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Ninepoint Partners

LP Sprott Corporate Class Inc.

SPROTT RESOURCE CLASS

SPROTT DIVERSIFIED BOND CLASS

SPROTT SHORT-TERM BOND CLASS

SPROTT SILVER EQUITIES CLASS

SPROTT ENHANCED EQUITY CLASS

SPROTT ENHANCED BALANCED CLASS

SPROTT REAL ASSET CLASS

SPROTT ENHANCED U.S. EQUITY CLASS

SPROTT FOCUSED GLOBAL DIVIDEND CLASS

SPROTT FOCUSED U.S. DIVIDEND CLASS

Annual Financial Statements

December 31

2017

2

Contents

5 Sprott Resource Class

17 Sprott Diversified Bond Class

26 Sprott Short-Term Bond Class

33 Sprott Silver Equities Class

43 Sprott Enhanced Equity Class

55 Sprott Enhanced Balanced Class

65 Sprott Real Asset Class

74 Sprott Enhanced U.S. Equity Class

85 Sprott Focused Global Dividend Class

96 Sprott Focused U.S. Dividend Class

105 Notes to Financial Statements

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto, ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

KPMG Canada provides services to KPMG LLP.

3

INDEPENDENT AUDITORS' REPORT

To the Shareholders of

Sprott Resource Class

Sprott Diversified Bond Class

Sprott Short-Term Bond Class

Sprott Silver Equities Class

Sprott Enhanced Equity Class

Sprott Enhanced Balanced Class

Sprott Real Asset Class

Sprott Enhanced U.S. Equity Class

Sprott Focused Global Dividend Class

Sprott Focused U.S. Dividend Class

(Collectively, the “Funds”)

We have audited the accompanying financial statements of the Funds which comprise the statements of financial

position as at December 31, 2017 and 2016, the statements of comprehensive income (loss), changes in net assets

attributable to holders of redeemable shares and cash flows for the years then ended, and notes, comprising a

summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with

International Financial Reporting Standards, and for such internal control as management determines is necessary to

enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our

audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply

with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on our judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we

consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating

the overall presentation of the financial statements.

4

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for

our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Funds as

at December 31, 2017 and 2016, and their financial performance and cash flows for the years then ended in

accordance with International Financial Reporting Standards.

Chartered Professional Accountants, Licensed Public Accountants

March 16, 2018

Toronto, Canada

5


Statements of Financial Position

(in Canadian Dollars)

As at December 31 2017 2016

$ $

Assets

Current assets

Investments (excluding derivatives) (note 3, 5) 41,102,381 35,041,103

Cash 2,940,920 3,375,778

Subscriptions receivable 125,966 109,900

Dividends receivable 8,050 8,410

Total assets 44,177,317 38,535,191

Liabilities

Current liabilities

Due to broker 754,875 -

Redemptions payable 4,319 217,650

Accrued expenses 25,670 13,074

Incentive fees payable (note 12) 1,416,133 75,738

Total liabilities 2,200,997 306,462

Net Assets attributable to holders of redeemable shares 41,976,320 38,228,729

Net Assets attributable to holders of redeemable shares per series

Series A 36,138,189 27,528,426

Series F 5,838,131 10,700,303

Net Assets attributable to holders of redeemable shares per series per share (note 8)

Series A 10.67 8.61

Series F 11.16 9.07

See accompanying notes which are an integral part of these financial statements

On behalf of the Manager, Ninepoint Partners LP,

by the Board of Directors of Sprott Corporate Class Inc.

James Fox Stuart J. Freeman

DIRECTOR DIRECTOR

6


Statements of Comprehensive Income (Loss)

(in Canadian Dollars, except share amounts)

For the years ended December 31 2017 2016

$ $

Income

Net gain (loss) on investments and derivatives:(1)

Interest income for distribution purposes (note 3) 898 1,039

Dividends (note 3) 120,936 104,242

Net realized gains on sales of investments 5,539,553 6,959,368

Net realized gains on option contracts 2,846 -

Change in unrealized appreciation in the value of investments 4,641,757 5,057,765

Change in unrealized depreciation on option contracts (21,681) -

Net realized gains (losses) on foreign exchange 11,827 (9,718)

Other income 42 -

Total income 10,296,178 12,112,696

Expenses (note 12, 13)

Incentive fees (note 12) 1,416,133 75,738

Management fees 1,100,015 616,104

Transaction costs (note 3, 14) 683,573 721,975

Unitholder reporting costs 104,677 58,499

Administrative fees 29,897 23,059

Audit fees 21,274 13,797

Filing fees 11,070 22,602

Custodial fees 11,038 7,589

Directors' fees 6,790 4,324

Independent Review Committee fees (note 15) 5,087 4,690

Legal fees 5,083 9,998

Withholding taxes 1,324 1,776

Total expenses 3,395,961 1,560,151

Expenses waived/absorbed by the Manager (note 13) - (99,156)

Net expenses 3,395,961 1,460,995

Increase in Net Assets attributable to holders of redeemable shares from operations 6,900,217 10,651,701

Increase in Net Assets attributable to holders of redeemable shares from operation per series

Series A 6,532,008 10,242,209

Series F 368,209 409,492

Weighted average number of redeemable shares

Series A 4,031,007 2,848,062

Series F 820,914 308,995

Increase in Net Assets attributable to holders of redeemable shares from operations per series per share (note 3)

Series A 1.62 3.60

Series F 0.45 1.33

(1)Net gain (loss) on investments and derivatives comprised of:

Financial assets and liabilities designated at fair value through profit or loss ("FVTPL") 9,376,274 12,122,414

Financial assets and liabilities classified as held for trading ("HFT") 908,035 -

10,284,309 12,122,414


7


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares



$ $

Net Assets attributable to holders of redeemable shares, beginning of year

Series A 27,528,426 9,209,689

Series F 10,700,303 220,684

38,228,729 9,430,373

Increase in Net Assets attributable to holders of redeemable shares from operations

Series A 6,532,008 10,242,209

Series F 368,209 409,492

6,900,217 10,651,701

Distributions to holders of redeemable shares

From net investment income

Series A (95,273) (80,511)

Series F (15,255) (31,345)

(110,528) (111,856)

Redeemable share transactions (note 8)

Proceeds from redeemable shares issued

Series A 40,126,743 30,535,216

Series F 8,030,663 11,014,391

Reinvestments of distributions to holders of redeemable shares

Series A 94,353 80,099

Series F 13,127 5,577

Redemption of redeemable shares

Series A (38,048,068) (22,458,276)

Series F (13,258,916) (918,496)

(3,042,098) 18,258,511

Net increase (decrease) in Net Assets attributable to holders of redeemable shares

Series A 8,609,763 18,318,737

Series F (4,862,172) 10,479,619

3,747,591 28,798,356

Net Assets attributable to holders of redeemable shares, end of year

Series A 36,138,189 27,528,426

Series F 5,838,131 10,700,303

41,976,320 38,228,729

8


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares continued

Changes in outstanding redeemable shares of the Fund for the years ended December 31, 2017 and 2016 were as follows:

2017 2016

Series A Series F Series A Series F

Shares, beginning of year 3,198,234 1,179,779 2,010,016 46,069

Subscriptions 4,428,601 861,109 4,147,090 1,241,352

Reinvested distributions 9,001 1,196 9,269 613

Redemptions (4,249,636) (1,519,133) (2,968,141) (108,255)

Shares, end of year 3,386,200 522,951 3,198,234 1,179,779


9


Statements of Cash Flows



$ $

Cash flows from operating activities

Increase (decrease) in net assets attributable to holders of redeemable shares from operations 6,900,217 10,651,701

Adjustments for:

Foreign exchange (gains) on cash - (6)

Net realized (gains) on sales of investments (5,539,553) (6,959,368)

Net realized (gains) on options contracts (2,846) -

Change in unrealized (appreciation) in the value of investments (4,641,757) (5,057,765)

Change in unrealized depreciation on options contracts 21,681 -

Purchases of investments (68,609,234) (102,791,611)

Proceeds from sales of investments 111,378,920 117,083,896

Net increase (decrease) in other assets and liabilities 1,353,351 148,057

Net cash provided by operating activities 40,860,779 13,074,904

Cash flows from financing activities

Distributions paid to holders of redeemable shares, net of reinvested distributions (3,048) (26,180)

Proceeds from redeemable shares issued 8,232,242 13,185,993

Redemption of redeemable shares (49,524,831) (23,187,271)

Net cash used in financing activities (41,295,637) (10,027,458)

Foreign exchange gains on cash - 6

Net increase (decrease) in cash (434,858) 3,047,446

Cash at beginning of year 3,375,778 328,326

Cash at end of year 2,940,920 3,375,778

Supplemental Information

Interest received 898 1,039

Dividends received, net of withholding taxes 119,972 107,196


10


Schedule of Investment Portfolio As at December 31, 2017 Expiry Date Average Cost Fair Value

$ $

SHARES EQUITIES [97.92%]

MATERIALS [46.86%]

5,765 Alamos Gold Inc., Warrants Jan 7, 2019 - 6,053

34,050 Alio Gold Inc., Warrants Jul 20, 2018 8,853 3,235

447,950 Alphamin Resources Corp., Warrants Jun 29, 2020 - 16,686

386,400 Argonaut Gold Inc. 968,900 927,360 100,000 B2Gold Corp. 341,500 388,000

1,513,500 Bonterra Resources Inc. 829,062 877,830

2,147,500 Cardinal Resources Ltd. 836,901 1,129,828

506,700 Continental Gold Inc. 1,704,783 1,712,646

472,500 Eastmain Resources Inc. 146,659 163,013

1,200,000 Energold Drilling Corp., Warrants Jan 18, 2018 9,741 -

455,226 Garibaldi Resources Corp.* Jan 29, 2018 373,285 1,093,123 455,226 Garibaldi Resources Corp., Warrants Oct 1, 2019 - 663,196

543,000 Golden Predator Mining Corp. 662,132 439,830

500,000 Golden Predator Mining Corp., Warrants Jul 13, 2018 150,845 18,790

784,000 Group Eleven Resources Corp. 235,200 239,120

1,170,500 K92 Mining Inc., Warrants Jun 21, 2018 - 644

90,000 Kirkland Lake Gold Ltd. 819,066 1,734,300

2,194,174 Lithium Power International Ltd., Warrants Jul 6, 2019 - 365,728

1,666,675 Lucky Minerals Inc. 250,001 250,001 1,666,675 Lucky Minerals Inc., Warrants Nov 23, 2020 - 46,500

22,009,300 Metal Tiger PLC., Warrants Apr 27, 2022 - 80,657

213,200 Millennial Lithium Corp. 266,500 780,312

200,000 Millennial Lithium Corp., Warrants Sep 26, 2019 - 444,518

1,264,200 Minera Alamos Inc. 189,630 227,556

449,700 Neo Lithium Corp. 478,062 1,034,310

37,500 Osisko Gold Royalties Ltd., Warrants Feb 26, 2019 80,502 52,875

293,000 Osisko Metals Inc. 234,400 254,910 250,000 Osisko Metals Inc., Warrants Jul 18, 2019 - 33,255

238,800 Osisko Mining Inc. 752,943 809,532

195,900 Osisko Mining Inc., Warrants Aug 8, 2018 11,190 15,688

134,100 Pretium Resources Inc. 1,497,400 1,923,000

100,000 Probe Metals Inc., Warrants Feb 17, 2018 12,895 1,874

440,000 Prosper Gold Corp., Warrants Aug 5, 2019 3,332 -

2,400,000 Purepoint Uranium Group Inc., Warrants Apr 26, 2019 179,544 26,400 1,500,000 Quest Rare Minerals Ltd., Warrants Feb 22, 2020 150 3,480

1,106,400 Roxgold Inc. 1,662,211 1,548,960

533,600 Sabina Gold & Silver Corp. 881,332 1,211,272

392,000 Shear Diamonds Ltd. - -

450,000 Trevali Mining Corp. 531,394 684,000

350,000 White Gold Corp. 721,875 462,000

14,840,288 19,670,482

ENERGY [26.49%]

250,000 Birchcliff Energy Ltd. 2,009,755 1,100,000

2,557,800 Blackbird Energy Inc. 1,285,473 895,230

2,471,000 Ikkuma Resources Corp. 2,206,741 1,260,210

1,000,000 Leucrotta Exploration Inc. 1,990,672 1,720,000 425,000 NexGen Energy Ltd. 821,367 1,364,250

90,500 Parex Resources Inc. 1,585,593 1,643,480

625,000 Pentanova Energy Corp., Warrants Jul 31, 2022 - 22,144

18,500 Suncor Energy Inc. 792,168 853,775

454,747 Yangarra Resources Ltd. 1,497,487 2,260,092

12,189,256 11,119,181

11


Schedule of Investment Portfolio continued As at December 31, 2017 Expiry Date Average Cost Fair Value

$ $

SHARES HEALTH CARE [18.45%]

130,500 Aphria Inc. 1,290,352 2,440,350

325,000 Aurora Cannabis Inc., Warrants Oct 25, 2020 - 1,852,500

1,075,000 Liberty Health Sciences Inc. 1,420,801 2,225,250

250,000 OrganiGram Holdings Inc. 847,525 1,025,000

125,000 OrganiGram Holdings Inc., Warrants Jun 18, 2019 27,475 200,000

3,586,153 7,743,100

INFORMATION TECHNOLOGY [4.31%]

550,000 BIG Blockchain Intelligence Group Inc.* Apr 16, 2018 412,500 770,361 302,500 Hive Blockchain Technologies Ltd. 184,800 1,037,575

597,300 1,807,936

UTILITIES [1.81%]

43,800 Polaris Infrastructure Inc. 724,452 761,682

724,452 761,682

Total Equities 31,937,449 41,102,381

Transaction Costs (note 3) (69,764)

Total Investments [97.92%] 31,867,685 41,102,381

Options purchased [0.00%] (Schedule 1) -

Cash and Other Assets Less Liabilities [2.08%] 873,939

Total Net Assets attributable to holders of redeemable shares [100.00%] 41,976,320

* Securities that are restricted for resale until the date indicated.


12


Option Contracts (Schedule 1)

As at December 31, 2017

Options Purchased

Premium Fair

Number of Expiration Strike Paid Value

Option Details Option Type Contracts Date Price ($) $(CAD) $(CAD)

New Gold Inc. Call 816 19-Jan-18 8.00 CAD 20,865 -

20,865 -



Notes to financial statements – Fund specific information December 31, 2017

13

Financial Risk Management (note 6)

Investment Objective The investment objective of the Fund is to seek to achieve long-term capital growth. The Fund invests primarily in equity and equity-related

securities of companies in Canada and around the world that are involved directly or indirectly in the natural resource sector.

The Schedule of Investment Portfolio represents the securities held by the Fund as at December 31, 2017. Significant risks that are relevant to

the Fund are discussed here. General information on risk management is described in Note 6.

Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if the S&P/TSX Capped Materials Total Return Index and S&P/TSX Capped Energy Total Return Index

were to fluctuate by 10%, with all other variables held constant, Net Assets attributable to holders of redeemable shares would increase or

decrease by the amounts shown in the table below. This is a measure based on the historical relationship of the Fund’s performance against the

index noted above. The composition of this calculation contains several subjective components that, although reasonably estimated, could alter

the resulting calculation should these components be modified based on revised assumptions.

December 31, 2017 December 31, 2016

Impact

($’000)

As a % of Net Assets

attributable to holders

of redeemable shares

Impact

($’000)




4,533 10.80% 4,167 10.90%

b) Currency Risk

The tables below summarize the Fund’s exposure to currency risk as at December 31, 2017 and 2016. The tables also illustrate the potential

impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the

Canadian dollar, with all other variables held constant.

December 31, 2017

Currency Fair Value ($’000)

% of Net Assets



Impact on Net Assets



($’000)

Australian Dollar 1,115 2.66 11

Pound Sterling 81 0.19 1

1,196 2.85 12

December 31, 2016

Currency Fair Value ($’000)

% of Net Assets






($’000)

U.S. Dollar 2,513 6.57 25

c) Interest Rate Risk

As at December 31, 2017 and 2016, the Fund did not have a significant exposure to interest rate risk.



14

Credit Risk As at December 31, 2017 and 2016, the Fund did not have a significant exposure to credit risk.

Concentration Risk The table below summarizes the Fund’s concentration risk as a percentage of Net Assets attributable to holders of redeemable shares as at

December 31, 2017 and 2016.


Equities – Long:

Materials 46.86% 28.15%

Energy 26.49% 57.92%

Health Care 18.45% 0.67%

Information Technology 4.31% –

Utilities 1.81% 3.48%

Other – 1.44%

Options purchased – –

Cash and Other Assets Less Liabilities 2.08% 8.34%

Total Net Assets attributable to holders of redeemable shares 100.00% 100.00%

Fair Value Measurements (note 5)

The Fund’s assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below as at

December 31, 2017 and 2016:

December 31, 2017

Level 1 Level 2 Level 3 Total $ $ $ $

Equities – Long 35,384,674 1,863,484 – 37,248,158

Warrants 2,480,391 1,373,832 – 3,854,223

37,865,065 3,237,316 – 41,102,381

December 31, 2016


Equities – Long 33,200,466 1,572,478 – 34,772,944

Warrants 265,807 2,352 – 268,159

33,466,273 1,574,830 – 35,041,103

During the years ended December 31, 2017 and 2016, there were no significant transfers between levels other than the transfers indicated

below.



15

The reconciliation of investments measured at fair value using unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016,

is presented as follows:


Equities Equities

$ $

Balance at beginning of year – –

Purchases 2,329,900 113,645

Sales (1,423,675) –

Net transfers out (333,600) (526,014)

Realized losses (656,025)

Change in unrealized gains 83,400 412,369

Balance at end of year – –

Change in unrealized gains during the year for investments held at end of year – –

The Fund’s Level 3 securities consist of private equity positions. The Manager determines their fair value by utilizing a variety of valuation

techniques such as the use of comparable recent transactions, discounted cash flows and other techniques used by market participants. As at

December 31, 2017 and 2016, these positions were not significant to the Fund and any changes in reasonable possible assumptions used in their

valuation would not have a significant impact to the Net Assets attributable to holders of redeemable units of the Fund.

Related Party Holdings Ninepoint Financial Group, the parent company of the Fund manager, and Sprott Inc., the parent company of the previous Fund manager, and

their respective subsidiaries, held the following investments in the Fund as at December 31, 2017 and 2016, respectively:

December 31, 2017 December 31, 2016 Units held

Class A 122 –

Value of units held ($) 1,305 –

Management Fees (note 12)

This fee differs among the series of shares of the Fund as set out in the chart below:

Series A Series F Series I*

Up to 2.50% Up to 1.50% Negotiated by the

Shareholder

* The management fee for Series I shares of the Fund is negotiated by the investor and paid directly by the investor or by the Fund, and would not exceed the

management fee for Series A shares of the Fund.

