guardcap ucits funds plc · 6/30/2016 · one george’s quay plaza george’s quay dublin 2...

GuardCap UCITS Funds Plc Condensed semi-annual report and unaudited financial statements For the financial period ended 30 June 2016 (An umbrella fund constituted as an investment company with variable capital under the laws of Ireland with segregated liability between sub-funds and authorised by the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015.

GuardCap UCITS Funds Plc

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Condensed semi-annual report and unaudited financial statements

Contents Page Directors and other information 2 Investment Manager’s Report 3 - 14 Schedule of Investments 15 - 16 Condensed Statement of Financial Position 17 Condensed Statement of Comprehensive Income 18 Condensed Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares 19 - 20 Condensed Statement of Cash Flows 21 Notes forming part of the Condensed Financial Statements 22 - 36 Supplementary Information 37


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Directors and other information

Directors Victoria Parry* Brian Moore* Steve Bates Michael Boyd Company Secretary Matsack Trust Limited 70 Sir John Rogerson’s Quay Dublin 2 Ireland Registered Office 70 Sir John Rogerson’s Quay Dublin 2 Ireland Investment Manager and GuardCap Asset Management Limited Promoter 6th Floor

11 Charles II Street

St James's

London

SW1Y 4NS

United Kingdom Depositary RBC Investor Services Bank S.A., Dublin Branch 4th Floor One George’s Quay Plaza George’s Quay Dublin 2 Ireland Administrator RBC Investor Services Ireland Limited 4th Floor One George’s Quay Plaza George’s Quay Dublin 2 Ireland Legal Advisers Matheson 70 Sir John Rogerson’s Quay Dublin 2 Ireland Independent Auditors KPMG 1 Harbourmaster Place IFSC Dublin 1 Ireland

* Independent and non-executive Directors.


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Investment Manager’s Report for the financial period ended 30 June 2016 Philosophy Through investment in a small number of high quality, sustainable growth companies, the Investment Manager aims to achieve above market returns at below benchmark risk over the long-term. The Investment Manager believes that sustainable growth in the earnings of these companies will drive long-term returns provided they are not overvalued when purchased. In addition, the quality of the companies will help to protect their businesses and shares during periods of economic and stock market turmoil. The Investment Manager uses an intensive, confidence-building research process to identify, analyse and constantly monitor the 20 to 25 companies in the portfolio. Portfolio turnover for the six months was low at 5% in keeping with the Investment Manager’s 5 to 10 year investment horizon. Performance Between inception on 10th December 2014 and 30th June 2016 the GuardCap Global Equity (UCITS) Fund USD I Share Class has returned an annualised +8.22% in US$, versus a return for the MSCI World Index (Net Dividends Re-invested) of +0.33%. For the six months to 30th June 2016 it returned +3.43% versus the benchmark return of +0.66%. Portfolio Companies Company Business Growth drivers Quality profile Alphabet Develops world class web-

based services/software and provides them free of charge to consumers and businesses in order to drive advertising revenue. 7 key assets with >1bn users each include Google Search, Maps, Chrome, YouTube, Google Play, Gmail and Android.

Benefits from the huge secular trend away from advertising/brand building on traditional media channels (such as TV and print) to digital.

High ROIC of 30% reflects the uniqueness of the business and its barriers to entry (ownership of premier online platform assets).

Balance sheet is very strong. Cash generation is good but lumpy as CAPEX on data centres and land is not linear.

AO Smith One of the world's leading manufacturers of residential and commercial water heaters and boilers, offering a comprehensive product line featuring the best-known brands in North America, China, and India. Also sells water and air purification systems In China and India.

US residential is a low growth replacement market but US Commercial is growing double-digits due to the transition from non-condensing to condensing products. China (>30% of sales) is growing at twice GDP or 15% due to the rise of the middle classes.

India, water and air treatment are future drivers.

Decent ROIC of 15%. Balance sheet is strong with net cash.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) Automatic Data

Provides a range of HR solutions, via a software and service-based delivery model, which its >600k businesses of all sizes can use to recruit, staff, pay, manage and retain employees. Recurring revenue due to long-term client relationships. Number 1 in US and Europe in HR outsourcing.

Outsourcing pressures have intensified: evolving workforce demographics; intensifying compliance burden (eg Affordable Care Act in the US); attracting, developing and retaining talent; integrate, simplify and unify. $90bn global HCM market growing at 7% per annum.

Solid ROIC of 17%.

Balance sheet is very strong. Strong credit rating (AA) is important for client trust in handling their money. Cash generation is excellent and recessionary performance resilient.

CME Group

Offers the widest range of global benchmark products across all major asset classes: exchange-traded and OTC. Brings buyers and sellers together on the Globex electronic trading platform and open outcry and charges a transaction fee. Provides clearing and settlement services, regulatory reporting solutions and market data services.

Key differentiators are: liquidity and price transparency; most diverse product line; safety and soundness of CME’s markets; superior trading technology and distribution. Increased volatility requires greater degrees of hedging and use of derivatives. Volumes have grown 14% per annum over the last 40 years.

As CME is a merger of three large exchanges, high levels of goodwill suppresses its ROIC. Marginal returns on invested capital are extremely healthy.

Balance sheet is strong, cash generation is excellent and recessionary performance is resilient.

Cognizant Tech.

Global provider of IT, consulting, and business process services. Helps clients build more efficient operations, provide solutions to business and technology problems, and help drive technology-based innovation and growth. Operates a global delivery model. Spun-off from Dun & Bradstreet.

Indian outsourcing market has grown double-digits through the cycle. Cognizant’s addressable market has doubled over the last two years due to a push into BPO, infrastructure and social, mobility, analytics and cloud. Client penetration levels remain low.

High ROIC of 28%.

Company invests excess margin back into the business resulting in a consistent operating margin of 19-20%.

Very strong balance sheet: net cash since IPO in 1998.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) Colgate Global oral care market

leader for toothpaste, toothbrushes and mouthwash. Also offers personal hygiene and pet nutrition products.

Company holds dominant market shares in most developed and developing markets. In the US, it shares the market equally with P&G. Consumption of oral care is low in developing versus developed.

High ROIC of 20%+ reflects its strong competitive position and barriers to entry including relationships with dentists and vets and exceptional distribution.

Balance sheet has been managed conservatively and consistently.

Cash generation is excellent and cash conversion has been driven by strong working capital focus.

Dassault Syst.

Provides software to support and enhance companies’ innovation processes. World leader of the global Product Lifecycle Management market (3D design, simulation, digital manufacturing and business process management) with 30% share. More than 70% recurring software revenue and strong partnerships with global industry leaders.

>$30bn addressable market. Growing by: adding new industries in consumer, tech, finance, natural resources and life sciences (25% of rev to >30% by 2019); adding new users in marketing and sales; and adding high growth countries (16% in 2015); expanding market by 15% using mobile/cloud to appeal to SMEs.

ROIC of 10% has been reduced by recent acquisitions.

Balance sheet is very strong. Cash generation is excellent and recessionary performance is resilient.

Essilor The world’s leading ophthalmic optics company with 41% market share in a fragmented market. Invests more into innovation than all the other industry players combined. Supply chain is a competitive advantage. Brands include Varilux, Transitions and Crizal. Sells in over 120 countries and employs 61,000. Strong employee shareholder culture.

Core lens market growth is 3-4% per annum driven by Emerging Markets, ageing population and increasing number of unmet visual needs. Value added categories – anti-reflective, photochromic – are underpenetrated. Including sunglasses and online, Essilor estimate their market to total €27bn growing at 6-7% per annum.

ROIC of 9% has been diluted by a number of bolt-on acquisitions.

Balance sheet has traditionally been managed very conservatively.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) FANUC World class industrial

automation company. Pioneered the automation of machine tools in factories and the development of computer numeric controls. 65% market share: world standard in CNC/servo. One core common platform. Split into 3 business units: Factory Automation, Robot and Robomachine. Develops all hardware and software in-house.

