RANMORE GLOBAL EQUITY FUND PLC (the Company )

Transcription

1 RANMORE GLOBAL EQUITY FUND PLC (the Company ) Unaudited Interim Report and Financial Statements For the period from 1 st July 2016 to the 31 st December 2016

2 CONTENTS Financial Summary 2 Statement of Changes in Net Assets Attributable to Participating Shareholders 10 Investment Manager s Report 3 Statement of Cash Flows 11 Background Information 5 Notes to the Financial Statements 12 Statement of Financial Position 8 Portfolio Statement 27 Statement of Profit or Loss and Other Comprehensive Income 9 Significant Portfolio Movements 28 Corporate Information 29 Page 1 of 30

3 FINANCIAL SUMMARY For the period ended 31 st December 2016 Performance Investor Class Advisor Class EUR Investor Class GBP Investor Class Total Net Assets as at 31 st December 2016 $75,990,908 $12,365,617 16,750,207 17,846,638 Net Asset Value Per Participating Share as at 31 st December 2016 $ $ MSCI World Index as at 31 st December , Percentage change during the period % % % % Net Asset Value Per Participating Share MSCI World Index 6.8 Net Asset Value Per Participating Share $ $ High Low For the year ended 30th June 2016 Performance Investor Class Advisor Class EUR Investor Class GBP Investor Class Total Net Assets as at 30 th June 2016 $72,829,916 $12,823,464 15,828,481 17,878,860 Net Asset Value Per Participating Share as at 30 th June 2016 $ $ MSCI World Index as at 30 th June , Percentage change during the year % % % % Net Asset Value Per Participating Share (5.5) (6.0) (5.2) 11.5 MSCI World Index (2.8) Net Asset Value Per Participating Share $ $ High Low For the year ended 30th June 2015 Performance Investor Class Advisor Class EUR Investor Class GBP Investor Class Total Net Assets as at 30 th June 2015 $74,319,584 $14,714,828 17,321,744 13,281,785 Net Asset Value Per Participating Share as at 30 th June 2015 $ $ MSCI World Index as at 30 th June , Percentage change during the year % % % % Net Asset Value Per Participating Share (2.0) (2.5) MSCI World Index 1.4 Net Asset Value Per Participating Share $ $ High Low Page 2 of 30

4 INVESTMENT MANAGER S REPORT The six month period to 31 st December 2016 saw the impact of two political events which caught markets off guard. The first was the UK s referendum to leave the EU (the vote actually took place in the final week of June 2016), and the second was the election of Donald Trump as US President on November 8 th. Over the period 1 st July st December 2016, the Fund returned 0.3%, underperforming the MSCI World Index, which returned 6.8%. The underperformance occurred in the immediate aftermath of these events. In spite of the shock of the Brexit vote, the MSCI World Index rallied in July, rising 4.2%, and the Fund lagged (up 1.4% for the month) as a result of an underweight exposure to Asia (up 5.8% in July) and the Fund s cash holdings. The election of Mr. Trump saw a sharp rally in Financials, Industrials, Materials and Energy as the market took a bullish view of a Trump administration scaling back regulation, lowering taxes and increasing infrastructure spending. The Fund had almost no exposure to these sectors and as a result trailed the MSCI World Index by 2.9% in November and 1.6% in December. Although we are clearly disappointed to have trailed the wider market by 6.5%, we wrote in December that we would rather be cautious and preserve investors capital than lose money on bad businesses that don t meet our investment criteria. The bounce in the aforementioned sectors was, we believe, a reflection of the bullish, risk on approach of the market took post November 8 th, rather than any change at the time in the fundamentals of the companies in the sectors concerned. The Information Technology sector provided the largest return over the period, returning 2.5%. Leading the sector was the Fund s largest holding, Alphabet Inc. (Google). After largely treading water in the first half of 2016, Google generated 0.85% to the Fund in the second half of the year. Google s core advertising segment is robust enough to fund less established operations, such as Google Cloud, its Daydream virtual reality product, and its Google Pixel phone, which should contribute to earnings in the coming years. In the 12 months capturing its most recent quarterly results, Google generated free cash flow of $26bn, in contrast to the whole of the MSCI World Energy Index, which failed to generate positive free cash flow in the 12 months to December In falling 1.0%, the largest detractor to performance was the Healthcare sector, largely as a result of Gilead Sciences. We took the opportunity in January to reduce our specific risk in Gilead by trimming the position. Despite strong free cash flow generation and a growing HIV franchise, the outlook for Gilead s previously blockbuster Hepatitis C segment has weakened due to weak pricing power as a result of generic competition. These drugs generate such high gross margins that any drop in revenue is reflected in earnings. Ultimately, earnings drives share price and we took a disciplined approach, acknowledged that our original investment thesis had no played out, and reduced our exposure to Gilead. The graph below and table below it demonstrate the Fund s Regional and Sector weightings relative to its benchmark, the MSCI World Index. At year-end, the Fund was underweight all regions as a result of its cash holding. The sector breakdown shows that the Fund was overweight Information Technology and Healthcare, sectors that, in general, are capital light and generate free cash flow. The Fund was underweight Financials, Materials, Industrials and Energy sectors which benefited from the Trump rally. Shareholders will have noticed from our January factsheet that we have taken the opportunity to rebalance the portfolio by selling holding in which we see limited return potential, such as tobacco (Consumer Staples), and deploying the proceeds to companies where we think business conditions are improving, such as Blackstone (Financials). The latter s private equity model may benefit from high asset prices as it seeks to list or sell projects. We will deploy Fund assets in a disciplined manner when suitable opportunities present themselves, cognisant at all times of our objective of growing investors capital over a medium to long-term horizon. Page 3 of 30

