ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS …...One George’s Quay Plaza 4th Floor George’s...

PCM GLOBAL FUNDS ICAV

(An Irish collective asset-management vehicle constituted as an open-ended umbrella Fund with segregated

liability between Sub-Funds registered in Ireland on 7 July 2015 under the Irish Collective Asset-management Vehicles Act 2015 (“ICAV”) and authorised by the Central Bank of Ireland as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) pursuant to 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 2019 (together the “UCITS Regulations”). Registration Number C142346)

ANNUAL REPORT AND AUDITED FINANCIAL

STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 December 2019

PCM Global Funds ICAV Annual Report and Audited Financial Statements

2

CONTENTS

General Information 3

Directors’ Report 4 - 7

Report of the Depositary to the Shareholders 8

Investment Manager’s Report 9 - 11

Independent Auditor’s Report 12 - 15

Financial Statements

Statement of Financial Position 16

Statement of Comprehensive Income 17

Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares 18

Statement of Cash Flows 19

Notes to the Financial Statements 20 - 36

Schedule of Investments (unaudited) 37 - 40

Supplemental information

- Financial Information and Material Portfolio Changes (unaudited) 41 - 46

- Remuneration disclosures (unaudited) 47 - 49


3

GENERAL INFORMATION

BOARD OF DIRECTORS INVESTMENT MANAGER AND DISTRIBUTOR

Kathleen Jacobs (Chairman, U.S. Resident)^ Polaris Capital Management, LLC

Bernard R. Horn Jr. (U.S. Resident)^ 121 High Street

Jason Crawshaw (U.S. Resident)^ Boston

Neil Clifford (Irish Resident)^ Massachusetts 02110-2475

Frank Kenny (Irish Resident)* United States

REGISTERED OFFICE DEPOSITARY 4th Floor RBC Investor Services Bank, S.A., Dublin Branch One George’s Quay Plaza 4th Floor George’s Quay One George’s Quay Plaza

Dublin 2 George’s Quay

Ireland Dublin 2

Ireland

ADMINISTRATOR

RBC Investor Services Ireland Limited IRISH LEGAL ADVISERS

4th Floor Dechert

One George’s Quay Plaza 2nd Floor

George’s Quay 5 Earlsfort Terrace

Dublin 2 Dublin 2 Ireland Ireland

ICAV SECRETARY

Dechert US LEGAL ADVISERS

2nd Floor Dechert LLP

5 Earlsfort Terrace One International Place

Dublin 2 40th Floor Ireland 100 Oliver Street

Boston

INDEPENDENT AUDITORS Massachusetts 02110-2605

KPMG, Chartered Accountants USA

1 Harbourmaster Place

IFSC REPRESENTATIVE IN SWITZERLAND Dublin 1 ACOLIN Fund Services AG Ireland 6 Cours de Rive

CH-1204 Geneva

THE MANAGER (effective from 9 July 2019) Switzerland

Carne Global Fund Managers (Ireland) Limited

2nd Floor PAYING AGENT IN SWEDEN Block E, Iveagh Court Skandinaviska Enskilda Banken AB (Publ) Harcourt Road Investor Services/Paying Agent

Dublin AS-12

Ireland Råsta Strandväg 5

SE – 169 79 Solna

Sweden PAYING AGENT IN SWITZERLAND

BCGE – Banque Cantonale de Geneve FACILITIES AGENT IN UNITED KINGDOM Quai de l’Ile 17 Carne Financial Services (UK) LLP CH-1204 Geneva 1st Floor

Switzerland 5 Old Bailey

London EC4M 7BA *Independent non-executive directors United Kingdom ^Non-executive directors


4

DIRECTORS’ REPORT For the financial year ended 31 December 2019 The Directors of the ICAV present herewith their report together with the audited financial statements of the ICAV for the year ended 31 December 2019, which includes Polaris Global Value UCITS Fund (“the Fund”), being the only Sub-Fund in operation at 31 December 2019. The financial statements of the ICAV have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union, the Irish statute comprising the Irish Collective Asset Management Vehicle Act 2015 (the “ICAV Act 2015”) and the UCITS Regulations. Segregated Liability The ICAV is an umbrella Fund with segregated liability between the Funds and as such, as a matter of Irish Law, the assets of a Fund will not be exposed to the liabilities of the ICAV’s other Funds. Segregated liability ensures that the liabilities incurred on behalf of a Fund will generally be discharged solely out of the assets of that Fund and there can generally be no recourse to the other Funds to satisfy those liabilities. Each Fund will be responsible for paying its fees and expenses regardless of the level of profitability. Notwithstanding the foregoing there can be no guarantee or assurance that, should an action be brought against the ICAV on a court of another jurisdiction, that the segregated nature of the Funds would necessarily be upheld. As at the end of the financial year, only one fund was in operation, being Polaris Global Value UCITS Fund. Statement of Directors’ responsibilities The Directors are responsible for preparing the Directors’ Report and financial statements of the ICAV, in accordance with applicable law and regulations. The ICAV Act 2015 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 EU and applicable law. The financial statements are required to give a true and fair view of the assets, liabilities and financial position of the ICAV at the end of the financial year and of the profit or loss of the ICAV for the financial year. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether applicable Accounting Standards have been followed, subject to any material departures

disclosed and explained in the financial statements; • assess the ICAV’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern; and • use the going concern basis of accounting unless they either intend to liquidate the ICAV or to cease

operations, or have no realistic alternative but to do so. The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the ICAV and enable them to ensure that the financial statements comply with the ICAV Act 2015 and the UCITS Regulations. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the ICAV. In this regard they have entrusted the assets of the ICAV to a Depositary for safe-keeping. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and 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 ICAV Act 2015. Review of business development, performance, principal activities and future developments A detailed review of the business and future developments is included in the Investment Manager’s Report on pages 9 to 11. The principal activity of the Fund is to seek capital appreciation. The ICAV will continue to act as an Investment vehicle as set out in the Prospectus.


5

DIRECTORS’ REPORT For the financial year ended 31 December 2019 (continued)

Results

The financial position and results of the ICAV for the financial year ended 31 December 2019 are set out on pages 16 to 17. Distributions

It is the policy of the Fund to reinvest all revenues and capital gains and not to pay any dividends. The Fund has made no dividend distributions during the financial year (31 December 2018: Nil). Please refer to the Fund’s supplement for further information. Risk Management Objectives and Policies The assets of each Fund will be invested separately in accordance with the investment objectives and policies of the Fund. The specific investment objective and policies of the Fund will be set out in the relevant Supplement and will be formulated by the Directors in consultation with the Investment Manager at the time of creation of the relevant Fund.

The investment objective of the Fund is to seek capital appreciation by investing primarily in equity and equity related securities of companies, both U.S. and non-U.S., of any market capitalization, including companies which are organized, headquartered or do a substantial amount of their business in Emerging Market countries. Details of the ICAV and the Fund’s risk management objectives and policies are included in Note 9. of the financial statements.

Principal risks and uncertainty

Investment in the ICAV carries with it a degree of risk including, but not limited to, the risks referred to in Note 9 to these financial statements.

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 ICAV. Key Performance Indicators (“KPIs”) monitored by the Directors include month to month movement in the NAV per share and the share capital movements. Significant events that occurred during the financial year

There was updated Prospectus for PCM Global Fund ICAV dated 9 July 2019.

On 9 July 2019 Carne Global Fund Managers (Ireland) Limited was appointed as ICAV Manager. There were no other significant events occurred during the financial year. Impact on UK Withdrawal from EU Following a referendum in June 2016, Britain announced their intention to leave the European Union. The United Kingdom formally left the European Union at 11pm GMT on 31 January 2020. However whilst the terms of departure have been agreed, the United Kingdom and EU are currently in a transition period which will last until 31 December 2020. At the end of the transition period the United Kingdom will leave the single market and customs union with a free trade agreement intact or without an agreement in place which will ultimately depend upon the result of negotiations in the 11 month period. Whilst the implications of leaving the EU are not possible to predict with certainty at this time, market volatility as well as instability in foreign exchange markets are potential impacts of Brexit. The Board have assessed the potential impacts of Brexit through contingency planning and believe operations will continue after the departure date.


6

DIRECTORS’ REPORT For the financial year ended 31 December 2019 (continued) Events since financial year end

Since early January 2020, global financial markets have been monitoring and reacting to the novel coronavirus (2019-nCoV) that is believed to have originated in Wuhan, China. As of late February 2020, the virus has negatively impacted the health of more than 80,000 individuals in at least 33 countries, with most confirmed cases concentrated in mainland China. While containment efforts may have helped to slow the growth of the virus in mainland China, in late March 2020, global financial markets reacted sharply to the news that the virus continued to spread into South Korea, Italy and Iran, as well as concerns regarding the larger economic impact this may have on a global scale. Factories around the world continue to cope with shortages as Chinese suppliers struggle to resume normal operations. The eventual impact on the global economy and markets will largely depend upon the scale and the duration of the outbreak which at this point is not fully known. The Polaris management team continues to monitor this situation closely and has put in place measures to safeguard its ability to provide services to the Fund and all its clients. There have been no significant redemptions, liquidity concerns or valuation problems experienced in management of the Fund. While markets continue to experience volatility the overall risk and liquidity profile of the Fund has not changed significantly. There have been no breaches of regulatory or investment restrictions. Year to date March 13, 2020 the NAV per share has declined approximately 30%. The investment manager expects continued market volatility and NAV impact; however the Fund is a going concern, financially stable and able to meet its obligations to shareholders and continue its business and investment strategy for the foreseeable future. Polaris has temporarily increased the cash position in the Fund to take advantage of market opportunity. As reports of the Corona virus’ continued spread to other countries and despite the reduction in cases in China the team has made efforts to further reduce downside risk and reviewed the portfolio stock by stock to identify companies which represent the highest downside risk. The Polaris team will provide a more extensive analysis of specific companies in the upcoming first quarter report available at https://www.pcmglobalfundsicav.com/

An Addendum to the Prospectus was noted by the Central Bank on 31 January 2020.

