Notes to the Financial Statements 83

VERITAS FUNDS PLC

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018

VERITAS FUNDS PLC

TABLE OF CONTENTS

Directory 2

Directors’ Report 3

Independent Auditor’s Report 7

Depositary’s Report 10

Investment Manager’s Report -Veritas Asian Fund 11 -Veritas Global Focus Fund 18 -Veritas Global Equity Income Fund 22 -Veritas China Fund 25 -Veritas Global Real Return Fund 32 -Veritas Izoard Fund 36

Schedule of Investments -Veritas Asian Fund 40 -Veritas Global Focus Fund 46 -Veritas Global Equity Income Fund 50 -Veritas China Fund 56 -Veritas Global Real Return Fund 62 -Veritas Izoard Fund 71

Statement of Financial Position 75

Statement of Comprehensive Income 77

Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares 79

Statement of Cash Flows 81

Notes to the Financial Statements 83

Schedule of Changes in Investments (Unaudited) -Veritas Asian Fund 143 -Veritas Global Focus Fund 145 -Veritas Global Equity Income Fund 146 -Veritas China Fund 147 -Veritas Global Real Return Fund 149 -Veritas Izoard Fund 151

Supplementary Information (Unaudited) 152

Appendix 158

Additional Information 159

VERITAS FUNDS PLC

DIRECTORY

DIRECTORS REGISTERED OFFICE Mike Kirby (Irish) 25-28 North Wall Quay Richard Grant (British) IFSC Brian Wilkinson* (Irish) Dublin 1 Ian Barnes (British) Ireland

DEPOSITARY INVESTMENT MANAGER AND UNITED HSBC Institutional Trust Services (Ireland) DAC KINGDOM REPRESENTATIVE 1 Grand Canal Square Veritas Asset Management LLP Grand Canal Harbour 90 Longacre Dublin 2 London WC2E 9RA Ireland United Kingdom

ADMINISTRATOR LEGAL ADVISERS TO THE COMPANY AND REGISTRAR A&L Goodbody HSBC Securities Services (Ireland) DAC 25-28 North Wall Quay 1 Grand Canal Square IFSC Grand Canal Harbour Dublin 1 Dublin 2 Ireland Ireland SWISS PAYING AGENT & SWISS INDEPENDENT AUDITORS REPRESENTATIVE PricewaterhouseCoopers Société Générale Paris One Spencer Dock Zurich Branch North Wall Quay Talacker 50, P.O.B. 1928 Dublin 1 CH- 8001 Zürich Ireland Switzerland

SUB ADVISOR TO THE VERITAS ASIAN COMPANY SECRETARY FUND AND VERITAS CHINA FUND Goodbody Secretarial Limited Veritas Asset Management (Asia) Ltd. 25-28 North Wall Quay Level 16, Man Yee Building IFSC 60-68 Des Voeux Road Dublin 1 Hong Kong Ireland

All Directors are non-executive *Independent Director

VERITAS FUNDS PLC

DIRECTORS’ REPORT

The Directors submit their report together with the audited financial statements for the year ended 30 September 2018.

Directors’ responsibilities Company law requires the Directors to prepare Company financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with Irish Law and International Financial Reporting Standards (IFRS’s) as adopted by the EU and applicable law.

Irish company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the assets, liabilities and financial position of Veritas Funds Plc (''The Company'') and of the Statement of Comprehensive Income of the Company for that year. In preparing these financial statements, the Directors are required to:  select suitable accounting policies and then apply them consistently;  make judgments and estimates that are reasonable and prudent;  state whether the financial statements have been prepared in accordance with IFRS as adopted by the European Union ("EU") and ensure that they contain additional information required by the Companies Act, 2014 (the “Companies Act”); and  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act and the Central Bank (Supervision and Enforcement) Act 2013 (section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the “Central Bank UCITS Regulations”). They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under the Central Bank UCITS Regulations, the Directors are required to entrust the assets of the Company to the Depositary for safe-keeping. In carrying out this duty, the Directors have delegated custody of the Company’s assets to HSBC Institutional Trust Services (Ireland) DAC.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Adequate Accounting Records The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements are prepared in accordance with Financial Reporting Standards applicable in the Republic of Ireland and comply with the Companies Act and the Central Bank UCITS Regulations.