5 Sector Portfolio June 2016 (%) Portfolio December 2016 (%) MSCI WI December 2016 (%) Overweight / (Underweight) relative to MSCI World Index as at December 2016 (%) Consumer Discretionary Consumer Staples Energy (7) Financials (18) Healthcare Industrials (11) Information Technology Materials (5) Real Estate (3) Telecommunication Services (1) Utilities (3) Cash Finally, as investors will be aware from the communication before Christmas, Tim Allsop and Kevin Williams stepped down on 31 st December 2016 as co-portfolio managers of the Fund. Sean Peche will continue as portfolio manager of the Fund, a role he has performed since its inception. Ranmore Fund Management Ltd wishes to thank Tim and Kevin for their contributions and expertise during their time on the Investment Committee. Thank you for your support, Ranmore Fund Management Ltd. Page 4 of 30

6 BACKGROUND INFORMATION Principal Activity Ranmore Global Equity Fund PLC (formerly BlueAlpha Global Equity Fund PLC) was originally incorporated in Jersey on 26th June 2008 and was registered in Ireland by way of continuation, as an open-ended investment company and authorised as a UCITS by the Central Bank of Ireland pursuant to the UCITS Regulations 2011 on 29th September It has subsequently been rebranded. The accompanying changes that followed this rebrand were (i) the name change to Ranmore Global Equity Fund PLC, (ii) the change of Promoter to Bateleur Capital and (iii) to delete the restriction of investing no more than 2% of the Company s net assets in exchange traded put options and to instead permit the Company to use options for efficient portfolio management. Investment in derivative instruments will not exceed 10% of the Company s net asset value at any point in time. Investment Objective To seek to outperform the MSCI World Index, a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets (Bloomberg Ticker: NDDUWI Index) and to provide capital growth over a medium to long-term time horizon. Investment Strategy The Investment Manager s approach is a bottom up, value based research driven stock picking methodology applied to companies which are forecast to grow earnings over the medium to long term. Under normal circumstances, the Fund will invest in companies with one or more of the following characteristics: An above average return on assets when compared to companies in the MSCI World Index Forecast to grow earnings over the medium to long-term A history of generating free cash flow Strong balance sheet Attractive valuation suggesting appreciation potential The Fund will typically comprise fewer than 40 equities at any point in time, primarily in large and mid-sized companies from a range of industry sectors. This relatively concentrated approach means that the position size of the average holding will be greater than for a broadly diversified portfolio. This is to ensure that the return from investment opportunities is maximised and not diluted away by an over-diversified portfolio. In seeking to meet its Investment Objective, the Fund may, from time-to-time, hold substantial cash balances. Investment in emerging markets equities is limited to no more than 20% of the Fund's net assets. The Company may borrow up to 10% of its net assets but only for the purpose of the redemption of Shares. Investment Restrictions The assets of the Company must be invested in accordance with the restrictions on investments set out in the UCITS Regulations and such additional investment restrictions, if any, as may be adopted from time to time by the Directors, such as those described in the Investment Strategy of the Company above. Connected Persons A connected person means the management company or depositary to a UCITS; and the delegates or sub-delegates of such a management company or depositary (excluding any non-group company sub-custodians appointed by a depositary); and any associated or group company of such a management company, depositary, delegate or subdelegate. The term Connected Persons was introduced to replace the term Connected Parties with the introduction of the Central Bank UCITS regulations Any transaction carried out by a connected person with the Company must be carried out as if negotiated at arm s length. Transactions must be in the best interests of the unit holders. The Board of Directors are satisfied that there are arrangements (evidenced by written procedures) in place, to ensure the obligations set out in the Central Bank UCITS regulations 2015 are applied to all transactions with connected persons; and the Board is satisfied that transactions entered into during the year complied with the obligations set out in the Central Bank UCITS regulations Page 5 of 30