There were no other events that occurred since the financial year. Employees

There were no employees of the ICAV throughout the financial year (31 December 2018: Nil). Directors

The names and nationalities of the persons who were Directors at any time during the financial year, as set out on page 3. Directors’ and secretary interests in shares and contracts

The Directors and secretary (including their families) had no beneficial interest in the shares of the ICAV during the financial year ended 31 December 2019 (31 December 2018: Nil), apart from the Redeemable Management Shares as disclosed in Note 5 on page 25. All Directors have an engagement with the ICAV but have no material interest in any contract of significance, subsisting during or at the end of the period, in relation to the business of the ICAV. Note 8, Related Party Disclosures, provides details of the Directors’ executive positions and other directorships held within the managers’ group, where applicable. Connected party transactions

Section 48(1) of the Central Bank of Ireland UCITS Regulations 2019 states that “a responsible person shall ensure that any transaction between a UCITS and a connected person is conducted at (a) arm’s length; and (b) in the best interests of the shareholders of the UCITS”. As required under Regulation 78(4) of the Central Bank of Ireland UCITS Regulations 2019, the Directors are satisfied that there are in place arrangements, evidenced by written procedures, to ensure that the obligations that are prescribed by Section 48(1) are applied to all transactions with a connected party; and all transactions with connected parties that were entered into during the period to which the report relates complied with the obligations that are prescribed by Section 48(1).

https://www.pcmglobalfundsicav.com/


9

INVESTMENT MANAGER’S REPORT for the financial year ended 31 December 2019 Polaris Global Value UCITS Fund 2019 ANNUAL COMMENTARY Global markets closed the decade on a bullish note, with fourth-quarter gains marking a year of unexpected strength given the considerable trade headwinds faced. A combination of low interest rates, continued resilience of the U.S. consumer, and strong election results in the U.K. fueled higher equity prices. In a continued high-growth market, the Polaris Global Value UCITS Fund gained 21.81% for the year, while the MSCI World and ACWI Indices returned 28.40% and 27.30% respectively. Underperformance was attributable to the Fund’s underweight in the U.S. market, which continued to outpace most non-U.S. markets. The Fund was overweight and outperformed in the vast majority of other countries, including European developed regions of the U.K., Germany and the Nordic countries of Sweden, Norway and Finland. At the sector level, contributions came from financials, consumer discretionary, information technology (IT) and industrials. The Fund’s holdings in communications services, utilities and energy posted absolute positive gains, but underperformed the sector benchmarks. 2019 Performance Analysis U.K. stocks contributed substantially, with five of the top 10 holdings hailing from the region. In the third quarter of 2019, stocks started to rebound on BREXIT expectations. Then in October, the U.K. and European Union reached an agreement on the conditions of the U.K.’s departure from the EU. In December, U.K. Prime Minister Boris Johnson won the general election in a resounding victory; years of BREXIT uncertainty gave way to inevitability. A revaluation of British stocks followed, as investors renewed interest in fundamentally strong companies. Stock prices of U.K.-based Bellway PLC, Taylor Wimpey PLC, Babcock International Group and Next PLC rose markedly. On a fundamental basis, clothing retailer, Next PLC, was up after meeting market expectations with strong online and overseas sales that mitigated declines in brick-and-mortar stores. Engineering services contractor, Babcock International, confirmed full year guidance, pointing to a strong order book that included a new $1.6 billion ship building contract with the U.K. Ministry of Defense. Homebuilders recovered from late 2018 lows, citing solid forward sales indicators and strong order books in all U.K. locales outside of Central London. At the sector level, financials contributed most to portfolio returns, with 18 holdings posting double-digit returns for the year. Two German reinsurers, Hannover Re and Munich Re, reported better-than-anticipated pricing on annual renewals, while catastrophic losses were limited in early 2019. An optimistic two-year outlook for Colombia’s economy, driven by commercial and infrastructure activity, emboldened the local stock market. Bancolombia was one beneficiary, noting consumer loan growth as well as credit and operating cost controls. Conversely, Franklin Resources declined on net asset outflows and lackluster performance due to Argentinian bond market exposure. Yet, Franklin achieved decent earnings, citing higher income on lower expenses and taxes. Consumer discretionary was the second largest sector contributor, led by the aforementioned U.K. homebuilders and clothing retailers. Other strong gains were noted in U.S.-based children’s apparel manufacturer, Carter’s Inc., and Canada’s automotive supplier, Magna International. Carter’s advanced after third quarter 2019 earnings. Although the children’s apparel manufacturer wrote down its investment in Skip Hop, which lost key customer Toys “R” Us, the underlying sales, earnings, and margins all increased. Magna International’s results came in ahead of expectations, as sales outpaced vehicle production. The main sector detractor was L Brands, down ~25% for the year, as its Victoria’s Secret franchise struggled with changing consumer preferences; however, its Bath & Body Works division remained extremely strong.


10

INVESTMENT MANAGER’S REPORT for the financial year ended 31 December 2019 (continued) Polaris Global Value UCITS Fund (continued) In IT, Microsoft Corp. gained after reporting solid quarterly results, with revenue and operating income up more than 10% from the comparable 2018 period. Commercial cloud revenue grew 48% year-over-year, with more targeted investments slated in this space. Western Union tackled top- and bottom-line growth with 1) an extensive multi-year $100 million cost reduction initiative, reducing manual processes in favor of technology; and 2) the introduction of a cross-border platform marketed to third parties. For example, Western Union signed an agreement with TD Bank of Canada whereby TD account holders could move money cross-border through the TD mobile app, effectively doing away with a more costly and lengthy wire transfer. U.S. protein supplier, Tyson Foods, beat analyst expectations in its quarterly results. Volume growth in its core retail lines continued to outpace other large food companies, driven primarily by product innovation. Given the magnitude of the losses in China’s pork supply due to African swine fever, global protein supply and demand fundamentals are expected to help processors like Tyson raise protein prices. These consumer staples gains were somewhat offset by KT&G Corp., the South Korean tobacco manufacturer. KT&G Corp.’s operating profits fell in the third quarter amid waning sales of e-cigarettes due to health hazard concerns. The Fund’s holdings in communication services and utilities underperformed the MSCI World and ACWI Indices sector benchmarks. South Korean telecom, LG Uplus, waned due to slower than expected benefits from 5G offerings and higher costs related to 5G expenses. French advertising company, Publicis Groupe, had weak organic growth and implied flat to negative organic growth for 2020. The advertising agency, which struggled with client attrition, acquired Epsilon in an attempt to improve its product offerings. In utilities, NextEra Energy’s stock price rose more than 40% for the year, gaining momentum in renewable energy projects. Such projects have become quite profitable with lower costs and can operate on a stand-alone basis without governmental tax credits. With stable regulation for the Florida utility and a record pipeline for renewables, NextEra’s aggressive growth targets will likely be reached. Sector results were muted due to losses at Japan’s Kansai Electric Power. The Japan Nuclear Regulation Authority imposed strict anti-terrorism guidelines, likely cowing to the pressures of local anti-nuclear activists. The Authority was resolute in not issuing extensions for retrofitting nuclear reactors; Kansai and others in the industry may struggle to meet the aggressive deadlines, resulting in nuclear facility shutdowns. During the year, Israeli-based generic drug manufacturer, Teva Pharmaceutical, was sold as it faced multiple legal battles related to allegations of drug price fixing and opioid sales. Japanese gaming company Nexon Co. was sold due to fundamental deterioration in combination with Nexon founder’s protracted sale of his NXC stake. Xerox Corp. was a top performing stock in the portfolio, beating analyst estimates and announcing plans to restructure its business under a holding company. Steady sales and aggressive cost cutting efforts led to strong guidance; when the stock price rose to our target valuation, we sold at a profit. Proceeds were reallocated to purchase the following companies: Sumitomo Mitsui Trust Holding, the largest trust custodian bank in Japan; Asahi Group Holdings, the Japanese beer and beverage company, that had been a prior successful portfolio holding repurchased at an attractive valuation; Sparebanken Vest, a Norwegian bank with an appealing footprint and market share in the retail mortgage space; U.S.-based Cambridge Bancorp; UK-based pulp and paper company, Mondi PLC; Toronto-Dominion Bank, one of Canada’s largest banks; and Daicel Corp., the Japanese chemical company.


11

INVESTMENT MANAGER’S REPORT for the financial year ended 31 December 2019 (continued) Polaris Global Value UCITS Fund (continued) Investment Environment and Strategy The capital loss carryover as of 12/31/2012 stands at approximately $117,000,000 with the earliest scheduled expirations of such carryover not incurring until 12/31/2016.

Competing trends continue to muddle the direction of the global economy. Industrial production figures are slowing down, which indicates that industrials and similarly-positioned sectors (like materials and construction) could get weaker. Yet the service sectors, which comprise up to 75% of gross domestic product in many countries, show considerable strength. Corporate capital spending has slowed, as companies are wary of on-going U.S.-China trade frictions and weak bellwether industry metrics like industrial production and trade flow data. Yet retail spending has continued unabated, with consumers seemingly unfazed by the trade tensions. With no clear trajectory, markets may experience volatility in coming quarters, and we hope to capitalize on downturns to purchase watch list stocks. As we enter a new decade, we are excited about the changes in technology, advances in healthcare, continued emerging market growth, and all the opportunities and disruptions that will ensue. We are also mindful of the headwinds we may face: excessive deficit spending, geopolitical upheaval, potential asset bubbles and liquidity crises to name a few. At Polaris, we remain committed to our value discipline and believe that buying good companies at attractive valuations continues to be a prudent strategy for the decades. Regards, Polaris Capital Management, LLC 13 March 2020


17

STATEMENT OF COMPREHENSIVE INCOME for the financial year ended to 31 December 2019

PCM Global Funds ICAV including

Polaris Global Value UCITS Fund

PCM Global Funds ICAV including

Polaris Global Value UCITS Fund

31 December 2019 31 December 2018

Notes USD USD

INCOME

Dividends 6,105,430 3,097,825 Bank Interest 124,635 68,320 Net gain/(loss) on financial instruments at fair value through profit or loss 32,620,899 (18,382,078) Other income 1,655 7,705

Total investment gain/(loss) 38,852,619 (15,208,228)

EXPENSES Investment Management fees 6 (1,361,653) (814,883) Investment Manager rebate for capped expenses 6 303,245 320,695 Operating expenses 7 (611,355) (525,481)

Total operating expenses (1,669,763) (1,019,669)

Increase/(Decrease) in net assets attributable to holders of redeemable participating shares before tax 37,182,856 (16,227,897) Withholding tax expenses 3 (859,507) (522,970)

Increase/(Decrease) in net assets attributable to holders of redeemable participating shares 36,323,349 (16,750,867)

The accompanying notes form an integral part of the Financial Statements.