Flow-Through LP Mergers During the years ended December 31, 2017 and 2016, the Fund acquired all the assets of the flow-through partnerships listed below, and in

exchange, the Fund issued shares to such partnerships. In turn, the shares were distributed to the limited partners of the partnerships. The

Manager was the investment advisor to the limited partnerships. The General Partners of the limited partnerships were under common control

of the Manager. Tax elections were made which allowed the transfer of assets to occur on a tax-deferred basis.

Merger Date Flow-Through Partnerships

Number of shares issued by

the Fund

Fair Value of Assets Acquired

by the Fund

February 24, 2016 Sprott 2014 Flow-Through LP 1,606,050 $8,469,826

September 30, 2016 Sprott 2014-II Flow-Through LP 2,243,744 $19,783,988

January 24, 2017 Sprott 2015 Flow-Through LP 2,231,223 $20,184,313

January 24, 2017 Sprott 2016 Short Duration Flow-Through LP 1,959,840 $17,729,301



16

Sharing Arrangements (note 14) The Fund paid $5,888 out of the total transaction costs incurred to certain brokers for research expenses provided to the portfolio manager

during the year ended December 31, 2017 (2016 - $6,057).

See accompanying generic notes which are an integral part of these financial statements

17


Statements of Financial Position (in Canadian Dollars)


$ $

Assets

Current assets

Investments (note 3, 5) 87,952,284 62,856,184

Subscriptions receivable 14,978 1,321,572

Other assets 6,083 -

Total assets 87,973,345 64,177,756

Liabilities

Current liabilities

Bank indebtedness 268,681 103,088

Due to broker 45,154 1,231,205


Accrued expenses - 24,965

Total liabilities 338,237 1,385,570



Series A 16,158,334 13,572,523

Series F 42,321,787 32,229,738

Series FT 9,945,123 6,139,303

Series P 93,653 -

Series T 3,805,841 4,115,981

Series PF 15,301,149 6,734,641

Series PFT - -

Series QF 9,221 -


Series A 13.23 12.70

Series F 13.74 13.05

Series FT 9.53 9.62

Series P 10.10 -

Series T 9.02 9.18

Series PF 11.26 10.69

Series PFT - -

Series QF 10.38 -





DIRECTOR DIRECTOR

18


Statements of Comprehensive Income (Loss) (in Canadian Dollars, except share amounts)

For the years ended December 31 2017 2016 $ $

Income Net gain (loss) on investments:(1)

Distribution income (note 3) 3,616,369 2,035,990

Net realized gains on sales of investments 385,248 35,146

Change in unrealized appreciation in the value of investments 586,881 1,831,548

Other income 2,774 224

Total income 4,591,272 3,902,908


Management fees 830,395 629,684


Filing fees 53,347 37,055 Administrative fees 26,340 34,566

Legal fees 7,040 13,634



Audit fees 4,582 4,177


Total expenses 1,024,842 794,995

Expenses waived/absorbed by the Manager (note 13) (110,905) (114,576)

Net expenses 913,937 680,419


Increase in Net Assets attributable to holders of redeemable shares from operation per series Series A 597,791 642,434

Series F 1,821,676 1,695,763

Series FT 504,081 359,053

Series P 964 -

Series T 169,475 222,315

Series PF 374,961 302,924

Series PFT 27 - Series QF 208,360 -


Series A 1,169,162 1,049,148 Series F 2,738,298 2,195,519

Series FT 1,075,874 605,940

Series P 8,494 -

Series T 436,516 503,692

Series PF 828,165 444,614

Series PFT 5,879 -

Series QF 441,964 -

Increase in Net Assets attributable to holders of redeemable shares from operation per series per share (note 3)

Series A 0.51 0.61

Series F 0.67 0.77

Series FT 0.47 0.59 Series P 0.11 -

Series T 0.39 0.44

Series PF 0.45 0.68

Series PFT - -

Series QF 0.47 -

(1)Net gain (loss) on investments comprised of:

Financial assets and liabilities designated at FVTPL 4,588,498 3,902,684

Financial assets and liabilities classified as HFT - -

4,588,498 3,902,684


19





$ $


Series A 13,572,523 12,399,277

Series F 32,229,738 20,901,807

Series FT 6,139,303 5,910,095

Series P - -

Series T 4,115,981 5,281,997

Series PF 6,734,641 -

Series PFT - -

Series QF - -

62,792,186 44,493,176


Series A 597,791 642,434

Series F 1,821,676 1,695,763

Series FT 504,081 359,053

Series P 964 -

Series T 169,475 222,315

Series PF 374,961 302,924

Series PFT 27 -

Series QF 208,360 -

3,677,335 3,222,489


From return of capital

Series A - -

Series F - -

Series FT (630,124) (350,410)

Series P - -

Series T (240,570) (277,530)

Series PF - -

Series PFT - -

Series QF - -

(870,694) (627,940)

20



continued



$ $



Series A 7,687,367 4,692,886

Series F 23,882,336 16,904,674

Series FT 8,723,895 3,189,238

Series P 92,689 -

Series T 310,266 127,075

Series PF 13,090,977 6,652,199

Series PFT 58,787 -

Series QF 5,793,841 -


Series A - -

Series F - 98

Series FT - -

Series P - -

Series T - 10

Series PF - -

Series PFT - -

Series QF - -


Series A (5,699,347) (4,162,074)

Series F (15,611,963) (7,272,604)

Series FT (4,792,032) (2,968,673)

Series P - -

Series T (549,311) (1,237,886)

Series PF (4,899,430) (220,482)

Series PFT (58,814) -

Series QF (5,992,980) -

22,036,281 15,704,461


Series A 2,585,811 1,173,246

Series F 10,092,049 11,327,931

Series FT 3,805,820 229,208

Series P 93,653 -

Series T (310,140) (1,166,016)

Series PF 8,566,508 6,734,641

Series PFT - -

Series QF 9,221 -

24,842,922 18,299,010


Series A 16,158,334 13,572,523

Series F 42,321,787 32,229,738

Series FT 9,945,123 6,139,303

Series P 93,653 -

Series T 3,805,841 4,115,981

Series PF 15,301,149 6,734,641

Series PFT - -

Series QF 9,221 -

87,635,108 62,792,186

21




2017 2016

Series A Series F Series FT Series P Series T Series PF Series PFT Series QF Series A Series F Series FT Series T Series PF

Shares, beginning of year 1,069,023 2,469,373 638,479 - 448,185 630,079 - - 1,026,131 1,699,009 613,988 568,651 -

Subscriptions 589,149 1,769,899 901,457 9,272 33,888 1,178,473 5,879 578,827 380,926 1,346,563 331,727 13,859 651,353

Reinvested distributions - - - - - - - - - - 10 1 -

Redemptions (436,987) (1,158,603) (496,672) - (60,009) (450,054) (5,879) (577,939) (338,034) (576,199) (307,246) (134,326) (21,274)

Shares, end of year 1,221,185 3,080,669 1,043,264 9,272 422,064 1,358,498 - 888 1,069,023 2,469,373 638,479 448,185 630,079


22





$ $



Adjustments for:

Distribution income (3,616,369) (2,035,990)

Net realized (gains) on sales of investments (385,248) (35,146)

Change in unrealized (appreciation) in the value of investments (586,881) (1,831,548)



Net increase (decrease) in other assets and liabilities (31,048) 92,810

Net cash used in operating activities (22,635,864) (13,784,481)





Net cash provided by financing activities 22,470,271 13,788,624

Net increase (decrease) in cash (165,593) 4,143

Bank indebtedness at beginning of year (103,088) (107,231)

Bank indebtedness at end of year (268,681) (103,088)


23


Schedule of Investment Portfolio As at December 31, 2017 Average Cost Fair Value

$ $

UNITS MUTUAL FUNDS [100.36%]

8,038,706 Sprott Diversified Bond Fund, Series I 86,277,946 87,952,284


Cash and Other Assets Less Liabilities [-0.36%] (317,176)





24


Investment Objective The Fund aims to provide income and maximize the total return of the Fund. It seeks a similar return to its underlying fund, Sprott Diversified

Bond Fund, by investing substantially all of its assets in securities of that fund. The underlying fund invests primarily in debt and debt-like

securities of corporate and government issuers from around the world.


the Fund are discussed here. As the Fund invests in underlying funds, it may be indirectly exposed to other price risk, currency risk, interest rate

risk, credit risk and concentration risk from these holdings. As at December 31, 2017, 100.36% (2016 - 100.10%) of the Fund’s Net Assets

attributable to holders of redeemable shares were invested in mutual fund units. Only direct exposure to significant risks that are relevant to the

Fund are discussed here. For more information regarding the risks of the underlying funds, refer to each underlying fund’s financial statements.

General information on risk management is described in Note 6.




Mutual Funds 100.36% 100.10%

Cash and Other Assets Less Liabilities (0.36%) (0.10%)





December 31, 2017

Level 1 Level 2 Level 3 Total

$ $ $ $

Mutual Funds 87,952,284 – – 87,952,284

December 31, 2016


Mutual Funds 62,856,184 – – 62,856,184

During the years ended December 31, 2017 and 2016, there were no significant transfers between levels.

Investments in Underlying Funds The Fund invests in redeemable units or shares of an investment fund managed by Ninepoint Partners LP (the “Underlying Fund”) to gain

exposure to the investment objective and strategies of the Underlying Fund.

The Underlying Fund invests in a portfolio of assets to generate returns in the form of investment income and capital appreciation for its

unitholders. The Underlying Fund finances its operations primarily through the issuance of redeemable units, which are puttable at the

unitholder’s option and entitle the unitholder to a proportionate share of the Underlying Fund’s net assets. The Fund’s interest in the Underlying

Fund, held in the form of redeemable units, is reported in its Schedule of Investment Portfolio at fair value, which represents the Fund’s

maximum exposure to this investment. Distributions earned from the Underlying Fund are included in “Distribution income” in the Statements

of Comprehensive Income. The total realized gains and change in unrealized gains arising from the Underlying Fund included in the Statements

of Comprehensive Income for the year ended December 31, 2017 are $385,248 and $586,881, respectively (2016 – realized gains of $35,146

and unrealized gains of $1,831,548). The Fund does not provide any additional significant financial or other support to the Underlying Fund.

The tables below set out the interest held by the Fund in the Underlying Fund:



25

December 31, 2017

Underlying Fund

Country of

establishment

and principal

place of business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount

included in Statement

of Financial Position

Sprott Diversified Bond Fund Canada 46.69% $188,359,011 $87,952,284

$87,952,284

December 31, 2016

Underlying Fund

Country of

establishment and

principal place of

business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount




$62,856,184



Series A Series F Series I* Series FT Series T Series P Series PT Series PF

Series

PFT Series Q Series QT Series QF

Series

QFT

Up to

1.65%

Up to

0.75%

Negotiated

by the

Shareholder

Up to

0.75%

Up to

1.65%

Up to

1.55%

Up to

1.55%

Up to

0.65%

Up to

0.65%

Up to

1.45%

Up to

1.45%

Up to

0.55%

Up to

0.55%




26





$ $

Assets

Current assets


Cash - 278,509

Receivable from Manager (note 13) - 23,673

Other assets 732 -

Total assets 6,341,492 10,102,623

Liabilities

Current liabilities

Bank indebtedness 3,245 -

Due to broker - 400,000



Total liabilities 8,930 427,642



Series A 1,513,924 3,568,921

Series F 4,818,638 6,106,060


Series A 10.88 10.84

Series F 10.98 10.91





DIRECTOR DIRECTOR

27





$ $

Income

Net gain (loss) on investments:(1)

Distribution income (note 3) 165,257 130,999

Net realized gains (losses) on sales of investments (13,472) 9,533

Change in unrealized depreciation in the value of investments (26,730) (21,467)

Total income 125,055 119,065






Legal fees 7,039 13,647





Total expenses 123,522 132,351


Net expenses 50,422 59,695

Increase in Net Assets attributable to holders of redeemable shares from operations 74,633 59,370

Increase in Net Assets attributable to holders of redeemable shares from operations per series

Series A 16,963 21,639

Series F 57,670 37,731


Series A 206,680 262,929

Series F 511,301 348,980


Series A 0.08 0.08

Series F 0.11 0.11


Financial assets and liabilities designated at FVTPL 125,055 119,065


125,055 119,065


28





$ $


Series A 3,568,921 2,538,045

Series F 6,106,060 3,334,123

9,674,981 5,872,168


Series A 16,963 21,639

Series F 57,670 37,731

74,633 59,370



Series A 808,472 3,582,602

Series F 8,336,254 7,902,111


Series A (2,880,432) (2,573,365)

Series F (9,681,346) (5,167,905)

(3,417,052) 3,743,443


Series A (2,054,997) 1,030,876

Series F (1,287,422) 2,771,937

(3,342,419) 3,802,813


Series A 1,513,924 3,568,921

Series F 4,818,638 6,106,060

6,332,562 9,674,981


2017 2016


Shares, beginning of year 329,360 559,745 236,549 309,505

Subscriptions 74,210 760,886 330,765 724,152

Redemptions (264,360) (881,695) (237,954) (473,912)

Shares, end of year 139,210 438,936 329,360 559,745


29


Statements of Cash Flows (in Canadian Dollars)


$ $


Increase in Net Assets attributable to holders of redeemable shares from operations 74,633 59,370

Adjustments for:

Distribution income (165,257) (130,999)

Net realized (gains) losses on sales of investments 13,472 (9,533)

Change in unrealized depreciation in the value of investments 26,730 21,467



Net increase (decrease) in other assets and liabilities 9,038 45,218

Net cash provided by (used in) operating activities 3,143,352 (4,491,578)




Net cash provided by (used in) financing activities (3,425,106) 3,757,182

Net decrease in cash (281,754) (734,396)

Cash at beginning of year 278,509 1,012,905

Cash (Bank indebtedness) at end of year (3,245) 278,509


30



$ $


645,600 Sprott Short-Term Bond Fund, Series I 6,400,067 6,340,760







31


Investment Objective The Fund aims to preserve capital and maintain liquidity. It seeks a similar return to its underlying fund, Sprott Short-Term Bond Fund, by

investing substantially all of its assets in securities of that fund. The underlying fund invests primarily in short-term debt securities issued by

Canadian federal, provincial and municipal governments as well as corporate issuers.










Mutual Funds 100.13% 101.30%

Cash and Other Assets Less Liabilities (0.13%) (1.30%)





December 31, 2017


Mutual Funds 6,340,760 – – 6,340,760

December 31, 2016


Mutual Funds 9,800,441 – – 9,800,441








of Comprehensive Income. The total realized losses and change in unrealized losses arising from the Underlying Fund included in the

Statements of Comprehensive Income for the year ended December 31, 2017 are $13,472 and $26,730, respectively (2016 – realized gains of

$9,533 and unrealized losses of $21,467). The Fund does not provide any additional significant financial or other support to the Underlying

Fund. The tables below set out the interest held by the Fund in the Underlying Fund:



32

December 31, 2017

Underlying Fund

Country of

establishment

and principal

place of business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount



Sprott Short-Term Bond Fund Canada 45.52% $13,929,198 $6,340,760

$6,340,760

December 31, 2016

Underlying Fund

Country of

establishment and

principal place of

business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount



Sprott Short-Term Bond Fund Canada 47.98% $20,425,172 $9,800,441

$9,800,441




December 31, 2017 December 31, 2016 Units held

Class F 92 55,571

Value of units held ($) 1,007 606,201





Shareholder




33





$ $

Assets

Current assets

Investments (excluding derivatives) (note 3, 5) 112,105,798 124,668,570

Cash 902,296 3,884,729

Broker margin - 1,892,005


Total assets 113,147,057 130,518,507

Liabilities

Current liabilities

Options written (note 3, 5) - 285,301

Unrealized depreciation on forward currency contracts (note 3, 5) - 21,971

Due to broker - 1,560,327



Incentive fees payable (note 12) - 444,368

Total liabilities 234,814 2,399,589



Series A 60,276,028 59,976,848

Series F 52,636,215 68,142,070


Series A 5.61 6.41

Series F 5.94 6.71





DIRECTOR DIRECTOR

34





$ $

Income


Dividends (note 3) 867,897 333,259

Net realized gains (losses) on sales of investments (15,645,345) 27,909,660

Net realized gains (losses) on option contracts 719,637 (2,503,434)

Net realized gains (losses) on forward currency contracts (57,042) 434,138

Change in unrealized appreciation (depreciation) in the value of investments 4,197,752 (1,493,876)

Change in unrealized appreciation (depreciation) on option contracts (113,543) 70,730

Change in unrealized appreciation (depreciation) on forward currency contracts 21,971 (21,971)

Net realized gains (losses) on foreign exchange (512,366) 758,539

Other income 1,002 293

Total income (loss) (10,520,037) 25,487,338


Transaction costs (note 3, 14) 3,006,661 2,217,744

Management fees 2,858,970 1,679,739




Audit fees 14,968 11,796


Legal fees 6,863 8,438



Securities borrowing expense 4,364 -


Incentive fees (note 12) - 444,368

Total expenses 6,175,573 4,515,428

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations (16,695,610) 20,971,910

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations per series

Series A (8,157,404) 7,668,665

Series F (8,538,206) 13,303,245


Series A 10,006,033 5,811,723

Series F 10,656,463 5,206,271


per share (note 3)

Series A (0.82) 1.32

Series F (0.80) 2.56


Financial assets and liabilities designated at FVTPL (11,112,866) 26,845,616

Financial assets and liabilities classified as HFT 1,104,193 (2,117,110)

(10,008,673) 24,728,506


35





$ $


Series A 59,976,848 11,023,802

Series F 68,142,070 15,077,514

128,118,918 26,101,316

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations

Series A (8,157,404) 7,668,665

Series F (8,538,206) 13,303,245

(16,695,610) 20,971,910



Series A (212,330) (92,860)

Series F (185,239) (105,517)

(397,569) (198,377)



Series A 17,514,583 48,903,420

Series F 9,014,812 45,049,635


Series A 206,262 88,578

Series F 184,159 104,922


Series A (9,051,931) (7,614,757)

Series F (15,981,381) (5,287,729)

1,886,504 81,244,069


Series A 299,180 48,953,046

Series F (15,505,855) 53,064,556

(15,206,675) 102,017,602


Series A 60,276,028 59,976,848

Series F 52,636,215 68,142,070

112,912,243 128,118,918

36



Changes in outstanding redeemable shares of the Fund for years ended December 31, 2017 and 2016 were as follows:

2017 2016


Shares, beginning of year 9,363,501 10,156,365 3,288,133 4,329,053

Subscriptions 2,843,372 1,329,218 7,223,767 6,525,916

Reinvested distributions 36,732 30,998 13,192 14,917

Redemptions (1,499,246) (2,650,336) (1,161,591) (713,521)

Shares, end of year 10,744,359 8,866,245 9,363,501 10,156,365


37




$ $


Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations (16,695,610) 20,971,910

Adjustments for:

Foreign exchange (gains) losses on cash 11,591 (42,837)

Net realized (gains) losses on sales of investments 15,645,345 (27,909,660)

Net realized (gains) losses on options contracts (719,637) 2,503,434

Change in unrealized (appreciation) depreciation in the value of investments (4,197,752) 1,493,876

Change in unrealized (appreciation) depreciation on option contracts 113,543 (70,730)