The measures taken by the Directors to secure compliance with the Company’s obligation to keep adequate accounting records are the use of appropriate systems and procedures and employment of competent persons. To this end the Directors have engaged HSBC Securities Services (Ireland) DAC as Administrator and Goodbody Secretarial Limited as Secretary. The accounting records are kept at 1 Grand Canal Square, Grand Canal Harbour, Dublin 2. 3

VERITAS FUNDS PLC

DIRECTORS’ REPORT (CONTINUED)

Review of business and future developments The Company is an open-ended investment company with variable capital which has been authorised by the Central Bank of Ireland (the “Regulator”) under the Central Bank UCITS Regulations. There was no change in the nature of the Company’s business during the year.

The Investment Manager’s Report on pages 11-39 contains a review of the factors which contributed to the performance for the year.

Risk management objectives and policies A detailed review of the principal activities is included in the Investment Manager’s Report on pages 11-39 and in note 9 of these financial statements.

Principal risks and uncertainties The Company is an umbrella fund with segregated liability between sub funds. The principal risks facing the Company relate primarily to the holding of financial instruments and markets in which it invests. The most significant types of financial risk to which the Company is exposed are market risk, credit risk and liquidity risk. Market risk includes other price risk, currency risk and interest rate risk. Details of the risks associated with financial instruments are included in note 9 to the financial statements.

Results and dividends The results and dividends for the year are set out in the Statement of Comprehensive Income on pages 77-78.

Significant matters arising during the year Significant matters arising during the year are outlined in note 16.

Subsequent events Details of subsequent events since the statement of financial position date are outlined in note 19.

Directors Mr Brian Wilkinson, Mr Mike Kirby, Mr Richard Grant and Mr Ian Barnes were the Directors who held office throughout the year.

Directors’ and secretary’s interests The Directors of the Company at 30 September 2018 are set out on page 2 and the shares held by Directors are outlined in note 12.

The Company uses the services of KB Associates for the provision of a Money Laundering Reporting Officer. Mr Mike Kirby who is a Director of the Company, is the Managing Principle of KB Associates.

The Secretary does not have any interest in the Company.

VERITAS FUNDS PLC

DIRECTORS’ REPORT (CONTINUED)

Connected persons In accordance with the requirements of the Central Bank UCITS Regulations, all transactions carried out with the Company by the management company or depositary of a UCITS, and the delegate or sub- delegates of such a management company or depositary (excluding any non-group company sub- depositarys appointed by a depositary), and any associated or group companies of such a management company, depositary, delegate or sub-delegate (“connected persons”) must be carried out as if negotiated at arm's length and be in the best interests of shareholders. The Directors are satisfied that there are arrangements in place to ensure that the obligations set out in the Central Bank UCITS Regulations are applied to all transactions with connected persons and transactions with connected persons entered into during the period complied with the obligations set out in the Central Bank UCITS Regulations. The Central Bank UCITS Regulations came into effect on 1 November 2015. The Central Bank UCITS Regulations consolidate into one location all of the requirements which the Central Bank imposes on UCITS, UCITS management companies and depositaries of UCITS. They supplement existing legislative requirements, in particular the European Communities (Undertaking for Collective Investment in Transferrable Securities) Regulations 2011.

Independent auditors The auditors, PricewaterhouseCoopers, have indicated their willingness to continue in office in accordance with the provisions of section 383(2) of the Companies Act.