18

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES for the financial year ended 31 December 2019

PCM Global Funds ICAV including Polaris

Global Value UCITS Fund



31 December 2019 31 December 2018 USD USD

Net assets attributable to holders of redeemable participating shares at beginning of the financial year

155,733,460 105,910,746 Increase/(Decrease) in net assets attributable to holders of redeemable participating shares

36,323,349 (16,750,867)

Proceeds from issuance of redeemable participating shares

47,186,056 94,217,520

Payments on redemption of redeemable participating shares

(15,521,262) (27,643,939)

Net assets attributable to holders of redeemable participating shares at end of the financial year

223,721,603 155,733,460



19

STATEMENT OF CASH FLOWS for the financial year ended 31 December 2019






Cash flows from operating activities Increase/(Decrease) in net assets attributable to holders of redeemable participating shares from operations 36,323,349 (16,750,867) Dividend income net of withholding tax (5,245,923) (2,574,855) Bank interest income (124,635) (68,320) Net (gain)/loss on financial instruments at fair value through profit or loss (32,620,899) 18,382,078

Operating loss before changes in operating assets and liabilities (1,668,108) (1,011,964)

Changes in operating assets and liabilities Movement in investments (32,601,954) (61,838,368) Decrease in receivable from Investment Manager 11,199 47,728 Increase/(Decrease) in other receivables 9,394 (22,555) Increase in other payables 143,869 65,250

Cash used in operating activities (34,105,600) (62,759,909)

Dividend received net of withholding tax 5,083,288 2,528,175 Interest received 124,880 70,241

Net cash used in operating activities (28,897,431) (60,161,493)

Financing activities Payments of redemptions of redeemable participating shares (15,521,262) (27,684,539) Proceeds from issue of redeemable participating shares 47,186,056 94,217,520

Net cash provided from financing activities 31,664,794 66,532,981

Net increase in cash and cash equivalents 2,767,363 6,371,488 Cash and cash equivalents at the beginning of the financial year 8,507,363 2,135,875

Cash and cash equivalents at the end of the financial year 11,274,726 8,507,363



20

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 1. Reporting Entity

The ICAV is an Irish collective asset-management vehicle constituted as an open-ended umbrella Fund with segregated liability between Sub-Funds registered in Ireland on 7 July 2015 under the ICAV Act 2015 and authorised by the Central Bank of Ireland as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) pursuant to the UCITS Regulations. The ICAV’s registration number is C142346. As at 31 December 2019, there was one active Fund, being Polaris Global Value UCITS Fund. The principal activity of the Fund is to seek capital appreciation.

2. Basis of Preparation

The principal accounting policies and estimation techniques applied in the preparation of these financial statements are set out below. (a) Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union, and Irish law comprising the ICAV Act 2015 and the UCITS Regulations. (b) Basis of Measurement

The financial statements have been prepared on the historical cost basis, except for financial instruments at fair value through profit or loss, which are measured at fair value. The financial statements are prepared on a going concern basis. Changes to significant accounting policies are described in Note 3. (c) Functional and Presentation Currency

Items included in the Fund’s financial statements are measured using the primary economic environment in which the respective Fund operates (“the functional currency”). The functional and presentational currency is United States Dollar (“USD”). If indicators of the primary economic environment are mixed, then management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The majority of the Fund’s investments and transactions are denominated in USD. Investor subscriptions and redemptions are determined based on the net asset value, and received and paid in USD. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into said functional currency at the closing rates of exchange at each financial year end. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value through profit or loss are retranslated into the functional currency at the spot rate at the date the fair value was determined. Transactions during the financial year, including purchases and sale of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction. Foreign currency gains and losses on items measured at fair value through profit or loss are included in the net gain or loss on financial instruments at fair value through profit or loss in the Statement of Comprehensive Income.


21

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued)

2. Basis of Preparation (continued)

(d) Use of estimates and judgements

The preparation of financial statements in conformity with IFRS as adopted by the EU, requires management to make judgements, estimates and assumptions which affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors which are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimates are revised and in any future years affected. There were no estimates used in measuring the fair value of investments at the financial year end date of 31 December 2019 (31 December 2018: Nil) as all investments held at year end were classified as level 1.

3. Significant Accounting Policies

(a) New standards, amendments and interpretations effective from 1 January 2019 IFRIC 23 “Uncertainty over Income Tax Treatments” was issued in June 2017 and became effective for periods beginning on or after 1 January 2019. It clarifies the accounting for uncertainties in income taxes which is applied to the determination of taxable profits (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments in accordance with IAS 12. It clarifies whether tax treatments should be considered independently or collectively, whether the relevant tax authority will or will not accept each tax treatment and, the requirement to reassess its judgments and estimates if facts and circumstances change.

The interpretation which is effective after 1 January 2019, did not have a material effect on the ICAV’s financial statements.

New standards, amendments and interpretations effective after 1 January 2019 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2019, and have not been early adopted in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the ICAV.

(b) Financial Assets and Liabilities at Fair Value through Profit or Loss

(i) Classification and subsequent measurement

All financial assets of the ICAV are measured at FVTPL.

The ICAV held equity securities at year end which are classified as fair value through profit or loss.

In addition, a portfolio of financial assets that meets the definition of held for trading is not held to collect contractual cash flows or held both to collect contractual cash flows and to sell financial assets. For such portfolios, the collection of contractual cash flows is only incidental to achieving the business model’s objective. Consequently, such portfolios of financial assets are measured at fair value through profit or loss.

The ICAV classify their investments based on both the ICAV’ business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The ICAV are primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The ICAV have not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. Consequently, all investments are measured at fair value through profit or loss.

Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any foreign exchange gains and losses are recognised in the profit or loss in “net gain or loss on financial instruments at FVTPL” in the statement of comprehensive income.


22

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 3. Significant Accounting Policies (continued)

(b) Financial Assets and Liabilities at Fair Value through Profit or Loss (continued)

Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method. Cash and cash equivalents, other receivables, dividends receivable, receivable from the investment manager are included in this category. Interest income on cash and cash equivalents which was calculated using the effective interest rate method is recognised in bank interest income in the statement of comprehensive income. Financial liabilities that are held for trading are measured at fair value through profit or loss. ii) De-recognition The ICAV de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire. It also derecognises a financial asset when it transfers the financial assets and the transfer qualifies for derecognition in accordance with IFRS 9. The ICAV derecognises a financial liability when the obligation specified in the contract is discharged, cancelled or expires. (c) Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis, or realise the assets and settle the liability simultaneously. There were no master netting agreements in place for the financial year ended 31 December 2019 and 31 December 2018. As a result, the requirements of IFRS 7 to disclose offsetting positions of financial assets and liabilities have no impact on current disclosures in the ICAV’s financial statements.

(d) Transaction Costs Transaction costs include fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and security exchanges, and transfer taxes and duties. Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding costs. Transaction costs relate to the purchase and sale of investments and are recognised in operating expenses in the Statement of Comprehensive Income.

(e) Net Gain/(Loss) on Financial Instruments at Fair Value through Profit or Loss

Results arising from trading activities are recognised in the Statement of Comprehensive Income. Included are all realised and unrealised fair value changes of financial instruments and foreign exchange differences, but excludes interest and dividend income which are presented separately in the Statement of Comprehensive Income. Realised gains and losses on sales of investments are calculated based on average book cost of the investment in local currency and are included in net gain/loss on financial instruments at FVTPL in the Statement of Comprehensive Income. Unrealised gains and losses on investments are the discrepancies between the original cost of the investment and it’s value at the reporting period and are included in the net gain/loss on financial instruments at FVTPL in the Statement of Comprehensive Income.


23


(f) Income Tax

Withholding tax expense Dividend and interest income received by the ICAV might be subject to withholding tax imposed in the country of origin. Income that is subject to such tax is recognised gross of the taxes and the corresponding withholding tax is recognised as tax expense in the Statement of Comprehensive Income. The ICAV may be liable to taxes (including withholding taxes) in countries other than Ireland on dividend, interest income and capital gains arising on its investments. The ICAV may not be able to benefit from a reduction in the rate of such foreign tax by virtue of double taxation treaties between Ireland and other countries. The ICAV may not, therefore, be able to reclaim any foreign withholding tax suffered by it in particular countries. Income that is subject to such tax is recognised gross of the taxes and the corresponding withholding tax is recognised as a tax expense. Capital gains tax Capital gains tax (if any) received on investments made by the ICAV may be subject to withholding taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the ICAV or its shareholders. (g) Redeemable Participating Shares

A puttable instrument that includes a contractual obligation for the issuer to repurchase or redeem that instrument for cash or another financial asset is classified as equity instruments if it meets the following conditions:

- it entitles the holder to a pro rata share of the ICAV's net assets in the event of the ICAV's liquidation; - it is in the class of instruments that is subordinate to all other classes of instruments; - all financial instruments in the class of instruments that is subordinate to all other classes of instruments have identical features; - apart from the contractual obligation for the ICAV to repurchase or redeem the instrument for cash or another financial asset, the instrument does not include other features that would require classification as a liability; - the total expected cash flows attributable to the instrument over its life are based substantially on the profit or loss, the change in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the ICAV over the life of the instrument. The ICAV issues redeemable participating shares in the ICAV which are redeemable at the holder’s option and are classified as financial liabilities. (h) Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and other short term deposits with original maturities of three months or less, net of bank overdrafts. (i) Interest Income and Interest Expense Interest income is recognised in the Statement of Comprehensive Income on an accruals basis, using the effective interest method. The effective interest method is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or when appropriate; a shorter period) to the carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the ICAV estimate future cash flows considering all contractual terms but not future credit losses. Interest expense is recognised on an accruals basis in line with the contractual terms. Interest is accrued on a daily basis.


24


(j) Dividend Income

Dividend income is recognised in the Statement of Comprehensive Income on the date upon which the related security is first listed as “ex-dividend”. Dividend income is shown gross of any non-recoverable withholding taxes and net of any tax credits.

(k) Expenses

All expenses are recognised in the Statement of Comprehensive Income on an accrual basis and as the related services are performed. The Investment Manager has undertaken to limit the annual expenses through the use of an Expense Limitation. Reimbursement of expenses, arising as a result of the Expense Limitation, is included in the operating expenses in the Statement of Comprehensive Income.

4. Taxation

The ICAV is an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997. Therefore, the ICAV will not be liable to Irish tax in respect of its income and gains, other than on the occurrence of a chargeable event. Generally a chargeable event arises on any distribution, redemption, repurchase, cancellation, transfer of shares or the ending of a ‘Relevant Period’. A ‘Relevant Period’ is an eight year period beginning with the acquisition of the shares by the Shareholder and each subsequent period of eight years beginning immediately after the preceding Relevant Period. A gain on a chargeable event does not arise in respect of:

a) A shareholder who is not an Irish resident and not ordinarily resident in Ireland at the time of the chargeable event, provided the necessary signed statutory declarations are held by the ICAV;

b) Certain exempted Irish tax resident Investors who have provided the ICAV with the necessary

signed statutory declarations;

c) An exchange of shares arising on a qualifying amalgamation or reconstruction of the ICAV with another Fund;

d) Any transaction in relation to shares held in a recognised clearing system as designated by order of

the Revenue Commissioners of Ireland;

e) Certain exchanges of shares between spouses and former spouses on the occasion of judicial separation and/or divorce;

f) An exchange by a Shareholder, effected by way of an arm’s length bargain where no payment is

made to the Shareholder of Shares in the ICAV for other Shares in the ICAV. Capital gains, dividends and interest (if any) received on investments made by the ICAV may be subject to withholding taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the ICAV or its shareholders. In the absence of an appropriate declaration, the ICAV will be liable for Irish tax on the occurrence of chargeable event, and the ICAV reserves its right to withhold such taxes from the relevant shareholders.