Change in unrealized (appreciation) depreciation on forward currency contracts (21,971) 21,971



Net increase (decrease) in other assets and liabilities 1,467,120 (1,480,146)

Net cash used in operating activities (4,521,726) (77,442,447)





Net cash provided by financing activities 1,550,884 81,067,703

Foreign exchange gains (losses) on cash (11,591) 42,837

Net increase (decrease) in cash (2,970,842) 3,625,256


Cash at end of year 902,296 3,884,729




38



$ $


SILVER [99.29%]

335,900 Alexco Resource Corp. 747,391 668,441

205,000 Alexco Resource Corp., Warrants May 17, 2018 - 68,230

215,000 Alio Gold Inc., Warrants Jul 20, 2018 55,900 20,425

1,402,100 Almaden Minerals Ltd. 2,453,675 1,794,688

850,000 Almaden Minerals Ltd., Warrants Jun 1, 2020 - 77,724

200,000 Americas Silver Corp. 975,080 916,000 128,458 Americas Silver Corp., Warrants Jun 14, 2021 - 179,050

1,391,900 Argonaut Gold Inc. 3,380,835 3,340,560

61,126 Avino Silver & Gold Mines Ltd. 136,565 102,935

115,661 Azure Minerals Ltd., Warrants Aug 17, 2019 - 222

1,000,000 Canasil Resources Inc., Warrants Jun 28, 2018 - -

1,500,000 China Silver Group Ltd. 631,326 576,652

193,495 Cia de Minas Buenaventura SAA 3,439,181 3,423,786 602,300 Coeur Mining Inc. 6,493,995 5,676,864

628,000 Dalradian Resources Inc. 838,551 832,100

2,000,000 Discovery Metals Corp. 1,000,000 980,000

2,000,000 Discovery Metals Corp., Warrants Dec 18, 2018 - 24,640

3,105,000 Dolly Varden Silver Corp. 2,000,450 2,204,550

1,000,000 Dolly Varden Silver Corp.* Jan 8, 2018 730,000 704,920

1,022,261 Endeavour Silver Corp. 3,236,806 3,080,567

2,198,966 Excellon Resources Inc. 3,746,253 4,046,097 434,783 Excellon Resources Inc., Warrants Jul 23, 2018 34,800 208,696

375,000 Excellon Resources Inc.,Warrants Dec 31, 2018 - 97,500

261,400 First Majestic Silver Corp. 2,450,920 2,216,672

481,900 Fortuna Silver Mines Inc. 3,096,367 3,161,264

338,798 Fresnillo PLC 8,392,110 8,214,017

1,000,000 Golden Arrow Resources Corp., Warrants Jan 28, 2018 - 14,030

786,200 Great Panther Silver Ltd. 1,529,413 1,274,550

625,000 Great Panther Silver Ltd., Warrants Jan 11, 2018 153,886 - 889,300 Hecla Mining Co. 5,262,352 4,436,833

1,286,847 Hochschild Mining PLC 5,461,613 5,763,859

302,676 Industrias Penoles SAB de CV 9,182,639 7,924,767

1,414,000 Kootenay Silver Inc. 565,600 289,870

1,250,000 Kootenay Silver Inc.* Apr 6, 2018 250,000 235,750

562,500 Kootenay Silver Inc., Warrants Apr 21, 2021 - 61,875

387,526 MAG Silver Corp. 6,031,077 6,014,404 399,460 Pan American Silver Corp. 8,460,337 7,821,427

197,300 Pretium Resources Inc. 2,823,513 2,829,282

900,905 Sabina Gold & Silver Corp. 2,070,419 2,045,054

495,000 Santacruz Silver Mining Ltd., Warrants Jan 11, 2019 - -

944,067 Silvercorp Metals Inc. 3,419,355 3,096,540

2,209,800 Silvercrest Metals Inc. 3,397,418 3,955,542

700,000 Silvercrest Metals Inc.* Apr 19, 2018 735,000 1,161,798

562,500 Silvercrest Metals Inc., Warrants Dec 6, 2018 157,410 123,750 350,000 Silvercrest Metals Inc., Warrants Dec 19, 2019 - 202,503

347,500 SSR Mining Inc. 4,092,995 3,846,825

563,700 Tahoe Resources Inc. 5,180,352 3,393,265

539,400 Wheaton Precious Metals Corp. 14,995,093 14,997,274

Total Equities 117,608,677 112,105,798



Options purchased [0.00%] (Schedule 1) -



* Securities that are restricted for resale until the date indicated.


39




Options Purchased

Premium Fair



New Gold Inc. Call 1,988 19-Jan-18 8.00 CAD 50,834 -

50,834 -




40


Investment Objective The investment objective of the Fund is to seek to achieve long-term capital growth by investing primarily in equity securities of companies

that are directly or indirectly involved in the exploration, mining, production or distribution of silver. The Fund can also invest in silver and

silver certificates.



Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if the MSCI ACWI Select Silver Miners IMI Net Return Index were to fluctuate by 10%, with all other

variables held constant, Net Assets attributable to holders of redeemable shares would increase or decrease by the amounts shown in the table

below. This is a measure based on the historical relationship of the Fund’s performance against the index noted above. The composition of this

calculation contains several subjective components that, although reasonably estimated, could alter the resulting calculation should these

components be modified based on revised assumptions.


Impact

($’000)




Impact

($’000)




10,727 9.50% 12,171 9.50%

b) Currency Risk




December 31, 2017

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 30,320 – 30,320 26.85 303

Pound Sterling 13,985 – 13,985 12.39 140

Mexican Peso 7,925 – 7,925 7.02 79

Hong Kong Dollar 577 – 577 0.51 6

52,807 – 52,807 46.77 528

December 31, 2016

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 80,727 – 80,727 63.01 807

Pound Sterling 18,487 (16,381) 2,106 1.64 21

Australian Dollar 2 – 2 – –

Mexican Peso 4,869 – 4,869 3.80 49

104,085 (16,381) 87,704 68.45 877



41



Credit Risk As at December 31, 2017, the Fund did not have a significant exposure to credit risk. As at December 31, 2016, the Fund was exposed to credit

risk from over-the-counter derivative contracts with counterparties. The credit risk is considered minimal as these counterparties have a

minimum credit rating of AA- by S&P or equivalent.




Equities:

Silver and other metals 99.29% 97.31%

Unrealized depreciation on forward currency contracts – (0.02%)

Options written – (0.22%)






December 31, 2017


Equities – Long 108,924,685 2,102,468 – 111,027,153

Warrants 512,246 566,399 – 1,078,645

109,436,931 2,668,867 – 112,105,798

December 31, 2016


Equities – Long 121,812,296 – – 121,812,296

Warrants 825,748 2,030,526 – 2,856,274

Forward Currency Contracts – (21,971) – (21,971)

Options written (285,301) – – (285,301)

122,352,743 2,008,555 – 124,361,298


Restricted Cash and Investments (note 11)

As at December 31, 2017, restricted cash and investments held for the Fund totaled $nil (2016 - $1,892,005).



42





Shareholder






43




$ $

Assets

Current assets

Investments (excluding derivatives) (note 3, 5, 11) 460,237,353 545,682,720

Cash (note 11) 14,694,671 200,390,585

Options purchased (note 3, 5) 1,314,340 2,431,361

Broker margin (note 11) 13,251,918 8,734,141

Unrealized appreciation on forward currency contracts (note 3, 5) 4,043,573 -



Due from broker 1,025,532 -

Total assets 495,579,281 758,409,383

Liabilities

Current liabilities

Options written (note 3, 5) 324,651 1,964,663

Unrealized depreciation on forward currency contracts (note 3, 5) - 1,743,307

Redemptions payable 794,663 7,204,230


Total liabilities 1,186,196 11,028,189



Series A 266,530,870 387,058,931

Series A1 13,064,269 24,059,318

Series F 192,209,668 283,740,441

Series F1 4,680,202 13,881,567

Series I 13,084 12,036

Series T 6,435,663 12,789,338

Series FT 11,459,329 25,839,563


Series A 13.10 12.48

Series A1 13.18 12.55

Series F 14.00 13.19

Series F1 14.04 13.22

Series I 14.94 13.93

Series T 8.86 8.98

Series FT 9.29 9.31

Series A $US 10.42 9.30

Series F $US 11.14 9.83

Series I $US 11.88 10.37

Series T $US 7.05 6.69

Series FT $US 7.40 6.94





DIRECTOR DIRECTOR

44





$ $

Income


Interest income for distribution purposes (note 3) 1,463,028 290,925

Dividends (note 3) 10,099,847 12,004,829

Net realized gains on sales of investments 16,400,701 37,182,009

Net realized gains (losses) on forward currency contracts 11,081,525 (791,975)

Net realized gains (losses) on option contracts 14,479,669 (21,510,890)

Change in unrealized depreciation in the value of investments (1,569,098) (24,109,099)

Change in unrealized appreciation (depreciation) on forward currency contracts 5,786,880 (3,362,584)

Change in unrealized appreciation (depreciation) on option contracts (2,382,775) 5,234,082

Securities lending income (note 3) 219,175 -

Net realized gains (losses) on foreign exchange (9,677,566) 549,866

Other income 9,237 18,187

Total income 45,910,623 5,505,350


Management fees 10,209,623 15,051,699






Audit fees 31,964 45,860


Legal fees 6,904 45,171



Total expenses 12,335,020 17,961,733

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations 33,575,603 (12,456,383)


Series A 16,523,698 (8,172,384)

Series A1 813,557 (817,986)

Series F 14,513,590 (2,987,035)

Series F1 338,880 (370,036)

Series I 1,048 137

Series T 376,818 (296,548)

Series FT 1,008,012 187,469


Series A 24,729,552 36,649,810

Series A1 1,383,521 2,452,774

Series F 17,069,547 25,979,246

Series F1 495,968 1,493,746

Series I 864 861

Series T 1,105,595 1,632,031

Series FT 1,815,303 4,206,310

45


Statements of Comprehensive Income (Loss) continued



$ $


per share (note 3)

Series A 0.67 (0.22)

Series A1 0.59 (0.33)

Series F 0.85 (0.11)

Series F1 0.68 (0.25)

Series I 1.21 0.16

Series T 0.34 (0.18)

Series FT 0.56 0.04



Financial assets and liabilities classified as HFT 28,899,889 (20,431,367)

55,359,777 4,937,297


46





$ $


Series A 387,058,931 495,616,205

Series A1 24,059,318 38,008,543

Series F 283,740,441 379,670,996

Series F1 13,881,567 25,337,305

Series I 12,036 11,899

Series T 12,789,338 16,701,138

Series FT 25,839,563 35,417,772

747,381,194 990,763,858


Series A 16,523,698 (8,172,384)

Series A1 813,557 (817,986)

Series F 14,513,590 (2,987,035)

Series F1 338,880 (370,036)

Series I 1,048 137

Series T 376,818 (296,548)

Series FT 1,008,012 187,469

33,575,603 (12,456,383)



Series A (3,516,558) (1,348,604)

Series A1 (172,234) (83,779)

Series F (2,544,338) (989,130)

Series F1 (61,672) (48,320)

Series I (172) (41)

Series T (86,110) (44,839)

Series FT (153,447) (90,732)


Series A (1,068) (4,390)

Series A1 - -

Series F (7,557) (12,512)

Series F1 (306) (834)

Series I - -

Series T (579,154) (943,183)

Series FT (963,129) (2,466,126)

(8,085,745) (6,032,490)

47



continued (in Canadian Dollars, except share amounts)


$ $



Series A 12,378,255 54,377,813

Series A1 75,842 83,338

Series F 31,125,275 71,414,993

Series F1 78,417 379,089

Series I - -

Series T 167,801 1,614,546

Series FT 2,482,024 17,261,398


Series A 3,364,250 1,289,557

Series A1 168,279 82,177

Series F 2,133,889 836,252

Series F1 61,172 47,992

Series I 172 41

Series T 136,573 187,712

Series FT 112,434 156,547


Series A (149,276,638) (154,699,266)

Series A1 (11,880,493) (13,212,975)

Series F (136,751,632) (164,193,123)

Series F1 (9,617,856) (11,463,629)

Series I - -

Series T (6,369,603) (4,429,488)

Series FT (16,866,128) (24,626,765)

(278,477,967) (224,893,791)


Series A (120,528,061) (108,557,274)

Series A1 (10,995,049) (13,949,225)

Series F (91,530,773) (95,930,555)

Series F1 (9,201,365) (11,455,738)

Series I 1,048 137

Series T (6,353,675) (3,911,800)

Series FT (14,380,234) (9,578,209)

(252,988,109) (243,382,664)


Series A 266,530,870 387,058,931

Series A1 13,064,269 24,059,318

Series F 192,209,668 283,740,441

Series F1 4,680,202 13,881,567

Series I 13,084 12,036

Series T 6,435,663 12,789,338

Series FT 11,459,329 25,839,563

494,393,085 747,381,194

48


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares continued Changes in outstanding redeemable shares of the Fund for the years ended December 31, 2017 and 2016 were as follows:

2017 2016

Series A Series A1 Series F Series F1 Series I Series T Series FT Series A Series A1 Series F Series F1 Series I Series T Series FT

Shares, beginning

of year 31,003,809 1,917,440 21,503,638 1,050,179 864 1,423,697 2,774,573 39,146,093 2,989,250 28,691,255 1,912,759 861 1,718,830 3,555,282

Subscriptions 987,370 5,987 2,337,024 6,005 - 18,716 269,994 4,494,294 6,781 5,624,203 29,660 - 175,193 1,843,836

Reinvested

distributions 256,190 12,740 152,083 4,348 12 15,549 12,240 102,920 6,525 63,178 3,619 3 20,829 16,856

Redemptions (11,901,224) (944,692) (10,262,913) (727,082) - (731,839) (1,823,882) (12,739,498) (1,085,116) (12,874,998) (895,859) - (491,155) (2,641,401)

Shares, end of year 20,346,145 991,475 13,729,832 333,450 876 726,123 1,232,925 31,003,809 1,917,440 21,503,638 1,050,179 864 1,423,697 2,774,573


49





$ $


Increase (decrease) in net assets attributable to holders of redeemable shares from operations 33,575,603 (12,456,383)

Adjustments for:

Foreign exchange (gains) losses on cash 450,580 (608,150)

Net realized (gains) on sales of investments (16,400,701) (37,182,009)

Net realized (gains) losses on options contracts (14,479,669) 21,510,890

Change in unrealized depreciation in the value of investments 1,569,098 24,109,099

Change in unrealized (appreciation) depreciation on forward currency contracts (5,786,880) 3,362,584

Change in unrealized (appreciation) depreciation on option contracts 2,382,775 (5,234,082)



Net increase (decrease) in other assets and liabilities (4,530,519) 72,909,676



Distributions paid to holders of redeemable shares, net of reinvested distributions (2,108,976) (3,432,212)




Foreign exchange gains (losses) on cash (450,580) 608,150

Net decrease in cash (185,245,334) (18,390,877)

Cash at beginning of year 200,390,585 218,173,312



Interest received 1,463,028 290,925

Dividends received, net of withholding taxes 9,712,362 10,495,652


50



$ $ SHARES EQUITIES [93.09%]

FINANCIALS [24.09%]

499,200 Bank of America Corp. 15,888,543 18,519,327

190,500 Canadian Imperial Bank of Commerce 20,991,556 23,343,870

184,800 Citigroup Inc. 16,931,942 17,280,947

1,988,800 ECN Capital Corp. 5,751,692 7,815,984

1,647,700 Element Fleet Management Corp. 18,791,404 15,653,150 210,400 Intercontinental Exchange, Inc. 11,391,635 18,656,861

679,000 Manulife Financial Corp. 14,463,866 17,803,380

104,210,638 119,073,519

ENERGY [20.42%] 944,900 AltaGas Ltd. 29,291,899 26,806,813

371,000 Inter Pipeline Ltd. 9,667,481 9,657,130

623,700 Parex Resources Inc. 10,161,640 11,326,392

1,402,500 Precision Drilling Corp. 5,343,525 5,343,525

351,000 ShawCor Ltd. 11,573,640 9,624,420

542,658 Suncor Energy Inc. 18,571,841 25,043,667

214,372 TransCanada Corp. 9,751,218 13,115,279

94,361,244 100,917,226


442,100 CGI Group Inc. 15,732,741 30,195,429

177,500 Fiserv Inc. 24,485,240 29,250,593

509,308 Real Matters Inc. 6,621,004 5,133,825 86,000 Trilogy International Partners Inc., Warrants Feb 7, 2022 - 53,320

46,838,985 64,633,167

CONSUMER DISCRETIONARY [8.66%] 227,300 Comcast Corp. 9,307,424 11,440,269

904,800 Hudson's Bay Co. 17,768,125 10,206,144

738,000 Roots Corp. 8,856,000 8,317,260

54,000 The Home Depot Inc. 8,796,273 12,861,926

44,727,822 42,825,599

HEALTH CARE [6.61%]

41,500 Danaher Corp. 3,981,078 4,840,876

100,500 UnitedHealth Group Inc. 18,201,433 27,843,904

22,182,511 32,684,780

INDUSTRIALS [6.45%]

66,900 Northrop Grumman Corp. 14,173,710 25,803,073

36,200 Union Pacific Corp. 5,200,722 6,100,587

19,374,432 31,903,660

CONSUMER STAPLES [5.46%]

411,500 Alimentation Couche-Tard Inc., Class B 9,831,852 26,990,285

9,831,852 26,990,285

UTILITIES [4.47%]

392,400 Brookfield Infrastructure Partners LP 14,504,035 22,123,512

14,504,035 22,123,512

REAL ESTATE [3.86%]

685,300 Brookfield Property Partners LP 19,275,577 19,085,605

19,275,577 19,085,605

Total Equities 375,307,096 460,237,353



Total unrealized appreciation on forward currency contracts [0.82%] (Schedule 1) 4,043,573

Options purchased [0.27%] (Schedule 2) 1,314,340

Options written [-0.07%] (Schedule 2) (324,651)

Cash and Other Assets Less Liabilities [5.89%] 29,122,470



51


Forward Currency Contracts (Schedule 1)


Contract Cost Forward Value

Unrealized

Appreciation

Bought ($) Sold ($) Settlement Date $(CAD) $(CAD) $(CAD)

44,926,000 Canadian Dollar (35,000,000) U.S. Dollar 19-Jan-18 (44,926,000) (43,969,302) 956,698


96,889,000 Canadian Dollar (75,400,000) U.S. Dollar 19-Jan-18 (96,889,000) (94,722,536) 2,166,464

Total 4,043,573



Options Purchased

Premium Fair



Energy Select Sector SPDR Call 844 16-Mar-18 70.50 USD 125,157 342,061

iShares S&P TSX Capped Energy Fund Call 12,650 16-Feb-18 12.50 CAD 303,550 271,975

iShares S&P TSX Capped Energy Fund Call 3,280 16-Feb-18 12.00 CAD 55,760 159,080

iShares S&P TSX Capped Energy Fund Put 8,450 16-Feb-18 10.75 CAD 135,200 42,250

iShares S&P TSX Capped Energy Fund Put 4,200 16-Feb-18 11.00 CAD 75,600 29,400

SPDR Euro Stoxx 50 ETF Put 17,060 19-Jan-18 34.00 USD 1,607,947 7,107

SPDR S&P 500 ETF Trust Call 7,600 19-Jan-18 271.00 USD 716,319 305,629

Union Pacific Corp. Put 362 19-Jan-18 110.00 USD 131,929 4,778

WisdomTree Europe Hedged Equity Fund Call 12,100 16-Feb-18 67.00 USD 473,272 152,060

3,624,734 1,314,340

Options Written

Premium Fair

Number of Expiration Strike Received Value


iShares S&P TSX Capped Energy Fund Call 2,050 16-Feb-18 13.00 CAD (6,150) (15,375)

iShares S&P TSX Capped Energy Fund Put 4,200 16-Feb-18 11.75 CAD (153,300) (65,100)

iShares S&P TSX Capped Energy Fund Put 8,450 16-Feb-18 11.50 CAD (253,500) (92,950)

SPDR Euro Stoxx 50 ETF Put 17,060 19-Jan-18 37.00 USD (3,001,503) (39,497)

Union Pacific Corp. Put 362 19-Jan-18 100.00 USD (45,492) (1,592)

WisdomTree Europe Hedged Equity Fund Call 12,100 16-Feb-18 68.00 USD (168,398) (110,137)

(3,628,343) (324,651)




52


Investment Objective The Fund seeks to achieve long-term capital growth by investing primarily in Canadian and U.S. equity securities. The Fund provides downside

protection through the use of option strategies and tactical changes to the amount of its equity exposure, and is suitable for investors with a

long-term time horizon.



Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if a blended index of the S&P/TSX Composite Total Return Index and S&P 500 Total Return Index in

Canadian dollar terms were to fluctuate by 10%, with all other variables held constant, Net Assets attributable to holders of redeemable shares

would increase or decrease by the amounts shown in the table below. This is a measure based on the historical relationship of the Fund’s

performance against the index noted above. The composition of this calculation contains several subjective components that, although

reasonably estimated, could alter the resulting calculation should these components be modified based on revised assumptions.


Impact

($’000)




Impact

($’000)




26,697 5.40% 41,106 5.50%

b) Currency Risk

The tables below summarize the Fund’s direct exposure to currency risk as at December 31, 2017 and 2016. The tables also illustrate the

potential impact to the Fund’s Net Assets attributable to holders of redeemable shares as a result of a 1% change in these currencies relative to

the Canadian dollar, with all other variables held constant.

December 31, 2017

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 204,064 (182,724) 21,340 4.32 213

December 31, 2016

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 475,218 (377,058) 98,160 13.13 982

Credit Risk As at December 31, 2017 and 2016, the Fund is exposed to credit risk from over-the-counter derivative contracts with counterparties. The credit

risk is considered minimal as these counterparties have a minimum credit rating of AA- by S&P or equivalent.



53




Equities:

Financials 24.09% 16.07%

Energy 20.42% 13.90%

Information Technology 13.07% 10.67%

Consumer Discretionary 8.66% 6.55%


Industrials 6.45% 7.19%

Consumer Staples 5.46% 6.69%


Real Estate 3.86% 2.69%

Unrealized appreciation on forward currency contracts 0.82% –


Options purchased 0.27% 0.33%

Options written (0.07%) (0.26%)




The Fund’s financial assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below

as at December 31, 2017 and 2016:

December 31, 2017


Equities – Long 460,184,033 – – 460,184,033

Warrants 53,320 – – 53,320

Forward Currency Contracts – 4,043,573 – 4,043,573

Options purchased 1,314,340 – – 1,314,340

Options written (324,651) – – (324,651)

461,227,042 4,043,573 – 465,270,615

December 31, 2016


Equities – Long 545,424,000 – – 545,424,000

Warrants 258,720 – – 258,720

Forward Currency Contracts – (1,743,307) – (1,743,307)

Options purchased 2,431,361 – – 2,431,361

Options written (1,964,663) – – (1,964,663)

546,149,418 (1,743,307) – 544,406,111


Offsetting of Financial Instruments

In the normal course of business, the Fund enters into various master netting arrangements or other similar agreements that do not meet the

criteria for offsetting in the Statements of Financial Position but still allow for the related amounts to be set off in certain circumstances, such as

bankruptcy or termination of the contracts. The following table presents the over-the-counter derivatives that are offset, or subject to

enforceable master netting agreements or other similar agreements but that are not offset, as at December 31, 2017 and 2016. The “Net” column

shows what the impact on the Fund’s Statements of Financial Position would be if all set-off rights were exercised.



54

Financial assets and liabilities Amounts offset Amounts not offset Net

Gross

assets/liabilities

Gross

assets/liabilities

offset

Net

amounts

presented

Subject to

master

netting

arrangements

Cash

collateral

received $ $ $ $ $ $

December 31, 2017

Derivative assets 4,043,573 – 4,043,573 – – 4,043,573

Derivative liabilities – – – – – –

December 31, 2016

Derivative assets – – – – – –

Derivative liabilities 1,743,307 – 1,743,307 – – 1,743,307


As at December 31, 2017, restricted cash and investments held for the Fund totaled $13,251,918 (2016 - $32,231,246).



Series A Series A1 Series F Series F1 Series I* Series T Series FT

Up to 2.00% Up to 1.90% Up to 1.00% Up to 0.90% Negotiated by

the Shareholder

Up to 2.00% Up to 1.00%





Securities Lending (note 3)

As at December 31, 2017 and 2016 the market values of securities loaned and related collateral amounts were as follows:


$ $

Securities loaned – –

Collateral amounts – –

Collateral as a percentage of securities loaned – –

For the years ended December 31, 2017 and 2016, securities lending income was as follows:


$ $

Gross securities lending income 292,233 –

Securities lending charges (73,058) –

Net securities lending income 219,175 –

Withholding taxes on securities lending income (15,734) –

Net securities lending income received by the Fund 203,441 –

For the year ended December 31, 2017 securities lending charges represent 25% (2016 – nil%) of the gross securities lending income.


55




$ $

Assets

Current assets


Cash (note 11) 1,359,017 3,723,252

Subscriptions receivable 16,100 100

Unrealized appreciation on forward currency contracts (note 3, 5) 88,210 -

Options purchased (note 3, 5) 28,904 50,986

Broker margin (note 11) 173,336 128,947


Due from broker 315,665 -

Total assets 18,520,198 24,719,305

Liabilities

Current liabilities

Due to broker 689,065 -

Options written (note 3, 5) 6,744 41,305







Series A 5,362,087 9,321,335

Series F 10,515,785 12,758,511

Series FT 667,024 658,837

Series T 1,256,162 1,865,860


Series A 11.15 10.71

Series F 11.72 11.13

Series FT 9.08 9.16

Series T 8.61 8.80





DIRECTOR DIRECTOR

56





$ $

Income


Interest income for distribution purposes (note 3) 29,656 5,913

Dividends (note 3) 201,696 234,677

Distribution income (note 3) 381,337 364,630

Net realized gains on sales of investments 416,206 192,102

Net realized gains (losses) on option contracts 294,654 (458,807)

Net realized gains (losses) on forward currency contracts 231,324 (29,768)

Change in unrealized appreciation in the value of investments 72,734 484,400

Change in unrealized appreciation (depreciation) on option contracts (55,537) 105,361

Change in unrealized appreciation (depreciation) on forward currency contracts 125,274 (70,478)


Other income 1,749 1,664

Total income 1,491,143 854,219






Audit fees 14,769 13,796



Legal fees 6,772 30,471




Net expenses 419,439 599,718

Increase in Net Assets attributable to holders of redeemable shares from operations 1,071,704 254,501

Increase in Net Assets attributable to holders of redeemable shares from operations per series

Series A 298,993 26,027

Series F 672,528 206,570

Series FT 33,973 13,365

Series T 66,210 8,539


Series A 619,787 1,045,882

Series F 1,058,246 1,254,751

Series FT 57,565 74,058

Series T 163,153 223,910


Series A 0.48 0.02

Series F 0.64 0.16

Series FT 0.59 0.18

Series T 0.41 0.04



Financial assets and liabilities classified as HFT 577,210 (453,692)

1,697,344 828,030


57


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares (in Canadian Dollars, except share amounts)


Net Assets attributable to holders of redeemable shares, beginning of year Series A 9,321,335 11,733,434

Series F 12,758,511 14,421,755

Series FT 658,837 688,398

Series T 1,865,860 2,083,552

24,604,543 28,927,139


Series A 298,993 26,027

Series F 672,528 206,570

Series FT 33,973 13,365

Series T 66,210 8,539

1,071,704 254,501


From net investment income Series A (38,653) (18,575)

Series F (75,734) (25,435)

Series FT (4,863) (1,321)

Series T (9,147) (3,743)


Series A - -

Series F (1,745) (1,664)

Series FT (32,371) (42,301) Series T (83,647) (124,921)

(246,160) (217,960)

Redeemable share transactions (note 8) Proceeds from redeemable shares issued

Series A 409,602 1,720,927

Series F 2,227,631 2,043,733

Series FT 253,167 285,138

Series T 241,478 310,499


Series A 38,493 18,629 Series F 71,661 25,727

Series FT 2,733 5,089

Series T 9,147 5,620


Series A (4,667,683) (4,159,107)

Series F (5,137,067) (3,912,175)

Series FT (244,452) (289,531)

Series T (833,739) (413,686)

(7,629,029) (4,359,137)


Series A (3,959,248) (2,412,099) Series F (2,242,726) (1,663,244)

Series FT 8,187 (29,561)

Series T (609,698) (217,692)

(6,803,485) (4,322,596)


Series A 5,362,087 9,321,335

Series F 10,515,785 12,758,511

Series FT 667,024 658,837

Series T 1,256,162 1,865,860

17,801,058 24,604,543

58




2017 2016

Series A Series F Series FT Series T Series A Series F Series FT Series T

Shares, beginning of year 870,506 1,146,179 71,906 212,132 1,100,590 1,316,165 71,660 223,104

Subscriptions 37,696 194,920 27,908 28,093 165,173 190,934 31,312 35,190

Reinvested from distributions 3,447 6,108 302 1,064 1,735 2,311 553 632

Redemptions (430,573) (449,885) (26,649) (95,330) (396,992) (363,231) (31,619) (46,794)

Shares, end of year 481,076 897,322 73,467 145,959 870,506 1,146,179 71,906 212,132


59




$ $



Adjustments for:

Foreign exchange (gains) on cash (19,395) (14,079)

Distribution income (381,337) (364,630)

Net realized (gains) on sales of investments (416,206) (192,102)

Net realized (gains) losses on options contracts (294,654) 458,807

Change in unrealized (appreciation) in the value of investments (72,734) (484,400)

Change in unrealized (appreciation) depreciation on forward currency contracts (125,274) 70,478

Change in unrealized (appreciation) depreciation on options contracts 55,537 (105,361)



Net increase (decrease) in other assets and liabilities (34,415) 2,181,316







Foreign exchange gains on cash 19,395 14,079

Net increase (decrease) in cash (2,383,630) 354,340




Interest received 29,656 5,913



60



$ $ SHARES EQUITIES [56.60%]

FINANCIALS [15.41%]

11,500 Bank of America Corp. 366,022 426,627

4,400 Canadian Imperial Bank of Commerce 484,846 539,176

4,300 Citigroup Inc. 393,979 402,100

45,820 ECN Capital Corp. 150,762 180,073

38,020 Element Fleet Management Corp. 471,316 361,190 4,800 Intercontinental Exchange, Inc. 304,745 425,632

15,600 Manulife Financial Corp. 339,252 409,032

2,510,922 2,743,830

ENERGY [12.20%] 18,300 AltaGas Ltd. 566,970 519,171

8,600 Inter Pipeline Ltd. 224,098 223,858

14,400 Parex Resources Inc. 235,581 261,504

32,300 Precision Drilling Corp. 123,063 123,063

7,700 ShawCor Ltd. 250,173 211,134


4,920 TransCanada Corp. 227,576 301,006

2,031,775 2,171,846


9,250 CGI Group Inc. 427,858 631,774

4,100 Fiserv Inc. 568,856 675,647

11,700 Real Matters Inc. 147,102 117,936 1,750 Trilogy International Partners Inc., Warrants Feb 7, 2022 - 1,085

1,143,816 1,426,442

HEALTH CARE [4.23%] 1,000 Danaher Corp. 101,107 116,648

2,300 UnitedHealth Group Inc. 454,394 637,224

555,501 753,872

CONSUMER DISCRETIONARY [4.15%] 5,200 Comcast Corp. 222,983 261,722

17,000 Roots Corp. 204,000 191,590

1,200 The Home Depot Inc. 210,710 285,821

637,693 739,133

INDUSTRIALS [4.03%]

1,510 Northrop Grumman Corp. 365,355 582,400

800 Union Pacific Corp. 114,933 134,820

480,288 717,220


8,780 Alimentation Couche-Tard Inc., Class B 350,684 575,879

350,684 575,879

UTILITIES [2.86%] 9,030 Brookfield Infrastructure Partners LP 345,212 509,111

345,212 509,111

REAL ESTATE [2.47%] 15,790 Brookfield Property Partners LP 456,780 439,752

456,780 439,752

Total Equities 8,512,671 10,077,085


589,057 Sprott Diversified Bond Fund, Series I 6,344,401 6,444,934

Total Mutual Funds 6,344,401 6,444,934



Total unrealized appreciation on forward currency contracts [0.50%] (Schedule 1) 88,210

Options purchased [0.16%] (Schedule 2) 28,904





61





Unrealized

Appreciation



Total 88,210



Options Purchased

Premium Fair




iShares S&P TSX Capped Energy Fund Call 300 16-Feb-18 12.50 CAD 7,200 6,450


iShares S&P TSX Capped Energy Fund Put 200 16-Feb-18 10.75 CAD 3,200 1,000

iShares S&P TSX Capped Energy Fund Put 100 16-Feb-18 11.00 CAD 1,800 700

SPDR Euro Stoxx 50 ETF Put 330 19-Jan-18 34.00 USD 31,103 137

SPDR S&P 500 ETF Trust Call 150 19-Jan-18 271.00 USD 14,138 6,032

Union Pacific Corp. Put 8 19-Jan-18 110.00 USD 2,916 106

WisdomTree Europe Hedged Equity Fund Call 200 16-Feb-18 67.00 USD 7,792 2,513

72,475 28,904

Options Written

Premium Fair



iShares S&P TSX Capped Energy Fund Call 50 16-Feb-18 13.00 CAD (150) (375)

iShares S&P TSX Capped Energy Fund Put 100 16-Feb-18 11.75 CAD (3,650) (1,550)


SPDR Euro Stoxx 50 ETF Put 330 19-Jan-18 37.00 USD (58,060) (764)

Union Pacific Corp. Put 8 19-Jan-18 100.00 USD (1,005) (35)

WisdomTree Europe Hedged Equity Fund Call 200 16-Feb-18 68.00 USD (2,764) (1,820)

(71,629) (6,744)




62


Investment Objective The Fund seeks to achieve long-term capital growth and income. The Fund invests primarily in equities and fixed-income securities of

Canadian issuers, and may invest a portion of its assets in foreign equities and fixed-income securities. The Fund will seek to enhance income

generation by employing investment strategies such as short selling and options trading.







Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if a blended index of the S&P/TSX Composite Total Return Index, S&P 500 Total Return Index and FTSE

TMX Canada Universe Bond Index Return were to fluctuate by 10%, with all other variables held constant, Net Assets attributable to holders

of redeemable shares would increase or decrease by the amounts shown in the table below. This is a measure based on the historical

relationship of the Fund’s performance against the index noted above. The composition of this calculation contains several subjective

components that, although reasonably estimated, could alter the resulting calculation should these components be modified based on revised

assumptions. As at December 31, 2017, approximately 56.60% (2016 – 43.68%) of the Fund’s Net Assets attributable to holders of redeemable

shares were invested in equities that were exposed to market price fluctuations.


Impact ($’000)



of redeemable shares Impact ($’000)




961 5.40% 1,427 5.80%

b) Currency Risk

The tables below summarize the Fund’s direct exposure to currency risk as at December 31, 2017 and 2016. The tables also illustrate the

potential impact to the Fund’s Net Assets attributable to holders of redeemable shares as a result of a 1% change in these currencies relative to

the Canadian dollar, with all other variables held constant.

December 31, 2017

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 5,155 (3,858) 1,297 7.28 13

December 31, 2016

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 9,354 (8,017) 1,337 5.44 13



63






Equities:


Energy 12.20% 8.96%





Consumer Staples 3.24% 4.21%



Mutual Funds 36.21% 40.85%

Unrealized appreciation on forward currency contracts 0.50% –







The Fund’s financial assets and liabilities measured at fair value have been categorized based upon the fair value hierarchy in the tables below

as at December 31, 2017 and 2016:

December 31, 2017


$ $ $ $

Equities – Long 10,076,000 – – 10,076,000

Mutual Funds 6,444,934 – – 6,444,934

Warrants 1,085 – – 1,085

Forward Currency Contracts – 88,210 – 88,210

Options purchased 28,904 – – 28,904

Options written (6,744) – – (6,744)

16,544,179 88,210 – 16,632,389

December 31, 2016


$ $ $ $

Equities – Long 10,742,005 – – 10,742,005

Mutual Funds 10,051,174 – – 10,051,174

Warrants 5,210 – – 5,210

Forward Currency Contracts – (37,064) – (37,064)


Options written (41,305) – – (41,305)

20,808,070 (37,064) – 20,771,006



64









of Comprehensive Income. The total realized gains and change in unrealized gains arising from the Underlying Fund included in the Statements

of Comprehensive Income for the year ended December 31, 2017 are $106,682 and $51,830, respectively (2016 – realized losses of $11,960

and unrealized gains of $329,407). The Fund does not provide any additional significant financial or other support to the Underlying Fund. The

tables below set out the interest held by the Fund in the Underlying Fund:

December 31, 2017

Underlying Fund

Country of

establishment

and principal

place of business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount




$6,444,934

December 31, 2016

Underlying Fund

Country of

establishment and

principal place of

business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount




$10,051,174


As at December 31, 2017, restricted cash and investments held for the Fund totaled $173,336 (2016 - $622,538).



Series A Series F Series I* Series FT Series T

Up to 1.90% Up to 0.90% Negotiated by the Shareholder Up to 0.90% Up to 1.90%



Sharing Arrangements (note 14) The Fund paid $951 out of the total transaction costs incurred to certain brokers for research expenses provided to the portfolio manager during

the year ended December 31, 2017 (2016 - $979).