The Directors confirm to the best of their knowledge so far as each of the Directors is aware, there is no relevant audit information of which the Company's auditor is unaware and each Director has taken all the reasonable steps he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Directors Compliance Statement The Directors confirm, in accordance with Section 225 of the Companies Act, that the following has been completed:

- produced a compliance policy statement setting out the Company's compliance policies;

- established arrangements/structures sufficient to "secure material compliance" with the Company's "relevant obligations"; and

- conducted a review of these arrangements/structures during the financial year ended 30 September 2018.

Audit Committee Section 167 (2) of the Companies Act requires the Board of Directors to either establish an audit committee or decide not to establish such a committee. The Directors believe that there is no requirement to form an audit committee as:

- the Board has all non-executive Directors and one independent Director;

- Veritas Asset Management LLP has been appointed as investment management and general administration of the Company with power to delegate such functions subject to the overall supervision and control of the Directors;

- the Company have also appointed HSBC Institutional Trust Services (Ireland) DAC as Depositary of the assets of the Company.

Independent auditors’ report to the members of Veritas Funds Plc

Report on the audit of the financial statements

Opinion In our opinion, Veritas Funds Plc’s financial statements:  give a true and fair view of the Company’s and Sub-Funds’ assets, liabilities and financial position as at 30 September 2018 and of their results and cash flows for the year then ended;  have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union; and  have been properly prepared in accordance with the requirements of the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended). We have audited the financial statements, included within the Annual Report and Audited Financial Statements, which comprise:  the Statement of Financial Position as at 30 September 2018;  the Statement of Comprehensive Income for the year then ended;  the Statement of Cash Flows for the year then ended;  the Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares for the year then ended;  the Schedule of Investments for each of the Sub-Funds as at 30 September 2018; and  the notes to the financial statements for the Company and for each of its Sub-Funds, which include a description of the significant accounting policies.

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and applicable law. Our responsibilities under ISAs (Ireland) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, which includes IAASA’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us to report to you where:  the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or  the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company’s and Sub-Funds’ ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s and Sub-Funds’ ability to continue as going concerns.

Reporting on other information The other information comprises all of the information in the Annual Report and Audited Financial Statements other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. With respect to the Directors’ Report, we also considered whether the disclosures required by the Companies Act 2014 have been included. Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and the Companies Act 2014 require us to also report certain opinions and matters as described below:  In our opinion, based on the work undertaken in the course of the audit, the information given in the Directors’ Report for the year ended 30 September 2018 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.  Based on our knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified any material misstatements in the Directors’ Report. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements As explained more fully in the Directors’ responsibilities set out on page 3, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company’s and Sub-Funds’ ability to continue as going concerns, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at: https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for _audit.pdf. This description forms part of our auditors’ report. Use of this report This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2014 opinions on other matters  We have obtained all the information and explanations which we consider necessary for the purposes of our audit.  In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.  The financial statements are in agreement with the accounting records. Companies Act 2014 exception reporting Directors’ remuneration and transactions Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising from this responsibility.

Sarah Murphy for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin 25 January 2019

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT

Macro headwinds chilling EM

Despite a buoyant global market, emerging markets have had a tough quarter driven by the negative impact of the US/China trade war, fears of emerging market contagion and rising interest rates. The offshore Chinese markets (MSCI China) collapsed by 8% and the Shanghai Composite index fell 5% in USD terms. The Veritas Asian Fund (USD A) fell 7% in the third quarter. Over the past twelve months The Veritas Asian Fund (USD A) rose 4.14% net of fees against the MSCI AC Asia Pacific ex-Japan index which rose 1.95%. The September quarter marks the 14th year of the Fund (USD A) and during that period it returned 387% in USD terms, significantly outperforming the index which returned 237%.

Trade war or China containment?

The trade war between China and the USA is now fully fledged. In China, officials are of the view that Donald Trump’s tariffs are not about trade, but rather to thwart China’s rise to keep it a permanent Number 2 in a world dominated by the USA. Bloomberg reported that President Xi Jinping is preparing for Trump to put duties on all Chinese goods and expects him to start using the US military, technological and financial advantage to pressure Beijing.