Industrial automation. Robotics growth driven by falling integration costs and improvements in performance and capability, and low penetration in China and Emerging Markets.

20% ROIC and nearly 35% operating margin.

Strong balance sheet with net cash.

Hennes & Mauritz

Makes “fashion, quality, sustainability at the best price” accessible to people all over the world through its 4,000 stores.

Retail brands include H&M, COS, Monki, Weekday, Cheap Monday, & Other Stories.

Increasing the number of stores by 10–15% per year and achieving positive comp sales. Opportunities in Europe are slowing down but still plenty of room for expansion in the US, China and new markets in Asia, Africa and South America, and online. New concepts include H&M Sport, H&M Home and H&M Beauty.

Strong 25%+ ROIC but it has been declining and has halved over the last 7 years due to increased investments in new concepts. Significant net cash on the balance sheet and strong cash flow generation. All stores are leased not owned which lowers the CAPEX requirements of its expansion.

Intertek Provides testing and certification services that ensure that customers’ products meet quality, health, environmental, safety, and social accountability standards. It holds extensive global accreditations, recognitions, agreements, and knowledge of and expertise in overcoming regulatory, market, and supply chain hurdles in many industries.

New product innovation, increasing end-user quality expectations, supply chain changes, quality, safety and environmental standards, growth of developing economies, global trade, industry consolidation and internationalisation of client base.

Healthy ROIC of 20%.

Balance sheet is satisfactory with Net Debt/FCF of 3.3. Cash generation is solid. Resilience in recessions is good.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) LVMH Founded in 1987 with the

merger of Louis Vuitton and Moet Hennessy. It is a leader at the top end of the global luxury market with ~11% market share. The company has five segments: fashion & leather; wines & spirits; perfume and cosmetics; watches and jewellery; and selective retailing.

Demand for LVMH products is driven by increasing consumption (both in developed and developing markets) and the “desirability” of the most premium brands.

ROIC has been reasonably constant at around 10% over the last five years. Modest net debt position.

MasterCard A technology company in the global payments industry that connects consumers, financial institutions, merchants, governments and businesses, enabling use of electronic forms of payment. Acts as a franchisor, processor and adviser. Does not issue cards or extend credit. The business is highly defensible with a hard to replicate network.

Benefits from the ongoing secular shift from cash to card-based and electronic payments (85% of global transactions are still with cash or cheques, 95-99% in India and China). Other drivers include growth in PCE and big data initiatives.

Exceptional ROIC of 79%. High incremental margins. Balance sheet is conservatively managed and has net cash. Low capex requirements, strong free cash flow generation.

Mead Johnson

The number two infant formula producer in the world and is the only one of the major infant formula manufacturers that operates as a standalone company. It has over one hundred years’ experience in infant formula manufacturing and industry leading expertise in immunology, which it uses to develop products for infants with allergies.

The infant formula market is projected to grow at 7% per year. This is predominantly due to increased demand for infant formulas and growing up milks as middle classes continue to emerge in the developing world. Mead should be able to grow at or above market rate owing to its high exposure to fast growing markets (China 32% of sales, Latin America 20% of sales)

Generates an industry leading ROIC of nearly 40% which has been consistently high since it listed as an independent business. Balance sheet is healthy with Net Debt/Free Cash Flow of 1.8x.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) Monsanto The largest producer of

genetically modified seeds in the world. It develops traits across various crop seeds, corn and soybeans in particular. It also produces pesticide within its agricultural products division.

Increasing meat consumption and a growing global population mean that demand for corn is expected to continue to grow. The UN estimates that food demand will increase by 70% 2004-2050 and that available arable land per capita will decline from half an acre per person in 2010 to one third of an acre in 2030. Growers need to invest in the best possible seed technology to maximize productivity.

Average ROIC of 14% of sales over the past 5 years. Net Debt/FCF expected to peak this year at 4.3x. Cash conversion average of 99% over the last five years.

Moody’s An entrenched industry standard with stable market share in key ratings business. Diversification of business through Moody’s Analytics (33% of sales, research, data and software for financial risk analysis) boosts recurring revenues. Regulatory winner. Core market segments total ~$18 bn.

Top line drivers: GDP growth drives issuance; disintermediation; analytics; and pricing (3-4% pa). Additional secular drivers include stress testing and offshore services (banks look to reduce costs).

Consistently high ROIC (37% in 2015). Capex-light model leads to strong free cash flow generation.

Nestle Founded in 1866, is one of the largest food and beverage companies in the world. Resilience due to breath of portfolio (20 categories) sold in over 190 countries. Brands include Nescafe, Nespresso, Milo, Nestea, Gerber, Perrier, Maggi, Buitoni, KitKat, and Purina. Strong focus on R&D and innovation.

Organic growth averaged mid-single digits over the past 10+ years. Focus on health, wellness and nutrition, and emerging middle class in Emerging Markets (43% of sales).

ROIC is a key management focus. ROIC has fallen following acquisitions, but consistently recovered. The company has always operated with debt but at levels consistent with its strong cash generation. Working capital management is a key focus.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) Novo Nordisk

Focused pharmaceutical company with leading positions in diabetes, haemophilia and growth hormone. Core capabilities include a history of protein engineering, deep disease understanding, efficient large-scale production of proteins and global presence. Holds 28% of the global diabetes market, 47% of the insulin market.

Diabetes pandemic driven by unhealthy lifestyles and genetics. 380+ million diabetics of which 50% are diagnosed, of which 50% have access to care, of which 50% get appropriate care.

Exceptional levels of ROIC (112% in 2015). Very strong balance with net cash. Company targets 90% cash conversion.

Priceline The world’s biggest online travel company with gross bookings of approx. $50bn that connects consumers with providers of travel services including accommodation, car rental, airline tickets, holiday packages and cruises. Main assets are booking.com, agoda.com, priceline.com, KAYAK.com, rentalcars.com and OpenTable.com.

Travel grows at double GDP and there is a secular trend towards consumers booking online and a global consolidation of a highly fragmented travel agency market. Online has captured over 50% of US and European markets but less than 30% of Asian and LATAM markets. Has nearly 90% of its sales in faster growing non-US markets.

Healthy ROIC of 30%.

Balance sheet is strong with net cash. Cash generation is excellent and recession resilience is impressive.

Reckitt Benckiser

The world’s leading consumer health and hygiene company. Also competes in the home segment. The company has a highly focused portfolio: 19 brands account for 92% of sales. The RB virtuous formula: be no.1 or no.2 in growth categories; focus on innovation; spend heavily on marketing; rinse and repeat to drive top line.

Delivered 14 straight years of above market, high quality growth. Increasing wealth in Emerging Markets drives consumer trade up. Focus on higher growth segments of Health and Hygiene.

Acquisitions in 2006 (BHI), 2008 (Adams) and 2010 (SSL) diluted ROIC, but subsequently recovered. Conservative balance sheet culture. Cash conversion consistently strong mainly due to working capital management (-11% working capital as percentage of sales).


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) Stryker One of the world’s leading

medical technology companies. The company is well diversified split into 3 segments: Reconstructive (hip, knee implants, trauma); Medical and Surgery (instruments, endoscopic cameras and beds); and Neurotechnology and Spine.

34 consecutive years of sales growth. Benefits from ageing demographics and people wanting to lead more active and satisfying lives. Beneficiary of the ACA legislation in the US.

Strong ROIC of 20%. Balance sheet 1.8x Net debt/FCF as a result of recent acquisitions. Historically net cash. Cash conversion usually 80-100%

Tiffany Global leader in the highly fragmented luxury jewellery market with around 300 stores. It has approximately 10% of the high end jewellery market in the US and less elsewhere. Cartier is the next biggest competitor.