7 BACKGROUND INFORMATION (continued) Board of Directors and Management Arrangements The Directors listed on page 6 are responsible for overseeing the business affairs of the Company. The Directors have delegated the management of the assets and investments of the Company to the Investment Manager. The Directors have delegated the day-to-day administration of the Company's affairs, shareholder registration and transfer agency duties, including the calculation of the Net Asset Value and the Net Asset Value per Share, to the Administrator. The Directors have delegated the providing of custody and related services to collective investment schemes, to the Custodian. The Investment Manager The Company has appointed Ranmore Fund Management Limited (formerly BlueAlpha Investment Advisory Limited) as the Investment Manager. Ranmore Fund Management Limited was formed in the United Kingdom on 18th January It is authorised and regulated by the UK Financial Conduct Authority ("FCA"). The Investment Manager serves as Investment Manager to the Company, pursuant to the Investment Management Agreement. As such, the Investment Manager is responsible for the day-to-day management of the Company s assets. Promoter On 21st May 2014, Ranmore Fund Management Limited signed an agreement with Bateleur Capital Pty Ltd appointing Bateleur Capital as the representative and host for the marketing of shares of the scheme in the Republic of South Africa effective from the date of approval by the Financial Services Board of the change in Representative Office. The Promoter is an authorised Financial Services Provider regulated by the Financial Services Board of South Africa. The Administrator The Company has appointed Apex Fund Services (Ireland) Limited to act as Administrator and Transfer Agent of the Company, pursuant to the Administration Agreement, dated 29th September 2011, with responsibility for performing the day-to-day administration of the Company and providing related fund accounting services (including the calculation of the Net Asset Value of the Company and the Net Asset Value per Share). Apex Fund Services (Ireland) Limited was incorporated in Ireland as a private limited company on 26th January The Depositary The Company has appointed BNP Paribas Securities Services Dublin Branch as custodian of its assets pursuant to the Depositary Agreement, 22 nd September The Depositary is a branch office of BNP Paribas Securities Services which is incorporated in France as a Partnership Limited by Shares and is authorised by the ACP (Autorité de Contrôle Prudentiel) and supervised by the AMF (Autorité des Marchés Financiers), whose head office is at 3 rue d Antin, Paris, France. It is 99.99% owned by BNP Paribas Group, one of Europe s largest banks. Company Secretary The Company secretary throughout the financial year was Intertrust Management Ireland Limited. Auditors The auditors, Mazars, Chartered Accountants and Statutory Audit Firm, continue in office in accordance with Section 383(2) of the Companies Act Directors The Board who held office for the entire period from 1st July 2016 to 31st December 2016 are listed below: Sean Philip Peche Kevin Molony (Independent as defined by the Corporate Governance Code) John Skelly (Independent of Investment Manager) Page 6 of 30

8 Sean Philip Peche is not entitled to receive Director s fees from the Company. Sean Philip Peche has a direct interest in the Company worth $183,012 and an indirect interest worth $519,511 as at 31st December None of the other directors held any shares of the Company as at 31st December 2016 or at any time during the period. Results and State of Affairs The Statement of Financial Position as at 31st December 2016 and the results for the period are set out on pages 8 to 11. Dividends There have been no dividends declared during the period ended 31st December Going Concern The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the accounts. Page 7 of 30

9 STATEMENT OF FINANCIAL POSITION Non-current assets As at As at 31 st December th June 2016 Notes Financial assets at fair value through profit or loss 4 92,248, ,402,572 Current assets Prepayments 6 40,600 36,556 Dividends receivable 85,477 73,161 Cash and cash equivalents 7 39,513,218 25,406,229 Amounts due from brokers - 628,827 Total assets 131,887, ,547,345 Current liabilities Investment Management fees payable 10 94,689 97,167 Financial Intermediary fees payable (Advisor Class) 10 53,765 25,644 Administration fees payable 10 7,845 8,610 Custody fees payable 10 4,229 5,988 Audit fee payable 10 3,920 11,725 Directors fees payable 10 6,073 Legal fees payable 5,447 7,301 Other professional fees payable 15,815 12,555 Withholding tax payable 106,307 67,207 Redemptions payable 3,564, ,231 Total liabilities 3,856, ,501 Net assets attributable to redeemable participating shareholders 128,030, ,029,844 Total Equity and Liabilities 131,948, ,547,345 Net assets attributable to redeemable participating shareholders 128,030, ,029,844 Number of Shares Outstanding Investor Class 8 343, , Advisor Class 8 105, , EUR Investor Class 8 92, , GBP Investor Class 8 94, , NAV per Share Investor Class 8 $ $ Advisor Class 8 $ $ EUR Investor Class GBP Investor Class The Financial Statements on pages 8-25 were approved by the Board of Directors of the Company on28th February Page 8 of 30