65




$ $

Assets

Current assets


Cash 161,200 7,547,566

Subscriptions receivable - 75,289


Total assets 10,202,604 20,477,100

Liabilities

Current liabilities






Series A 8,975,887 16,257,725

Series F 1,205,083 4,198,009


Series A 9.32 10.15

Series F 9.69 10.42





DIRECTOR DIRECTOR

66





$ $

Income

Net gain (loss) on investments:(1)

Interest income for distribution purposes (note 3) 626 -

Dividends (note 3) 9,179 32,627

Distribution income (note 3) 316,686 2,694,583

Net realized losses on sales of investments (2,263,159) (633,333)

Change in unrealized appreciation (depreciation) in the value of investments 1,250,982 (874,617)

Net realized gains (losses) on foreign exchange (74,679) 112

Other income 46 68

Total income (loss) (760,319) 1,219,440







Legal fees 6,880 45,327




Withholding taxes - 4,942

Transaction costs (note 3, 14) - 314


Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations (1,210,926) 732,905


Series A (990,109) 482,501

Series F (220,817) 250,404


Series A 1,335,146 1,059,299

Series F 248,742 614,712


per share (note 3)

Series A (0.74) 0.46

Series F (0.89) 0.41


Financial assets and liabilities designated at FVTPL (685,686) 1,219,260


(685,686) 1,219,260


67




$ $


Series A 16,257,725 12,072,353

Series F 4,198,009 8,420,724

20,455,734 20,493,077


Series A (990,109) 482,501

Series F (220,817) 250,404

(1,210,926) 732,905



Series A (433,636) (334,959)

Series F (80,485) (192,084)

(514,121) (527,043)



Series A 1,348,580 8,380,052

Series F 1,171,770 1,379,445


Series A 406,093 315,959

Series F 70,649 149,542


Series A (7,612,766) (4,658,181)

Series F (3,934,043) (5,810,022)

(8,549,717) (243,205)


Series A (7,281,838) 4,185,372

Series F (2,992,926) (4,222,715)

(10,274,764) (37,343)


Series A 8,975,887 16,257,725

Series F 1,205,083 4,198,009

10,180,970 20,455,734

68




2017 2016


Shares, beginning of year 1,602,237 402,815 1,227,132 843,265

Subscriptions 134,742 116,412 833,535 137,229

Reinvested from distributions 43,426 7,258 33,020 15,333

Redemptions (817,569) (402,072) (491,450) (593,012)

Shares, end of year 962,836 124,413 1,602,237 402,815


69




$ $


Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations (1,210,926) 732,905

Adjustments for:

Foreign exchange losses on cash 11 -

Distribution income (316,686) (2,694,583)

Net realized losses on sales of investments 2,263,159 633,333

Change in unrealized (appreciation) depreciation in the value of investments (1,250,982) 874,617










Foreign exchange (losses) on cash (11) -


Cash (Bank indebtedness) at beginning of year 7,547,566 (245,534)



Interest received 626 -



70


Schedule of Investment Portfolio As at December 31, 2017 Maturity Date Average Cost Fair Value

$ $

PAR VALUE BONDS AND CONVERTIBLE DEBENTURES [0.06%]

31,300 Estrella International Energy Services Ltd.**, 4.00% Dec 31, 2018 18,780 6,260

Total Bonds and Convertible Debentures 18,780 6,260


412,902 Sprott Energy Fund, Series I 3,590,527 2,735,927

253,465 Sprott Global Infrastructure Fund, Series I 2,404,374 2,421,604

208,557 Sprott Global Real Estate Fund, Series I 2,220,588 2,491,475

396,329 Sprott Gold and Precious Minerals Fund, Series I 2,394,579 2,384,317

Total Mutual Funds 10,610,068 10,033,323




** Private Company.




71


Investment Objective The investment objective of the Fund is to seek to provide total return over the long term by investing in a portfolio of mutual funds that are

managed by the Manager, its associates or its affiliates in various real asset sectors of the global economy. The Fund may also invest directly in

equity securities and/or exchange-traded funds operating in, or providing exposure to, the real asset sector.







Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, the Fund did not have a significant exposure to other price risk.

b) Currency Risk

As at December 31, 2017 and 2016, the Fund did not have a significant exposure to currency risk.






Bonds and Convertible Debentures 0.06% –

Mutual Funds 98.55% 62.83%






December 31, 2017


Bonds and Convertible Debentures – – 6,260 6,260

Mutual Funds 10,033,323 – – 10,033,323

10,033,323 – 6,260 10,039,583

December 31, 2016


Mutual Funds 12,852,296 – – 12,852,296



72

During the years ended December 31, 2017 and 2016, there were no significant transfers between levels other than the transfers indicated

below.

The reconciliation of investments measured at fair value using unobservable inputs (Level 3) for the year ended December 31, 2017 is

presented as follows:

December 31, 2017

Bonds and Convertible

Debentures

$

Balance at beginning of year –

Purchases 18,780

Change in unrealized losses (12,520)

Balance at end of year 6,260

Change in unrealized losses during the year for investments held at end of year (12,520)

The Fund’s Level 3 securities consist of private equity positions. The Manager determines their fair value by utilizing a variety of valuation

techniques such as the use of comparable recent transactions, discounted cash flows and other techniques used by market participants. As at

December 31, 2017, these positions were not significant to the Fund and any changes in reasonable possible assumptions used in their valuation

would not have a significant impact to the Net Assets attributable to holders of redeemable units of the Fund. As at December 31, 2016, the

Fund did not hold any Level 3 securities.

Investments in Underlying Funds The Fund invests in redeemable units or shares of other investment funds managed by Ninepoint Partners LP (the “Underlying Funds”) to gain

exposure to the investment objective and strategies of the Underlying Funds.

Each Underlying Fund invests in a portfolio of assets to generate returns in the form of investment income and capital appreciation for its

unitholders. Each Underlying Fund finances its operations primarily through the issuance of redeemable units, which are puttable at the

unitholder’s option and entitle the unitholder to a proportionate share of the Underlying Fund’s net assets. The Fund’s interests in Underlying

Funds, held in the form of redeemable units, are reported in its Schedule of Investment Portfolio at fair value, which represent the Fund’s

maximum exposure to these investments. Distributions earned from Underlying Funds are included in “Distribution income” in the Statements

of Comprehensive Income. The total realized losses and change in unrealized gains arising from Underlying Funds included in the Statement of

Comprehensive Income for the year ended December 31, 2017 are $1,187,720 and $1,263,502, respectively (2016 – realized losses of $790,394

and unrealized losses of $663,545). The Fund does not provide any additional significant financial or other support to any Underlying Funds.

The tables below set out the interest held by the Fund in Underlying Funds:

December 31, 2017

Underlying Fund

Country of

establishment

and principal

place of business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount

included in

Statement of

Financial Position

Sprott Energy Fund Canada 1.72% $158,702,682 $2,735,927

Sprott Global Infrastructure Fund Canada 18.07% $13,400,793 $2,421,604

Sprott Global Real Estate Fund Canada 16.81% $14,825,169 $2,491,475

Sprott Gold and Precious Minerals Fund Canada 1.44% $165,423,202 $2,384,317

$10,033,323



73

December 31, 2016

Underlying Fund

Country of

establishment and

principal place of

business

Ownership

interest

Total Net Assets

of Underlying

Fund

Carrying amount



Sprott Global Infrastructure Fund Canada 25.23% $12,979,876 $3,275,228

Sprott Global Real Estate Fund Canada 54.23% $17,659,488 $9,577,068

$12,852,296





Shareholder





December 31, 2017 December 31, 2016 Shares held

Series A 112 16,981

Value of shares held ($) 1,040 172,306

Fund Mergers During the year ended December 31, 2016, the Fund acquired all the assets of the funds listed below (the “Acquired Funds”), and in exchange,

the Fund issued shares to such funds. In turn, those shares were distributed to the unitholders of those Acquired Funds. The Manager was the

investment advisor to the Acquired Funds. Tax elections were made which allowed the transfer of assets to occur on a tax-deferred basis.

Transfer Date Acquired Funds

Fair Value of Assets Acquired by

the Fund

Number of shares issued by the

Fund to the Acquired Fund

December 30, 2016 Sprott Tactical Balanced Fund $5,382,249 529,509

December 30, 2016 Sprott Tactical Balanced Class $2,134,207 209,965


74


Statements of Financial Position (in U.S. Dollars)


$ $

Assets

Current assets


Cash (note 11) 6,134,048 8,036,352

Unrealized appreciation on forward currency contracts (note 3, 5) 169,695 17,266

Options purchased (note 3, 5) 47,953 28,350

Broker margin (note 11) 332,823 1,008,383

Subscriptions receivable 7,291 -


Total assets 17,413,722 20,800,895

Liabilities

Current liabilities

Options written (note 3, 5) 11,856 24,750

Redemptions payable - 34,351





Series A 3,614,520 5,972,609

Series AH 5,344,964 2,005,714

Series F 5,406,604 8,313,522

Series FH 2,570,049 2,954,274

Series FT 286,384 1,248,906

Series T 152,634 229,806


Series A 10.29 9.43

Series AH 10.83 9.34

Series F 10.59 9.59

Series FH 11.24 9.60

Series FT 9.20 8.85

Series T 8.90 8.64

Series AH $CAD 13.60 12.54

Series FH $CAD 14.13 12.90





DIRECTOR DIRECTOR

75


Statements of Comprehensive Income (Loss) (in U.S. Dollars, except share amounts)


Income Net gain (loss) on investments and derivatives:(1)

Interest income for distribution purposes (note 3) 81,747 56

Dividends (note 3) 166,870 440,248

Net realized gains (losses) on sales of investments 133,934 (1,305,595)


Net realized gains on forward currency contracts 244,666 107,250


Change in unrealized appreciation (depreciation) on option contracts (55,691) 162,843 Change in unrealized appreciation on forward currency contracts 152,429 13,661

Securities lending income (note 3) - 30,156


Other income 12 353

Total income (loss) 2,612,497 (182,820)





Filing fees 19,767 24,616 Withholding taxes 16,877 38,381




Legal fees 4,910 48,414




Expenses waived/absorbed by the Manager (note 13) - (32,325)

Net expenses 448,353 638,974

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations 2,164,144 (821,794)


Series A 419,924 (229,857)

Series AH 638,187 28,524

Series F 640,238 (583,001)

Series FH 397,173 104,194

Series FT 52,297 (119,545)

Series T 16,325 (22,109)


Series A 504,124 739,488

Series AH 382,152 175,953 Series F 654,207 1,565,779

Series FH 240,894 382,703

Series FT 62,657 185,261

Series T 20,762 47,737

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations per series per share (note 3)

Series A 0.83 (0.31)

Series AH 1.67 0.16

Series F 0.98 (0.37)

Series FH 1.65 0.27

Series FT 0.83 (0.65) Series T 0.79 (0.46)


Financial assets and liabilities designated at FVTPL 1,756,416 220,258 Financial assets and liabilities classified as HFT 877,313 (657,438)

2,633,729 (437,180)


76


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares (in U.S. Dollars, except share amounts)


$ $


Series A 5,972,609 7,547,049

Series AH 2,005,714 1,080,349

Series F 8,313,522 19,957,162

Series FH 2,954,274 1,375,020

Series FT 1,248,906 3,820,526

Series T 229,806 544,076

20,724,831 34,324,182


Series A 419,924 (229,857)

Series AH 638,187 28,524

Series F 640,238 (583,001)

Series FH 397,173 104,194

Series FT 52,297 (119,545)

Series T 16,325 (22,109)

2,164,144 (821,794)



Series A (16,377) -

Series AH (24,020) -

Series F (24,578) -

Series FH (11,513) -

Series FT (1,304) -

Series T (699) -


Series A - -

Series AH - -

Series F - -

Series FH - -

Series FT (29,727) (101,052)

Series T (10,582) (26,330)

(118,800) (127,382)

77



continued (in U.S. Dollars, except share amounts)


$ $



Series A 665,534 2,840,887

Series AH 3,355,504 1,753,795

Series F 1,084,472 3,831,760

Series FH 438,060 3,917,725

Series FT 12,203 763,902

Series T - 276,593


Series A 16,165 -

Series AH 24,000 -

Series F 22,020 -

Series FH 11,513 -

Series FT 12,737 62,568

Series T 1,323 10,261


Series A (3,443,335) (4,185,470)

Series AH (654,421) (856,954)

Series F (4,629,070) (14,892,399)

Series FH (1,219,458) (2,442,665)

Series FT (1,008,728) (3,177,493)

Series T (83,539) (552,685)

(5,395,020) (12,650,175)


Series A (2,358,089) (1,574,440)

Series AH 3,339,250 925,365

Series F (2,906,918) (11,643,640)

Series FH (384,225) 1,579,254

Series FT (962,522) (2,571,620)

Series T (77,172) (314,270)

(3,349,676) (13,599,351)


Series A 3,614,520 5,972,609

Series AH 5,344,964 2,005,714

Series F 5,406,604 8,313,522

Series FH 2,570,049 2,954,274

Series FT 286,384 1,248,906

Series T 152,634 229,806

17,375,155 20,724,831

78


Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares continued Changes in outstanding redeemable shares of the Fund for the years ended December 31, 2017 and 2016 were as follows:

2017 2016

Series A Series AH Series F Series FH Series FT Series T Series A Series AH Series F Series FH Series FT Series T

Shares, beginning of year 633,663 214,818 867,120 307,613 141,146 26,584 777,979 114,462 2,045,906 143,090 398,975 57,191

Subscriptions 70,004 343,703 110,689 42,478 1,370 - 304,070 191,486 407,750 419,908 83,671 30,275

Reinvested distributions 1,569 2,204 2,077 1,023 1,420 152 - - - - 6,974 1,152

Redemptions (354,128) (66,984) (469,244) (122,546) (112,823) (9,577) (448,386) (91,130) (1,586,536) (255,385) (348,474) (62,034)

Shares, end of year 351,108 493,741 510,642 228,568 31,113 17,159 633,663 214,818 867,120 307,613 141,146 26,584


79


Statements of Cash Flows (in U.S. Dollars)


$ $


Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations 2,164,144 (821,794)

Adjustments for:

Foreign exchange (gains) losses on cash 66 (1,531)

Net realized (gains) losses on sales of investments (133,934) 1,305,595



Change in unrealized (appreciation) on forward currency contracts (152,429) (13,661)

Change in unrealized (appreciation) depreciation on options contracts 55,691 (162,843)










Foreign exchange gains (losses) on cash (66) 1,531

Net decrease in cash (1,902,238) (4,049,775)




Interest received 81,747 56



80


Schedule of Investment Portfolio (in U.S. Dollars) As at December 31, 2017 Average Cost Fair Value

$ $


FINANCIALS [14.42%]

21,600 Bank of America Corp. 552,537 637,632 7,600 Citigroup Inc. 559,618 565,516

14,900 Intercontinental Exchange, Inc. 744,350 1,051,344

12,000 Manulife Financial Corp. 205,349 250,320

2,061,854 2,504,812

ENERGY [9.52%]

34,800 AltaGas Ltd. 821,937 785,604

15,100 Canadian Natural Resources Ltd. 435,333 539,372

15,900 Inter Pipeline Ltd. 332,371 329,334

20 Suncor Energy Inc. 552 734

1,590,193 1,655,044

UTILITIES [8.87%]

34,425 Brookfield Infrastructure Partners LP 905,885 1,542,584

905,885 1,542,584

INDUSTRIALS [6.87%]

3,190 Northrop Grumman Corp. 578,862 979,043

1,600 Union Pacific Corp. 185,856 214,560

764,718 1,193,603

REAL ESTATE [6.38%]

50,020 Brookfield Property Partners LP 1,122,404 1,108,443

1,122,404 1,108,443

HEALTH CARE [5.67%]

1,800 Danaher Corp. 135,562 167,076


650,630 984,983


7,300 Fiserv Inc. 770,132 957,248

770,132 957,248

CONSUMER DISCRETIONARY [4.37%]

9,500 Comcast Corp. 303,993 380,475


556,433 759,535

Total Equities 8,422,249 10,706,252




Options purchased [0.28%] (Schedule 2) 47,953





81



(in U.S. Dollars)



Unrealized

Appreciation

Bought ($) Sold ($) Settlement Date $(USD) $(USD) $(USD)

6,586,010 Canadian Dollar (5,129,479) U.S. Dollar 31-Jan-18 5,129,479 5,243,412 113,933

142,376 Canadian Dollar (113,136) U.S. Dollar 31-Jan-18 113,136 113,357 221

3,210,659 Canadian Dollar (2,500,605) U.S. Dollar 31-Jan-18 2,500,605 2,556,146 55,541

Total 169,695


(in U.S. Dollars)


Options Purchased

Premium Fair


Option Details Option Type Contracts Date Price ($) $(USD) $(USD)






SPDR Euro Stoxx 50 ETF Put 720 19-Jan-18 34.00 USD 54,000 239

SPDR S&P 500 ETF Trust Call 350 19-Jan-18 271.00 USD 26,250 11,200

Union Pacific Corp. Put 16 19-Jan-18 110.00 USD 4,640 168

WisdomTree Europe Hedged Equity Fund Call 600 16-Feb-18 67.00 USD 18,600 6,000

128,004 47,953

Options Written

Premium Fair


Option Details Option Type Contracts Date Price ($) $(USD) $(USD)

iShares S&P TSX Capped Energy Fund Call 100 16-Feb-18 13.00 CAD (239) (597)



SPDR Euro Stoxx 50 ETF Put 720 19-Jan-18 37.00 USD (100,800) (1,326)

Union Pacific Corp. Put 16 19-Jan-18 100.00 USD (1,600) (56)

WisdomTree Europe Hedged Equity Fund Call 600 16-Feb-18 68.00 USD (6,600) (4,346)

(123,404) (11,856)




(in U.S. Dollars)

82


Investment Objective The Fund seeks to achieve long-term capital growth by investing primarily in U.S. equity securities. The Fund provides downside protection

through the use of option strategies and tactical changes to the amount of its equity exposure, and is suitable for investors with a long-term

horizon.



Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if the S&P 500 Total Return Index were to fluctuate by 10%, with all other variables held constant, Net

Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a measure based

on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation contains several

subjective components that, although reasonably estimated, could alter the resulting estimate should these components be modified based on

revised assumptions.


Impact

($’000)



of redeemable units

Impact

($’000)



of redeemable units

747 4.30% 870 4.20%

b) Currency Risk


impact to the Fund’s Net Assets attributable to holders of redeemable units as a result of 1% changes in these currencies relative to the U.S.

dollar, with all other variables held constant.

December 31, 2017

Currency

Fair Value

($’000)

Forward Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets


of redeemable units



of redeemable units

($’000)

Canadian Dollar 1,108 7,909 9,017 51.90% 90

December 31, 2016

Currency

Fair Value

($’000)

Forward Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets


of redeemable units



of redeemable units

($’000)

Canadian Dollar 87 5,055 5,142 24.81% 51





(in U.S. Dollars)

83






Equities - Long:


Energy 9.52% 3.50%







Consumer Staples – 3.62%

Unrealized appreciation on forward currency contracts 0.98% 0.08%








December 31, 2017


$ $ $ $

Equities – Long 10,706,252 – – 10,706,252



Options written (11,856) – – (11,856)

10,742,349 169,695 – 10,912,044

December 31, 2016


$ $ $ $

Equities – Long 11,692,311 – – 11,692,311



Options written (24,750) – – (24,750)

11,695,911 17,266 – 11,713,177



As at December 31, 2017, restricted cash and investments held for the Fund totaled $332,823 (2016 - $1,657,193).