Five key industry drivers: internationalisation and consolidation; growth of branded products; a reconfigured channel landscape; hybrid consumption; and fast fashion. Branded jewellery was 10% in 2003 and now is close to 20% of the market. McKinsey expects 30-40% by 2020. A trusted brand, excellent design and strong finances are key advantages.

ROIC of 13% but the need to hold sizeable inventories and have expensively decorated stores will keep it modest. Balance sheet is satisfactory with Net debt/FCF of <1.

Ulta Beauty

Founded in 1990, Ulta is the largest specialty beauty retailer in the US. Holds 5% of the US beauty market. Operates in an attractive industry, has a winning concept (one-stop shop for prestige, mass and salon products and salon services), unit runway (886 stores, potential for 1,200+) and supply chain and CRM initiatives. Relies on vendors to innovate as newness is a significant driver of business.

Attractive category driven by ageing population, higher beauty consumption and all-natural product trend. Store growth in a sweet spot in terms of average age and back-filling. Market share gains through improved marketing, loyalty card program, supply chain and merchandising.

Consistently impressive ROIC (21% in 2015). No debt since 2008.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Portfolio Companies (continued) United Health

UnitedHealth Group is the biggest healthcare insurer in the US. It provides health insurance benefits to over 46 million individuals predominantly through employer and government programmes.

Optum, its health services platform focuses on improving care management and delivery through its three divisions; Optum Health, Optum Rx and Optum Insight.

Management is targeting 13-16% long-term earnings growth. Achievable through 1) Growth in the Optum Business 2) Growth in the government business (both Medicare Advantage and Medicaid)

ROIC currently low double digits. Expect some improvement as growing contribution of Optum contributes to margin expansion. Net Debt/FCF has risen to >2x as a result of Catamaran acquisition in 2015. Cash conversion consistently >100%.

YUM! Brands

Has over 40,000 restaurants in over 125 countries. Key brands include KFC (opened in 1952), Pizza Hut (1958) and Taco Bell (1962). 80% of restaurants are franchised and licensed resulting in fees and income of nearly $2 bln. A majority of the owned stores are in China. Company announced the spin-off of the China business in late 2015.

The growth opportunity is new unit development in Emerging Markets: YUM! has 57 restaurants per 1 million people in the US and only 2 in its top 10 emerging markets, 5 per million in China. Has a very strong competitive position in China due to its first mover advantage.

Franchise model drives ROIC consistently over 20%. ROIC dipped in 2013 (26%) due to the Little Sheep acquisition, but recovered to 30% by 2015. Consistent royalty payments give management confidence to take on some debt - Net Debt/FCF is just below 3 years (2015). Yum China will carry no significant debt.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Stock level Attribution for the six months to 30 June 2016 Top 5

Stock Average Portfolio Weight

Portfolio Total

Return

Total Effect

Commentary

Stryker 5.82% 29.55 1.44%

Good operating momentum: strong organic revenue growth; margin improvement; and full year guidance raised. Recent bolt on acquisitions complement its existing product portfolio.

Ulta Salon Cosmetics

4.47% 31.70 1.17%

Double-digit same-store-sales growth continued into 2016. Share gains in all categories. 20 million active loyal program members. Attractive industry, winning concept, store growth runway.

UnitedHealth Group

5.27% 20.76 0.89%

Q1 saw strong growth from health care services business Optum while the health insurance division saw its highest ever retention rate. The government business continues to perform well due to a differentiated benefit offering (Medicare) and increasing opportunities for managing complex healthcare needs (Medicaid).

Intertek 4.93% 14.86 0.69%

The strategy unveiled by newly appointed CEO, Andre Lacroix, in March was well received by investors and sets the company on a potentially slightly faster growth path than in the past. Signs of recovery in some underperforming segments was also positive.

AO Smith 2.42% 41.49 0.69%

Investor worries about the impact of a slowing Chinese economy on consumer spending were allayed by solid Q4 2015 and Q1 2016 results.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Stock level Attribution for the six months to 30 June 2016 (continued) Bottom 5

Stock Average Portfolio Weight

Portfolio Total

Return

Total Effect

Commentary

Alphabet 6.91% -9.57 -0.69%

Shy of expectations Q1 results and the threat of regulatory action against the company placed pressure on the share price.

Tiffany

2.50% -19.78 -0.57%

Tourist spend is under pressure worldwide particularly in the important US and European markets. US domestic customers are also spending less. Refurbishment and revised selling practices have yet to have a positive impact.

Mastercard

4.92% -9.30 -0.46%

Investor concerns over the impact of challenging macro on PCE. Merchant litigation settlement rejected by a federal appeals court. Local FX volatility.

Hennes & Mauritz 2.42% -16.75 -0.41%

Poor weather during the spring season has dampened sales in key markets. In addition, the strong US dollar (most product is sourced in $) and inventory write-offs have pressurised gross margins.

Cognizant Technology

6.07% -4.63 -0.36%

Deceleration in organic growth (from 17% to 11-14%). Fear of weak macro delaying decision-making in financial services. US healthcare clients also delaying until merger approvals are granted.

Significant transactions In January, the holding in Assa Abloy was replaced with a 2.5% holding in AO Smith. AO Smith offered superior growth, quality and projected returns. AO Smith is a leading global water technology company. The company manufactures residential and commercial water heaters and boilers, offering a comprehensive product line featuring the best-known brands in North America and China. The company has an excellent pedigree in engineering, a strong corporate culture aided by a strong family shareholding, a willingness to take decisions for the long term, and has operated in China since 1995 (>30% of sales). In China, it is a consumer products company: brand recognition is high and the company has an extensive distribution network. It targets organic growth in China of twice GDP growth driven by household formation, a healthy replacement market, market share gains and the need for water treatment. AO Smith’s balance sheet is very strong, cash generation is excellent and its recessionary performance has been resilient.


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Investment Manager’s Report for the financial period ended 30 June 2016 (continued) Significant transactions (continued) In April, the entire holding in Gemalto was sold. The stock was sold due to the combination of a number factors including: the unexpected resignation of the CEO; uncertainty over the new strategy; increased volatility of the commoditised SIM business; persistently low ROIC; acquisition appetite; and conflicting messages from an EMV competitor. In June, a new position in Monsanto was initiated. Monsanto is a leading global provider of agricultural products for farmers. Monsanto’s seeds, biotechnology traits, herbicides and precision agriculture products provide farmers with solutions that improve productivity, reduce the costs of farming and produce better foods for consumers and better feed for animals. The business is split into two segments: Seeds and Genomics and Agricultural Productivity. The demand for genetically modified seeds is expected to continue to grow as the world’s population continues to increase and available arable land per person declines. Monsanto has the most diverse germplasm library and largest field testing network in the world. ROIC has averaged 14% over the last five years. Portfolio metrics The portfolio is in excellent shape: growth prospects remain strong with revenue and EPS forecast to increase at 8% and 11% per annum respectively over the next 5 years; and quality metrics are strong with net cash on the balance sheet, broad diversification, robust cash flow metrics and good corporate governance.