The options available to China are complex. If China retaliates with full force, it would risk reactions that could harm the economy. China does have ample tools that it can use to retaliate and this includes imposing greater pain on US farmers as well as putting restrictions on US companies’ access to the Chinese markets. In particular, US investment banks and commercial banks have been wanting to enter the Chinese market, US technology companies such as Apple have significant revenue contribution from China, US gaming companies (Las Vegas Sands, Wynn, MGM) face Macau licenses which expire in 2020-2022 and may not be renewed, US hardware companies need China anti-trust approval before they can do global mergers (eg Qualcomm and NXP). Compromising too early may signal weakness and lead to more unreasonable requests by the Trump administration which is already congratulating itself on what it perceives to be initial victories. In the meantime, China needs to implement easier fiscal and monetary policies to cushion the slower growth as a result of the trade war. Ex-PBOC head Zhou Xiaochuan said that the trade war will have about 0.2-0.8% impact on China’s GDP growth and may force China to give up on the US market and encourage China to expand to other markets

US Tariffs on China

Value of Chinese Goods Impacted, $ Billion

Tariffs in place $50 .ITAS FUNDS PLC 0.2 ppt

Tariffs from 24 Sep $50 $20 0 0.5 ppt

Tariffs from 1 Jan $250 0.9 ppt Tariffs on further amount $250 $267 (threatened over uncertain horizon) 1.5 ppt

$0 $100 $20 0 $30 0 $400 $50 0 $600 Source: Bloomberg Economics; Note - assumed tariff level; boxes show cumulative impact on annual growth 11

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

In a sign that the trade war is finally affecting the USA, the Trump administration exempted some Apple products from the tariffs. Trump also accused China of trying to influence the US elections by “attacking our farmers, ranchers and industrial workers” in a September tweet. Unfortunately, there needs to be greater pain before the trade war can end as President Trump is congratulating himself on a US victory pointing to the US market reaching new highs as evidence of his success. It is only when the US economy, the corporates and the US citizens are adversely affected that there will be pressure on the Trump administration to tone down the trade war.

The trade war has also expanded to disputes on intellectual property rights (IPR) with two Chinese origin scientists arrested in recent months. Zheng Xiaoqing, a Chinese-American General Electric engineer was arrested in August 2018 by New York state for allegedly stealing technology secrets in turbine technology from the company, according to the Wall Street Journal. Zheng was recruited to the Thousand Talents programme (a programme that began in 2008 as a way to attract the brightest overseas Chinese to return to China to contribute to China’s development) in 2012 and founded two companies in China that also specialise in turbine technology. In a separate incident in July 2018, a former Apple employee, Zhang Xiaolang, was alleged to have downloaded a blueprint related to self-driving car to a personal laptop in the US before going to work for China Xiaopeng Motor. Zhang was arrested at the San Jose airport in California.

The arrests of these Chinese professionals are perceived to be lending creditability to Trump’s allegation that China was stealing US jobs and technologies. The competition in technology, especially in areas of artificial intelligence, self-driving automation, virtual reality, fintech and cloud technology is likely to intensify in the coming years.

The US-China dispute is also spreading to other areas. In late September, the US approved the USD330m sale of military equipment to Taiwan which was strongly opposed by China. China’s Defence Minister demanded that the US cancel the sales to avoid damaging the US-China military relations. Separately, the US Secretary of State Mike Pompeo expressed concern over Hong Kong’s ban of a separatist party (Hong Kong National Party HKNP) which has called for armed revolution to fight for Hong Kong’s independence. China’s Foreign Ministry subsequently issued a stern rebuke (without naming the US) to other countries to stop intervening in China’s internal affairs under the guise of free speech and association. The chilling of the relationship between the two countries has also prompted China to cancel an important annual security meeting planned for mid-October with US Defence Secretary Jim Mattis in Beijing according to Bloomberg reports.

