2017, as stated above are not required to retire by rotation under the Constitution. All Directors of the Company attended five Board meetings each during the financial year. NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 4

6 DIRECTORS REPORT (continued) Directors and Secretary s Interests in Shares Andrew Lodge and Tracey Wiltcher held 3,484 and 44 shares respectively in the Nedgroup Investments Growth Class C shares as at 30 June 2017 (30 June 2016: 3,484 and 44 shares respectively). John Skelly, Yvonne Connolly and Lorcan Murphy did not hold any interest, beneficial or otherwise, in the share capital of the Company during the financial year ended 30 June 2017 (30 June 2016: Nil). The Company Secretary did not hold any interest, beneficial or otherwise, in the share capital of the Company during the financial year ended 30 June 2017 (30 June 2016: Nil). Transactions Involving Directors The Board of Directors are not aware of any estimates or arrangements of any significance in relation to the business of the Company in which the Directors had any interest as defined in the Companies Act 2014 at any time during the year ended 30 June 2017 (2016:Nil), other than those disclosed in Note 6, Related Parties. Directors Compliance Statement The Directors, acknowledge that they are responsible for securing the Company s compliance with the relevant obligations as set out in Section 225 of the Companies Act The Directors confirm that: a) a compliance policy statement has been drawn up setting out the Company s policies (that, in the Directors opinion, are appropriate to the Company) with respect to compliance by the Company with its relevant obligations; b) appropriate arrangements or structures are in place that, in the Directors opinion, are designed to secure material compliance with the Company s relevant obligations, and c) a review of the arrangements or structures referred to in paragraph (b) above has been conducted during the financial year ended 30 June Employees There were no employees of the Company during the financial year under review (2016: Nil) Remuneration Policy The full remuneration policy is detailed in the additional information (unaudited) page 52. Significant Events during the Financial Year New Depositary and Service Level Agreements including revised fee rates became effective on 1 November 2016, see Note 11. Effective 28 November 2016, Citi Depositary Services Ireland Limited (CDSIL) underwent a change of company name to Citi Depositary Services Ireland Designated Activity Company (CDSIDAC). Effective 12 December 2016, the Prospectus and Supplements have been updated for UCITS V. Effective 16 June 2017, the supplement for Nedgroup Investments Income was updated and shareholders were advised of a change to distribution pay day to the last business day of each of March, June, September and December. There were no other significant events during the financial year. Significant Events since the Financial Year End There were no significant events since the financial year ended 30 June NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 5

7 DIRECTORS REPORT (continued) Accounting Records The Directors ensure compliance with the Company s obligation to maintain adequate accounting records by appointing competent persons to be responsible for them. The Company s accounting records are kept by Citibank Europe plc. Audit Committee Requirement In accordance with Section 167(2) of the Companies Act 2014, the Board is required to either establish an audit committee or decide not to establish one. The Directors believe that there is no requirement to form an audit committee based on the following rationale: (a) The Company is authorised as a self-managed investment company with the Central Bank pursuant to UCITS Regulations; (b) As a self-managed investment company authorized pursuant to the UCITS Regulations, the Company is obliged by the Central Bank to have a Business Plan in which it identifies directors (the Designated Directors) responsible for, among other areas, Financial Control, Accounting Policy and Procedures, Internal Audit, Monitoring of Capital, Monitoring Compliance and Risk Management. As a result, the Company has systems in place whereby named Designated Directors take initial responsibility for each such area and any material issues arising are referred to the Board of Directors for review and, as applicable, action; (c) The Company has its own conflicts of interest policy and the Board of Directors receives confirmation of the auditor s independence annually; (d) The nature, scale and complexity of the Company s sub-funds do not warrant an audit committee; (e) The Directors believe that the Company already has adequate procedures in place that cover, in all material respects, the areas of responsibility of an audit committee, as provided for in Section 167(7) of the Companies Act Audit Information Statement In accordance with Section 330 of the Companies Act 2014, the Directors hereby confirm that: (a) So far as the Directors are aware, there is no relevant audit information of which the Company s statutory auditor is unaware; and (b) The Directors have taken all the steps that ought to have been taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company s statutory auditor is aware of that information. Independent Auditor The Company s Independent Auditor, KPMG, Chartered Accountants, have indicated their willingness to continue in office in accordance with Section 383(2) of the Companies Act On behalf of the Board of Directors: John Skelly Date: 18 October 2017 Yvonne Connolly Date: 18 October 2017 NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 6