The ICAV may be subject to taxes imposed on realised and unrealised gains on securities for certain foreign countries in which the ICAV invests. The foreign tax expense, if any, is recorded on an accrual basis and is included in the capital gains tax line in the statement of comprehensive income. The amount of foreign tax owed, if any, is included in the capital gains tax payable in the statement of financial position. There were no capital gains tax charges for the year ended 31 December 2019 (31 December 2018: Nil), of which Nil were payable at the year end 31 December 2019 (31 December 2018: Nil).


25

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 5. Share Capital

Authorised Shares The authorised share capital of the ICAV is 500,000,000,000 Redeemable Shares of no par value. There were also 300,000 Redeemable Management Shares of €1 each and shall at all times be equal to the value for the time being of the issued share capital of the ICAV. Redeemable Management Shares At the registration of the ICAV Neil Clifford and Declan O’Sullivan were each issued one Redeemable Management Share. On 28 July 2015, Neil Clifford and Declan O’Sullivan each transferred their shares to Mr. Bernard R. Horn Jr. and Polaris Capital Management, LLC. Mr. Bernard R. Horn Jr. holds his share, for and on behalf of Polaris Capital Management, LLC.

The Redeemable Management Shares entitle the holders to attend and vote at general meetings of the ICAV but do not entitle the holders to participate in the profits or assets of the ICAV except for a return of capital on a winding-up.

Redeemable Participating Shares A Fund may consist of one or more Classes of Shares. A separate pool of assets will not be maintained for each Class within a Fund. The Shares of each Class allocated to a Fund will rank pari passu with each other in all respects provided that Classes may differ as to certain matters including, without limitation as to all or any of the following: currency of denomination of the Class, distribution policy, the amount of fees and expenses to be charged (including any Share Class specific expenses) and the minimum subscription and redemption amounts.

Each of the Shares entitles the holder to attend and vote at meetings of the ICAV and to participate equally in the profits and assets of the Fund to which the Shares relate, subject to any differences between fees, charges and expenses applicable to different Classes. Each Shareholder shall have one vote for each whole Share held. The liability of the shareholders shall be limited to the amount, if any, unpaid on the Shares respectively held by them, and the shareholders shall not be liable for the debts of the Fund. Minimum subscription and redemption amounts are specified in the relevant Supplement for each Fund.

The ICAV may from time to time by Ordinary Resolution increase its capital, consolidate its shares or any of them into a smaller number of shares, sub-divide shares or any of them into a larger number of shares or cancel any shares not taken or agreed to be taken by any person. The ICAV may by Special Resolution from time to time reduce its share capital in any way permitted by Irish law.

The rights attached to each Class (and for these purposes, reference to any Class shall include reference to any Class) may, whether or not the ICAV is being wound up, be varied with the consent in writing of the holders of three fourths of the issued Shares of that Class or with the sanction of a Special Resolution passed at a separate general meeting of the holders of the Shares of that Class.


26

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 5. Share Capital (continued)

The provisions of the Instrument of Incorporation in relation to general meetings shall apply to every such separate general meeting except that the necessary quorum at any such meeting shall be two persons holding or representing by proxy at least one third of the issued Shares of the Class in question or, at an adjourned meeting, one person holding Shares of the Class in question or his proxy. Any holder of Shares representing one tenth of the Shares in issue of the Class in question present in person or by proxy may demand a poll. The rights attaching to any Class shall not be deemed to be varied by the creation or issue of further Shares of that Class ranking pari passu with Shares already in issue, unless otherwise expressly provided by the terms of issue of those Shares.

The Instrument of Incorporation provide that on a show of hands at a general meeting of the ICAV every Shareholder present in person or by proxy shall have one vote and on a poll at a general meeting every Shareholder shall have one vote in respect of each Share, as the case may be, held by him; provided, however, that, in relation to a resolution which in the opinion of the directors affects more than one Class or gives or may give rise to a conflict of interest between the shareholders of the respective Classes, such resolution shall be deemed to have been duly passed, only if, in lieu of being passed at a single meeting of the Shareholders of all of those Classes, such resolution shall have been passed at a separate meeting of the Shareholders of each such Class.

All general meetings of the ICAV or any Fund shall be held in Ireland. At least 21 days’ notice (exclusive of the day on which the notice is served or deemed to be served and of the day for which the notice is given) shall be given to Shareholders. The notice shall specify the place, day and hour of the meeting and the terms of the resolutions to be proposed. A proxy may attend on behalf of any Shareholder.

The initial issue price per Share for Shares being offered by the Fund is:

Class A USD Accumulating USD $10.00

Class I USD Accumulating USD $10.00

Class I EUR Accumulating EUR €10.00

Class I EUR Accumulating (Hedged) EUR €10.00

Class I GBP Accumulating GBP £10.00

Class I GBP Accumulating (Hedged) GBP £10.00

Class R GBP Accumulating GBP £10.00

Class R GBP Accumulating (Hedged) GBP £10.00

Class X USD Accumulating USD $10.00

As of 31 December 2019 and 31 December 2018, Class I USD Accumulating share class and Class A USD Accumulating share class were in issue. Investors may apply for shares in the Class I USD Accumulating share class and Class A USD Accumulating share class net asset value. 31 December 2019 31 December 2018

Share Class I USD

Accumulating Share Class I USD

Accumulating

Redeemable participating shares in issue at beginning of the year 13,273,090 7,895,869 Shares issued during the year 3,533,137 7,434,031 Shares redeemed during the year (1,083,761) (2,056,810)

Redeemable participating shares in issue at end of the year 15,722,466 13,273,090


27

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 5. Share Capital (continued)


Share Class A USD

Accumulating Share Class A USD

Accumulating

Redeemable participating shares in issue at beginning of the year 100,495 7,419 Shares issued during the year 31,683 97,897 Shares redeemed during the year (110,970) (4,821)

Redeemable participating shares in issue at end of the year 21,208 100,495

Shares in the Fund may be redeemed on a daily basis at the net asset value per share of the relevant class. For details of the proceeds from issuance and payments on redemption of redeemable participating shares, please see the Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares.

Dividend Policy It is intended that, in the normal course of business, dividends will not be declared and that any net investment income and net realised capital gains will be accumulated in the respective Net Asset Value per Share of each Class. Shareholders will be notified in advance of any change in distribution policy. Significant shareholders Sygnia Life Limited held 8,855,397 shares in Class I USD Accumulating at 31 December 2019 (31 December 2018: 6,091,513) which represents 56.27% (31 December 2018: 45.65%) of the net asset value of the ICAV at financial year end. Transactions with Sygnia Life Limited during the year ended 31 December 2019 and 31 December 2018 were as follows:


Subscriptions 45,460,780 24,071,538 Redemptions 8,823,337 13,989,063

Irving Oil Limited held 5,075,696 shares in Class I USD Accumulating at 31 December 2019 (31 December 2018: 5,075,696) which represents 32.25% (31 December 2018: 38.04%) of the net asset value of the ICAV at financial year end.

6. Investment Management Fees and Expense Limitation Under the Investment Management Agreement, the ICAV pays to the Investment Manager a maximum fee at an annual rate equal to the percentage of the average daily Net Asset Value of the relevant Class of the Fund, with the exception of the Class X Shares (of which there are none in issue) which are set out in a separate agreement. The investment management fee shall accrue and be calculated daily and shall be payable monthly in arrears. In addition, the Investment Manager shall be entitled to be reimbursed its reasonable vouched out-of-pocket expenses. Each Fund shall bear pro rata its share of such out-of-pocket expenses. The Investment Manager may also, from time to time and at its sole discretion, use part of its investment management fee to remunerate certain financial intermediaries and may pay reimbursements or rebates to certain institutional shareholders in circumstances where its fees are charged directly to such intermediaries and/or institutional shareholders and not to the Fund.


28

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 6. Investment Management Fees and Expense Limitation (continued)

The Investment Manager also may pay trail or service fees out of its investment management fee to financial intermediaries who assist in the sales of Shares of the Fund and provide on-going services to the Shareholders. The Investment Manager has committed to waive a portion of its management fee and, if necessary, reimburse the Fund’s operating expenses, in order to keep the Fund’s total operating expenses (including the fees of the Investment Manager, Administrator and Depositary) from exceeding an annual rate of the daily Net Asset Value of the Fund as set out in the schedule to the supplement. Operating expenses in relation to the expense limitation do not include the cost of buying and selling investments, withholding tax, stamp duty or other taxes on investments, commissions and brokerage fees incurred with respect to investments, and such extraordinary or exceptional costs and expenses (if any) as may arise from time to time, such as material litigation in relation to the ICAV as may be determined by the Directors in their discretion. The expenses subject to the Expense Limitation shall include the investment management fee. The Investment Manager may renew or discontinue this arrangement at any time upon prior notification to Shareholders.

Class Investment

Management Fee Expense

Limitation

Class A USD Accumulating 1.000% N/A

Class I USD Accumulating 0.750% 0.900%

Class I EUR Accumulating 0.750% 0.900%

Class I EUR Accumulating (Hedged) 0.750% 0.900%

Class I GBP Accumulating 0.750% 0.900%

Class I GBP Accumulating (Hedged) 0.750% 0.900%

Class R GBP Accumulating 0.825% 0.975%

Class R GBP Accumulating (Hedged) 0.825% 0.975%

Class X USD Accumulating N/A 0.150%

To the extent that the Investment Manager waives its fee or reimburses the Fund’s operating expenses under the Expense Limitation, the Fund’s overall expense ratio will be lower than it would have been without the Expense Limitation. This reduction in operating expenses may increase the Fund’s investment return and such returns may not be achieved without the benefit of the Expense Limitation. For the financial year ended 31 December 2019 fees charged by the Investment Manager amounted to USD 1,361,653 (31 December 2018: USD 814,883), of which USD 266,281 remains payable at 31 December 2019 (31 December 2018: USD 154,982). For the financial year ended 31 December 2019 Investment Manager rebate for capped expenses amounted to USD 303,245 (31 December 2018: USD 320,695), of which USD 111,058 (31 December 2018: USD 122,257) is due from the Investment Manager at 31 December 2019.