In a sign that China is increasingly being isolated, the Joint Statement of the Trilateral Meeting of Trade Ministers (US, EU and Japan) jointly denounced industrial practices of a certain unnamed country (unnamed but obviously pointing to China) that distorted the global markets. The Trilateral will co- sponsor a proposal to reform the WTO to increase its surveillance function to prevent subsidies. The Ministers also shared Washington’s concern about China’s alleged intellectual property and technology theft and affirmed that no country should require or pressure technology transfer from foreign companies to domestic companies.

In conclusion, the latest tariff measures implemented in September suggest that the conflict will last beyond the mid-term elections in November: the 10% tariff starts on September 24 and will rise to 25% on the first day of 2019. In addition, the more intense competition for technology advancement and the US intensified crackdown on IPR protection would mean that the current dispute between China and the US may not end any time soon. Jack Ma, the Chairman of Alibaba Group warned that the trade war could last 20 years at the company’s investor day in Hangzhou in mid-September and said: “If you want a short term solution, there is no solution”.

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

The outlook is grim for Sino-US relations and the worsening of the relationship between the two largest economies in the world will have a negative impact on world economic growth. However it is way too early to give up on China yet. Indeed, the Sino-US relationship has had more difficult times than what we are witnessing today. After the brutal suppression of pro-democracy student movement in June 1989, the US government under George Bush, together with other leaders in the developed world quickly imposed a series of diplomatic and economic sanctions against China. The details of those sanctions varied from country to country, but in general they involved the suspension of high-level official visits, official development assistance and export credits, and sales of military and police equipment. The relaxation of controls on the transfer of advanced technology to China, both by individual governments and by the Coordinating Committee (COCOM), was also postponed. Under pressure from the United States and members of the European Community, the World Bank and the Asian Development Bank agreed to halt lending to China. These official actions were supplemented by the unofficial and spontaneous decisions of private individuals and institutions in Europe, Japan, and the United States to reconsider the desirability of conducting business with China.

The net impact of all these decisions on China’s foreign relations was substantial. The level of official dialogue between China and the West fell sharply. There were dramatic declines in revenues from tourism (down 20 percent in 1989), direct foreign investment (down 22 percent in the first half of 1990), and foreign lending (down 40 percent in 1989), although Beijing was able to protect its foreign exchange balances by imposing strict controls over imports. Real GDP growth fell sharply from 9.4% in 1988 to 2.6% in 1989 and 2.4% in 1990. In fact, in USD terms, GDP fell from 456bn in 1989 to 395bn in 1990. On top of that, the leadership in Beijing feeling embattled and besieged, became more conservative and xenophobic. It decided to roll back some of the key reforms introduced in the early 80s and fell back to the socialist planned economy model. To me, a young graduate student in China, it looked as though the economic boom from the beginning of the eighties had met a premature death and that China’s gradual opening to the world had come to a full stop. Of course, we know that didn’t happen. By 1992, China growth was 12.8% and it went on to grow in double digits for three years. How did China emerge from that crisis? How did it come back from the edge of economic collapse after peering into the abyss of economic ruin and isolation?

The main reason is that China chose to reform further. Domestic reforms addressing the inefficiency of the state owned industries, and regulatory and bureaucratic barriers to growth was the answer. Deng Xiaoping, then the paramount leader, started to push for more radical reform from the spring of 1991. The rest is history. Chinese GDP grew 30 times from less than 400bn USD in 1990 to 12 trillion in 2017.

The question remains whether the current government will have the wisdom and political courage to introduce sweeping reforms to change the structure of the economy to withstand external pressures. Our view is that if and when it chooses to do so, the Chinese economy will still be able to maintain its growth trajectory. China still has significant advantages and resources to sustain its growth. Its domestic market, soon to be the biggest consumer market in the world is not something global companies can afford to forget. So we think it is absolutely too early to throw in the towel with regard to China.