8 REPORT OF THE DEPOSITARY TO THE SHAREHOLDERS We have enquired into the conduct of Nedgroup Investments s plc ( the Company ) for the year ended 30 June 2017, in our capacity as Depositary to the Company. This report including the opinion has been prepared for and solely for the shareholders in the Company as a body, in accordance with the Part 7 of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1) (Undertaking for Collective Investment in Transferable Securities) Regulations 2015 (the Central Bank Regulations ), and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown. Responsibilities of the Depositary Our duties and responsibilities are outlined in the UCITS Regulations. One of those duties is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders. Our report shall state whether, in our opinion, the Company has been managed in that period in accordance with the provisions of the Company s Constitution (the Constitution ) and the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations, 2011 as amended and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the Regulations ). It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as Depositary must state why this is the case and outline the steps which we have taken to rectify the situation. Basis of Depositary Opinion The Depositary conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in UCITS Regulations Part 12 and to ensure that, in all material respects, the Company has been managed (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations and (ii) otherwise in accordance with the Company s constitutional documentation and the appropriate regulations. Opinion In our opinion, the Company has been managed during the year, in all material respects: (i) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Constitution and by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as amended, and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2015 ( the Regulations ); and (ii) otherwise in accordance with the provisions of the Constitution and the Regulations. Citi Depositary Services Ireland Designated Activity Company 1 1 North Wall Quay Dublin 1 Ireland Date: 18 October Effective 28 November 2016, Citi Depositary Services Ireland Limited (CDSIL) underwent a change of company name to Citi Depositary Services Ireland Designated Activity Company (CDSIDAC). NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 7

9 INVESTMENT MANAGER S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017 General Market Commentary The twelve month period ending June 2017 was largely defined by political, rather than economic events. In the UK, the fallout from the Brexit vote caused growing uncertainty, and was a key catalyst for Theresa May s disastrous decision to call a snap general election, the result of which only served to weaken her hand and demonstrate just how divided the UK and its parliament is over how best to handle Brexit. In the US, Donald Trump s unexpected victory in the US presidential election was another demonstration of discontent among the masses. Finally, the remarkable election of President Macron, along with the rise of his new Republique en Marche party, added further proof of widespread dissatisfaction with establishment politics. With all these political changes, alongside occasionally worrying geopolitical headlines about North Korea and the Middle East, we have been somewhat surprised how well markets have done, and also how low market volatility has been over this period. We believe there are two main reasons that can rationalize this outcome. Firstly, the growth outlook has improved, and also become more synchronized globally, with the Eurozone, in particular, doing much better than expected. This improvement in the underlying economic fundamentals has allowed investors to block out some of the more worrying political events. Secondly, despite the strong upturn in economic activity, monetary policy around the world has remained extremely accommodative, helped in part by subdued inflation. Effectively, central banks have continued to back-stop markets, and effectively anaesthetize volatility. However, towards the end of the period there were signs that we may be moving to a world with less central bank support, although any shift is likely to be very gradual. Against this background, equity markets rose strongly, with the MSCI AC World Index returning +18.8% when measured in US dollars. Amongst the majors, Europe ex UK (+24.4%) and Emerging Markets (+23.7%) led the way, whilst the UK (+13.3%) was the most significant laggard. At the sector level, the improved outlook for economic growth meant cyclicals, such as Information Technology (+36.0%) and Financials (+20.7%) clearly outpaced stable earners, such as Consumer Staples (+4.9%), Utilities (+4.3%) and Telecoms (-1.4%). In terms of style, whilst there was significant swings through the period, there was not much to separate Value (+19.8%) and Growth (+19.0%) over the full twelve months, whilst higher risk smaller companies (+20.9%) rose more than larger companies (+18.8%). Rising interest rates, especially in the second half of 2016, were a headwind for the fixed income asset class. A steepening of yield curves saw price declines in government bonds, especially amongst longer dated, more interest rate sensitive issues. Over the period, the JP Morgan Government Bond Index declined -2.1%, whilst the Merrill Lynch Global Investment Grade Corporate Bond Index rose a modest +2.8%. In other areas, improving economic growth and a generally higher investor risk appetite proved supportive for both emerging market debt and lower quality corporate bonds, as witnessed by the JP Morgan Emerging Market Bond Index and Merrill Lynch Global High Yield Bond Index, which rose by +5.5% and +12.4% respectively. Although the Bloomberg Commodities Index (-6.5%) fell, the headline number masked significant differences across the sub-sectors. Crude Oil (-16.9%) and Agriculture (-13.0%) were impacted by negative inventory and demand/ supply dynamics, whilst Industrial Metals (+17.5%) reacted positively to the improved outlook for economic activity and demand. Finally, safe haven Gold (-6.9%) lost ground, in part because increasing bond yields effectively raise the opportunity cost of holding the asset class as it is devoid of any cash flow. The US dollar was mixed over the period, due in part to political ambiguity towards a strong dollar from the new Trump administration. Whilst the US dollar strengthened against the yen (+8.9%) and the pound (+2.0%), it was weak against the euro (-3.0%) and a number of emerging market currencies, such as the Mexican peso (-2.1%) and the South African rand (-11.1%). The Nedgroup Investments Growth returned +14.5% in US dollar terms from 1 July 2016 to 30 June 2017, which, for reference, compares to the Morningstar Aggressive Allocation peer group average return of +12.5%. The Growth s stated benchmark, 3-month LIBID +3% to +5%, returned +3.9% to +5.9% over the period. As a higher risk profile fund, the absolute performance of the Growth was driven mainly by its exposure NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 8