10 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Income Notes For the period ended 1 st July st December 2016 For the year ended 30 th June 2016 Dividend revenue 789,930 1,390,640 Other income 1,855 1,825 Net gain/(loss) on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 5 671,432 (6,245,974) Total investment income 1,463,217 (4,853,509) Expenses Investment Management fees ,051 1,137,506 Financial Intermediary Fee (Advisor Class) 31,809 61,475 Administration fees 10 53, ,368 Depositary fees 10 28,777 49,170 Audit fee 10 8,911 13,065 Transaction costs 2.2(j) 80, ,656 Legal fee 10 16,934 51,382 Directors fees 3 18,062 39,190 Risk Management fees 10 5,076 11,873 FATCA fees 10 10,624 10,885 Secretarial fees 10 5,520 11,052 Tax Preparation fees 10 2,752 17,882 Oversight fees 10 14,684 29,420 Other professional fees 10 42,494 43,627 Total expenses 899,966 1,999,551 Income / (loss) on ordinary activities before taxation 563,251 (6,853,060) Taxation Withholding tax on dividends 11 (279,982) (333,111) Increase / (decrease) in net assets from operations attributable to redeemable participating shareholders 283,269 (7,186,171) Gains and losses arise solely from continuing operations. There were no gains or losses other than those dealt with in the Statement of Profit or Loss and Other Comprehensive Income. The Financial Statements on pages 8-25 were approved by the Board of Directors of the Company on xxxxxxx2017. Page 9 of 30

11 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES Net assets attributable to redeemable participating For the year period 1 st July st December 2016 For the year ended 30 th June 2016 shareholders at the start of the period/year 127,029, ,211,673 Issue of redeemable participating shares 12,369,737 32,403,450 Redemption of redeemable participating shares (11,652,005) (27,399,108) Increase / (decrease) in net assets from operations attributable to Net assets attributable to redeemable participating 283,269 (7,186,171) shareholders at the end of the period/year 128,030, ,029,844 The accompanying notes form an integral part of these financial statements. Page 10 of 30

12 STATEMENT OF CASH FLOWS Cash flows from operating activities For the period 1 st July st December 2016 For the year ended 30 th June 2016 Increase / (decrease) in net assets attributable to redeemable participating shareholders 283,269 (7,186,171) Decrease in financial assets at cost 8,861,483 23,128,249 Change in unrealised movement on financial assets and liabilities at fair value through profit or loss on investments 292,963 (6,450,883) Change in receivables 551,567 2,533,985 Change in payables 110,647 (1,522,452) Net cash inflow from operating activities 10,099,929 10,502,728 Cash flows from financing activities Proceeds from issue of redeemable participating shares 12,369,737 32,403,450 Payment on redemption of redeemable participating shares (8,362,677) (27,123,877) Net cash inflow from financing activities 4,007,060 5,279,573 Net increase in cash and cash equivalents 14,106,989 15,782,301 Cash and cash equivalents at beginning of the reporting period/year 25,406,229 9,623,928 Net cash and cash equivalents at the end of the reporting period/year 39,513,218 25,406,229 The accompanying notes form an integral part of these financial statements. Page 11 of 30

13 NOTES TO THE FINANCIAL STATEMENTS 1. Corporate Information Ranmore Global Equity Fund PLC was originally incorporated in Jersey on 26th June 2008 and was registered in Ireland by way of continuation, as an open-ended investment Company and authorised as a UCITS by the Central Bank pursuant to the UCITS Regulations 2011 as amended. In accordance with the requirements of the Central Bank. Shares may be divided into different Classes to accommodate different subscriptions and/or redemption charges and/or charges and/or dividend and/or fee arrangements. Separate pools of assets will not be maintained for each Class. Share Class Name Date Launched Initial Minimum Subscription Ranmore Global Equity Fund PLC - Investor Class 8 th October ,000 Ranmore Global Equity Fund PLC - Advisor Class 26 th January ,000 Ranmore Global Equity Fund PLC - EUR Investor Class 30 th June 2010 EUR equivalent of 100,000 Ranmore Global Equity Fund PLC - GBP Investor Class 30 th June 2010 GBP equivalent of 100,000 Dealing The day on which Shares may be subscribed or redeemed being the first Business Day following the relevant Valuation Point or such other days as determined by the Directors from time to time provided that there shall always be at least one such day per fortnight and Shareholders are notified in advance. Dealing currently takes place every Business Day. Objective The Company s investment objective and strategy is described in the Background information on page 6. The Company has no employees. 2. Accounting policies 2.1 Basis of preparation and statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (''IFRS") as adopted for use in the European Union and Irish Statute comprising of the Companies Act 2014 and all regulations to be construed as one with those Acts, including the European Communities Undertaking for Collective Investments in Transferrable Securities Regulations 2011 and 2015 as amended under historical cost convention as modified to include financial assets at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. These financial statements comply with IAS 1 - 'Presentation of Financial Statements'. The information required by IAS 1, to be included in the Statement of Changes in Equity, is in the opinion of the Directors included in the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders. 2.2 Summary of significant accounting policies The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Directors to exercise their judgement in the process of applying the Company s accounting policies. The Directors believe that the estimates utilised in preparing the financial statements are reasonable and prudent. Actual results could differ from these estimates. The financial statements include the performance and position of underlying Share Classes. The financial statements reflect the aggregated figures of the Share Classes in issue at the end of the reporting period. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in the accounting policies overleaf. Page 12 of 30