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Schedule of Investments As at 30 June 2016 GuardCap Global Equity Fund Quantity/ Valuation % net Description Face value Currency in USD assets 1) INVESTMENTS A) TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1) LISTED SECURITIES : SHARES DENMARK Novo Nordisk A/S 61,183 DKK 3,268,698 3.12 3,268,698 3.12 FRANCE Dassault Systemes 38,094 EUR 2,886,525 2.76 Essilor International SA 22,264 EUR 2,936,483 2.81 LVMH Moet Hennessy Louis Vuitton SE 18,957 EUR 2,861,104 2.73 8,684,112 8.30 GREAT BRITAIN Intertek Group Plc 111,622 GBP 5,169,682 4.94 Reckitt Benckiser Group Plc 39,039 GBP 3,892,603 3.72 9,062,285 8.66 JAPAN FANUC Corp 19,219 JPY 3,077,683 2.94 3,077,683 2.94 SWEDEN Hennes & Mauritz AB 72,579 SEK 2,114,236 2.02 2,114,236 2.02 SWITZERLAND Nestle SA 41,731 CHF 3,211,884 3.07 3,211,884 3.07 UNITED STATES OF AMERICA Alphabet Inc 10,794 USD 7,593,903 7.26 AO Smith Corp 35,434 USD 3,122,090 2.98 Automatic Data Processing Inc 35,633 USD 3,273,604 3.13 CME Group Inc 42,365 USD 4,126,351 3.94 Cognizant Technology Solutions Corp 114,052 USD 6,528,336 6.24 Colgate-Palmolive Co 42,320 USD 3,097,824 2.96 MasterCard Inc 51,471 USD 4,532,536 4.33 Mead Johnson Nutrition Co 52,603 USD 4,773,722 4.56


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Schedule of Investments (continued) As at 30 June 2016

GuardCap Global Equity Fund (continued) Quantity/ Valuation % net Description Face value Currency in USD assets A) TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING (continued) 1) LISTED SECURITIES : SHARES (continued) UNITED STATES OF AMERICA (continued)

Monsanto Co 25,078 USD 2,593,316 2.48 Moody's Corp 44,639 USD 4,183,121 4.00 Priceline Group Inc 4,611 USD 5,756,419 5.50 Stryker Corp 54,875 USD 6,575,671 6.28 Tiffany & Co 36,837 USD 2,233,796 2.14 Ulta Salon Cosmetics & Fragrance Inc 16,882 USD 4,113,130 3.93 UnitedHealth Group Inc 41,606 USD 5,874,767 5.61 Yum! Brands Inc 55,709 USD 4,619,390 4.42 72,997,976 69.76 TOTAL LISTED SECURITIES : SHARES 102,416,874 97.87 TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICI AL STOCK EXCHANGE LISTING 102,416,874 97.87 TOTAL FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 102,416,874 97.87 CASH AND CASH EQUIVALENTS 4,643,795 4.44 OTHER NET LIABILITIES (2,419,650) (2.31) TOTAL NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMA BLE PARTICIPATING SHARES 104,641,019 100.00


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Condensed Statement of Financial Position As at 30 June 2016 (In United States Dollars)

GuardCap Global Equity

Fund


Fund 30 June 2016 31 December 2015 $ $ Notes Assets Cash and cash equivalents 7 4,643,795 2,117,735 Financial assets at fair value through profit or loss: - Investments 102,416,874 53,106,320 Other receivables 10 275,956 71,983 Total assets 107,336,625 55,296,038 Liabilities Accrued liabilities 10 2,695,606 72,160 Total liabilities, excluding net assets attributable to holders of redeemable shares 2,695,606 72,160 Net assets attributable to holders of redeemable shares 104,641,019 55,223,878

Redeemable Participating Shares

USD I Class: Shares issued 6,555,686.922 2,609,603.297 Net Asset Value per share $11.308 $10.933

USD X Class: Shares issued 2,179,730.203 2,179,730.203 Net Asset Value per share $11.406 $10.983 GBP I Class: Shares issued 77,286.880 3,887.879 Net Asset Value per share £12.095 £10.559 EUR I Class: Shares issued 377,256.600 247,152.600 Net Asset Value per share €9.879 €9.753 GBP A Class: Shares issued 14,900.834 5,000.000 Net Asset Value per share £11.550 £10.093 EUR A Class*: Shares issued 3,000.000 - Net Asset Value per share €10.490 -

* Launched on 2 February 2016. The accompanying notes form an integral part of these condensed financial statements.


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Condensed Statement of Comprehensive Income (In United States Dollars) For the financial period ended 30 June 2016


Fund


Fund 30 June 2016 30 June 2015 $ $ Notes Income Interest - 15 Dividends 755,535 281,865 Other income 48,188 - Net realised (losses)/gains on sale of investments (138,565) 205,274 Net realised gains on currencies 22,264 65 Unrealised appreciation in value of investments 3,804,370 2,140,513 Net investment income 4,491,792 2,627,732 Expenses Investment manager fees 9 (221,092) (54,813) Administration fees 9 (46,375) (9,844) Depositary fees 9 (12,448) (7,800) Audit fees 9 (8,767) (6,922) Legal fees 9 (45,459) (2,769) Directors’ fees 9 (22,296) (16,612) Transaction costs (56,586) (12,215) Registration fees (12,443) (11,074) Net foreign exchange loss (4,205) (21,674) Other expenses (16,077) (15,470) Total operating expenses (445,748) (159,193) Investment Manager rebate for capped expenses 9 79,749 43,041 Net Expenses (365,999) (116,152) Profit before tax 4,125,793 2,511,580 Withholding tax expense (145,154) (56,238) Increase in net assets attributable to holders of redeemable shares from operations 3,980,639 2,455,342

The accompanying notes form an integral part of these condensed financial statements.


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Condensed Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares (In United States Dollars) For the financial period ended 30 June 2016

GuardCap Global

Equity Fund GuardCap Global

Equity Fund 30 June 2016 30 June 2015 $ $ Net assets attributable to holders of redeemable shares beginning of financial period 55,223,878 - Increase in net assets attributable to holders of redeemable shares from operations 3,980,639 2,455,342 Issue of redeemable shares for cash 47,051,739 25,000,000 Redemption of redeemable shares (1,615,237) - Increase in net assets during the financial period 49,417,141 27,455,342

Net assets attributable to holders of redeemable shares

end of financial period 104,641,019 27,455,342 Continuity of redeemable shares GuardCap Global


Equity Fund 30 June 2016 30 June 2015 USD I Class shares Number of

shares Net asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period 2,609,603.297 27,500,000 - - Shares issued for cash 4,082,469.563 44,233,027 1,258,484.461 12,500,000 Shares redeemed (136,385.938) (1,500,000) - - Shares outstanding, end of financial period 6,555,686.922 70,233,027 1,258,484.461 12,500,000 USD X Class shares Number of

sharesNet asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period 2,179,730.203 22,500,000 - - Shares issued for cash - - 1,258,071.217 12,500,000 Shares redeemed - - - - Shares outstanding, end of financial period 2,179,730.203 22,500,000 1,258,071.217 12,500,000 GBP I Class shares Number of

sharesNet asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period 3,887.879 59,632 - - Shares issued for cash 73,399.001 1,149,341 - - Shares redeemed - - - - Shares outstanding, end of financial period 77,286.880 1,208,973 - - EUR I Class shares Number of

sharesNet asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period 247,152.600 2,692,754 - - Shares issued for cash 140,454.000 1,492,950 - - Shares redeemed (10,350.000) (114,402) - - Shares outstanding, end of financial period 377,256.600 4,071,302 - -

The accompanying notes form an integral part of these condensed financial statements.


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Condensed Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares (continued) (In United States Dollars) For the financial period ended 30 June 2016 Continuity of redeemable shares (continued)

GuardCap Global Equity Fund

GuardCap Global Equity Fund

30 June 2016 30 June 2015 GBP A Class shares Number of

sharesNet asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period 5,000.000 75,588 - - Shares issued for cash 9,955.834 143,919 - - Shares redeemed (55.000) (835) - - Shares outstanding, end of financial period 14,900.834 218,671 - -

EUR A Class shares* Number of

shares Net asset

value Number of

shares Net asset

value Shares outstanding, beginning of financial period - - - - Shares issued for cash 3,000.000 32,502 - - Shares redeemed - - - - Shares outstanding, end of financial period 3,000.000 32,502 - -

* Launched on 2 February 2016. The accompanying notes form an integral part of these condensed financial statements.