10 INVESTMENT MANAGER S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017 (continued) to global equities, which rose over the period. In terms of current strategy, the portfolio continue to be underweight equities and bonds, whilst overweighting other income generating assets, such as listed property, infrastructure (traditional and renewable energy), leasing and cash. Within equities, it remains overweight better valued non-us equities. In other areas, the US dollar is favoured over most other currencies, whilst the strategy also seeks to protect against the risk of increased interest rates by maintaining a bias towards shorter dated bonds. Looking forward, we believe that markets have a number of headwinds to overcome, including somewhat challenging valuations across major asset classes, political uncertainty in the US and Europe, and the reduction in central bank support. Whilst the tightening in monetary policy is expected to happen gradually, and in conjunction with an improving economic outlook, the markets may suffer a few shakes as they are forced to withdraw from their current addiction to low interest rates and quantitative easing. The Nedgroup Investments Balanced returned +8.4% in US dollar terms from 1 July 2016 to 30 June 2017, which, for reference, compares to the average return of +6.9% for the Morningstar Moderate and Morningstar Cautious Allocation peer groups. The Balanced s stated benchmark, 3-month LIBID +1% to +3%, returned +1.9% to +3.9% over the period. As a medium risk profile fund, the absolute performance was aided by its exposure to bonds (due to tilts towards credit, specifically high yield debt), as well as its allocation to global equities. In terms of current strategy, the portfolio continue to be underweight equities and bonds, whilst overweighting other income generating assets, such as listed property, infrastructure (traditional and renewable energy), leasing and cash. Within equities, it remains overweight better valued non-us equities. In other areas, the US dollar is favoured over most other currencies, whilst the strategy also seeks to protect against the risk of increased interest rates by maintaining a bias towards shorter dated bonds. Looking forward, we believe that markets have a number of headwinds to overcome, including somewhat challenging valuations across major asset classes, political uncertainty in the US and Europe, and the reduction in central bank support. Whilst the tightening in monetary policy is expected to happen gradually, and in conjunction with an improving economic outlook, the markets may suffer a few shakes as they are forced to withdraw from their current addiction to low interest rates and quantitative easing. The Nedgroup Investments Income returned +5.7% in US dollar terms from 1 July 2016 to 30 June 2017, which, for reference, compares to the Morningstar Global Bonds Hedged peer group average return of +1.3%. The Income s stated benchmark, 3-month LIBID, returned +0.9% for the same period. As a low risk profile fund, the absolute performance of the Income was aided by its exposure to corporate bonds (especially high yield), which outperformed other fixed income sectors over the period. In terms of strategy, the portfolio continues to favour high yielding corporate credit, whilst seeking to protect against the risk of increased interest rates through a bias towards shorter dated bonds. It also includes a modest weighting across a diversified mix of other income generating assets, such as listed property, infrastructure (traditional and renewable energy), leasing and higher yielding equities. Looking forward, we believe that markets have a number of headwinds to overcome, including somewhat challenging valuations across major asset classes, political uncertainty in the US and Europe, and the reduction in central bank support. Whilst the tightening in monetary policy is expected to happen gradually, and in conjunction with an improving economic outlook, the markets may suffer a few shakes as they are forced to withdraw from their current addiction to low interest rates and quantitative easing. The UK s decision to exit from the European Union ( Brexit ) could affect the regulatory regime under which the fund markets the Irish UCITS into the UK, this will be a matter for local UK law post Brexit. The Fund shall seek to minimise the costs and other implications of any such changes, although investors should be aware that some or all of the costs of such changes may be borne by the Fund. Nedgroup Investments (IOM) Limited July 2017 NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 9