(in U.S. Dollars)

84



Series A Series AH Series F Series FH Series FT Series I* Series T

Up to 2.00% Up to 2.00% Up to 1.00% Up to 1.00% Up to 1.00% Negotiated by the

Shareholder

Up to 2.00%






Series A 101 15,000

Value of shares held ($USD) 1,038 141,373

Sharing Arrangements (note 14) The Fund paid $449 out of the total transaction costs incurred to certain brokers for research expenses provided to the portfolio manager during

the year ended December 31, 2017 (2016 – $2,040).

Securities Lending (note 3)

As at December 31, 2017 and 2016 the market values of securities loaned and related collateral amounts were as follows:


$ $

Securities loaned – –

Collateral amounts – –

Collateral as a percentage of securities loaned – –

For the years ended December 31, 2017 and 2016, securities lending income was as follows:


$ $

Gross securities lending income – 36,224

Securities lending charges – (6,068)

Net securities lending income – 30,156

Withholding taxes on securities lending income – (1,401)

Net securities lending income received by the Fund – 28,755

For the year ended December 31, 2017 securities lending charges represent nil% (2016 – 17%) of the gross securities lending income.


85





$ $

Assets

Current assets


Cash (note 11) - 2,807,385

Unrealized appreciation on forward currency contracts (note 3, 5) 14,302 21,205

Subscriptions receivable 50 260,601


Other assets 917 -

Total assets 29,899,399 32,923,560

Liabilities

Current liabilities

Bank indebtedness 151,490 -







Series A 9,467,015 5,919,454

Series A1 9,428,881 13,577,790

Series F 5,998,148 7,978,648

Series F1 3,068,433 3,330,661

Series PF 1,729,327 1,790,349


Series A 10.55 9.58

Series A1 10.56 9.59

Series F 10.80 9.70

Series F1 11.51 10.34

Series PF 11.08 9.94





DIRECTOR DIRECTOR

86


Statements of Comprehensive Income (Loss) (in Canadian Dollars, except share amounts)


Income Net gain (loss) on investments and derivatives:(1)


Dividends (note 3) 589,233 570,372

Net realized gains (losses) on sales of investments 2,207,236 (1,427,491)




Change in unrealized appreciation on forward currency contracts 7,205 7,098 Net realized losses on foreign exchange (144,631) (39,429)

Other income 91 -

Total income 4,588,439 1,964,271







Administrative fees 23,434 37,233 Custodial fees 9,954 18,271

Audit fees 8,617 12,231

Legal fees 7,040 22,483





Net expenses 721,705 851,661

Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations 3,866,734 1,112,610

Increase in Net Assets attributable to holders of redeemable shares from operation per series Series A 919,516 251,858

Series A1 1,359,882 577,113

Series F 908,352 67,440

Series F1 415,669 192,229

Series PF 263,315 23,970


Series A 762,637 402,055

Series A1 1,030,665 1,374,806

Series F 697,133 772,088

Series F1 273,777 287,475

Series PF 177,992 170,973


Series A 1.21 0.63

Series A1 1.32 0.42 Series F 1.30 0.09

Series F1 1.52 0.67

Series PF 1.48 0.14



Financial assets and liabilities classified as HFT 49,974 763,874

4,732,979 2,003,700


87





$ $


Series A 5,919,454 600,221

Series A1 13,577,790 4,293,548

Series F 7,978,648 6,936,879

Series F1 3,330,661 -

Series PF 1,790,349 1,508,846

32,596,902 13,339,494


Series A 919,516 251,858

Series A1 1,359,882 577,113

Series F 908,352 67,440

Series F1 415,669 192,229

Series PF 263,315 23,970

3,866,734 1,112,610



Series A (257,602) (149,173)

Series A1 (337,698) (493,661)

Series F (230,400) (268,757)

Series F1 (97,500) (82,787)

Series PF (61,272) (60,217)

(984,472) (1,054,595)



Series A 6,353,773 5,920,922

Series A1 2,136,545 13,141,490

Series F 4,312,084 8,050,732

Series F1 580,424 3,928,730

Series PF 72,727 311,054


Series A 230,304 134,965

Series A1 299,684 460,275

Series F 189,929 231,536

Series F1 84,307 74,949

Series PF 56,053 58,000


Series A (3,698,430) (839,339)

Series A1 (7,607,322) (4,400,975)

Series F (7,160,465) (7,039,182)

Series F1 (1,245,128) (782,460)

Series PF (391,845) (51,304)

(5,787,360) 19,199,393

88



continued (in Canadian Dollars, except share amounts)


$ $


Series A 3,547,561 5,319,233

Series A1 (4,148,909) 9,284,242

Series F (1,980,500) 1,041,769

Series F1 (262,228) 3,330,661

Series PF (61,022) 281,503

(2,905,098) 19,257,408


Series A 9,467,015 5,919,454

Series A1 9,428,881 13,577,790

Series F 5,998,148 7,978,648

Series F1 3,068,433 3,330,661

Series PF 1,729,327 1,790,349

29,691,804 32,596,902


2017 2016

Series A Series A1 Series F Series F1 Series PF Series A Series A1 Series F Series F1 Series PF

Shares, beginning of year 617,723 1,415,865 822,353 322,175 180,179 59,700 427,025 689,314 - 146,842

Subscriptions 623,076 205,165 421,347 51,311 6,956 633,467 1,404,870 852,304 391,526 32,588

Reinvested distributions 22,712 29,681 18,494 7,684 5,302 14,349 49,026 24,513 7,429 6,002

Redemptions (365,783) (757,895) (706,824) (114,694) (36,410) (89,793) (465,056) (743,778) (76,780) (5,253)

Shares, end of year 897,728 892,816 555,370 266,476 156,027 617,723 1,415,865 822,353 322,175 180,179


89





$ $


Increase (decrease) in net assets attributable to holders of redeemable shares from operations 3,866,734 1,112,610

Adjustments for:

Foreign exchange losses on cash 11,980 56

Net realized (gains) losses on sales of investments (2,207,236) 1,427,491



Change in unrealized (appreciation) on forward currency contracts (7,205) (7,098)



Net increase (decrease) in other assets and liabilities (38,348) (42,414)







Foreign exchange (losses) on cash (11,980) (56)



Cash (Bank indebtedness) at end of year (151,490) 2,807,385





90



$ $


FINANCIALS [27.21%]

3,268 Affiliated Managers Group Inc. 724,281 842,945

4,322 Berkshire Hathaway Inc. 829,940 1,076,630

22,353 Brookfield Asset Management Inc. 1,045,829 1,223,156

48,612 Credit Agricole SA 1,001,203 1,011,498 40,900 Credit Suisse Group AG 879,498 917,892

8,917 Intercontinental Exchange Inc. 685,991 790,700

9,535 JPMorgan Chase and Co. 972,938 1,281,431

40,400 UBS Group AG 904,230 934,809

7,043,910 8,079,061

INDUSTRIALS [25.93%]

34,018 Ashtead Group PLC 786,185 1,149,690

8,543 East Japan Railway Co. 1,048,438 1,047,548

4,730 WABCO Holdings Inc. 874,405 852,997

2,359 FedEx Corp. 509,180 739,780

28,016 Ferrovial SA 770,260 799,437 4,147 Raytheon Co. 838,745 978,993

6,250 Siemens AG 1,051,009 1,094,565

11,621 Waste Connections Inc. 862,392 1,036,022

6,740,614 7,699,032


858 Alphabet Inc. 950,837 1,128,286

15,919 InterXion Holding NV 989,128 1,178,926

5,954 Mastercard Inc. 800,383 1,132,542

11,040 Microsoft Corp. 1,050,973 1,186,786

8,002 Visa Inc. 887,519 1,146,605

4,678,840 5,773,145

ENERGY [7.47%]

14,400 Royal Dutch Shell PLC 608,251 612,857

22,000 Suncor Energy Inc. 935,763 1,015,300

8,500 Total SA 598,407 590,125

2,142,421 2,218,282


4,288 The Home Depot Inc. 795,933 1,021,332

7,060 Valeo SA 535,926 662,866

1,331,859 1,684,198

HEALTH CARE [4.27%]

4,577 UnitedHealth Group Inc. 834,360 1,268,074

834,360 1,268,074

TELECOMMUNICATION SERVICES [4.24%]

39,133 Cellnex Telecom, S.A. 1,132,826 1,259,747

1,132,826 1,259,747


6,750 Henkel AG & Co. KGaA 1,036,635 1,017,762

1,036,635 1,017,762

UTILITIES [2.69%]

36,900 Engie SA 774,553 797,566

774,553 797,566

Total Equities 25,716,018 29,796,867







91




Contract

Cost

Forward

Value

Unrealized

Appreciation


879,893 Canadian Dollar (510,000) Pound Sterling 19-Jan-18 (879,892) (865,590) 14,302

Total 14,302




92


Investment Objective The Fund seeks to provide consistent income and capital appreciation by investing primarily in a diversified portfolio of dividend yielding

global equities.



Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if the MSCI World Index were to fluctuate by 10%, with all other variables held constant, Net Assets

attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a measure based on the

historical relationship of the Fund’s performance against the index noted above. The composition of this calculation contains several subjective

components that, although reasonably estimated, could alter the resulting estimate should these components be modified based on revised

assumptions.


Impact

($’000)



of redeemable units

Impact

($’000)



of redeemable units

2,553 8.60% 2,672 8.20%

b) Currency Risk




December 31, 2017

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 16,292 – 16,292 54.87 163

Euro 7,274 – 7,274 24.50 73

Swiss Franc 1,881 – 1,881 6.34 19

Japanese Yen 1,048 – 1,048 3.53 10

Pound Sterling 1,762 (865) 897 3.02 9

28,257 (865) 27,392 92.26 274

December 31, 2016

Currency

Fair Value

($’000)

Forward

Currency

Contracts

($’000)

Net Exposure

($’000)

% of Net Assets






($’000)

U.S. Dollar 19,644 – 19,644 60.26 196

Swiss Franc 2,195 – 2,195 6.73 22

Euro 2,079 (1,025) 1,054 3.24 11

Pound Sterling 2,963 (2,896) 67 0.21 1

26,881 (3,921) 22,960 70.44 230



93








Equities - Long:




Energy 7.47% 5.20%



Telecommunication Services 4.24% 3.93%

Consumer Staples 3.43% –

Utilities 2.69% –



Cash and Other Assets Less Liabilities (0.40%) 8.63%


The Fund’s investment portfolio is concentrated in the following geographic segments as at December 31, 2017 and 2016.


United States 45.29% 53.72%

Canada 11.03% 11.20%

France 10.31% 4.50%

Germany 7.11% 1.84%

Spain 6.94% –

Switzerland 6.24% 6.68%

United Kingdom 5.94% 9.09%

Netherlands 3.97% –

Japan 3.52% –

Ireland – 4.31%



Cash and Other Assets Less Liabilities (0.40%) 8.63%





December 31, 2017


$ $ $ $

Equities – Long 29,796,867 – – 29,796,867


29,796,867 14,302 – 29,811,169



94

December 31, 2016


$ $ $ $

Equities – Long 29,776,652 – – 29,776,652


29,776,652 7,098 – 29,783,750


Offsetting of Financial Instruments

In the normal course of business, the Fund enters into various master netting arrangements or other similar agreements that do not meet the

criteria for offsetting in the Statements of Financial Position but still allow for the related amounts to be set off in certain circumstances, such as

bankruptcy or termination of the contracts. The following table presents the over-the-counter derivatives that are offset, or subject to

enforceable master netting agreements or other similar agreements but that are not offset, as at December 31, 2017 and 2016. The “Net” column

shows what the impact on the Fund’s Statements of Financial Position would be if all set-off rights were exercised.

Financial assets and liabilities Amounts offset Amounts not offset Net

Gross

assets/liabilities

Gross

assets/liabilities

offset

Net

amounts

presented

Subject to

master

netting

arrangements

Cash

collateral

received $ $ $ $ $ $

December 31, 2017

Derivative assets 14,302 – 14,302 – – 14,302

Derivative liabilities – – – – – –

December 31, 2016

Derivative assets 21,205 – 21,205 – – 21,205

Derivative liabilities 14,107 – 14,107 – – 14,107



Series A Series A1 Series F Series F1 Series P Series PF Series Q Series QF Series I*

Up to 2.00% Up to 1.95% Up to 1.00% Up to 0.95% Up to 1.80% Up to 0.80% Up to 1.70% Up to 0.70% Negotiated by

the Shareholder






Series A 99 15,620

Series F 96 123,701

Value of shares held ($) 2,081 1,349,860



95

Fund Merger During the year ended December 31, 2017, the Fund acquired all the assets of the below fund (the “Acquired Fund”), and in exchange, the

Fund issued shares to this fund. In turn, those shares were distributed to the shareholders of the Acquired Fund. The Manager was the

investment advisor to the Acquired Fund.

Transfer Date Acquired Fund

Fair Value of Assets

Acquired by the Fund



December 4, 2017 Sprott Focused Global Balanced Class $6,265,110 593,395




96





$ $

Assets

Current assets


Cash 786,667 1,432,542

Receivable from Manager (note 13) - 22,065

Subscriptions receivable 55 -


Total assets 11,572,128 13,225,581

Liabilities

Current liabilities

Redemptions payable 70,880 -

Accrued expenses 381 13,091




Series A 2,808,816 1,138,278

Series A1 3,779,558 5,489,328

Series F 3,079,969 3,986,413

Series F1 1,832,524 2,598,471


Series A 10.71 10.00

Series A1 10.72 10.00

Series F 10.96 10.12

Series F1 11.22 10.35





DIRECTOR DIRECTOR

97





$ $

Income



Dividends (note 3) 159,739 191,237

Net realized gains (losses) on sales of investments 608,018 (95,421)


Net realized gains on option contracts - 1,424

Change in unrealized appreciation in the value of investments 603,671 707,762

Net realized losses on foreign exchange (44,721) (10,875)

Other income 2 158

Total income 1,407,520 945,386








Audit fees 8,616 11,231

Legal fees 7,039 17,505






Net expenses 236,409 240,059


Increase in Net Assets attributable to holders of redeemable shares from operation per series

Series A 156,614 60,657

Series A1 434,550 330,934

Series F 364,558 181,067

Series F1 215,389 132,669


Series A 163,495 82,814

Series A1 445,403 445,241

Series F 316,916 434,180

Series F1 188,507 168,691


Series A 0.96 0.73

Series A1 0.98 0.74

Series F 1.15 0.42

Series F1 1.14 0.79


Financial assets and liabilities designated at FVTPL 1,373,406 803,846

Financial assets and liabilities classified as HFT 78,833 152,257

1,452,239 956,103


98




Net Assets attributable to holders of redeemable shares, beginning of year Series A 1,138,278 359,565

Series A1 5,489,328 1,144,389

Series F 3,986,413 5,645,105

Series F1 2,598,471 -

13,212,490 7,149,059


Series A 156,614 60,657

Series A1 434,550 330,934

Series F 364,558 181,067

Series F1 215,389 132,669

1,171,111 705,327


From return of capital Series A (58,011) (29,986)

Series A1 (151,796) (162,140)

Series F (109,433) (147,962)

Series F1 (66,544) (49,685)

(385,784) (389,773)



Series A 2,445,686 1,286,602

Series A1 538,228 5,061,582

Series F 2,968,984 1,250,006

Series F1 442,292 2,630,725 Reinvestments of distributions to holders of redeemable shares

Series A 50,978 21,909

Series A1 126,879 127,563

Series F 84,782 98,315

Series F1 61,014 45,469


Series A (924,729) (560,469) Series A1 (2,657,631) (1,013,000)

Series F (4,215,335) (3,040,118)

Series F1 (1,418,098) (160,707)

(2,496,950) 5,747,877


Series A 1,670,538 778,713

Series A1 (1,709,770) 4,344,939

Series F (906,444) (1,658,692)

Series F1 (765,947) 2,598,471

(1,711,623) 6,063,431


Series A 2,808,816 1,138,278

Series A1 3,779,558 5,489,328 Series F 3,079,969 3,986,413

Series F1 1,832,524 2,598,471

11,500,867 13,212,490

99




2017 2016

Series A Series A1 Series F Series F1 Series A Series A1 Series F Series F1

Shares, beginning of year 113,837 548,679 393,829 250,944 36,088 114,846 566,008 -

Subscriptions 233,386 50,566 280,349 39,725 133,882 524,407 128,495 262,135

Reinvested distributions 4,895 12,234 8,025 5,654 2,241 13,086 9,984 4,506

Redemptions (89,844) (258,860) (401,287) (133,038) (58,374) (103,660) (310,658) (15,697)

Shares, end of year 262,274 352,619 280,916 163,285 113,837 548,679 393,829 250,944


100





$ $


Increase in net assets attributable to holders of redeemable shares from operations 1,171,111 705,327

Adjustments for:

Foreign exchange losses on cash 10,790 24

Net realized (gains) losses on sales of investments (608,018) 95,421

Net realized (gains) on options contracts - (1,424)

Change in unrealized (appreciation) in the value of investments (603,671) (707,762)



Net increase (decrease) in other assets and liabilities 23,833 (19,956)







Foreign exchange (losses) on cash (10,790) (24)

Net increase (decrease) in cash (635,085) 812,604







101



$ $


INDUSTRIALS [24.71%]

4,800 CSX Corp. 354,982 331,831

1,420 FedEx Corp. 340,100 445,310

1,750 Honeywell International Inc. 334,810 337,275

7,800 Quanta Services Inc. 364,945 383,369 1,982 Raytheon Co. 410,593 467,895

5,481 Waste Connections Inc. 423,999 488,636

4,516 Xylem Inc. 306,744 387,055

2,536,173 2,841,371

FINANCIALS [24.12%]

1,437 Affiliated Managers Group Inc. 323,139 370,659

11,050 Bank of America Corp. 363,480 409,933

1,615 Berkshire Hathaway Inc. 321,577 402,304

7,062 Brookfield Asset Management Inc. 333,825 386,433

4,443 Intercontinental Exchange Inc. 356,434 393,975

2,970 JPMorgan Chase and Co. 311,095 399,145 1,940 S&P Global Inc. 370,255 412,999

2,379,805 2,775,448


316 Alphabet Inc. 353,400 415,546 1,760 Apple Inc. 353,212 374,304

1,180 Broadcom Ltd. 363,895 380,961

2,182 Mastercard Inc. 300,409 415,050

3,875 Microsoft Corp. 371,197 416,558

2,965 Visa Inc. 335,718 424,854

2,077,831 2,427,273


3,210 Aptiv PLC 348,289 342,207

1,799 Delphi Technologies PLC 117,010 118,625


782,292 858,837

HEALTH CARE [7.39%]

1,500 Thermo Fisher Scientific Inc. 359,109 357,935


684,233 849,705

ENERGY [6.08%]

2,040 Diamondback Energy Inc. 280,078 323,665


627,528 699,788

MATERIALS [2.88%]

3,700 DowDuPont Inc. 335,804 331,160

335,804 331,160

Total Equities 9,423,666 10,783,582








102


Investment Objective The Fund seeks to provide consistent income and capital appreciation by investing primarily in a diversified portfolio of dividend yielding U.S.

equities.