7. Operating Expenses

Administrator’s Fees and Expenses The Administrator is entitled to receive out of the assets of the Fund an annual fee which will not exceed 0.0275% of the net assets of the Fund, subject to a minimum fee of USD 2,670 per month per Fund (plus any applicable taxes). This fee accrues and is calculated on each Dealing Day and payable monthly in arrears. Minimum fee requirements commenced from 1 June 2016 onwards. The Administrator is also entitled to charge to the Fund all agreed fees and transaction charges, at normal commercial rates, together with reasonable out of-pocket expenses (plus any applicable taxes), it incurs on behalf of the Fund in the performance of its duties under the Administration Agreement, which shall be payable monthly in arrears. For the financial year ended 31 December 2019 fees charged by the Administrator were USD 51,988 (31 December 2018: USD 39,459). As at 31 December 2019 fees of USD 8,808 (31 December 2018: USD 5,932) were payable to the Administrator.


29

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 7. Operating Expenses (continued)

Transfer Agent Fees The Administrator, in relation to the provision of its services shall be entitled to a fee payable out of the assets of each Fund accruing daily and payable monthly in arrears at the end of each calendar month at the following rates: - Transfer Agent fee - USD 2,000 per share class per annum subject to a minimum monthly fee of USD

2,500. Account maintenance and servicing fees will be charged at normal commercial rates. For the financial year ended 31 December 2019 fees charged by the Transfer Agent were USD 32,287 (31 December 2018: USD 30,116). As at 31 December 2019 fees of USD 5,014 (31 December 2018: USD 5,014) were payable to the Transfer Agent. Depositary’s Fees and Expenses The Depositary is entitled to receive out of the assets of the Fund, the greater of an annual fee which will not exceed 0.023% of the net assets of the Fund, or a minimum oversight fee of up to USD 1,117 per month (plus any applicable taxes) and a depositary cash flow monitoring & reconciliation flat fee of USD 291 per month. These fees accrue and are calculated on each Dealing Day and payable monthly in arrears. The Depositary is also entitled to receive out of the assets of the Fund, the greater of a safekeeping fee accrued daily and payable monthly in arrears at a rate, depending on the custody markets, ranging from 0.5 bps up to 108 bps on the Net Asset Value of the Fund, subject to a minimum safekeeping fee of USD 8,000 per annum (plus VAT, if any). These fees accrue and are calculated on each Dealing Day and payable monthly in arrears. The Depositary shall also be entitled to receive out of the net assets of the Fund all agreed sub-custodian fees, transaction charges (which will be charged at normal commercial rates) together with reasonable out-of-pocket expenses incurred by the Depositary in the performance of its duties under the Depositary Agreement. For the financial year ended 31 December 2019 fees charged by the Depositary were USD 97,948 (31 December 2018: USD 52,179). As at 31 December 2019 fees of USD 17,178 (31 December 2018: USD 7,960) were payable to the Depositary. Directors Remuneration The Instrument of Incorporation provides that the Directors shall be entitled to a fee by way of remuneration for their services at a rate to be determined from time to time by the Directors. However, Directors affiliated with the Investment Manager are not entitled to a fee. The aggregate amount of Directors’ remuneration in any one year shall not exceed €60,000 without the approval of the Directors. All Directors will be entitled to reimbursement by the ICAV of expenses properly incurred in connection with the business of the ICAV or the discharge of their duties. For the financial year ended 31 December 2019 fees charged by the Directors were USD 40,000 (31 December 2018: USD 40,000). As at 31 December 2019 fees of USD 7,824 (31 December 2018: USD 2,972) were payable to the Directors. There were no reimbursement of expenses made to the Directors during the year ended 31 December 2019 (2018: Nil). Manager’s Fees and Expenses The Manager shall be paid a fee out of the assets of the Fund, calculated and accrued on each Dealing Day and payable monthly in arrears, of an amount up to 0.06% of the net asset value of the Fund, subject to a minimum annual fee €36,000 per annum payable monthly in arrears at €3,000 per month. The Manager is also entitled to receive out of the assets of the Fund reasonable and properly vouched expenses. Carne Global Fund Managers (Ireland) Limited, as Manager to the ICAV, earned a fee of USD 28,530 (31 December 2018: Nil) during the year, of which USD 11,426 (31 December 2018: Nil) was payable at year end. Management fee earned for the year ended 31 December 2019 is below minimum annual fee of €36,000 as Carne Global Fund Managers (Ireland) Limited was appointed as ICAV Manager on 9 July 2019.


30

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 7. Operating Expenses (continued)

Audit Fees

Audit fees relate to the service provided by KPMG for the financial year ended 31 December 2019 and 31 December 2018.

Fees shown above are exclusive of VAT.

Transaction costs

Below is the transaction cost for the financial year ended 31 December 2019 and 31 December 2018:

31 December 2019 31 December 2018 USD USD Transaction costs

34,378 84,353

8. Related Parties

IAS 24 ‘Related Party Transactions’ requires the disclosure of information relating to material transactions with parties who are deemed to be related to the reporting entity. The Directors, the Investment Manager, Carne Global Financial Services Limited and Sygnia Life Limited, represent related parties for the purposes of the accounting standards to which the ICAV is subject.

Please refer to Note 5 for significant shareholders.

Transactions with key management personnel

Polaris Capital Management, LLC has been appointed as the Investment Manager of the ICAV pursuant to the Investment Management Agreement dated 1 October 2015 and shall remain in effect until terminated. Investment Management fees incurred by the ICAV are disclosed in Note 6. The Investment Manager has imposed a voluntary cap on the fees and expenses payable in respect of each Share Class of the Fund. The Investment Manager will discharge all fees and expenses in excess of the cap payable in respect of each Class. The cap for each Class will be reviewed on a periodic basis by the Investment Manager, in consultation with the Directors. Any increase or removal of the cap in respect of any Class will be notified to Shareholders of that Class in advance. Amounts reimbursed by the Investment Manager with respect to the expense cap is disclosed in Note 6.

Ms. Kathleen Jacobs, Mr. Bernard R. Horn Jr and Mr. Jason Crawshaw, Directors of the ICAV, are also employees of the Investment Manager.

By virtue of their roles within Polaris Capital Management, LLC Ms. Jacobs, Mr. Horn Jr. and Mr. Crawshaw are considered related parties. For the financial year ended 31 December 2019 Investment Management fees and the Expense Limitation are discussed in Note 6.

Carne Global Fund Managers (Ireland) Limited, as Manager to the ICAV, earned a fee of USD 28,530 (31 December 2018: Nil) during the year, of which USD 11,426 (31 December 2018: Nil) was payable at year end.

Neil Clifford, a Director of the ICAV, is also an employee of Carne Global Financial Services Limited. Carne Global Financial Services Limited earned fees during the year in respect of Director support services and other Fund governance services provided to the ICAV, the fees amounted to USD 7,114 and USD 61,926, (31 December 2018: USD 45,308) respectively, of which USD 28,849 was payable at year end (31 December 2018: USD 14,635).

31 December 2019 31 December 2018 Description USD USD Audit (including reimbursement of expenses) 13,511 13,400 Tax advisory (VAT returns) 7,836 9,165 UK Reporting

9,121 3,940

Total 30,468 26,505


31

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 8. Related Parties (continued)

Transactions with key management personnel (continued)

For the financial year ended 31 December 2019 Neil Clifford earned USD 9,240 Directors fees (31 December 2018 : USD 9,744).

Directors’ remuneration is discussed in Note 7. 9. Risks Associated with Financial Instruments

Polaris Global Value UCITS Fund, the ICAV’s only Fund in operation, aims to seek capital appreciation by investing primarily in equity and equity-related securities of companies both U.S. and non-U.S., of any market capitalisation, including companies which are organised, headquartered or do a substantial amount of their business in Emerging Market countries. The ICAV is exposed to risks which includes market risk, credit risk and liquidity risk arising from the financial instruments it holds. The ICAV may use derivatives and other instruments in connection with its risk management activities.

The ICAV has in place guidelines that set out its overall business strategies and its general risk management philosophy and has established processes to monitor and control economic hedging transactions in a timely and accurate manner. The Investment Manager employs a risk management process to monitor and control position risk in a timely and accurate manner. Global exposure is calculated using the commitment approach. (a) Market Risk Market risk arises mainly from uncertainty about future prices of financial instruments held. It represents the potential loss the ICAV might suffer through holding market positions in the face of price movements. The ICAV is exposed, particularly in its equity assets, to market risks. The ICAV invests in securities traded on global markets and market risk is a risk to which exposure is unavoidable. Market risk comprises of price risk, currency risk and interest rate risk. (i) Price Risk Price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting equity instruments traded in the market. As the majority of the ICAV’s investments are carried at fair value with fair value changes recognised in the Statement of Comprehensive Income, all changes in market conditions will directly affect net income. The risk is mitigated through diversification of the portfolio in investments in various geographic zones and industries. The investment strategy of the ICAV is not to replicate a market index and therefore correlation between the return from the ICAV and any market index is likely to vary. As a result, it is appropriate to use the financial year end portfolio as a risk variable in any market sensitivity analysis. To illustrate the sensitivity of the portfolio based on a reasonably possible estimate of market price movements for a financial year, if the price of each of the equity securities to which the ICAV had exposure had increased by 5%, whilst the foreign currency rates held constant, there would have been the following approximate increases in net assets attributable to holders of redeemable participating shares:


32

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2019 (continued) 9. Risk Associated with Financial Instruments (continued)

(a) Market Risk (continued)

(i) Price Risk (continued)


Polaris Global Value UCITS Fund 10,619,989 7,358,847

A decrease by 5% would have resulted in an equal but opposite effect on net assets attributable to holders of redeemable shares by the amounts shown above, on the basis that all other variables remained constant.

(ii) Currency Risk

Currency risk is the risk that the ICAV’s operations or the NAV of the ICAV will be affected by changes in exchange rates and regulatory controls on currency movements. The ICAV may employ techniques and instruments intended to provide protection against exchange rate risks in the context of the management of its assets and liabilities, for example where there is a difference between the date an investment purchase or sale is entered into and the date when settlement of the proceeds occurs. When the ICAV enters into a transaction which will involve the buying or selling of foreign currency in order to complete a transaction, a forward foreign exchange contract may be entered into at the same time as the initial transaction in order to eliminate exchange rate risk. The ICAV may also enter into forward foreign exchange contracts to hedge the foreign exchange risk implicit in the value of portfolio securities denominated in a currency other than the ICAV’s base currency, USD.

Monetary items are units of currency held assets and liabilities or paid in a fixed or determinable number of units of currency. Monetary assets and liabilities included cash and cash equivalents, other receivables and other payables. All assets and liabilities that do not meet the definition of monetary items are classified as non-monetary. Marketable equity investments are considered non-monetary assets. The currency associated with equities is included in other price risk. Net assets attributable to holders of redeemable shares are non-monetary. At 31 December 2019 and 31 December 2018, the Fund did not hold any significant monetary assets or liabilities that are exposed to currency risk since all monetary assets are in the denomination of the Fund’s currency.