11 INDEPENDENT AUDITOR S REPORT TO THE SHAREHOLDERS Report on the audit of the financial statements Opinion We have audited the financial statements of Nedgroup Investments s plc ( the Company ) for the year ended 30 June 2017 set out on pages 12 to 48, which comprise the Statement of Comprehensive Income, Statement of Financial Position, the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, the Statement of Cash Flows and related notes, including the summary of significant accounting policies set out in note 2. The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). In our opinion, the accompanying financial statements: We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Going concern We have nothing to report in respect of the following matters in relation to which ISA 570 (Ireland) Going concern require us to report to you where: the directors use of the going concern basis of accounting in the preparation of the financial statements is not appropriate: or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when which the financial statements are authorised for issue. give a true and fair view of the assets, liabilities and financial position of the Company as at 30 June 2017 and of its increase in net assets attributable to holders of redeemable participating shares for the year then ended; have been properly prepared in accordance with IFRS as adopted by the EU; and have been properly prepared in accordance with the requirements of the Companies Act 2014, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Accounting and Auditing Supervisory Authority (IAASA), and we have fulfilled our other ethical responsibilities in accordance with these requirements. Other information The directors are responsible for preparation of other information accompanying the financial statements. The other information comprises annual report, other than the financial statements and our auditor s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion on that information. In connection with our audit of the financial statements, ISAs (Ireland) and the Companies Act 2014 require that we read the other information and, in doing so, consider whether that information is materially inconsistent with the financial statements or our knowledge obtained from our audit work, or otherwise appears to be materially misstated. Based solely on that work, we report that we have not identified material misstatements in the directors report or other accompanying information; in our opinion, the information given in the directors report is consistent with the financial statements; in our opinion, the directors report has been prepared in accordance with the Companies Act NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 10

12 INDEPENDENT AUDITOR S REPORT TO THE SHAREHOLDERS (continued) Opinion on other matter prescribed by the Companies Act 2014 We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the financial statements are in agreement with the accounting records. Matters on which we are required to report by exception The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors remuneration and transactions required by sections 305 to 312 of the Act are not made. We have nothing to report in this regard. Respective responsibilities and restrictions on use Responsibilities of directors for the financial statements As explained more fully in the directors responsibilities statement set on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Company, the directors are responsible for assessing the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A fuller description of our responsibilities is provided on IAASA s website at responsiblities_for_audit.pdf. The purpose of our audit work and to whom we owe our responsibilities Our report is made solely to the Company s shareholders, as a body, in accordance with section 391 of the Companies Act Our audit work has been undertaken so that we might state to the Company s shareholders those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s shareholders as a body, for our audit work, for this report, or for the opinions we have formed. Darina Barrett Date 18 October 2017 for and on behalf of KPMG Chartered Accountants, Statutory Audit Firm 1 Harbourmaster Place International Financial Services Centre Dublin 1 Ireland NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 11