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Condensed Statement of Cash Flows (In United States Dollars) For the financial period ended 30 June 2016

GuardCap Global


Equity Fund 30 June 2016 30 June 2015 $ $ Cash flows from operating activities Change in net assets attributable to holders of redeemable shares resulting from operations 3,980,639 2,455,342 Cash flows from operating activities Net investment in financial assets and liabilities at fair value through profit or loss (49,310,554) (26,191,679) Increase in other receivables (203,973) (17,696) Increase in other accrued expenses 2,623,446 69,248 Net cash from operating activities (46,891,081) (26,140,127) Financing activities Issue of redeemable shares for cash 47,051,739 25,000,000 Redemption of redeemable shares (1,615,237) - Cash flow from financing activities 45,436,502 25,000,000 Net increase in cash 2,526,060 1,315,215 Cash and cash equivalents, beginning of financial period 2,117,735 - Cash and cash equivalents, end of financial period 4,643,795 1,315,215 Supplemental disclosure of cash flow information: Interest received - 15 Dividends received 701,483 272,384 Interest paid (67) (14) The accompanying notes form an integral part of these condensed financial statements.

GuardCap UCITS Funds Plc Notes to Condensed Financial Statements For the financial period ended 30 June 2016

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1. Reporting entity

GuardCap UCITS Funds Plc (“the Company”) is an open-ended investment company with variable capital incorporated in Ireland on 31 October 2014 under the laws of Ireland as a public limited company pursuant to the Companies Act 2014 under registration number 552001. The Company has been authorised by the Central Bank of Ireland (the ‘Central Bank’) as an Undertaking for Collective Investment in Transferable Securities (‘UCITS’) under the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (“UCITS Regulations”) and has been established as an umbrella fund with segregated liability between funds and will comply with the Central Bank’s UCITS Regulations. The Company’s principal objective is to invest in transferable securities and other liquid assets listed or traded on recognised markets and, to the limited extent specified in the relevant Supplement, in units or shares of other investment funds, all in accordance with the UCITS Regulations operating on the principle of risk spreading. The Company has obtained the approval of the Central Bank for the establishment of the following sub-funds: GuardCap Global Equity Fund, which launched on 5 December 2014; and GuardCap Emerging Markets Equity Fund which has not yet launched. The initial investment in GuardCap Global Equity Fund (the “Fund”) was made on 10 December 2014.

GuardCap Global Equity Fund The investment objective of this Fund is to seek long-term growth of capital with lower than market volatility by investing primarily in equity and similar securities issued by high quality companies listed on recognised markets in countries which are members of the Organisation for Economic Co-operation and Development (“OECD”). This Fund will invest primarily in equity and similar securities listed on recognised markets in the OECD, and, in particular, the United States and Western European OECD countries.

GuardCap Emerging Markets Equity Fund The investment objective of this Fund is to seek long-term growth of capital with lower than market volatility by investing primarily in equity and similar securities issued by high quality companies listed on recognised markets of emerging market countries. This Fund will invest primarily in equity and similar securities listed on recognised markets of emerging market countries. Securities similar to equity securities include convertible bonds, convertible preferred stock and depositary receipts. Convertible bonds enable the holder to convert their investment in the bonds into the issuer’s common stock at a pre-agreed price and convertible preferred stocks enable the holder to convert their investment in the preferred stock into the issuer’s common stock at a pre-agreed rate. Convertible bonds and convertible preferred stocks embed options and may therefore be leveraged. Depositary receipts generally evidence an ownership interest in a corresponding foreign security on deposit with a financial institution.

GuardCap UCITS Funds Plc Notes to Condensed Financial Statements For the financial period ended 30 June 2016 (continued)

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2. Basis of preparation

(a) Statement of compliance The condensed financial statements for the financial period ended are prepared in accordance with IFRS as adopted by the EU and in accordance with the requirements of the Companies Act 2014 (the “Acts”). The same accounting policies and methods of computation are followed in the preparation of these condensed interim financial statements as were followed in the preparation of the audited annual financial statements prepared for the financial period from 5 December 2014 to 31 December 2015. These condensed interim financial statements do not contain all of the information and disclosures required in the full annual financial statements and should be read in conjunction with the financial statements of the Company for the financial period from 5 December 2014 to 31 December 2015.

The accounting policies set out below have, unless otherwise stated, been applied to these condensed financial statements.

(b) Basis of measurement

These condensed 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.

All references to net assets, or net asset value (“NAV”) throughout this document refer to net assets attributable to holders of redeemable participating shares unless otherwise stated.

(c) Functional and presentation currency The condensed financial statements are presented in United States Dollars (“USD”) which is also the functional currency.

(d) Use of estimates and judgements The preparation of the condensed financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. 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 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 during the financial period ended 30 June 2016.


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3. Significant accounting policies

(a) New standards and interpretations not yet adopted

The final version of IFRS 9, Financial Instruments, was issued by the IASB in July, 2014, and will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces a model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially reformed approach to hedge accounting. The new single principle-based approach for determining the classification of financial assets is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments, which will require more timely recognition of expected credit losses. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, but is available for early adoption. The Company is in the process of assessing the impact of IFRS 9.

(b) New standards and interpretations adopted during the period

In December 2014, the IASB issued Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28), effective for annual periods beginning on or after 1 January 2016. This amendment requires an investment entity to measure all investment entity subsidiaries at fair value through profit or loss, regardless of whether they provide investment related services. This amendment did not have an impact on the presentation of the Company’s financial statements.

4. Financial risk management

The Fund’s financial instruments consist principally of cash, short-term securities and investments. As a result, the Fund is exposed to various types of financial risks that are associated with its investment strategies, financial instruments and the markets in which it invests. The most significant financial risks include market risk, which includes currency risk, interest rate risk and other price risk, concentration risk, liquidity risk and credit risk. These risks and related risk management practices employed by the Fund are discussed below:

a) Market risk

(i) Currency risk

The Fund may hold assets and liabilities that are denominated in currencies other than the

functional currency of the Fund. The Fund may therefore be exposed to currency risk, as the value of the net assets denominated in other currencies will fluctuate due to changes in exchange rates.

(ii) Interest rate risk

The Fund may be exposed to interest rate risk through investments in short-term securities, investments in interest-bearing investments, and indirect exposure through investments in other investment funds which hold interest-bearing investments.


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4. Financial risk management (continued)

a) Market risk (continued) (iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes in prices. The investments of the Fund are subject to price fluctuations and the risks inherent in financial markets. The Investment Manager moderates this risk through a careful selection of securities and derivatives within specified limits as outlined in the investment policies of the Fund, and through diversification of the investment portfolios. The Investment Manager monitors the Fund’s overall market positions on a daily basis, and positions are maintained within established ranges.

b) Concentration risk The Fund is exposed to the possible risk inherent in the concentration of the investment portfolios in a small number of industries, investment sectors and/or countries. The Investment Manager moderates this risk through a careful selection of securities in several investment sectors within established ranges.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The main liquidity risk to the Company arises from the redemption requests of investors. The Company’s shareholders may redeem their shares on each Dealing Day for cash equal to a proportionate share of the Company’s net asset value and it is therefore potentially exposed to the liquidity risk of meeting the daily redemptions by its shareholders. In order for the Company to meet these requests, the Company may need to dispose of the underlying assets at an inopportune time. To help manage this risk, if the number of shares to be redeemed on any Dealing Day equals 10% or more of the total number of shares of the Fund in issue on that day, the Directors or their delegate may at their discretion refuse to redeem any shares in excess of 10% of the total number of shares in issue as aforesaid. If the Directors so refuse, the requests for redemption on such Dealing Day shall be reduced pro-rata and shares which are not redeemed by reason of such refusal shall be treated as if a request for redemption had been made in respect of each subsequent Dealing Day until all shares to which the original request related have been redeemed. The Fund’s listed securities are considered readily realisable, as they are quoted in reputable stock exchanges. The Fund has the ability to borrow in the short term to ensure settlement. No such borrowings arose during the financial period. In accordance with the Fund’s policy, the Investment Manager monitors the liquidity position on a daily basis.