(iii) Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk arises when the ICAV invests in interest bearing financial instruments. At the financial year end the ICAV held no fixed income securities, and interest rate risk in relation to cash and cash equivalents is not regarded as a material risk.

(iv) Concentration risk

The Investment Manager reviews the concentration of risk of equity securities held based on industries and geographical location. The tables shown below provides geographical concentration and exposures to industries above 5% of the Net Asset Value of the ICAV:

Countries, as at 31 December 2019

United States of America 29.79% Great Britain 13.01% South Korea 6.87% Germany 6.78% Japan 5.44%

Total 61.89%


33


(a) Market Risk (continued) (iv) Concentration risk (continued)

(b) Credit Risk Credit risk arises where there is a possibility that a loss may occur from the failure of another party to fulfil its duties according to the terms of a contract. The ICAV will also be exposed to credit risk on parties with whom they trade securities and may also bear the risk of settlement default. The ICAV may also be exposed to credit risk on issuers in which the ICAV invests in respect of a default in payment of dividends declared by the issuer. The Investment Manager seeks to minimise concentrations of credit risk by undertaking transactions with various numbers of counterparties on recognised exchanges. In choosing and appointing a sub-custodian as a safe keeping agent, the Depositary exercises care and diligence to ensure that the sub-custodian has and maintains the expertise, competence and standing appropriate to discharge the responsibilities concerned. These criteria are monitored by the Depositary on an ongoing basis. As at 31 December 2019, RBC Investor Services Bank S.A., Dublin Branch has a credit rating of AA- with Standard & Poor’s (31 December 2018: AA-) . The credit risk on liquid Funds is mitigated through the use of counterparties or banks with high credit-ratings assigned by international credit-rating agencies. The carrying amount of financial assets recognised in the financial statements, which is net of impairment losses, represents the ICAV’s maximum exposure to credit risk, without taking into account collateral or other credit enhancements held. Substantially all of the investments and cash of the Fund is held by the Depositary, and its sub-custodians, on behalf of the Fund. The investments are clearly segregated from the Depositary’s own assets. However, bankruptcy or insolvency of the Depositary, or one of its sub-custodians, could cause the Fund's rights with respect to assets held by the Depositary or sub custodian to be delayed.

Countries, as at 31 December 2018

United States of America 31.25% Great Britain 13.48% South Korea 7.29% Germany 6.40% France 5.25%

Total 63.67%

Investment Sector, as at 31 December 2019

Banks and Financial Institutions 20.48% Holding and Finance Companies 6.30% Chemicals 5.65% Mechanics Machinery 5.63% Construction Building Material 5.30%

Total 43.36%

Investment Sector, as at 31 December 2018

Banks and Financial Institutions 18.73% Holding and Finance Companies 7.09% News Transmission 5.45% Pharmaceuticals and Cosmetics 5.04%

Total 36.31%


34


(c) Liquidity Risk

Liquidity risk is the risk that the ICAV will encounter difficulty in realising assets or otherwise raising Funds to meet commitments. Not all securities or instruments invested in by the ICAV will be listed or rated and consequently liquidity may be low. Moreover, the accumulation and disposal of holdings in some investments may be time consuming and may need to be conducted at unfavourable prices. The ICAV may also encounter difficulties in disposing of assets at their amounts approximating fair values due to adverse market conditions leading to limited liquidity.

Substantial redemption at the option of Shareholders may necessitate liquidation of investments. It is possible that losses may be incurred due on such liquidations, which might otherwise not have arisen.

All financial liabilities are due within 1 month.

The Fund’s assets comprise of highly liquid equity securities which are readily convertible to cash within 5 days.

(d) Capital Management

At 31 December 2019, the ICAV had $223,721,603 (31 December 2018: $155,733,460) of redeemable share capital classified as financial liability. The ICAV does not intend to declare any dividends and any net investment income and net realised capital gains will be accumulated in the Net Asset Value of the ICAV. The Directors may at their discretion change the distribution policy of a Fund or Class upon notice in advance to Shareholders and the provision of an addendum or revision to the Prospectus in relation to same.

The Manager is compliant with the minimum capital requirements imposed by the Regulations and has been throughout the current and the prior financial year.

(e) Fair Value Measurements

IFRS 13, Fair Value Measurement, requires a fair value hierarchy for inputs used in measuring fair value that classify investments according to how observable the inputs are. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the ICAV. Unobservable inputs reflect the ICAV’s assumptions, made in good faith, about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorised into three levels based on the inputs as follows:

Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the ICAV has the ability to access at the measurement date;

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3 - Inputs that are unobservable.

For those instruments which have significant unobservable inputs (Level 3), the amendment requires disclosures on the transfers into and out of Level 3, a reconciliation of the opening and closing balances, total gains and losses for the period, purchases, sales issues and settlements. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.


35


9. Risk Associated with Financial Instruments (continued)

(e) Fair Value Measurements (continued)

The determination of what constitutes ‘observable’ requires significant judgement by the ICAV. The ICAV considers observable data to be that market data that is readily available, regularly distributed or updated and reliable.

There were no transfers between Level 1 and Level 2 during the financial year (31 December 2018: Nil). There were no Level 3 securities held as at 31 December 2019 or 31 December 2018. At 31 December 2019, all instruments held were classified as Level 1 (31 December 2018: Level 1).

(f) Assets and liabilities not carried at Fair Value through Profit or Loss

Cash and cash equivalents are classified as Level 2 and all other assets and liabilities not carried at fair value are classified as Level 2.

Assets and liabilities not carried at fair value are carried at amortised cost, their carrying values are a reasonable approximation of fair value.

10. Cash and Cash Equivalents All cash and cash equivalents were held with RBC Investor Services Bank S.A., Dublin Branch during the

financial year.

11. Events during Financial Year End There was updated Prospectus for PCM Global Fund ICAV dated 9 July 2019. On 9 July 2019 Carne Global Fund Managers (Ireland) Limited was appointed as ICAV Manager. There were no other significant events occurred during the financial year.

12. Events since Financial Year End

Since early January 2020, global financial markets have been monitoring and reacting to the novel coronavirus (2019-nCoV) that is believed to have originated in Wuhan, China. As of late February 2020, the virus has negatively impacted the health of more than 80,000 individuals in at least 33 countries, with most confirmed cases concentrated in mainland China. While containment efforts may have helped to slow the growth of the virus in mainland China, in late March 2020, global financial markets reacted sharply to the news that the virus continued to spread into South Korea, Italy and Iran, as well as concerns regarding the larger economic impact this may have on a global scale. Factories around the world continue to cope with shortages as Chinese suppliers struggle to resume normal operations. The eventual impact on the global economy and markets will largely depend upon the scale and the duration of the outbreak which at this point is not fully known. The Polaris management team continues to monitor this situation closely and has put in place measures to safeguard its ability to provide services to the Fund and all its clients. There have been no significant redemptions, liquidity concerns or valuation problems experienced in management of the Fund. While markets continue to experience volatility the overall risk and liquidity profile of the Fund has not changed significantly. There have been no breaches of regulatory or investment restrictions. Year to date March 13, 2020 the NAV per share has declined approximately 30%. The investment manager expects continued market volatility and NAV impact; however the Fund is a going concern, financially stable and able to meet its obligations to shareholders and continue its business and investment strategy for the foreseeable future.


36


12. Events since Financial Year End (continued)

Polaris has temporarily increased the cash position in the Fund to take advantage of market opportunity. As reports of the Corona virus’ continued spread to other countries and despite the reduction in cases in China the team has made efforts to further reduce downside risk and reviewed the portfolio stock by stock to identify companies which represent the highest downside risk. The Polaris team will provide a more extensive analysis of specific companies in the upcoming first quarter report available at https://www.pcmglobalfundsicav.com/

An Addendum to the Prospectus was noted by the Central Bank on 31 January 2020. There were no other events that occurred since the financial year.

13. Approval of Financial Statements The financial statements were approved and authorised for issue, by the Board of Directors on 13 March 2020.

https://www.pcmglobalfundsicav.com/


37

Polaris Global Value UCITS Fund Schedule of Investments as at 31 December 2019 (expressed in USD) Fair % net

Description Quantity Currency Value Assets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING

LISTED SECURITIES : SHARES

AUSTRIA (2018: 1.17%)

ANDRITZ AG 47,600 EUR 2,050,107 0.92

2,050,107 0.92

BELGIUM (2018: 1.16%)

Solvay SA 24,000 EUR 2,780,670 1.24

2,780,670 1.24

CANADA (2018: 2.50%)

Magna International Inc 55,041 CAD 3,018,384 1.35

Methanex Corp 69,700 CAD 2,692,226 1.20

Toronto-Dominion Bank 46,591 CAD 2,613,487 1.17

8,324,097 3.72

COLOMBIA (2018: 1.24%)

Bancolombia SA 153,400 COP 2,051,878 0.92

Bancolombia SA - ADR 21,600 USD 1,183,464 0.53

3,235,342 1.45

FINLAND (2018: 1.30%)

Kone OYJ 49,100 EUR 3,209,513 1.43

3,209,513 1.43

FRANCE (2018: 5.25%)

Cie Generale des Etablissements Michelin 20,451 EUR 2,502,519 1.12

Imerys SA 41,067 EUR 1,735,569 0.78

IPSOS 27,200 EUR 883,194 0.39

Publicis Groupe SA 46,464 EUR 2,103,321 0.94

Vinci SA 26,100 EUR 2,898,101 1.30

10,122,704 4.53

GERMANY (2018: 6.40%)

BASF SE 36,800 EUR 2,779,865 1.24

Deutsche Telekom AG 158,611 EUR 2,591,974 1.16

Hannover Rueck SE 18,400 EUR 3,555,831 1.59

LANXESS AG 45,600 EUR 3,059,491 1.37

Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen 10,800 EUR 3,185,789 1.42

15,172,950 6.78


38

Polaris Global Value UCITS Fund Schedule of Investments as at 31 December 2019 (continued)

(expressed in USD) Fair % net


TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING (continued)

LISTED SECURITIES : SHARES (continued)

GREAT BRITAIN (2018: 13.48%)