14 NOTES TO THE FINANCIAL STATEMENTS (continued) 2.2 Summary of significant accounting policies (continued) (a) Financial instruments at fair value through profit or loss (i) Classification In accordance with IAS 39, the Company has designated its investments in equity securities as financial assets at fair value through profit or loss. Financial assets at fair value through profit or loss The Company has designated all of their investments upon initial recognition as financial assets at fair value through profit or loss. These include financial assets that are held for trading purposes and which may be sold and represent a group of financial assets which is managed and its performance is evaluated on a fair value basis, in accordance with the risk management and investment strategies of the Company, as set out in the Company s Prospectus. (ii) Recognition All regular way purchases and sales of financial instruments are recognised using trade date accounting, the day that the Company commits to purchase or sell the asset. From this date any gains and losses arising from changes in fair value of the financial assets or financial liabilities are recorded. Regular way purchases, or sales, are purchases and sales of financial assets that require delivery of the asset within a time frame generally established by regulation or convention in the market place. (iii) Measurement Financial assets are measured at fair value through profit or loss. (iv) Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where: - The rights to receive cash flows from the asset have expired; or - The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and - Either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expires. (v) Fair value measurement principles Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. If an asset or liability measured at fair value has a bid and an ask price, the price within the bid-ask spread that is most representative of fair value in the circumstances shall be used to measure fair value regardless of where the input is categorized within the fair value hierarchy. The use of bid prices for asset positions and ask prices for liability positions is permitted, but not required. The bid-ask spread has been considered and it is not material to the accounts. The fair value of financial instruments is based on their quoted closing market prices at the Statement of Financial Position date without any deduction for estimated future selling costs. Investments measured and reported at fair value are classified and disclosed in one of the following fair value hierarchy levels based on the significance of the inputs used in measuring its fair value. Page 13 of 30

15 NOTES TO THE FINANCIAL STATEMENTS (continued) 2.2 Summary of significant accounting policies (continued) Level 1 inputs are unadjusted quoted prices in active markets for identical assets that the reporting entity has the ability to access at the valuation date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices in active markets included within level 1 that are observable for the asset, either directly or indirectly. Level 3 inputs are inputs that are not based on observable data and the unobservable inputs have a significant effect on the instrument s valuation. An investment is always categorised as level 1, 2 or 3 in its entirety. (vi) Redeemable participating shares All Shares issued by the Company provide the investors with the right to require redemption for cash at the value proportionate to the investor s share in the Company s net assets at the redemption date. (vii) Specific Instruments (a) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position if, and only if, there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. (b) Foreign currency translations The functional currency of the Company is the, (as the Directors have determined that this reflects the Company s primary economic environment). The presentation currency of the Company is also. Transactions in foreign currencies are translated at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to at the foreign currency closing exchange rate ruling at the Statement of Financial Position date. Foreign currency exchange differences arising on translation and realised gains and losses on disposals or settlements of monetary assets and liabilities are recognised in the Statement of Profit or Loss and Other Comprehensive Income. Nonmonetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to at the foreign currency exchange rates ruling at the dates that the values were determined. Foreign currency exchange differences relating to investments at fair value through profit or loss and derivative financial instruments are included in gains and losses on investments. All other foreign currency exchange differences relating to monetary items, including cash are presented in the Statement of Profit or Loss and Other Comprehensive Income. Foreign currency monetary assets and liabilities, including financial assets and financial liabilities at fair value through profit or loss, are translated into the functional currency of the Company at the closing exchange rate at the end of the reporting period. (c) Gains and losses Any foreign exchange losses on financial assets and financial liabilities at fair value through profit or loss are included in the Statement of Profit or Loss and Other Comprehensive Income as part of the Net gain on financial assets at fair value through profit or loss and foreign exchange. This item also includes realised and unrealised gains and losses on financial assets and liabilities designated upon initial recognition as held at fair value through profit or loss and excludes interest and dividend income and expense. Realised gains and losses arising on the disposal of financial instruments classified as at fair value through profit or loss are calculated by reference to the proceeds received on disposal and the actual cost attributable to those instruments, and are recognised in the Statement of Profit or Loss and Other Comprehensive Income. Unrealised gains and losses comprise changes in the fair value of financial instruments for the year and from the reversal of prior period s unrealised gains and losses for financial instruments which were realised in the reporting period. Page 14 of 30