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d) Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge its obligation and cause the other party to incur a financial loss. The Fund may be exposed to credit risk through holding short-term securities, interest-bearing investments, indirect exposure through investments in other investment funds which hold interest bearing investments, and dealings with counterparties to the over-the-counter derivative instruments held by the Fund. The Fund minimises concentration of credit risk by undertaking transactions with counterparties who maintain a high standard of credit worthiness. The Fund invests in financial instruments with counterparties which are rated as investment grade by well-known rating agencies. Credit risk is monitored by the Investment Manager. The cash held with the Fund’s Depositary, RBC Investor Services Bank S.A., Dublin Branch, (the “Depositary”), as at 30 June 2016 represented 4.44% (31 December 2015: 3.83%) of the net assets attributable to Redeemable Participating Shareholders. Bankruptcy or insolvency of the Depositary may cause the Fund’s rights with respect to securities and cash held by the Depositary to be delayed or limited. The Depositary is owned by Royal Bank of Canada (“RBC”). The credit rating for RBC, the parent company, as at 30 June 2016 is Aa3 for Moody’s (31 December 2015: Aa3) and AA- for S&P (31 December 2015: AA-).

e) Country risks Investments in securities of issuers of different nations and denominated in currencies other than USD present particular risks. Such risks include changes in relative currency exchange rates (included in Other Price Risk); political, economic, legal and regulatory developments; taxation; the imposition of exchange controls; confiscation and other governmental restrictions (including those related to foreign investment currency repatriation) or changes in policy. Investment in securities of issuers from different countries offers potential benefits not available from investments solely in securities of issuers from a single country, but also involves certain significant risks that are not typically associated with investing in the securities of issuers located in a single country.

f) Counterparty risk

The Fund is exposed to a credit risk on parties with which it trades and will also bear the risk of settlement default. Counterparty risk involves the risk that a counterparty or third party will not fulfil its obligations to the Fund. The Fund may be exposed to counterparty risk through investments such as securities lending and forward contracts. The Investment Manager may instruct the Depositary to settle transactions on a delivery free of payment basis where they believe that this form of settlement is appropriate.


27


g) Efficient portfolio management

The Company will employ an investment risk management process, which enables it to accurately monitor, measure and manage the risks attached to financial derivative instruments (“FDIs”). Efficient portfolio management means investment decisions involving transactions that are entered into for one or more of the following specific aims: 1. the reduction of risk; 2. the reduction of cost; or 3. the generation of additional capital or income for the UCITS with an appropriate level of risk, taking into account the risk profile of the UCITS and the general provisions of the UCITS directives.

Investment techniques and FDIs may be used for efficient portfolio management or investment purposes within the limits of the Company’s prospectus.

h) Global exposure to financial derivative instruments

The Investment Manager has assessed the risk profile of the Fund on the basis of the investment policy, strategy and the use of financial derivative instruments. Based on the risk profile, the Company has determined that the method for the calculation of the global exposure to financial derivative instruments for the Fund will be the commitment approach, where the Fund holds financial derivative instruments.

i) Custody and title risk

The Depositary is under a duty to take into custody and to hold the property of each sub-fund of the Company on behalf of its shareholders. The Central Bank of Ireland requires the Depositary to hold legally separately the non-cash assets of each sub-fund and to maintain sufficient records to clearly identify the nature and amount of all assets that it holds, the ownership of each asset and where the documents of title to such assets are physically located. When the Depositary employs a sub-custodian, the Depositary retains responsibility for the assets of the sub-fund. However, it should be noted that not all jurisdictions have the same rules and regulations as Ireland regarding the custody of assets and the recognition of the interests of a beneficial owner such as a sub-fund. Therefore, in such jurisdictions, there is a risk that if a sub-custodian becomes bankrupt or insolvent, the sub-fund’s beneficial ownership of the assets held by such sub-custodian may not be recognised and consequently the creditors of the sub-custodian may seek to have recourse to the assets of the sub-fund. In those jurisdictions where the sub-fund’s beneficial ownership of its assets is ultimately recognised, the sub-fund may suffer delay and cost in recovering those assets.


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5. Classification of financial instruments for fair value measurements

Financial instruments are recorded at fair value, and have been categorised based upon a fair value hierarchy. Fair values, based on quoted market prices (Level 1), internal models using observable market information as inputs (Level 2) and internal models without observable market information as inputs (Level 3), of investments are summarised as follows:.

As at 30 June 2016 Level 1 Level 2 Level 3 Total Equity investments 102,416,874 - - 102,416,874 Total 102,416,874 - - 102,416,874 Percentage of total investments 100.00% 0.00% 0.00% 100.00%

As at 31 December 2015 Level 1 Level 2 Level 3 Total Equity investments 53,106,320 - - 53,106,320 Total 53,106,320 - - 53,106,320 Percentage of total investments 100.00% 0.00% 0.00% 100.00%

The carrying values of cash, subscriptions receivable, interest receivable, payable for investments purchased, redemptions payable, distributions payable, accrued liabilities and each Fund’s obligation for NAV substantially equals their fair values due to their short-term nature. Fair values are classified as Level 1 when the related security or derivative is actively traded and a quoted price is available. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred out of Level 1, and reclassified into Level 2, unless the measurement of its fair value requires the use of significant unobservable inputs, in which case it is classified as Level 3.

Equity investments Investments are classified as Level 1 when the investment is actively traded and a reliable price is observable. Some of the Funds’ equity investments do not trade frequently and, therefore, observable prices may not be available. In such cases, fair value is determined using observable market data (e.g., transactions for similar securities of the same issuer), and the fair value is classified as Level 2, unless the determination of fair values requires significant unobservable data, in which case the measurement is classified as Level 3.

There were no transfers of securities between levels for the financial period ended 30 June 2016 (31 December 2015: Nil).

Assets and liabilities not carried at fair value Cash with deposit institutions and all other assets and liabilities not carried at fair value are classified as Level 2 for the Fund. The fair value of these instruments has not been disclosed because their carrying amounts represent a reasonable approximation of fair value.


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6. Taxation

The Company is an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997. Therefore, the Company will not be liable to Irish tax in respect of its income and gains, other than on the occurrence of a chargeable event. A chargeable event includes any distribution payments to shareholders or any encashment, redemption or transfer of shares or the ending financial year for which the investment was held. 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 Company;

b) certain exempted Irish tax resident Investors who have provided the Company with the

necessary signed statutory declarations; c) an exchange of shares arising on a qualifying amalgamation or reconstruction of the

Company with another fund; d) any transactions 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 Company for other shares in the Company. Capital gains, dividends and interest (if any) received on investment made by the Company 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 Company or its shareholders. In the absence of an appropriate declaration, the Company will be liable for Irish tax on the occurrence of a chargeable event, and the Company reserves its right to withhold such taxes from the relevant shareholders.

7. Cash and cash equivalents

During the financial period all cash was held with RBC Investor Services Bank S.A., Dublin Branch (31 December 2015: RBC Investor Services Bank S.A., Dublin Branch).


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8. Soft commissions Soft commissions represent formal pre-arranged commitments whereby fund brokerage commissions are allocated according to a pre-determined formula as payment for certain products or services other than order execution. There were no soft commissions during the financial period (31 December 2015: Nil).