Babcock International Group Plc 494,316 GBP 4,120,818 1.84

Bellway Plc 73,172 GBP 3,689,604 1.65

BHP Group Plc - ADR 64,000 USD 3,008,640 1.34

Cineworld Group Plc 976,400 GBP 2,833,493 1.27

Inchcape Plc 165,245 GBP 1,545,201 0.69

Mondi Plc 64,400 GBP 1,511,904 0.68

Mondi Plc 64,300 ZAR 1,498,759 0.67

Next Plc 39,100 GBP 3,634,478 1.62

Signature Aviation Plc 347,632 GBP 1,460,510 0.65

Standard Chartered Plc 249,552 GBP 2,354,706 1.05

Taylor Wimpey Plc 1,356,381 GBP 3,474,483 1.55

29,132,596 13.01

INDIA (2018: 1.49%)

Infosys Ltd - ADR 259,400 USD 2,677,008 1.20

2,677,008 1.20

IRELAND (2018: 2.61%)

Allergan Plc 16,600 USD 3,173,422 1.42

Greencore Group Plc 662,081 GBP 2,349,286 1.05

Linde Plc 15,608 USD 3,322,944 1.49

8,845,652 3.96

ITALY (2018: 0.06%)

TREVI - Finanziaria Industriale SpA 2,694 EUR 48,193 0.02

48,193 0.02

JAPAN (2018: 4.38%)

Asahi Group Holdings Ltd 58,900 JPY 2,700,951 1.21

Daicel Corp 139,000 JPY 1,341,840 0.60

Kansai Electric Power Co Inc 195,200 JPY 2,271,481 1.02

KDDI Corp 97,100 JPY 2,906,793 1.30

Sumitomo Mitsui Trust Holdings Inc 73,700 JPY 2,941,491 1.31

12,162,556 5.44

NORWAY (2018: 3.77%)

DNB ASA 144,300 NOK 2,696,057 1.21

SpareBank 1 SR-Bank ASA 208,923 NOK 2,380,158 1.06

Sparebanken Vest 63,131 NOK 455,984 0.20

Yara International ASA 63,000 NOK 2,621,143 1.17

8,153,342 3.64

PUERTO RICO (2018: 1.60%)

Popular Inc 59,200 USD 3,478,000 1.55

3,478,000 1.55


39






SINGAPORE (2018: 1.47%)

United Overseas Bank Ltd 150,808 SGD 2,961,108 1.32

2,961,108 1.32

SOUTH KOREA (2018: 7.29%)

Hyundai Mobis Co Ltd 11,100 KRW 2,457,984 1.10

Kia Motors Corp 65,100 KRW 2,494,600 1.12

KT&G Corp 23,400 KRW 1,898,606 0.85

LG Uplus Corp 155,400 KRW 1,908,780 0.85

Samsung Electronics Co Ltd 63,781 KRW 3,078,520 1.38

Shinhan Financial Group Co Ltd 54,600 KRW 2,047,376 0.92

SK Hynix Inc 18,000 KRW 1,465,138 0.65

15,351,004 6.87

SWEDEN (2018: 2.74%)

Duni AB 66,700 SEK 919,934 0.41

Loomis AB 52,300 SEK 2,165,095 0.97

SKF AB 158,800 SEK 3,210,690 1.44

Svenska Handelsbanken AB 270,100 SEK 2,909,266 1.30

9,204,985 4.12

SWITZERLAND (2018: 2.76%)

Chubb Ltd 18,723 USD 2,914,422 1.30

Novartis AG 30,500 CHF 2,896,807 1.29

5,811,229 2.59

THAILAND (2018: 1.40%)

Siam Commercial Bank Pcl 739,900 THB 3,032,186 1.36

3,032,186 1.36

UNITED STATES (2018: 31.25%)

ALLETE Inc 36,600 USD 2,970,822 1.33

Ameris Bancorp 55,300 USD 2,352,462 1.05

Anthem Inc 11,100 USD 3,352,533 1.50

Avnet Inc 62,400 USD 2,648,256 1.18

Brookline Bancorp Inc 48,269 USD 794,508 0.36

Cambridge Bancorp 7,000 USD 561,049 0.25

Capital One Financial Corp 27,500 USD 2,830,025 1.27

Carter's Inc 24,400 USD 2,667,896 1.19

Dime Community Bancshares Inc 48,400 USD 1,011,076 0.45

Franklin Resources Inc 79,300 USD 2,060,214 0.92

General Dynamics Corp 13,700 USD 2,415,995 1.08

Hewlett Packard Enterprise Co 82,300 USD 1,305,278 0.58

International Bancshares Corp 67,600 USD 2,911,532 1.30

JM Smucker Co 24,900 USD 2,592,837 1.16

JPMorgan Chase & Co 25,700 USD 3,582,580 1.60

L Brands Inc 62,600 USD 1,134,312 0.51


40






UNITED STATES (2018: 31.25%) (continued)

Marathon Petroleum Corp 49,900 USD 3,006,475 1.34

Microsoft Corp 23,400 USD 3,690,180 1.65

NextEra Energy Inc 15,100 USD 3,656,616 1.63

Quest Diagnostics Inc 27,000 USD 2,883,330 1.29

Tyson Foods Inc 29,600 USD 2,694,784 1.21

UnitedHealth Group Inc 11,300 USD 3,321,974 1.48

Verizon Communications Inc 49,500 USD 3,039,300 1.36

Webster Financial Corp 59,400 USD 3,169,584 1.42

WESCO International Inc 45,400 USD 2,696,306 1.21

Western Union Co 123,100 USD 3,296,618 1.47

66,646,542 29.79

TOTAL LISTED SECURITIES : SHARES 212,399,784 94.94

TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 212,399,784 94.94

CASH AND OTHER ASSETS AND LIABILITIES 11,321,819 5.06

NET ASSETS 223,721,603 100.00

(expressed in USD) % Total

Description Assets

TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 94.77

CASH AND CASH EQUIVALENTS 5.03

OTHER CURRENT ASSETS 0.20

TOTAL 100.00


41

Supplemental information (unaudited) - Financial Information Polaris Global Value UCITS Fund Establishment and Organisation PCM Global Funds ICAV (the “ICAV”) is an open-ended umbrella ICAV with segregated liability between its Funds established under the laws of Ireland authorised and regulated by the UCITS Regulations. The ICAV was incorporated on 7 July 2015 and commenced operations on 25 November 2015. The ICAV has established Polaris Global Value UCITS Fund (the "Fund"), a Fund of the ICAV. Investment Objective The investment objective of the Fund is to seek capital appreciation. Investment Policy The Fund will invest primarily in equity and equity related securities (including ADRs and MLPs) of companies, both U.S. and non-U.S., of any market capitalisation, including companies which are organised, headquartered or do a substantial amount of their business in Emerging Market Countries. Although there is no limit on the amount of Fund assets that may be invested in companies located in any one country, the Fund seeks to achieve broad geographic diversification and, at any given time, expects to be invested in securities representing approximately 15 of the 24 GICS industries. The GICS industries represented will vary depending on which industry, in the Investment Manager’s view, presents the best opportunities for the Fund. MLP’s derive at least 90% of their income from select sources for example, energy, natural resources and real estate. MLPs typically pay their investors quarterly distributions out of capital. As the MLP itself does not pay any income taxes, the amount of that cash flow is enhanced. The classes and currencies in which shares of each Fund are on offer, as per the Prospectus, are set out below: Fund Class Currency Polaris Global Value UCITS Fund Class A USD Accumulating USD Class I USD Accumulating USD Class I EUR Accumulating EUR Class I EUR Accumulating (Hedged) EUR Class I GBP Accumulating GBP Class I GBP Accumulating (Hedged) GBP Class R GBP Accumulating GBP Class R GBP Accumulating (Hedged) GBP Class X USD Accumulating USD

As at 31 December 2019, the Class A USD Accumulating & Class I USD Accumulating share classes are the only active share classes. Securities Lending

There was no securities lending during the financial year ended 31 December 2019 (31 December 2018: Nil).


42

Supplemental information (unaudited) - Financial Information (continued) Polaris Global Value UCITS Fund

Exchange rates The exchange rates to 1 USD as at 31 December 2019 and 31 December 2018 were:


CAD 1.298351 1.364901

CHF 0.967600 0.982900

COP 3,289.473684 3,246.753247

EUR 0.891583 0.872905

GBP 0.755002 0.784406

JPY 108.664943 109.584958

KRW 1,156.069364 1,113.585746

NOK 8.777705 8.647676

SEK 9.367681 8.863598

SGD 1.345050 1.362949

THB 29.769879 32.340481

ZAR 13.998544 14.370707

Soft Commissions

It is the Investment Manager’s policy to seek to obtain best execution on all client transactions over which the Investment Manager exercises discretion. However, under certain circumstances, consistent with applicable law and regulation, the Investment Manager may select broker-dealers that furnish the Investment Manager with proprietary and third-party brokerage and research services in connection with commissions paid on transactions placed for client accounts (including for the Funds). The Investment Manager has entered into client commission arrangements with a number of broker-dealers that it selects to execute client transactions from time to time. These client commission arrangements provide for the broker dealers to pay a portion of the commissions paid by eligible client accounts for securities transactions to providers of certain research services designated by the Investment Manager. Although the broker-dealers involved in these soft commission arrangements do not necessarily charge the lowest brokerage commissions, the Investment Manager will nonetheless enter into such arrangements where the broker-dealers have agreed to provide best execution and/or the value of the research and other services exceeds any incremental commission costs. Details of any such soft commission arrangements will be disclosed in the period reports of the relevant Fund.

The Investment Manager intends to enter into soft commission arrangements in accordance with all applicable law and industry standards when it is of the view that the arrangements enhance the quality of the provision of the investment services to the ICAV. While such arrangements are designed to be for the benefit of it clients, not all soft commission arrangements will benefit all clients at all times.

In selecting brokers or dealers to execute transactions and negotiating their commission rates, the Fund is expected to consider one or more of such factors as price, execution capabilities, reputation, reliability, financial resources, the quality of research products and services and the value and expected contribution of such services to the performance of the Fund. It is not possible to place a dollar value on information and services received from brokers and dealers, as they only supplement the research efforts of the Fund. If the Fund determines in good faith that the amount of the commissions charged by a broker or dealer is reasonable in relation to the value of the research products or services provided by such broker or dealer, the Fund may pay commissions to such broker or dealer in an amount greater than the amount another broker or dealer might charge. There were no soft commissions paid during the year nor in prior year.


43


Net Asset Value History

The Net Assets included in the table below are the Net Asset Values calculated for share dealing purposes. 31 December 2019 31 December 2018 31 December 2017 USD USD USD

Total Net Asset for share dealing 1dealinglingfinancial statement

purposes 223,759,449 155,790,192 105,986,205 Net Asset Value per Share – Class I USD Accumulating 14.22 11.67 13.41 Net Asset Value per Share – Class A USD Accumulating 10.54 8.68 10.03

Net Asset Value

The net assets value in the financial statements at 31 December 2019 differs from that included in the published valuations at 31 December 2019. The difference is due to the change in methodology in accounting for organisation costs as prescribed by IFRS, and the methodology indicated in the most recent Prospectus. This does not have any effect on the published or dealing Net Asset Value.