13 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 Nedgroup Investments Growth Holdings Quantity Fair Value % of NET Assets Financial assets at fair value through profit or loss % (2016: 96.63%) Money Market Funds 8.02% (2016: 7.24%) Institutional Cash Series plc - Institutional US Dollar Liquidity Fund (UCITS) 145,343 14,795, % 14,795, % Total Money Market Funds 14,795, % Investment Funds % (2016: 88.90%) Equity Funds Allianz Global Small Cap Equity (UCITS) 4,367 8,214, % Coronation Global Emerging Market Fund (UCITS) 663,743 7,520, % Dodge & Cox Worldwide Funds plc - Global Stock Fund (UCITS) 559,056 11,259, % Morgan Stanley Investment Funds - Global Brands Fund (UCITS) 247,799 14,218, % Most Diversified Portfolio SICAV - TOBAM Anti-Benchmark World Equity Fund (UCITS) 1,116 15,858, % Nedgroup Investments Funds plc - Global Equity Fund (UCITS) 14,824,003 28,444, % 85,515, % Fixed Income Funds Franklin Templeton Investment Funds - Templeton Global Total Return Fund (UCITS) 115,316 3,358, % 3,358, % Index Funds Vanguard Emerging Markets Stock Index Fund/Ireland (UCITS) 45,482 7,932, % Vanguard Investment Series plc - Global Stock Index Fund (UCITS) 1,406,339 34,942, % 42,874, % Property Funds F&C Commercial Property Trust Ltd (AIF) 2,826,763 5,335, % Impact Healthcare REIT plc (AIF) 2,120,000 2,863, % Nedgroup Investment Funds plc - Global Property Fund (UCITS) 8,406,232 8,458, % Standard Life Investment Property Income Trust (AIF) 1,280,488 1,484, % 18,141, % Other Funds 3i Infrastructure plc (AIF) 780,000 1,935, % GCP Asset Backed Income Fund Ltd (AIF) 1,330,000 1,796, % Greencoat UK Wind plc/funds (AIF) 2,549,808 4,014, % John Laing Environmental Assets Group Ltd (AIF) 1,508,137 2,110, % SQN Asset Finance Income Fund Ltd (AIF) 3,355,042 4,434, % 14,291, % Total Investment Funds 164,182, % NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 12

14 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Growth (continued) Unrealised gain on OTC forward foreign currency exchange contracts % (2016: 0.49%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Gain % of NET Assets 31/07/ ,119,982 13,113,857 45, % 31/07/2017 7,656,581 9,921,689 34, % 31/07/2017 4,175,269 5,410,473 18, % 31/07/ ,650 55,656 1, % 31/07/ ,000 57, % 31/07/ ,932 37, % 31/07/ ,529 28, % 31/07/2017 9,000 11, % 31/07/ % 11/08/ ,569,026 8,100,000 32, % Total unrealised gain on OTC forward foreign currency exchange contracts 135, % Financial assets at fair value through profit or loss 179,113, % Financial liabilities at fair value through profit or loss - (0.16)% (2016: (0.00)%) Unrealised loss on OTC forward foreign currency exchange contracts - (0.16)% (2016: (0.00)%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Loss % of NET Assets 31/07/ , ,009 (10,559) (0.01)% 31/07/ ,035 96,281 (163) (0.00)% 31/07/ ,990 76,220 (122) (0.00)% 31/07/ ,262 21,058 (120) (0.00)% 31/07/ ,883 16,904 (97) (0.00)% 31/07/ ,949 43,849 (70) (0.00)% 31/07/2017 2,302 1,800 (38) (0.00)% 31/07/ ,366 15,666 (6) (0.00)% 31/07/ ,322 12,556 (5) (0.00)% 31/07/ ,750 20,483 (2) (0.00)% 31/07/2017 1,350 1,756 - (0.00)% 11/08/2017 5,132,969 EUR 4,700,000 (239,354) (0.13)% 11/08/ ,082,899 12,400,000 (46,213) (0.02)% Total unrealised loss on OTC forward foreign currency exchange contracts (296,749) (0.16)% Financial liabilities at fair value through profit or loss (296,749) (0.16)% Deposits with credit institutions 5,634, % Other assets and liabilities (excluding net assets attributable to Redeemable Participating Shareholders) (56,810) (0.03)% Net Assets Attributable to Redeemable Participating Shareholders 184,394, % NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 13

15 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Growth (continued) Portfolio analysis: Fair Value % of Total Assets Transferable securities and money market instruments admitted to official stock exchange listing 38,770, % UCITS 140,207, % OTC financial derivative instruments 135, % Deposits with credit institutions 5,634, % Other current assets 451, % Total assets 185,199, % The counterparty to all open OTC forward foreign currency exchange contracts as at 30 June 2017 is Citigroup. NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 14