9. Fees

Investment Management fees The Investment Manager will receive a management fee (the "Management Fee") in respect of each A Class of Shares for management services to the Fund, equal to an annualised rate of up to 1.0% of the NAV attributable to each A Class of Shares. The Investment Manager will receive a Management Fee in respect of each I Class of Shares for management services to the Fund, equal to an annualised rate of up to 0.80% of the NAV attributable to each I Class of Shares. The Investment Manager will not receive a Management Fee in respect of each X Class of Shares. Investors will pay the Investment Manager such fees in respect of the X Class of Shares as may be separately agreed with the Investment Manager and payable directly by investors to the Investment Manager. The Management Fee, which is considered to be a related party transaction, is accrued daily and paid monthly in arrears. For purposes of calculating the Management Fee, the NAV of the Fund attributable to a class is determined by or under the direction of the Directors, based on the Fund's NAV as of the close of the prior Business Day adjusted to reflect any applicable redemptions and subscriptions. Notwithstanding the foregoing, the Investment Manager may, in its sole discretion, during any period, elect to waive a portion of its fees with respect to the Fund or any class without notice to shareholders. In addition, the Fund may issue shares of a separate class that may calculate the management fee differently or charge a lower management fee. Investment management fees for the financial period amounted to USD 221,092 (30 June 2015: USD 54,813). Investment management fees outstanding as at 30 June 2016 were USD 49,919 (31 December 2015: USD 21,318). Administration and Depositary fees The Administrator and Depositary will be entitled to receive fees calculated as a percentage of the NAV of each sub-fund for the provision, respectively, of administration, accounting, trustee and custodial services to the Company as set out in the relevant Supplement. Each fund may be subject to a combined monthly minimum fee in respect of administration, accounting and trustee services. The Administrator will also be entitled to receive certain other fees, including for financial reporting services in respect of the Company and for each sub-fund in respect of transfer agency services in respect of the relevant class of shares.


31

9. Fees (continued) Administration and Depositary fees (continued) The Administrator and Depositary will also be reimbursed by the Company out of the assets of the relevant sub-fund for reasonable out-of-pocket expenses incurred by them. The Depositary will also be paid by the Company out of the assets of the relevant sub-fund for transaction fees (which will not exceed normal commercial rates) and fees and reasonable out-of-pocket expenses of any sub-custodian appointed by the Depositary. The Administrator and Depositary may also charge each sub-fund certain other additional fees for services that may be required from time to time. The fees and expenses of the Administrator and Depositary are accrued daily and are payable monthly in arrears.

Administration Fees for the financial period amounted to USD 46,375 (30 June 2015: USD 9,844). Administration Fees outstanding as at 30 June 2016 were USD 13,255 (31 December 2015: USD 11,472). Depositary Fees for the financial period amounted to USD 12,448 (30 June 2015: USD 7,800). Depositary Fees outstanding as at 30 June 2016 were USD 4,720 (31 December 2015: USD 8,610). Auditors’ fees The below table discloses audit remuneration fees for the financial period. 30 June 2016 30 June 2015 USD USD Audit of statutory accounts 8,767 6,992 Other assurance services - - Tax advisory services 5,253 - Other non-audit services - - 14,020 6,992 Directors’ fees The Directors’ fees and expenses charged for the financial period amounted to USD 22,296 (30 June 2015: USD 16,612). Fees of USD 17,672 (31 December 2015: USD 9,345) were outstanding at 30 June 2016. Operating expenses The Fund pays all of its own operating expenses and bears its pro-rata share of the operating expenses of the Company which may be incurred by the Fund, the Company, the Investment Manager or their respective affiliates including, but not limited to the Capped expenses (“Capped Expenses”) and Uncapped expenses (“Uncapped Expenses”). For a detailed list of Capped Expenses and Uncapped Expenses please refer to the Company’s prospectus.


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10. Other receivables and accrued liabilities

Below is the breakdown for other fees receivables and accrued liabilities as at 30 June 2016.

GuardCap Global


Equity Fund 30 June 2016 31 December 2015 USD USD Other receivables Interest and dividends receivable, net 54,052 62,023 Receivable from Investment Manager 54,766 9,960 Other receivables 167,138 - Total 275,956 71,983

GuardCap Global


Equity Fund 30 June 2016 31 December 2015 USD USD Other accrued liabilities Administration fee payable 13,255 11,472 Amount payable on purchase of securities 2,553,140 - Audit fees payable 22,644 13,878 Formation expenses payable - 528 Depositary fees payable 4,720 8,610 Directors fees payable 17,672 9,345 Shareholder service fees payable 4,469 1,693 Legal fees payable - 135 Other fees payable 26,432 4,642 Investment management fees payable 49,919 21,318 Registration fees 3,355 539 Total 2,695,606 72,160

11. Share capital and redeemable participating shares

The share capital of the Company will at all times equal the NAV. The authorised share capital of the Company is €300,002 represented by 300,002 Subscriber Shares (“Subscriber Shares”) of no par value issued at €1.00 each and 500,000,000,000 shares (the “Shares”) of no par value. The Directors are empowered to issue up to 500 billion shares of no par value in the Company at the NAV per share (or the relevant initial subscription price in the case of new funds) on such terms as they may deem reasonable. The Subscriber Shares entitle the shareholders holding them to attend and vote at all meetings of the Company, but do not entitle the holders to participate in the dividends or net assets of any fund. Each of the shares entitles the shareholder to participate equally on a pro rata basis in the dividends (in the case of Funds and classes which declare dividends) and net assets of the Fund in respect of which they are issued, save in the case of dividends declared prior to becoming a shareholder.


33

11. Share capital and redeemable participating shares (continued) The Directors also reserve the right to redesignate any class of shares from time to time, provided that shareholders in that class will first have been notified by the Company that the shares will be redesignated and will have been given the opportunity to have their shares redeemed by the Company. Each of the shares entitles the holder to attend and vote at meetings of the Company and of the Fund represented by those shares. The Articles provide that matters may be determined at meetings of the shareholders on a show of hands unless a poll is requested by shareholders holding 10% or more of the shares or unless the Chairman of the meeting requests a poll. Each shareholder will have one vote on a show of hands. Each shareholder will be entitled to such number of votes as will be produced by dividing the aggregate NAV of that shareholder’s shareholding (expressed or converted into the base currency and calculated as of the relevant record date) by one. The “relevant record date” for these purposes will be a date being not more than 30 days prior to the date of the relevant general meeting or written resolution as determined by the Directors. Where a separate written resolution or general meeting of a particular class or tranche of shares is held, in such circumstances, the shareholders’ votes will be calculated by reference only to the NAV of each shareholder’s shareholding in that particular class or tranche, as appropriate. The Subscriber Shareholders will have one vote for each Subscriber Share held. In relation to a resolution which in the opinion of the Directors affects more than one class of shares or gives or may give rise to a conflict of interest between the shareholders of the respective classes, such resolution will be deemed to have been duly passed, only if, in lieu of being passed through a single meeting of the shareholders of those classes, such resolution will have been passed at a separate meeting of the shareholders of each such class. Shares in a fund may be purchased on any Dealing Day at the net asset value per share on the relevant Dealing Day on the terms and in accordance with the procedures described below and in the relevant Supplement. Subscription orders are effected at the net asset value per share applicable on the relevant Dealing Day. Details of the deadline by which subscription monies must be received by the Company will be set out in the relevant Supplement. No subscription order will be accepted after the relevant Valuation Point for a fund. If a subscription order is received prior to the Subscription Cut-Off Time, shares will be issued at the NAV per share applicable on the relevant Dealing Day. Subscription orders received after the relevant Subscription Cut-Off Time will be held over without interest on any related subscription monies and, in the absolute discretion of the Directors, either (i) such subscription monies will be returned (without interest) to the person from whom the subscription order and subscription funds were received, or (ii) the relevant shares will be issued on the next applicable Dealing Day at the relevant NAV per share, unless the Directors determine in their sole discretion to accept such subscriptions in exceptional circumstances (with the Directors ensuring that such exceptional circumstances are fully documented) and provided that such subscriptions for shares are received before the Valuation Point on the relevant Dealing Day. Subscription orders will not be processed at times when the calculation of the NAV per share is suspended in accordance with the terms of the Prospectus and the Articles.