Polaris Global Value

UCITS Fund

Polaris Global Value

UCITS Fund


Total Net Assets for financial statement purposes 223,721,603 155,733,460

Adjustment for formation cost written-off 37,846 56,732

Total Net Assets for unitholder dealing/prospectus 223,759,449 155,790,192

Establishment Costs

The preliminary expenses incurred in the formation of the ICAV and the Funds amounting to approximately €125,000 will be discharged out of the assets of the ICAV and will be amortised over the first five financial years of the ICAV’s operation and amortised and allocated among the Funds on a basis deemed fair and equitable by the Directors. The Directors may in their absolute discretion, following consultation with the Depositary, shorten the period over which said expenses are amortised. The preliminary expenses incurred in the establishment of each new Fund or Class will be charged to the respective Fund.

This practice is not in accordance with IFRS and, although this is not anticipated by the Directors, which leads to a divergence between the published Net Asset Value per Share, which is calculated in accordance with this Prospectus, and the Net Asset Value per Share included in the financial statements, which is calculated in accordance with International Financial Reporting Standards.


44


Efficient Portfolio Management

The ICAV may, subject to the conditions and within the limits laid down by the UCITS Notices, use techniques and instruments for hedging purposes (to protect a Fund against, or minimise liability from, fluctuations in market value or foreign currency exposures) or for the purposes of efficient portfolio management (namely: contracts for differences, forward contracts, futures contracts, options, put and call options on securities, indices and currencies, swap contracts, repurchase/reverse repurchase and stock lending agreements).

Such techniques and instruments may be used for the reduction of risk, cost or the generation of additional capital or income for each Fund taking into account the risk profile of the ICAV and to the extent the Investment Manager deems consistent with the investment objective and policies of the Fund as described in the Prospectus and the general provisions of the Regulations. The ICAV does not currently use Financial Derivative Instruments (“FDIs”) for efficient portfolio management or for investment purposes.

The Investment Manager operates a risk management process on behalf of each Fund in relation to the use of FDIs which allows it to accurately measure, monitor and manage the various risks associated with FDIs and other investments, and which is intended to ensure that the Fund’s investments including FDI exposure remains within the limits described below. This risk management process also takes into account any exposure created through FDIs embedded in investments held by the Funds. In particular, the Investment Manager will manage exposure risk using the commitment approach in accordance with the Central Bank’s requirements.


45

Supplemental information (unaudited) Polaris Global Value UCITS Fund Material Portfolio Changes for the Financial year ended 31 December 2019

Significant portfolio changes are defined as the aggregate purchases of a security exceeding one per cent of the total value of purchases for the period and aggregate sales of a security exceeding one per cent of the total value of sales for the period. At a minimum, the 20 largest purchases and 20 largest sales are to be disclosed. SIGNIFICANT PURCHASES*

SECURITY NAME QUANTITY COST % OF TOTAL

USD PURCHASES

Sumitomo Mitsui Trust Holdings Inc 73,700 2,777,077 6.22

Asahi Group Holdings Ltd 58,900 2,687,378 6.01

Toronto-Dominion Bank 46,591 2,672,047 5.98

Mondi Plc 128,700 2,497,223 5.59

SKF AB 158,800 2,362,969 5.29

Babcock International Group Plc 220,876 1,345,993 3.01

Methanex Corp 31,800 1,322,480 2.96

Daicel Corp 139,000 1,169,199 2.62

BASF SE 13,400 964,773 2.16

Marathon Petroleum Corp 15,000 851,952 1.91

LANXESS AG 13,800 827,053 1.85

Siam Commercial Bank Pcl 211,500 801,895 1.79

Webster Financial Corp 17,500 796,084 1.78

Svenska Handelsbanken AB 73,800 696,997 1.56

Cineworld Group Plc 240,400 691,255 1.55

Solvay SA 6,000 662,584 1.48

JM Smucker Co 5,600 599,369 1.34

Taylor Wimpey Plc 277,569 564,269 1.26

NextEra Energy Inc 2,300 532,116 1.19

Cambridge Bancorp 7,000 531,101 1.19

Magna International Inc 9,526 498,985 1.12

Hyundai Mobis Co Ltd 2,400 491,798 1.10

Chubb Ltd 3,200 474,798 1.06

Next Plc 5,400 469,671 1.05

ALLETE Inc 5,300 459,500 1.03

Quest Diagnostics Inc 4,700 458,011 1.03

Verizon Communications Inc 7,700 454,118 1.02

United Overseas Bank Ltd 24,100 451,161 1.01

Deutsche Telekom AG 27,100 450,622 1.01

Yara International ASA 11,000 450,592 1.01 * To the extent that trades have been executed the 1% aggregate trade shown above.


46

Supplemental information (unaudited) Polaris Global Value UCITS Fund Material Portfolio Changes for the Financial year ended 31 December 2019 (continued)

SIGNIFICANT SALES*

SECURITY NAME QUANTITY PROCEEDS % OF TOTAL

USD SALES

Linde Plc 15,500 2,585,765 22.03

Xerox Corp 77,625 2,487,154 21.18

Nexon Co Ltd 189,400 2,211,271 18.83

Teva Pharmaceutical Industries Ltd 120,600 1,074,968 9.15

Greencore Group Plc 380,934 982,403 8.36

Tyson Foods Inc 8,800 755,332 6.43

NextEra Energy Inc 1,700 391,655 3.33

Microsoft Corp 2,400 357,521 3.04

Alcon Inc 5,360 314,763 2.68

Next Plc 3,000 255,638 2.18

Hannover Rueck SE 1,100 203,711 1.73

Western Union Co 4,700 125,064 1.06 * Represents all trades during the financial year.


47

Supplemental information (unaudited) Remuneration disclosures The ICAV has in place a remuneration policy (“Remuneration Policy”) which applies to those categories of staff, including senior management, controlled functions (as defined by the Central Bank) and any employee receiving total remuneration who fall within the remuneration bracket of senior management in addition to any persons who are considered risk takers whose professional activities have a material impact on the risk profile of the ICAV (“Identified Staff”). The ICAV does not offer performance-related remuneration to its Identified Staff. Some categories of Identified Staff are paid directly by separate entities and do not receive a fee directly from the ICAV; however, the entities themselves are paid fixed fees and/or are paid on a time-spend basis by the ICAV for such services. The ICAV pays the independent Directors a fixed fee per annum. This fee is not related to the performance of the ICAV. The aggregate amount of Directors’ remuneration in any one year shall not exceed €60,000 without the approval of the Directors. All Directors will be entitled to reimbursement by the ICAV of expenses properly incurred in connection with the business of the ICAV or the discharge of their duties. No pension payments are made. A number of factors are included in determining the fee paid including the size and risk profile of the funds under management and the current market rate for directorships of this nature. The Remuneration Policy was prepared to address the requirements of Directive 2014/91/EU (“UCITS V”) and ensures compliance by the ICAV with UCITS V. The policy will be reviewed annually by the Directors in light of applicable law and in conjunction with any related guidance issued by ESMA or the Central Bank which is applicable during the relevant financial reporting period. Remuneration for the period 1 January 2019 – 9 July 2019 is as follows: (Amounts in USD)

Fixed Remuneration 53,375

Variable Remuneration 0

Number of Recipients 5

Directors 40,000

Management Staff 13,375


48

Supplemental information (unaudited) Remuneration disclosures (continued) The European Union Directive 2014/91/EU as implemented in Ireland by S.I. No. 143/2016 - European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2016, requires management companies to establish and apply remuneration policies and practices that promote sound and effective risk management, and do not encourage risk taking which is inconsistent with the risk profile of the UCITS. To that effect, Carne Global Fund Managers (Ireland) Limited (“the Manager”), has implemented a remuneration policy that applies to all UCITS for which the Manager acts as manager (the “Remuneration Policy”) and covers all staff whose professional activities have a material impact on the risk profile of the Manager or the UCITS it manages (“Identified Staff”). The Remuneration Policy also applies to all alternative investment Funds for which the Manager acts as alternative Investment Fund Manager. In accordance with the Remuneration Policy, all remuneration paid to Identified Staff can be divided into: • Fixed remuneration (payments or benefits without consideration of any performance criteria); and • Variable remuneration (additional payments or benefits depending on performance or, in certain cases,

other contractual criteria) which is not based on the performance of the UCITS. The Manager has designated the following persons as Identified Staff: 1. The Designated Persons; 2. Each of the Directors; 3. Compliance Officer; 4. Risk Officer; and 5. Chief Operating Officer. The Manager has a business model, policies and procedures which by their nature do not promote excessive risk taking and take account of the nature, scale and complexity of the Manager and the UCITS. The Remuneration Policy is designed to discourage risk taking that is inconsistent with the risk profile of the UCITS and the Manager is not incentivised or rewarded for taking excessive risk. The Manager has established a remuneration committee to oversee the implementation of the remuneration arrangements and to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk (the “Remuneration Committee”). The Remuneration Committee consists of at least two directors, the compliance officer, internal legal counsel and such other individuals as the Board may appoint from time to time. The Manager’s parent company is Carne Global Financial Services Limited (“Carne”). Carne operates through a shared services organisational model which provides that Carne employs all staff and enters into inter-group agreements with other Carne Group entities within the group to ensure such entities are resourced appropriately. Each of the Identified Staff, other than one non-executive independent director, are employed and paid directly by Carne and remunerated based on their contribution to the Carne Group as a whole. In return for the services of each of the Carne Identified Staff, the Manager pays an annual staff recharge to Carne (the “Staff Recharge”).


49

Supplemental information (unaudited) Remuneration disclosures (continued) The non-executive independent director is paid a fixed remuneration and each other Identified Staff member’s remuneration is linked to their overall individual contribution to the Carne Group, with reference to both financial and non-financial criteria and not directly linked to the performance of specific business units or targets reached or the performance of the UCITS. The aggregate of the total Staff Recharge and the remuneration of the independent non-executive director is EUR 1,497,600 paid to 12 individuals for the year ended 31 December 2019. The Manager has also determined that, on the basis of number of Sub-Funds / net asset value of the UCITS relative to the number of Sub-Funds / assets under management, the portion of this figure attributable to the UCITS is EUR 4,901. The ICAV does not pay any fixed or variable remuneration to identified staff of the Investment Manager. There have been no material changes made to the Remuneration Policy or the Manager’s remuneration practices and procedures during the financial year.

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS …...One George’s Quay Plaza 4th Floor George’s...

Documents

Transcript of ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS …...One George’s Quay Plaza 4th Floor George’s...