16 NOTES TO THE FINANCIAL STATEMENTS (continued) 2.2 Summary of significant accounting policies (continued) (d) Due to and due from brokers Amounts due to brokers are payables for securities purchased (in a regular way transaction) that have been contracted for but not yet delivered at the end of the reporting period. They are recognised and measured as other financial liabilities other than those classified as fair value through profit or loss. Amounts due from brokers are receivables for securities sold (in a regular way transaction) that have been contracted for but not yet delivered at the end of the reporting period. They are recognised and measured as loans and receivables. (e) Distribution policy of the Company The Directors anticipate the predominant source of return in respect of each of the Investor Class, the Advisor Class, the GBP Investor Class and the EUR Investor class to be through capital growth and do not expect investment income (net of expenses) to be significant. As such the Directors do not intend to declare any dividends. (f) Cash and cash equivalents Cash comprises cash at bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant changes in value. Cash held for the Company is held by BNP Paribas Securities Services as Depositary and by Danske Bank, in accordance with the UCITS Regulations that no more than 20% of net assets can be invested in cash deposits with any one credit institution. (g) Interest revenue and expense Interest income and interest expenses are accounted for on an accruals basis and recognised in the Statement of Profit or Loss and Other Comprehensive Income. (h) Dividend revenue Dividends on quoted equity securities are taken into account on the ex-dividend date. The ex-dividend date is the date that the market price of the security is reduced to reflect the amount of dividend (that is, securities traded on that date do not include rights to the upcoming dividend payment). Where no ex-dividend date is quoted, they are brought into account when the Company s right to receive payment is established. Income is shown in the Statement of Profit or Loss and Other Comprehensive Income gross of any imputed tax credits and presented gross of any withholding taxes deducted at source which is disclosed separately in the Statement of Profit or Loss and Other Comprehensive Income. (i) Fees All fees are recognised on an accruals basis. (j) Transaction Costs Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of a financial instrument. Page 15 of 30

17 NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Directors and Auditors Remuneration Directors remuneration in respect of the period 1 st July 2016 and 31 st December 2016, and the financial year ended 30 th June 2016 is as follows: Directors remuneration - Aggregate emoluments paid to or receivable by directors in respect of qualifying services For the period ended 1 st July 2016 to 31 st December 2016 For the year ended 30 th June ,062 39,190 - Aggregate amount of money or value of other assets, including shares but excluding share options, paid to or receivable by the directors under long term incentive schemes in respect of qualifying services - - Auditors remuneration for work carried out for the Company in respect of the period 1 st July 2016 and 31 st December 2016, and the financial year ended 30 th June 2016 is as follows: Auditors remuneration For the period ended 1 st July 2016 to 31 st December 2016 For the year ended 30 th June Audit of Company accounts 8,911 13,065 - Other assurance services Tax advisory services 2,752 17,882 - Other non-audit services Financial assets at fair value through profit or loss Financial assets designated at fair value through profit or loss For the period ended 1 st July 2016 to 31 st December 2016 As at 30 th June 2016 Listed equity securities at trading valuation 92,248, ,402,572 Financial assets at fair value through profit or 92,248, ,402, Net gains and losses on financial assets designated at fair value through profit or loss and foreign exchange Profit or Loss Listed and unlisted equity securities For the period ended 1 st July 2016 to 31 st December 2016 For the year ended 30 th June Realised gain / (loss) on equities 1,367,450 (14,404,349) - Realised loss on options - (131,000) - Unrealised (loss) / gain on equities (292,963) 6,599,043 - Unrealised loss on options - (48,800) Net foreign exchange (losses) / gains on realised and unrealized equities Net gain / (loss) on financial assets at fair value through profit or loss and foreign exchange (403,055) 1,739, ,432 (6,245,974) Page 16 of 30

18 NOTES TO THE FINANCIAL STATEMENTS (continued) 6. Prepayments As at 31 st December 2016 As at 30 th June 2016 Directors fees 9,996 4,115 License fee 14,041 11,091 Directors' insurance 4,305 1,279 Secretarial fees 28 5,613 Oversight & Monitoring services 7,076 7,467 MLRO fees 3,227 3,415 Other 1,927 3,576 Prepayments 40,600 36, Cash and cash equivalents As at 31 st December 2016 As at 30 th June 2016 Cash at bank BNP Paribas Securities Services 25,461,326 11,296,033 Cash at bank Danske Bank 14,051,892 14,110, Shares in issue As at 31 st December 2016 As at 30 th June 2016 Authorised share capital Number of shares Number of shares Subscriber s shares of 1.00 each 2 2 Shares of no par value 500,000, ,000,000 Redeemable Participating Shares Investor Class Number of shares Number of shares Shares in issue at the beginning of the year 330, , Shares issued during the year 40, , Shares redeemed during the year (27, ) (99, ) Total Shares in issue at the end of the year 343, , Advisor Class Shares in issue at the beginning of the year 108, , Shares issued during the year 1, , Shares redeemed during the year (5, ) (21, ) Total Shares in issue at the end of the year 105, , EUR Investor Class Shares in issue at the beginning of the year 92, , Shares redeemed during the year - (3, ) Total Shares in issue at the end of the year 92, , GBP Investor Class Shares in issue at the beginning of the year 102, , Shares issued during the year 12, , Shares redeemed during the year (20, ) (11, ) Total Shares in issue at the end of the year 94, , Page 17 of 30