16 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Balanced Holdings Quantity Fair Value % of NET Assets Financial assets at fair value through profit or loss % (2016: 97.94%) Money Market Funds 15.08% (2016: 15.37%) Institutional Cash Series plc - Institutional US Dollar Liquidity Fund (UCITS) 326,285 33,215, % 33,215, % Total Money Market Funds 33,215, % Investment Funds % (2016: 81.16%) Equity Funds Allianz Global Small Cap Equity (UCITS) 2,405 4,523, % Coronation Global Emerging Market Fund (UCITS) 428,394 4,853, % Dodge & Cox Worldwide Funds plc - Global Stock Fund (UCITS) 287,617 5,792, % Morgan Stanley Investment Funds - Global Brands Fund (UCITS) 114,188 6,552, % Most Diversified Portfolio SICAV - TOBAM Anti-Benchmark World Equity Fund (UCITS) 624 8,859, % Nedgroup Investments Funds plc - Global Equity Fund (UCITS) 8,075,319 15,494, % 46,076, % Fixed Income Funds AXA Fixed Interest ICVC - US Short Duration High Yield Fund (UCITS) 10,516,557 18,796, % Franklin Templeton Investment Funds - Templeton Global Total Return Fund (UCITS) 288,110 8,389, % Kames High Yield Global Bond (UCITS) 717,342 8,117, % Muzinich Short Duration High Yield Fund (UCITS) 83,404 9,333, % PIMCO Funds Global Investors Series plc - Global Investment Grade Credit Fund (UCITS) 746,152 13,759, % Wellington Management Funds Ireland plc - Wellington Global Credit Plus Fund (UCITS) 1,176,378 14,445, % 72,843, % Index Funds Vanguard Emerging Markets Stock Index Fund/Ireland (UCITS) 22,700 3,958, % Vanguard Investment Series plc - Global Stock Index Fund (UCITS) 763,642 18,973, % 22,932, % Property Funds F&C Commercial Property Trust Ltd (AIF) 3,568,655 6,735, % Impact Healthcare REIT plc (AIF) 2,500,000 3,377, % Nedgroup Investment Funds plc - Global Property Fund (UCITS) 10,791,398 10,858, % Standard Life Investment Property Income Trust (AIF) 1,743,902 2,021, % 22,992, % Other Funds 3i Infrastructure plc (AIF) 994,500 2,467, % GCP Asset Backed Income Fund Ltd (AIF) 1,665,000 2,249, % Greencoat UK Wind plc/funds (AIF) 3,303,150 5,200, % John Laing Environmental Assets Group Ltd (AIF) 1,903,340 2,663, % SQN Asset Finance Income Fund Ltd (AIF) 4,286,398 5,665, % 18,246, % Total Investment Funds 183,091, % NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 15

17 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Balanced (continued) Unrealised gain on OTC forward foreign currency exchange contracts % (2016: 1.41%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Gain % of NET Assets 31/07/ ,215,020 32,674, , % 31/07/ ,692,964 24,223,053 84, % 31/07/2017 7,946,457 10,297,322 35, % 31/07/ , ,163 4, % 31/07/ ,700 81,471 1, % 31/07/ ,535 64,435 1, % 31/07/ ,324 60, % 31/07/ ,714 46, % 31/07/ ,193 19, % 31/07/ ,781 69, % 31/07/ ,082 73, % 31/07/2017 3,170 2, % 11/08/ ,787,216 9,800,000 39, % Total unrealised gain on OTC forward foreign currency exchange contracts 282, % Financial assets at fair value through profit or loss 216,589, % Financial liabilities at fair value through profit or loss (0.12)% (2016: (0.01)%) Unrealised loss on OTC forward foreign currency exchange contracts - (0.12)% (2016: (0.01)%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Loss % of NET Assets 31/07/ , ,933 (9,826) (0.01)% 31/07/ , ,073 (2,898) (0.00)% 31/07/ , ,130 (268) (0.00)% 31/07/ ,445 36,649 (210) (0.00)% 31/07/ , ,392 (195) (0.00)% 31/07/ ,282 26,481 (152) (0.00)% 31/07/2017 5,827 4,570 (115) (0.00)% 31/07/ ,123 53,993 (86) (0.00)% 31/07/2017 4,144 3,250 (82) (0.00)% 31/07/ ,014 11,598 (67) (0.00)% 31/07/ ,270 40,978 (15) (0.00)% 31/07/ ,413 28,780 (11) (0.00)% 31/07/ ,019 13,092 (5) (0.00)% 11/08/2017 2,839,515 EUR 2,600,000 (132,408) (0.06)% 11/08/ ,613,232 29,000,000 (108,079) (0.05)% Total unrealised loss on OTC forward foreign currency exchange contracts (254,417) (0.12)% Financial liabilities at fair value through profit or loss (254,417) (0.12)% Deposits with credit institutions 4,500, % Other assets and liabilities (excluding net assets attributable to Redeemable Participating Shareholders) (543,380) (0.24)% Net Assets Attributable to Redeemable Participating Shareholders 220,291, % NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 16