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11. Share capital and redeemable participating shares (continued) Shareholders may request that shares of a fund be redeemed on any Dealing Day by completing and submitting a Redemption Application to the Administrator to arrive no later than the Redemption Cut-Off Time, in order to be effective on a Dealing Day. Redemption Applications received after the relevant Redemption Cut-Off Time will be held over until the next applicable Dealing Day, unless the Directors determine in their sole discretion, in exceptional circumstances (with the Directors ensuring that such exceptional circumstances are fully documented) and where such Redemption Applications are received before the relevant Valuation Point, to accept such Redemption Applications on the relevant Dealing Day. Redemption Applications may be sent by facsimile. Any minimum holding period in relation to a fund may be set out in the relevant Supplement. Redemption Applications received after the relevant Redemption Cut-Off Time will be effective on the next succeeding Dealing Day. Redemption Applications will not be processed at times when the redemption of shares or the calculation of the NAV per share is suspended in accordance with the terms of this Prospectus and the Articles. Shares which have been subject to a Redemption Application will be entitled to dividends, if any, up to the Dealing Day upon which the redemption is effective. The applicable Supplement may provide that if Redemption Applications on any Dealing Day exceed a specified percentage of the NAV of the applicable fund (which must be at least 10%), the Company may defer the excess Redemption Applications to subsequent Dealing Days. Any request for redemption on such Dealing Day shall be reduced rateably and the redemption requests shall be treated as if they were received on each subsequent Dealing Day until all the shares to which the original request related have been redeemed. A distribution in respect of a redemption may be made in kind, at the discretion of the Directors, after consultation with the Investment Manager, provided that where the redemption request represents less than 5% of the NAV of a fund, the redemption in kind will only be made with the consent of the redeeming shareholder. The assets to be transferred will be selected at the discretion of the Directors with the approval of the Depositary and taken at their value used in determining the redemption price of the shares being so redeemed. As a result, such distributions will only be made if the Directors and the Depositary consider that they will not materially prejudice the interests of the shareholders of the relevant fund as a whole and the Depositary is satisfied that the assets distributed are equivalent to the amount of the distribution declared. Shareholders will bear any risks of the distributed securities and may be required to pay a brokerage commission or other costs in order to dispose of such securities. If a shareholder so requests, the Investment Manager will sell the assets to be distributed to that shareholder and distribute the cash proceeds to the shareholder.

The Company currently offers 18 classes of shares in the Fund as set out below. The Company may also create additional classes of shares in the Fund in the future with prior notification to, and clearance in advance by, the Central Bank.


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11. Share capital and redeemable participating shares (continued) The following table is a list of the classes of shares available in the Fund. Currently only the USD I Class and USD X Class have been issued:

Share Class Description Minimum Initial Subscription Initial Offer Price USD A Class USD 10,000 USD 10 USD A Class (Hedged) USD 10,000 USD 10 EUR A Class USD 10,000 EUR 10 EUR A Class (Hedged) USD 10,000 EUR 10 GBP A Class USD 10,000 GBP 10 GBP A Class (Hedged) USD 10,000 GBP 10 USD I Class USD 500,000 USD 10 USD I Class (Hedged) USD 500,000 USD 10 EUR I Class USD 500,000 EUR 10 EUR I Class (Hedged) USD 500,000 EUR 10 GBP I Class USD 500,000 GBP 10 GBP I Class (Hedged) USD 500,000 GBP 10 USD X Class USD 10,000,000 USD 10 USD X Class (Hedged) USD 10,000,000 USD 10 EUR X Class USD 10,000,000 EUR 10 EUR X Class (Hedged) USD 10,000,000 EUR 10 GBP X Class USD 10,000,000 GBP 10 GBP X Class (Hedged) USD 10,000,000 GBP 10

Subscription monies must be paid in the class currency and must be paid by wire transfer to the bank account of the Administrator. Money must be remitted from an account in the name of the investor(s). After the initial issue of shares in any class, the shares in such class will be issued on the relevant Dealing Day at the relevant net asset value per share for the applicable class on the terms and in accordance with the procedures described herein.

12. Related party transactions and balances

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions, or if the party is a member of the key management personnel of the entity or its parent. The Investment Manager is deemed to be a related party of the Company. For details relating to fees paid by the Company to the Investment Manager please see Note 9. As at 30 June 2016 the Investment Manager and Alexandria Bancorp Limited, an affiliate of the Investment Manager, together held 6,198,894.40 (67.32%) (31 December 2015: 4,789,333.50 (94.93%)) of the Fund’s shares.

Directors, Steve Bates and Michael Boyd, are employees of the Investment Manager and Steve Bates is also a director of the Investment Manager. As such, they both have a business interest in services provided to the Company. Steve Bates and Michael Boyd do not earn Director's fees from the Company. As at 30 June 2016, Michael Boyd held 33,426.186 shares of the GBP I share class of the Fund.


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13. Significant events during the financial period New UCITS V depositary liability provisions came into effect from 18 March 2016. The Custodian is now termed Depositary.

14. Subsequent events after the financial period end

There were no significant events after the financial period end.

15. Securities lending The Company has no security lending arrangements and no securities lending took place during the financial period.

16. Exchange rates The following exchanges rates against the USD were as follows: 30 June 2016 31 December 2015 CHF 0.976400 1.001600 DKK 6.702862 6.868085 EUR 0.901104 0.920260 GBP 0.751174 0.678311 JPY 103.255011 120.195053 SEK 8.462027 8.443593

17. Accounting financial period

Financial statements cover the period from 1 January 2016 to 30 June 2016. Comparative figures relate to both annual audited financial statements and cover the period from 5 December 2014 to 31 December 2015 and interim financials and cover period from 5 December 2014 to 30 June 2015.

18. Approval of condensed financial statements

The condensed financial statements were approved by the Board on 26 July 2016.


Supplementary Information as at 30 June 2016

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1. Schedule of Significant Portfolio Changes GuardCap Global Equity Fund

Purchases

Cost % of Total Security name Quantity (USD) Purchases Alphabet Inc 5,834 4,294,473 8.42

Cognizant Technology Solutions Corp 59,005 3,490,477 6.85

Priceline Group Inc 2,471 3,116,734 6.11

Monsanto Co 25,078 2,553,140 5.01

Stryker Corp 23,745 2,499,138 4.90

AO Smith Corp 35,434 2,432,039 4.77

CME Group Inc 25,248 2,406,252 4.72

UnitedHealth Group Inc 18,036 2,263,040 4.44

Intertek Group Plc 48,471 2,110,818 4.14

Moody's Corp 22,290 2,076,316 4.07

MasterCard Inc 22,867 2,073,527 4.07

Yum! Brands Inc 24,176 1,857,560 3.64

Ulta Salon Cosmetics & Fragrance Inc 9,743 1,824,743 3.58

Novo Nordisk A/S 33,667 1,810,516 3.55

Mead Johnson Nutrition Co 22,814 1,794,652 3.52

Dassault Systemes 22,143 1,686,052 3.31

Reckitt Benckiser Group Plc 16,893 1,602,414 3.14

LVMH Moet Hennessy Louis Vuitton SE 8,210 1,389,165 2.73

Nestle SA 18,275 1,343,180 2.63

Automatic Data Processing Inc 15,394 1,337,418 2.62

Colgate-Palmolive Co 18,466 1,275,794 2.50

FANUC Corp 8,149 1,245,403 2.44

Gemalto NV 17,762 1,200,165 2.35

Essilor International SA 9,670 1,195,657 2.34

Tiffany & Co 16,013 1,084,605 2.13

Hennes & Mauritz AB 31,421 1,029,860 2.02

Sales

Proceeds % of Total Security name Quantity (USD) Sales Gemalto NV 46,065 2,756,730 52.10

Ulta Salon Cosmetics & Fragrance Inc 6,889 1,424,120 26.91

Assa Abloy AB 49,017 963,648 18.21

MasterCard Inc 1,554 147,306 2.78

guardcap ucits funds plc · 6/30/2016 · one george’s quay plaza george’s quay dublin 2...

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