19 NOTES TO THE FINANCIAL STATEMENTS (continued) 8. Shares in Issue (continued) Subscriber Shares On a poll each holder of Subscriber Shares is entitled to one vote irrespective of the number of shares held by them and the Subscriber Shares do not carry any right to dividends. On a winding up, the Subscriber Shares rank only for a return of paid up capital after the return of amounts paid up on the Shares. Shares Each holder of redeemable participating Shares present in person or by proxy at a general meeting of the Company is entitled, on a poll, to one vote for each participating share held. On a winding up each participating share carries a preferential right to a return out of the Company of capital paid up and a right to share in any surplus assets of the relevant Company after the return of capital paid up on the Subscriber Shares. 9. Net Asset Value per redeemable participating share The Net Asset Value per redeemable participating share is determined as at each Dealing Day by dividing the Net Asset Value of the Company by the number of Shares in issue. The Net Asset Value per participating share is shown on page 3. In accordance with the provisions of the Company s offering document the prices for buying and selling Shares in the Company are calculated by reference to the Net Asset Value per participating share. The issue price will be calculated by reference to the Net Asset Value of each participating share on the relevant dealing day and rounding the resulting sum upwards or downwards to the nearest whole cent. The redemption price payable on redemption of Shares will be calculated by reference to the Net Asset Value of each participating share on the relevant dealing day and rounding the resulting sum upwards or downwards to the nearest whole cent. 10. Related Party and Fee Disclosures A Director or the Investment Manager may be a party to, or otherwise interested in, any transaction or arrangement in which the Company is interested. There is no prohibition on the Directors or any person connected with them, holding Shares in the Company. The nature of any such interests/transactions will be declared by the relevant Director to the Board at the next Board meeting. Sean Peche is a director of both the Company and the Investment Manager. He is not entitled to receive director s fees from the Company. Sean Peche has a direct interest in the Company worth $183,012 (30 th June 2016: $182,526) and an indirect interest worth $519,511 (30 th June 2016: $518,129) as at 31 st December John Skelly is a Director of the Company and works for Carne Global Financial Services Limited which provides oversight, risk support and MLRO services to the Company. Carne fees expensed during the period ended 31 st December 2016 was 21,087 (30 th June 2016: 36,553) and as at 31 st December 2016 Carne fees prepaid was 12,092 (30 th June 2016: 12,113). The Secretarial fees expensed during the period ended 31 st December 2016 were 5,028 (30 th June: ). Legal fees for the period were $16,934 (30 th June 2016: $51,382) and as at 31 st December 2016 Legal fees payable were $5,447 (30 th June 2016: $7,301) The Directors fees expensed for the period ended 31 st December 2016 were $18,062 (30 th June 2016: $39,190) and as at 31 st December 2016 Directors fees prepaid were 9,501 (30 th June ,763 payable) The total fees payable at the end of the reporting period are shown in the Statement of Financial Position and the total fees for the year are shown in the Statement of Profit or Loss and Other Comprehensive Income. Page 18 of 30

20 NOTES TO THE FINANCIAL STATEMENTS (continued) Related Party and Fee Disclosures (continued) Investment Manager Ranmore Fund Management Limited The fees that are payable to the Investment Manager are stipulated in the prospectus and the Investment Management Agreement dated 29th September In terms of these documents, Ranmore Fund Management Limited is entitled to the following fees: Investment Management fee The Investment Manager will be entitled to receive a fee payable out of the Company's assets equivalent to 0.90% per annum of the Net Asset Value thereof. Investment Management fees will be accrued on a daily basis and paid on a monthly basis. The Investment Manager fee expensed for the period 1 st July 2016 to 31 st December 2016 was $581,051 (30 th June 2016: $1,137,506) and as at 31 st December 2016 the Investment Management fee payable was $94,689 (30 th June 2016: $97,167). Administrator fee Apex Fund Services (Ireland) Limited Under the terms of the Administration Agreement dated 1 st January 2014, Apex Fund Services (Ireland) Limited is entitled to the following fees: The Administrator is entitled to receive a fee payable out of the assets of the Company currently at the rate of 0.08% per annum up to $200 million and 0.04% per annum on assets exceeding $200 million of the adjusted Net Asset Value of the Company (payable before deduction of the management fees and the fees payable to the Depositary). This is subject to a minimum fee of $7,260 per month. The Company may also reimburse the Administrator for any out of pocket costs and expenses properly incurred by the Administrator in the discharge of its functions in connection with the Company. The fees of the Administrator that are based on the Net Asset Value are accrued daily and paid monthly in arrears. The Administrator fee expense for the period 1 st July 2016 to 31 st December 2016 was $53,149 (30 th June 2016: $102,368) and as at 31 st December 2016 the administration fee payable was $7,845 (30 th June 2016: $8,610). Depositary fee BNP Paribas Securities Services, Dublin Branch Under the terms of the Depositary Agreement dated 29th September 2011, BNP Paribas Securities Services, Dublin Branch is entitled to the following fees: The Depositary is entitled to receive a fee payable out of the net assets of the Company for Regulatory oversight services. The Depositary fee is calculated and accrued on each dealing day, currently at an annual rate which shall not exceed 0.03% per annum of the Net Asset Value of the Company subject to a minimum annual fee of 30,000 (plus VAT, if any) thereon. The Depositary s fees comprise two further components, a safekeeping fee (a basis point charge on the Company s Assets) and a transaction based fee (fixed Euro charge per transactions occurring in the Company). The Depositary fee accrued for the period ended 31 st December 2016 was $28,777 (30 th June 2016: $49,170) and as at 31 st December 2016 the Depositary fee payable was $4,229 (30 th June 2016: $5,988). Audit fee Mazars Ireland (Mazars Chartered Accountants and Registered Auditors) The audit fee accrued for the period 1 st July 2016 to 31 st December 2016 was $8,911 (30 th June 2016: $13,065) and at 31 st December 2016 the audit fee payable was $3,920 (30 th June 2016: $11,725). Other Professional Fees The other professional fees of $42,494 in the Statement of Comprehensive Income include the following expenses: - Bank Charges $4,779 (BNP Paribas) - License & Regulatory Filing Fees $5,014 (MSCI Inc) - Interest Expense $5,180 (BNP Paribas) - Tax Advice $16,000 (WeiserMazars) Page 19 of 30