18 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Balanced (continued) Portfolio analysis: Fair Value % of Total Assets Transferable securities and money market instruments admitted to official stock exchange listing 63,596, % UCITS 152,711, % OTC financial derivative instruments 282, % Deposits with credit institutions 4,500, % Other current assets 5,279, % Total assets 226,368, % The counterparty to all open OTC forward foreign currency exchange contracts as at 30 June 2017 is Citigroup. NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 17

19 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Income Holdings Quantity Fair Value % of NET Assets Financial assets at fair value through profit or loss % (2016: 93.11%) Money Market Fund 2.64% (2016: 0.96%) Insight Liquidity Funds plc - Liquidity Fund (UCITS) 1,000,000 1,000, % 1,000, % Total Money Market Funds 1,000, % Investment Funds % (2016: 92.15%) Equity Funds ishares UK Dividend UCITS ETF 90, , % 826, % Fixed Income Funds AXA Fixed Interest ICVC - US Short Duration High Yield Fund (UCITS) 7,068,154 6,906, % Franklin Templeton Investment Funds - Templeton Global Total Return Fund (UCITS) 202,847 2,275, % Kames High Yield Global Bond (UCITS) 235,620 2,639, % Kames Short Dated High Yield Global Bond Fund (UCITS) 260,075 2,600, % Muzinich Short Duration High Yield Fund (UCITS) 47,625 4,296, % PIMCO Funds Global Investors Series plc - Global Investment Grade Credit Fund (UCITS) 375,320 5,216, % Wellington Management Funds Ireland plc - Wellington Global Credit Plus Fund (UCITS) 546,145 5,991, % 29,926, % Property Funds F&C Commercial Property Trust Ltd (AIF) 749,077 1,088, % Standard Life Investment Property Income Trust (AIF) 313, , % 1,368, % Other Funds 3i Infrastructure plc (AIF) 175, , % GCP Asset Backed Income Fund Ltd (AIF) 360, , % Greencoat UK Wind plc/funds (AIF) 560, , % John Laing Environmental Assets Group Ltd (AIF) 681, , % SQN Asset Finance Income Fund Ltd (AIF) 942, , % 3,082, % Total Investment Funds 35,203, % NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 18

20 SCHEDULE OF INVESTMENTS AS AT 30 JUNE 2017 (continued) Nedgroup Investments Income (continued) Unrealised gain on OTC forward foreign currency exchange contracts % (2016: 0.00%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Gain % of NET Assets 31/07/2017 1,300, , % 31/07/ ,505 29, % 31/07/ ,104 15, % Total unrealised gain on OTC forward foreign currency exchange contracts % Financial assets at fair value through profit or loss 36,203, % Financial liabilities at fair value through profit or loss - (0.17)% (2016: (0.10)%) Unrealised loss on OTC forward foreign currency exchange contracts - (0.17)% (2016: (0.10)%) Maturity Date Issue Currency Currency Received Settle Currency Currency Delivered Unrealised Loss % of NET Assets 31/07/ ,900,955 9,187,351 (35,143) (0.09)% 31/07/2017 4,310,432 3,327,586 (12,729) (0.03)% 31/07/ , ,439 (7,849) (0.02)% 31/07/2017 2,460,808 1,899,706 (7,267) (0.02)% 31/07/ , ,984 (2,119) (0.01)% 31/07/ ,376 12,812 (218) (0.00)% 31/07/2017 8,346 10,857 (3) (0.00)% Total unrealised loss on OTC forward foreign currency exchange contracts (65,328) (0.17)% Financial liabilities at fair value through profit or loss (65,328) (0.17)% Deposits with credit institutions 934, % Other assets and liabilities (excluding net assets attributable to Redeemable Participating Shareholders) 809, % Net Assets Attributable to Redeemable Participating Shareholders 37,882, % Portfolio analysis: Fair Value % of Total Assets Transferable securities and money market instruments admitted to official stock exchange listing 5,450, % UCITS 30,752, % OTC financial derivative instruments % Deposits with credit institutions 934, % Other current assets 12,637, % Total assets 49,775, % The counterparty to all open OTC forward foreign currency exchange contracts as at 30 June 2017 is Citigroup. NEDGROUP INVESTMENTS MULTIFUNDS PLC - ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS Page 19