Market Risk

a) Other Price Risk

As at December 31, 2017 and 2016, if the S&P 500 Total Return Index were to fluctuate by 10%, with all other variables held constant, Net

Assets attributable to holders of redeemable units would increase or decrease by the amounts shown in the table below. This is a measure based

on the historical relationship of the Fund’s performance against the index noted above. The composition of this calculation contains several

subjective components that, although reasonably estimated, could alter the resulting estimate should these components be modified based on

revised assumptions.


Impact

($’000)



of redeemable units

Impact

($’000)



of redeemable units

794 6.90% 740 5.60%

b) Currency Risk




December 31, 2017

Currency

Fair Value

($’000)

% of Net Assets






($’000)

U.S. Dollar 10,518 91.45 105

December 31, 2016

Currency

Fair Value

($’000)

% of Net Assets






($’000)

U.S. Dollar 10,187 77.10 102

Pound Sterling 304 2.30 3

10,491 79.40 105



Credit Risk As at December 31, 2017 and 2016, the Fund did not have a significant exposure to credit risk.



103




Equities - Long:






Energy 6.08% 4.94%

Materials 2.88% –

Real Estate – 5.06%






December 31, 2017


$ $ $ $

Equities – Long 10,783,582 – – 10,783,582

December 31, 2016


$ $ $ $

Equities – Long 11,754,672 – – 11,754,672




Series A Series A1 Series F Series F1 Series P Series PF Series Q Series QF Series I*

Up to 2.00% Up to 1.95% Up to 1.00% Up to 0.95% Up to 1.80% Up to 0.80% Up to 1.70% Up to 0.70% Negotiated by

the Shareholder






Series A 97 15,460

Series F 190 279,155

Value of shares held ($) 3,117 2,980,248



104

Fund Merger During the year ended December 31, 2017, the Fund acquired all the assets of the below fund (the “Acquired Fund”), and in exchange, the

Fund issued shares to this fund. In turn, those shares were distributed to the shareholders of the Acquired Fund. The Manager was the

investment advisor to the Acquired Fund.

Transfer Date Acquired Fund

Fair Value of Assets

Acquired by the Fund



December 4, 2017 Sprott Focused U.S. Balanced Class $3,379,301 313,195


during the year ended December 31, 2017 (2016 - $nil).


Generic Notes to Financial Statements December 31, 2017

105

1. Establishment of the Funds Sprott Resource Class, Sprott Diversified Bond Class, Sprott Short-Term Bond Class, Sprott Silver Equities Class, Sprott Enhanced Equity

Class, Sprott Enhanced Balanced Class, Sprott Real Asset Class, Sprott Enhanced U.S. Equity Class, Sprott Focused Global Dividend Class

and Sprott Focused U.S. Dividend Class (collectively, the “Funds” and each, a “Fund”) are separate classes of shares of Sprott Corporate

Class Inc. (the “Corporation”), a corporation incorporated by articles of incorporation under the laws of Ontario on July 28, 2011, as amended

by articles of amendment under the laws of Ontario on September 22, 2011 and as further amended on January 31, 2012, March 27, 2012,

September 10, 2013, June 30, 2014, May 29, 2015 and October 8, 2015. Ninepoint Partners LP (the "Manager") is the manager and portfolio

advisor of the Funds. Prior to August 1, 2017, Sprott Asset Management LP was the manager and portfolio advisor of the Funds. The Manager

assumed the portfolio management of the Canadian diversified asset business of Sprott Asset Management LP on August 1, 2017. As of August

1, 2017, the Manager has retained Sprott Asset Management LP as the sub-advisor of Sprott Resource Class and Sprott Silver Equities Class.

RBC Investor Services Trust is the custodian of the Funds. The address of the Funds’ registered office is 200 Bay Street, Toronto, Ontario.

The date of inception and series structure of each of the Funds are as follows:

Name of the Fund Date of Inception Series Information

Sprott Resource Class September 23, 2011

(publicly launched on October 17, 2011)

A multi-series fund since inception, having three

series, Series A, F and I.

Sprott Diversified Bond Class September 23, 2011


A multi-series fund since inception, having five series,

Series A, F, FT, T and I. On May 28, 2015 new series

P, PT, PF, PFT, Q, QT, QF and QFT were introduced.

Sprott Short-Term Bond Class September 23, 2011




Sprott Silver Equities Class January 31, 2012

(publicly launched on February 28, 2012)



Sprott Enhanced Equity Class March 27, 2012

(publicly launched on April 16, 2012)


Series A, A1, F, F1 and I. On September 30, 2013,

new Series FT and T were introduced.

Sprott Enhanced Balanced Class September 10, 2013

(publicly launched on September 30, 2013)


Series A, F, FT, T and I.

Sprott Real Asset Class June 30, 2014

(publicly launched on July 17, 2014)



Sprott Enhanced U.S. Equity Class June 29, 2015

(publicly launched on July 23, 2015)


Series A, F, FT, T and I. On September 4, 2015 new

series AH and FH were introduced.

Sprott Focused Global Dividend Class October 8, 2015

(publicly launched on November 26, 2015)

A multi-series fund since inception, having eight

series, Series A, A1, F, P, PF, Q, QF and I. On March

1, 2016, new Series F1 was introduced.

Sprott Focused U.S. Dividend Class October 8, 2015

(publicly launched on November 26, 2015)

A multi-series fund since inception, having eight

series, Series A, A1, F, P, PF, Q, QF and I. On March

1, 2016, new Series F1 was introduced.

The differences among the series of shares are the different eligibility criteria, fee structures and administrative expenses associated with

each series.

The Statements of Financial Position of each of the Funds are as at December 31, 2017 and 2016. The Statements of Comprehensive Income

(Loss), Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares and Statements of Cash Flows for each Fund are for

the years ended December 31, 2017 and 2016, except for Funds or series of a Fund established during either period, in which case the

information for that Fund or applicable series is provided for the period from the inception of the Fund or start date of the series of the Fund to

December 31 of the applicable year. The Schedule of Investment Portfolio for each Fund is as at December 31, 2017.

These financial statements were approved for issuance by the Manager on March 16, 2018.


106

2. Basis of Presentation These financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as published by the

International Accounting Standards Board (“IASB”) and include estimates and assumptions made by the Manager that may affect the reported

amounts of assets, liabilities, income, expenses and the reported amounts of changes in Net Assets during the reporting period. Actual results

could differ from those estimates.

The financial statements have been prepared on a going concern basis using the historical cost convention. However, each Fund is an

investment entity and primarily all financial assets and financial liabilities are measured at fair value in accordance with IFRS. Accordingly, the

Funds’ accounting policies for measuring the fair value of investments and derivatives are consistent with those used in measuring the Net

Asset Value for transactions with shareholders.

The financial statements of each Fund are presented in Canadian dollars, which is each Fund’s functional currency, except for the financial

statements of Sprott Enhanced U.S. Equity Class, which are presented in U.S. dollars, which is that Fund’s functional currency.

3. Summary of Significant Accounting Policies The following is a summary of significant accounting policies followed by the Funds:

CLASSIFICATION AND VALUATION OF INVESTMENTS

The Funds’ investments and derivative assets and liabilities are measured at fair value through profit or loss (“FVTPL”). The category of

financial assets and liabilities at FVTPL is sub-divided into:

Financial assets and liabilities held for trading: Financial assets and liabilities are classified as held for trading if they are acquired for the

purpose of selling and/or repurchasing in the near term. These investments are used principally for the purpose of generating a profit from

short-term fluctuations in prices. Derivatives held by the Funds are classified as held for trading, and they do not meet the definition of effective

hedging instruments as defined by IAS 39, Financial Instruments – Recognition and Measurement (“IAS 39”). Investments sold short are also

classified as held for trading.

Financial instruments designated as fair value through profit or loss upon initial recognition: All investments owned (excluding derivatives)

are designated as FVTPL upon initial recognition. The Funds have included equities, bonds, and other interest-bearing investments in this

category. These financial assets are designated upon initial recognition on the basis that they are part of a group of financial assets that are

managed and have their performance evaluated on a fair value basis, in accordance with risk management and investment strategies of the

Funds, as set out in each Fund’s prospectus.

The Funds’ accounting policies for measuring the fair value of its investments and derivatives are identical to those used in measuring its Net

Asset Value for transactions with shareholders. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date.

Financial assets and liabilities at FVTPL are recorded in the Statements of Financial Position at fair value upon initial recognition. All

transaction costs such as brokerage commissions incurred in the purchase and sale of such securities are recognized directly in the Statements

of Comprehensive Income. Subsequent to initial measurement, these investments are recorded at fair value which, as at the financial reporting

period end is determined as follows:

1. Securities listed upon a recognized public stock exchange are valued at the closing price recorded by the exchange on which the security is

principally traded, where the last traded price falls within that day’s bid-ask spread. In circumstances where the closing price is not within

the bid-ask spread, the Manager determines the point within the bid-ask spread that is most representative of fair value based on the

specific facts and circumstances.

2. Common shares of unlisted companies and warrants that are not traded on an exchange are valued using valuation techniques established

by the Manager. Restricted securities are valued in a manner that the Manager determines represents fair value.

3. Bonds, debentures and other debt obligations are valued at the mean of bid/ask prices provided by recognized investment dealers. Unlisted

bonds are valued using valuation techniques established by the Manager.


107

4. Mutual fund units held as investments are fair valued using their respective Net Asset Value per share on the relevant valuation dates, as

these values are most readily and regularly available.

The difference between the fair value of investments and the cost of investments represents the unrealized appreciation or depreciation in the

value of investments. The cost of investments for each security is determined on an average cost basis.

Other assets and liabilities are recognized at fair value upon initial recognition. Other assets such as subscriptions receivable, due to broker,

and income receivables are classified as loans and receivables and measured at amortized cost. Other financial liabilities (including all

financial liabilities other than those measured at FVTPL), are measured at amortized cost. The Funds’ obligation for Net Assets attributable to

holders of redeemable shares is presented at the redemption amount.

TRANSACTION COSTS

Transaction costs are expensed and are included in “Transaction costs” in the Statements of Comprehensive Income. Transaction costs are

incremental costs that are directly attributable to the acquisition, issue or disposal of an investment, which include fees and commissions paid to

agents, advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties.

INVESTMENT TRANSACTIONS AND INCOME RECOGNITION

Investment transactions are accounted for on the business day following the date the order to buy or sell is executed, with the exception of

short-term investments, which are accounted for on the date the order to buy or sell is executed. Realized gains and losses arising from the sale

of investments and unrealized appreciation and depreciation on investments are calculated with reference to the average cost of the related

investments.

Interest income for distribution purposes represents the coupon interest recognized on an accrual basis. Dividend income is recognized on the

ex-dividend date, presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statements of

Comprehensive Income. Distributions from underlying funds are recognized on the distribution date.

FOREIGN CURRENCY TRANSLATION

The fair values of foreign-currency-denominated investments are translated into Canadian dollars (or U.S. dollars for Sprott Enhanced U.S.

Equity Class) using the prevailing rate of exchange on each valuation date. Income, expenses and investment transactions in foreign currencies

are translated into Canadian dollars (or U.S. dollars for Sprott Enhanced U.S. Equity Class) at the rate of exchange prevailing on the respective

dates of such transactions.

The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such

changes are included in “Change in unrealized appreciation (depreciation) in the value of investments” in the Statements of Comprehensive

Income. Realized foreign exchange gains or losses from sales of investments and cash in foreign currencies are included in “Net realized gains

(losses) on foreign exchange” in the Statements of Comprehensive Income. Any difference between the recorded amounts of dividends,

interest and foreign withholding taxes and the Canadian dollar (or U.S. dollar for Sprott Enhanced U.S. Equity Class) equivalent of the amounts

actually received is reported as part of the investment income in the Statements of Comprehensive Income.

CASH

Cash is comprised of cash on deposit with financial institutions.

CALCULATION OF NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS PER SERIES PER SHARE

The Net Assets attributable to holders of redeemable units per share of a series is based on the fair value of the series’ proportionate share of the

assets and liabilities of the Fund common to all series, less any liabilities of the Fund attributable only to that series, divided by the total

outstanding shares of that series. Income, non-series-specific expenses, realized and unrealized gains (losses) on investments and transaction

costs are allocated to each series of a Fund based on the series’ pro-rata share of Net Assets attributable to holders of redeemable shares of that

Fund. Expenses directly attributable to a series are charged directly to that series.


108

INCOME TAXES

The Funds are established as classes of shares of the Corporation. The Corporation will pay sufficient capital gains dividends and ordinary

dividends so that, generally, the tax paid by the Corporation with respect to realized capital gains and dividends from taxable Canadian

corporations will be refunded to the Corporation. The Corporation will be liable to pay tax at corporate rates applicable to mutual fund

corporations on income from other sources such as interest, derivative income and foreign source income. The Corporation will try to eliminate

this tax liability by using deductible expenses and tax credits. If the Corporation is not successful in eliminating its tax liability, the Corporation

will be subject to tax.

The Funds incur withholding taxes imposed by certain countries on investment income and capital gains. Such income and gains are recorded

on a gross basis and the related withholding taxes are shown separately in the Statements of Comprehensive Income.

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SHARES FROM OPERATIONS PER SHARE

“Increase (decrease) in Net Assets attributable to holders of redeemable shares from operations per share” in the Statements of Comprehensive

Income represents the increase (decrease) in Net Assets attributable to holders of redeemable shares per series, divided by the weighted average

number of shares of the series outstanding during the period, which is presented in the Statement of Comprehensive Income.

FORWARD CURRENCY CONTRACTS

The value of a forward currency contract is the gain or loss that would be realized if, on the date that valuation is made, the positions were

closed out. It is reflected in the Statements of Financial Position as part of “Unrealized appreciation (depreciation) on forward currency

contracts” and the change in value over the period is reflected in the Statements of Comprehensive Income as part of “Change in unrealized

appreciation (depreciation) on forward currency contracts”. When the forward currency contracts are closed out, gains and losses are realized

and are included in “Net realized gains (losses) on forward currency contracts” in the Statements of Comprehensive Income.

OPTION CONTRACTS

When the Funds purchase options, the premiums paid for purchasing options are included as an asset and are subsequently adjusted each

valuation day to the fair value of the option contract. Premiums received from writing options are included as a liability and are subsequently

adjusted each valuation day to the fair value of the option contract. These amounts are reflected in the Statements of Financial Position as part

of “Options purchased” or “Options written”. Option contracts are valued each valuation day according to the gain or loss that would be

realized if the contracts were closed out on that day. All unrealized gains (losses) arising from option contracts are recorded as “Change in

unrealized appreciation (depreciation) on option contracts” in the Statements of Comprehensive Income, until the contracts are closed out or

expire, at which time the gains (losses) are realized and reflected in the Statements of Comprehensive Income as “Net realized gains (losses) on

option contracts”.

OFFSETTING OF FINANCIAL INSTRUMENTS

Financial assets and liabilities are disclosed net if there is a legally enforceable right to offset the recognized amounts and there is an intention

to settle on a net basis, or to realize the asset and liability simultaneously. Where applicable, additional information is disclosed in the

Offsetting of Financial Instruments section of the Notes to financial statements – Fund specific information.

SECURITIES LENDING

The Funds may enter into securities lending transactions. These transactions involve the temporary exchange of securities as collateral with a

commitment to deliver the same securities on a future date. Income is earned from these transactions in the form of fees paid by the

counterparty and, in certain circumstances, interest paid on securities held as collateral. Income earned from these transactions is recognized on

an accrual basis and included in the Statements of Comprehensive Income.

Certain Funds have entered into a securities lending program with their custodian, RBC Investor Services Trust. The aggregate market value of

all securities loaned by a Fund cannot exceed 50% of the assets of the Fund. The Fund will receive collateral of at least 102% of the value of

the securities on loan. Collateral will generally be comprised of cash and obligations of, or guaranteed by, the Government of Canada or a

province thereof, or the United States Government or its agencies, or a permitted supranational agency as defined in National Instrument 81-

102. Securities lending income reported in the Statements of Comprehensive Income is net of a securities lending charge which the Fund’s

custodian, RBC Investor Services Trust, is entitled to receive

STANDARDS ISSUED BUT NOT YET EFFECTIVE

Standards issued but not yet effective up to the date of issuance of the Funds’ financial statements are listed below. The Funds intend to adopt

applicable standards when they become effective.


109

IFRS 9, Financial Instruments - Classification and Measurement (“IFRS 9”): In July 2014, the IASB issued the final version of IFRS 9,

bringing together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 and all

previous versions of IFRS 9. IFRS 9 introduces a logical, single classification and measurement approach for financial assets that reflects the

business model in which they are managed and their cash flow characteristics. Built upon this is a forward-looking expected credit loss model

that will result in more timely recognition of loan losses and is a single model that is applicable to all financial instruments subject to

impairment accounting. In addition, IFRS 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of

liabilities elected to be measured at fair value, such that gains caused by the deterioration of an entity’s own credit risk on such liabilities are no

longer recognized in profit or loss. IFRS 9 also includes an improved hedge accounting model to better link the economics of risk management

with its accounting treatment. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. In

addition, the own credit changes can be early applied in isolation without otherwise changing the accounting for financial instruments. The

new standard is not expected to have a significant impact on the Funds.

4. Critical Accounting Estimates and Judgments The preparation of financial statements requires management to use judgment in applying its accounting policies and to make estimates and

assumptions about the future. The following discusses the most significant accounting judgments and estimates that the Funds have made in

preparing the financial statements:

FAIR VALUE MEASUREMENT OF DERIVATIVES AND SECURITIES NOT QUOTED IN AN ACTIVE MARKET

The Funds hold financial instruments that are not quoted in active markets, including derivatives. Fair values of such instruments are

determined using valuation techniques and may be determined using reputable pricing sources (such as pricing agencies) or indicative prices

from market makers. Where no market data is available, the Funds may value investments using valuation models, which are usually based on

methods and techniques generally recognized as standard within the industry. The models used to determine fair values are validated and

periodically reviewed by experienced personnel of the Manager, independent of the party that created them. Models use observable data, to the

extent practicable. However, areas such as credit risk (both own and counterparty), volatilities and correlations require the Manager to make

estimates. Changes in assumptions about these factors could affect the reported fair values of financial instruments. The Funds consider

observable data to be market data that is readily available, regularly distributed and updated, reliable and verifiable, not proprietary, and

provided by independent sources that are actively involved in the relevant market. Common shares of unlisted companies may be valued at cost

and adjusted based on the last known transaction. Refer to Note 5 for further information about the fair value measurement of the Funds’

financial instruments.

CLASSIFICATION AND MEASUREMENT OF INVESTMENTS AND APPLICATION OF THE FAIR VALUE OPTION

In classifying and measuring financial instruments held by the Funds, the Manager is required to make judgments about whether or not the

business of the Funds is to invest on a total return basis for the purpose of applying the fair value option for the financial assets under IAS 39.