The globalisation of Chinese equities

Ironically, as barriers for trading in goods are being erected, the gradual globalisation of Chinese equities is gaining momentum. On 26 September, MSCI issued a consultation paper on raising the inclusion factor (IF) for A shares from 5% currently to potentially 20% by end 2019, and expanding the inclusion universe to mid-cap and ChiNext stocks. On 27 September, FTSE announced its decision to add 1249 A shares into the FTSE Global Equity Index Series (including the EM and Global indexes) in 3 phases starting June 2019. ,

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

Should the MSCI inclusion factor be raised to 20%, then China A shares will account for 2.6% in MSCI Asia Pacific (ex-Japan) and 2.8% of MSCI Emerging Markets according to Goldman Sachs estimates. And at 100% inclusion factor, China A will account for 14.7% EM, pushing ‘all-China’ (A+ H+ ADRs) weight to 41%. More importantly, China A shares and “all China” will account for 1.8% and 5% of MSCI ACWI (all country world index) respectively. In comparison, Japan, the United Kingdom and France are currently 7.4%, 5.27% and 3.42% in the MSCI ACWI index respectively.

After the FTSE inclusion, China A will represent 5.5% and 0.57% of FTSE EM and FTSE All World index respectively. More importantly, total China will represent 36.8% and 3.7% of FTSE EM and FTSE All World Index respectively.

Global Emerging All Cap All Cap All World Emerging China ex A shares ¹ 3.0 2% 32.17% 3.22% 33.79% China A ² 0 .57% 5.70 % 0 .57% 5.57% Total China ³ 3.56% 35.43% 3.77% 36.83% ¹ Data as at close 31 August 2018 ² Projected weight of China post the Country Classification changes for Poland (DM), Kuwait (EM) and Saudi Arabia (EM) ³ China A, B, H, N Share, P, Red and S Chip Source: FTSE

The rise of the Chinese shares in global weightings will come at the expense of Korea, Taiwan and India. In addition, the rise in weightings in global indices will have a profound impact on fund flows. Goldman Sachs estimates that such fund flows from global mandates is significant:

• MSCI increase China A inclusion factor from 5% to 20% would result in USD59b of net buying from global mandates, of which USD41b will come from EM mandates.

• FTSE inclusion will result in USD8b incremental net inflows due to Phase 1 inclusion.

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

Revisit of the Aspirational Asia Theme

One of the five key themes of the Veritas Asia Fund is Aspirational Asia where Asia moves gradually to a consumption-led economy which will transform it from the previous dependence on an investment led model and over reliance on commodities. In recognition of the changes in global economies, especially in China, the Global Industry Classification Standard (GICS) will have a major event with effect from September 28. The GICS is an industry classification employed (and developed) by MSCI and S&P Dow Jones and the last major revamp was done in 2016.

Although the new changes will affect only 29 stocks (out of a total of 461 MSCI constituents stocks) with 15 from IT, 7 from Consumer Discretionary and 7 from Telecom, these 29 stocks represent 39% of the index weightings. Among the major changes in Asia include:

• Tencent, Baidu, Netease, Weibo and Momo will be moved from the IT sector to the new Communication Services Sector (similarly for the US companies of Google and Facebook).

• MSCI China’s biggest loser is the huge IT sector weighting which will fall from 37% to only 3%, and the winners are Consumer Discretionary sector (rising from 9% to 21%) and Communication Services (rising from 5% to 27%).

These changes underscore our previous conviction that Asian consumers will emerge as a dominant theme and will become a major investment focus. According to Goldman Sachs, both MSCI Emerging Market (EM) and MSCI Asia Pacific ex Japan’s Consumer Discretionary sector will rise to 11%, on par with MSCI Developed Market after the reclassification. With the new changes, it confirms our view on Asia in general and China in particular the ongoing economic transformation trend of: 15

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

• Changing consumer preferences (from Staples to Discretionary). A rise in income and wealth increases the demand for not just simple goods (noodles, biscuits, beer, tissue, milk and water), but increasingly more premium products. The more affluent Asian consumers will move from staples to demand better quality products in all areas of their daily life, from condiments, toiletries, cosmetics, to phones and cars. They want products that will improve their quality of life and enhance a sense of wellbeing.