21 NOTES TO THE FINANCIAL STATEMENTS (continued) 11. Witholding taxes In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company shows the Dividend revenue gross of withholding taxes on the Statement of Profit or Loss and Other Comprehensive Income. For the purpose of the Statement of Cash Flows, Net Investment Income is shown net of withholding taxes. The withholding tax expense for the period from 1 st July 2016 to 31 st December 2016 was $279,982 (30 th June 2016: $333,111). 12. Taxation As the Company qualifies under Section 739B of the Irish Taxes Consolidation Act, 1997 as an investment undertaking, the Company is not liable to income tax, capital gains tax or corporation tax on its income or gains, other than on the occurrence of a chargeable event. A chargeable event includes any distribution to shareholders or any redemption or transfer of shares, or the ending of a relevant period. A relevant period is an eight year period beginning with the acquisition of shares by the shareholder and each subsequent period of eight years beginning immediately after the preceding relevant period. A chargeable event does not include: Any transactions in relation to shares held in a recognised clearing system as designated by order of the Revenue Commissioners of Ireland; or An exchange of shares representing one claim for shares in another class of the Company; or Any exchange of shares arising on a qualifying amalgamation or reconstruction of the Company with another Company or Company. A chargeable event will not occur in respect of shareholders who are neither resident nor ordinarily resident in Ireland and who have provided the Company with a relevant declaration to that effect. In the absence of an appropriate declaration, the Company will be liable to Irish tax on the occurrence of a chargeable event. There were no chargeable events during the year under review. Capital gains, dividends and interest may be subject to withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its shareholders. 13. Commitments and contingencies There were no commitments and contingencies at the end of the reporting year other than those disclosed in the financial statements. 14. Significant Portfolio Movements A schedule of significant portfolio movements is included at the end of the interim report. A full listing of changes in the composition of the portfolio for the period is available to shareholders at no cost upon request from the Administrator. Page 20 of 30

22 NOTES TO THE FINANCIAL STATEMENTS (continued) 15. Financial risk management The Company s investment activities expose it to the various types of risk which are associated with the financial instruments and markets in which it invests. The following information is not intended to be a comprehensive summary of all risks and investors should refer to the Prospectus for a more detailed discussion of the risks inherent in investing in the Company. The primary responsibility of reviewing and monitoring of risk in the Company rests with the Board; however as part of its strategy the Board has contractually delegated powers and responsibility for the day to day investment management of the assets of the Company to the Investment Manager. The Company is exposed to market risk, credit risk and liquidity risk and other financial risks arising from the financial investments it holds. Market risk includes price risk, interest rate risk and currency risk. (a) Counterparty / Credit Risk The Company is exposed to a credit risk on parties with whom it trades and will also bear the risk of settlement default. The Company minimises concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on recognised and reputable exchanges. As a result, they are not subject to significant amounts of credit risk. Credit risk arising on transactions with BNP Paribas Securities relates to transactions awaiting settlement. The Investment Manager monitors the Company's risk by establishing relationships with high quality financial institutions and thereafter monitoring the credit worthiness of the counterparty. The Investment Manager would take appropriate action should the credit quality of the financial institution deteriorate significantly. Al! of the Company's securities are held by BNP Paribas network (the 'Depositary"). The Company's non-cash assets are maintained by the Depositary in segregated accounts so that in the event of the Depositary's insolvency or bankruptcy the Company's non-cash assets are segregated and protected and this further reduces counterparty risk. While cash held by the Depositary or any depository will be identifiable as belonging to the Company, the Company will be exposed to the credit risk of the Depositary or any depository where cash is deposited. The Depositary is subject to stringent criteria - one of these being a Long-term Moody's credit rating of "A1" except in markets where an A1 rating is not available. In the event of the insolvency of the Custodian or any Depository. the Company will be treated as a general creditor of the Depositary in relation to cash holdings of the Company. As at the 31 st December 2016, the ultimate parent Company of the Depositary, BNP Paribas had a Standard and Poor s credit rating of A. The extent of the Company s exposure to credit risk in respect of the financial statements approximates the carrying value as recorded in the Company s Statement of Financial Position. There are no past due or impaired assets as at 31 st December Page 21 of 30