ASSESSMENT AS AN INVESTMENT ENTITY

Entities that meet the definition of an investment entity within IFRS 10, Consolidated Financial Statements are required to measure their

subsidiaries at FVTPL rather than consolidate them. The criteria which define an investment entity are as follows:

• an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

• an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,

investment income or both; and

• an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Manager has assessed the characteristics of an investment entity as they apply to the Funds, and such assessment requires significant

judgments. Based on the assessment, the Manager concluded that each Fund meets the definition of an investment entity.

5. Fair Value Measurements The Funds use a three-tier hierarchy as a framework for disclosing fair value based on inputs used to value the Funds’ investments. The fair

value hierarchy has the following levels:


110

Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access

at the measurement date;

Level 2 Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of

the asset or liability; and

Level 3 Prices, inputs or complex modeling techniques that are both significant to the fair value measurement and unobservable

(supported by little or no market activity).

The hierarchy of investments and derivatives for each Fund is included in the Notes to Financial Statements – Fund Specific Information of

each Fund.

All fair value measurements above are recurring. The carrying values of cash, subscriptions receivable, interest receivable, payable for

investments purchased, redemptions payable, distributions payable, accrued expenses and each Fund’s obligations for Net Assets attributable to

holders of redeemable shares approximate 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. In such cases, instruments are 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.

The following provides details of the categorization in the fair value hierarchy by asset classes:

Level 1 securities include:

• Equity securities and options using quoted market prices (unadjusted).

• Investments in other mutual funds valued at their respective Net Asset Value per share on relevant valuation dates.


• Equity securities that are not frequently traded in active markets. In such cases, fair value is determined based on observable market

data (e.g., transactions for similar securities of the same issuer).

• Fixed-income securities valued at evaluated bid prices provided by recognized investment dealers (i.e. third-party pricing vendor

based on a variety of factors including broker input, financial information on the issuer and other observable market inputs).

• Derivative assets and liabilities such as forward currency contracts and swaps, which are valued based on observable inputs such as

the notional amount, forward market rate, contract rates, interest and credit spreads. To the extent that the inputs used are observable

and reliable, these derivatives are included in Level 2.


• Investments valued using valuation techniques that are based on unobservable market data. These techniques are determined pursuant

to procedures established by the Manager. Quantitative information about unobservable inputs and related sensitivity of the fair value

measurement are disclosed in the Notes to financial statements – Fund specific information.

Additional disclosures relating to transfers between levels and a reconciliation of the beginning and ending balances in Level 3 are also

disclosed in the Notes to financial statements – Fund specific information. There were no material transfers between Level 1, Level 2 and

Level 3 during the period.

6. Financial Risk Management Each Fund is exposed to risks that are associated with its investment strategies, financial instruments and markets in which it invests. The

extent of risk within a Fund is largely contingent upon the Fund’s investment policy and guidelines as stated in its prospectus, and the

management of such risks is contingent upon the qualification and diligence of the portfolio manager designated to manage the Fund. The

Schedule of Investment Portfolio groups securities by asset type, sector or geographic region. Significant risks that are relevant to the Funds are

discussed below. Refer to the Notes to Financial Statements – Fund Specific Information of each Fund for specific risk disclosures.

MARKET RISK

The Funds’ investments are subject to market risk, which is the risk that the fair value of future cash flows of a financial instrument will

fluctuate because of changes in market variables such as equity prices, currency rates and interest rates.


111

a) Other Price Risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to a change in market price (other than those arising

from interest rate risk or currency risk). The sensitivity analysis disclosed is estimated based on the historical correlation between the return of a

Fund as compared to the return of a Fund’s benchmark. The analysis assumes that all other variables remain unchanged. The historical

correlation may not be representative of future correlation and, accordingly the impact on net assets could be materially different. The

investments of a Fund are subject to normal market fluctuations and the risks inherent in the financial markets. The maximum risk resulting

from purchased securities held by the Funds is limited to the fair value of these investments. The Manager moderates this risk through a careful

selection of securities within specified limits, as well as through the diversification of the investment portfolio.

b) Currency Risk

Currency risk is the risk that arises from the change in price of one currency against another. Where a Fund holds securities that are

denominated in currencies other than the Canadian dollar (or U.S. dollar for Sprott Enhanced U.S. Equity Class), these securities are converted

to the Fund’s functional currency (Canadian or U.S. dollar) in determining fair value, and fair values are subject to fluctuations relative to the

strengthening or weakening of the functional currency.


Interest rate risk is the risk borne by an interest-bearing financial instrument that is attributed to interest rate fluctuations. Cash does not expose

the Funds to significant amounts of interest rate risk.

CREDIT RISK

Credit risk is the risk of loss due to the failure of a counterparty to satisfy its obligations. All transactions executed by a Fund in listed securities

are settled upon delivery using approved brokers. The risk of default is considered minimal, as the delivery of those securities sold is made only

when the broker has received payment. Payment is made on purchases only when the security is received by the broker. The trade will fail to

consummate if either party fails to meet its obligations.

The Funds may be exposed to credit risk from the counterparties to the derivative instruments they use. Credit risk associated with these

transactions is considered minimal as all counterparties have an approved credit rating equivalent to a Standard & Poor’s credit rating of AA –

on their long-term debt.

LIQUIDITY RISK

Liquidity risk is the risk that a Fund will not be able to generate sufficient cash resources as to fulfill its payment obligations. The Funds

predominantly invest in liquid securities that are readily tradable in an active market. Consequently, the Funds are able to readily dispose of

securities if necessary to fund redemptions in the course of operations. Funds traditionally maintain a cash reserve in anticipation of normal

redemption activity. Although each Fund may, from time to time, invest in illiquid or restricted securities such as private placements, private

companies and warrants which are identified in the applicable Fund’s Schedule of Investment Portfolio, such investments do not comprise a

significant portion of a Fund’s investment portfolio. As a result, the risk is not material.

With the exception of derivative contracts and investments sold short, where applicable, all of the Funds’ financial liabilities are short-term

liabilities maturing within 90 days after the period end. For Funds that hold investments sold short, these investments have no specific maturity

date. For Funds that hold derivative contracts with a term to maturity that exceeds 90 days from the period end, further information related to

those contracts can be found in the derivatives schedules included in the Schedule of Investment Portfolio of those Funds.

CONCENTRATION RISK

Concentration risk arises as a result of the concentration of financial instrument exposures within the same category, whether it is geographic

region, asset type or industry sector.

7. Capital Management The capital of a Fund is represented by the issued and outstanding shares and the Net Asset Value attributable to participating shareholders. The

Manager utilizes the capital of the Funds in accordance with each Fund’s investment objectives, strategies and restrictions, as outlined in the

Funds’ prospectus, while maintaining sufficient liquidity to meet normal redemptions. The Funds do not have any externally imposed capital

requirements.


112

8. Redeemable Shares of the Funds Each of the Funds offers three series of redeemable shares: Series A, Series F and Series I, unless otherwise indicated. Series A shares are

available to all investors. Series F shares are designed for investors who participate in fee-based programs. Series I shares are special purpose

shares generally available only to institutional investors or as determined by the Manager on a case-by-case basis. Generally, an investor in

Series I shares negotiates a separate fee that will be paid directly to the Manager by the investor or by the Fund.

Each of Sprott Diversified Bond Class, Sprott Enhanced Equity Class, Sprott Enhanced Balanced Class and Sprott Enhanced U.S. Equity Class

also offer Series T shares and Series FT shares. Series T shares are intended for investors who seek monthly distributions at a target annual

distribution rate. Series FT shares are designed for investors who participate in fee-based programs and who seek monthly distributions at a

target annual distribution rate.

For Sprott Diversified Bond Class, Sprott Focused Global Dividend Class and Sprott Focused U.S. Dividend Class, Series P and Series PF

shares are available to an investor, discretionary accounts of an advisor or a “household group”, holding in aggregate at least a $1 million

investment in the Fund and Series Q and Series QF shares are available to an investor, discretionary accounts of an advisor or a “household

group”, holding in aggregate at least a $5 million investment in the Fund. A “household group” consists of members of the same family

residing at the same residence plus corporate, partnership or trust entities over which those family members have voting control (over 50%).

For Sprott Diversified Bond Class, Series PT and Series PFT shares are available to an investor, discretionary accounts of an advisor or a

“household group”, holding in aggregate at least a $1 million investment in the Fund and Series QT and Series QFT shares are available to an

investor, discretionary accounts of an advisor or a “household group”, holding in aggregate at least a $5 million investment in the Fund. A

“household group” consists of members of the same family residing at the same residence plus corporate, partnership or trust entities over

which those family members have voting control (over 50%).

Sprott Enhanced Equity Class, Sprott Focused Global Dividend Class and Sprott Focused U.S. Dividend Class also offer Series A1 and

F1 shares. Series A1 shares are available to all investors who purchased this series on or before a date the Manager determined. Series

F1 shares are designed for investors who participated in fee-based programs on or before a date the Manager determined.

Sprott Enhanced U.S. Equity Class also offers Series AH and FH shares. Series AH shares are available to all investors and are intended for

investors who seek to minimize the currency risk associated with their investments. Series FH shares are designed for investors who participate

in fee-based programs and who seek to minimize the currency risk associated with their investments.

The Funds’ redeemable shares are classified as financial liabilities on the Statements of Financial Position, since the Funds’ shares do not meet

the criteria in IAS 32, Financial Instruments: Presentation (“IAS 32”) for classification as equity.

9. Taxation of the Corporation The Corporation is a “mutual fund corporation” as defined in the Income Tax Act. The Corporation is a single legal entity for tax purposes and

is not taxed on a fund-by-fund basis. As a mutual fund corporation, taxable dividends received from taxable Canadian corporations are subject

to a tax rate of 38.33%. Such taxes are fully refundable upon payment of ordinary taxable dividends to its shareholders. Any such tax paid is

reported as an amount receivable until recovered through the payment to shareholders of dividends out of net investment income. All tax on net

taxable realized capital gains is refundable when the gains are distributed to shareholders as capital gains dividends or through redemptions of

shares at the request of shareholders, while the Corporation qualifies as a mutual fund corporation. Income and capital taxes (if any) are

allocated to the series on a reasonable basis and the amount charged to a series is reflected in the Statements of Comprehensive Income of the

series. Interest income and foreign dividends, net of applicable expenses, are taxed at full rates applicable to mutual fund corporations with

credits, subject to certain limitations, for foreign taxes paid.

Temporary differences between the carrying value of assets and liabilities for accounting and income tax purposes give rise to deferred income

tax assets and liabilities. When the market value of a Fund’s portfolio exceeds its cost, a deferred tax liability arises. As capital gains taxes

payable by the Funds are refundable under the provisions of the Income Tax Act, the deferred tax liability is offset by these future refundable

taxes. Conversely, when the cost exceeds the market value of the portfolio, a deferred tax asset is generated. In such cases, a deferred tax asset

is not recognized given the uncertainty that such deferred tax assets will ultimately be realized. Unused capital and non-capital losses (if any)

represent deferred tax assets to the Funds. The Corporation has not recognized a deferred tax asset for these losses as the probability of future

income being generated to utilize these losses is uncertain. The capital losses can be carried forward indefinitely and non-capital losses will

expire in 20 years. As of the tax year ended December 31, 2017, the Corporation had capital and non-capital losses available for tax purposes

as follows:


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Capital losses Non-capital losses

Non-capital losses

year of expiry

$ $

26,531,216 26,319 2031

- 251,452 2032

- 3,208,416 2033

- 8,082,587 2034

- 10,969,495 2035

10. Distributions The Corporation intends to pay ordinary dividends in December and capital gains dividends in February of each year to the extent necessary to

ensure it will not have any net liability for tax under Part IV of the Income Tax Act (Canada) on taxable dividends from taxable Canadian

corporations or for tax under Part I of the Income Tax Act on net realized capital gains. All dividends will be reinvested in additional shares of

the same series of the Fund unless shareholders request for the distributions to be paid in cash. Certain Funds distribute periodically, and such

monthly distributions to shareholders will be a return of capital.

11. Restricted Cash and Investments Cash, investments and broker margin include balances with prime brokers held as collateral for securities sold short and other derivatives. This

collateral is not available for general use by the Funds. The value of any restricted cash and investments held for each of the Funds is disclosed

in the Notes to Financial Statements – Fund Specific Information, if applicable.

12. Related-Party Transactions MANAGEMENT FEES

Each Fund pays the Manager an annual management fee to cover management expenses. Management fees are unique to each Fund and are

subject to applicable taxes. The management fee is calculated and accrued daily and is paid on the last business day of each month based on the

daily Net Asset Value of each Fund.

INCENTIVE FEES

Sprott Resource Class, Sprott Silver Equities Class, Sprott Enhanced Equity Class, Sprott Enhanced Balanced Class and Sprott Enhanced U.S.

Equity Class pay the Manager an incentive fee annually, subject to applicable taxes, equal to a percentage of the daily Net Asset Value of the

applicable series of the respective Funds. Such percentage will be equal to 10% of the difference by which the return in the Net Asset Value per

share of the applicable series of the respective Funds from January 1 (or inception) to December 31 exceeds the percentage return of the

benchmark index. The benchmark indices are as follows:

Name of the Fund Benchmark

Sprott Resource Class Blended index comprised of 50% of the daily return of the S&P/TSX Capped Materials Total Return Index and

50% of the daily return of the S&P/TSX Capped Energy Total Return Index.

Sprott Silver Equities Class MSCI ACWI Select Silver Miners IMI Net Return Index.

Sprott Enhanced Equity Class Blended index comprised of 50% of the S&P/TSX Composite Total Return Index and 50% of the S&P 500

Total Return Index in Canadian dollar terms.

Sprott Enhanced Balanced Class Blended index comprised of the S&P/TSX Composite Total Return Index, S&P 500 Total Return Index and

FTSE TMX Canada Universe Bond Index return, weighted 40%, 30% and 30%, respectively.

Sprott Enhanced U.S. Equity Class S&P 500 Index in U.S. dollar terms.


114

If the performance of a series of Sprott Resource Class, Sprott Silver Equities Class, Sprott Enhanced Equity Class, Sprott Enhanced Balanced

Class or Sprott Enhanced U.S. Equity Class in any year is less than the performance of their blended benchmark index described above

(the “Deficiency”), then no incentive fee will be payable in any subsequent year until the performance of the applicable series of the respective

Funds, on a cumulative basis calculated from the first of such subsequent years, has exceeded the amount of the Deficiency. The Manager may

reduce the incentive fee payable by the Fund with respect to a particular investor by rebating a portion of the incentive fee. Additionally,

investors in Series I shares may negotiate a different incentive fee than the one described above or no incentive fee at all.

The Funds other than those noted above do not pay an incentive fee directly, although certain of the underlying funds in which they invest may

pay annually an incentive fee, subject to applicable taxes as disclosed in the simplified prospectus of such underlying funds.

13. Operating Expenses and Sales Charges Each Fund pays its own operating expenses, other than marketing costs and costs of dealer compensation programs, which are paid by the

Manager. Operating expenses include, but are not limited to, audit, legal, safekeeping, custodial, fund administration expenses, preparation

costs of financial statements and other reports to investors and Independent Review Committee (“IRC”) member fees and expenses. Operating

expenses and other costs of a Fund are subject to applicable taxes. Each series of the Fund is responsible for its proportionate share of operating

expenses of the Corporation in addition to the expenses that the Fund alone incurs.

At its sole discretion, the Manager may waive or absorb a portion of the operating expenses of certain Funds. Amounts waived or absorbed by

the Manager are reported in the Statements of Comprehensive Income. Waivers or absorptions can be terminated at any time without notice.

14. Sharing Arrangements In addition to paying for the cost of brokerage services in respect of securities transactions, commissions paid to certain brokers may also cover

research services provided to the portfolio manager. Sharing arrangements for each Fund are disclosed in the Notes to Financial Statements –

Fund Specific Information, if applicable.

15. Independent Review Committee In accordance with National Instrument 81-107, Independent Review Committee for Investment Funds, the Manager has established an IRC for

all of the Funds. The mandate of the IRC is to consider and provide recommendations to the Manager on conflicts of interest to which the

Manager is subject when managing the Funds. The IRC reports annually to shareholders of the Funds on its activities, and the annual report is

available on and after March 31 in each year. The Manager charges compensation paid to the IRC members and the costs of the ongoing

administration of the IRC to the Funds. These amounts are shown in the Statements of Comprehensive Income.

16. Subsequent Events Effective March 12, 2018, the names of the Funds have changed to the below.

Current Fund Name Future Fund Name

Sprott Resource Class Ninepoint Resource Class

Sprott Diversified Bond Class Ninepoint Diversified Bond Class

Sprott Short-Term Bond Class Ninepoint Short-Term Bond Class

Sprott Silver Equities Class Ninepoint Silver Equities Class

Sprott Enhanced Equity Class Ninepoint Enhanced Equity Class

Sprott Enhanced Balanced Class Ninepoint Enhanced Balanced Class

Sprott Real Asset Class Ninepoint Real Asset Class

Sprott Enhanced U.S. Equity Class Ninepoint Enhanced U.S. Equity Class

Sprott Focused Global Dividend Class Ninepoint Focused Global Dividend Class

Sprott Focused U.S. Dividend Class Ninepoint Focused U.S. Dividend Class

Corporate Information

Corporate Address

Ninepoint Partners LP

Royal Bank Plaza, South Tower

200 Bay Street, Suite 2700, P.O. Box 27

Toronto, Ontario M5J 2J1

T 416.943.6707

TOLL-FREE 866.299.9906

F 416.943.6497

E [email protected]

For additional information visit our website:

www.ninepoint.com

Call our mutual fund information line for daily closing prices:

416.943.6707 or 866.299.9906

Auditors

KPMG LLP

Bay Adelaide Centre

333 Bay Street

Suite 4600

Toronto, Ontario M5H 2S5

Legal Counsel

Borden Ladner Gervais LLP

Scotia Plaza

40 King Street West

Toronto, Ontario M5H 3Y4

The opinions, estimates and projections (‘‘information’’) contained within this report are solely those of Ninepoint Partners LP and are subject

to change without notice. Ninepoint Partners LP makes every effort to ensure that the information has been derived from sources believed to be

reliable and accurate. However, Ninepoint Partners LP assumes no responsibility for any losses or damages, whether direct or indirect, that

arise out of the use of this information. Ninepoint Partners LP is not under any obligation to update or keep current the information contained

herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Ninepoint Partners LP is

the investment manager of the Sprott Resource Class, Sprott Diversified Bond Class, Sprott Short-Term Bond Class, Sprott Silver Equities

Class, Sprott Enhanced Equity Class, Sprott Enhanced Balanced Class, Sprott Real Asset Class, Sprott Enhanced U.S. Equity Class, Sprott

Focused Global Dividend Class and Sprott Focused U.S. Dividend Class (the ‘‘Funds’’). Commissions, trailing commissions, management

fees and other expenses may be associated with these Funds. Please read the simplified prospectus carefully before investing. The indicated

rates of return are based on the historical annual compounded total returns, including changes in share value and reinvestment of all

distributions, and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any shareholder that

would have reduced returns. Mutual funds are not guaranteed; their share values and investment returns will fluctuate, and past performance is

not indicative of future performance

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