• Aspirational consumption (from goods to services). As Asians get richer there will be increased spending on services (education and healthcare) and leisure activities (gaming, movies, concerts and amusement parks, sports and especially travel).

This matches our conviction that China will eventually become the largest consumer nation globally. Indeed, with the new GICS reclassification, the China Consumer Discretionary Sector at 21% of the index will be highest index weighting in the world, higher than that of US (11%), UK (7%), Japan (19%), and Germany (17%). With the new classification, it puts India and Indonesia Consumer Discretionary sectors on par with the US at 11% and Korea Consumer Discretionary Sector at 10% being higher than that of the UK.

China consumption

Consumer discretionary as % of MSCI country/region index cap

VERITAS FUNDS PLC

VERITAS ASIAN FUND

INVESTMENT MANAGER’S REPORT (CONTINUED)

Outlook

There is no denying that the macro picture for Asia as a whole has become more challenging. However, as always there are winners and losers in any environment. Our job as investors is to identify the longer term winners and back them when the price is right. We have reassessed our themes in light of the changes in global trades and geopolitical conditions. We remain convinced that our themes focusing on Asian consumers, healthcare, e-commerce/internet, environment as well as efficiency improvement in the economy are valid for the long term. The common feature of the five themes is that they are all domestic in nature. In a world increasingly hostile to globalisation, that may well be a good place to be for the longer term.

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

INVESTMENT MANAGER’S REPORT

US healthcare

US healthcare represents a significant investment in the portfolio. In this note we attempt to unpick some of the concerns surrounding the US healthcare system (and in particular the supply chain) and indicate why we are positive on the outlook for a number of our healthcare holdings.

In 2016 US healthcare spending represented 17.9% of US GDP. This is the highest of any nation. Most developed countries spend around 10% of GDP on healthcare. This high and growing spend is escalating as a political issue as affordability is a mounting concern coupled with the realisation that despite this spend, the US has the lowest life expectancy and highest infant mortality rates of other high-income nations.

The US healthcare system is unlike most other developed nations (particularly European) with citizens responsible for their own healthcare provision unless they are either poor (Medicaid) or elderly (Medicare). The consequence of this has been the development of a private health insurance industry that effectively underwrites an individual’s risk and offers anything from catastrophic coverage for only major illness through to comprehensive coverage for any illness. It is a market dominated by employer payers and historically, employers included the cost of health insurance for their employees (and their families) as part of total remuneration. One other feature of the US healthcare system has been that it has largely operated as a “fee-for-service” industry – in other words every action undertaken within healthcare is largely seen as discrete and reimbursed as such. An example would be a patient who presents at his physician with chest pain: The appointment at the physician would represent a chargeable event, as would any diagnostic tests that are ordered. Should this lead to further investigation such as an MRI this would also be separately chargeable and finally should it be determined that the patient needs an operation (for example a stent to open a blocked artery) this would be charged discretely as would any medicines required. If the patient were also morbidly obese, this would be treated as a totally separate condition. Such a system encourages the over-ordering of diagnostic tests (not helped by the litigious nature of the US), over prescribing of drugs and (sadly) performing interventions that are not always necessary. In many ways, US healthcare is like asking the barber if you need a haircut: he is incentivised to say yes. To add a further analogy, a broken down car presented to a garage, where different mechanics are responsible for testing and fixing different components of the engine, but no one is responsible for the ongoing road-worthiness of the car.

Partly as a consequence of the system (and partly due to other factors such as innovative procedures, drug price inflation, new biologic drugs etc) over the past two decades US healthcare costs have increased much faster than GDP. This has led to pressure on employers as healthcare cost has increasingly weighed on profitability and has led employers to seek ways to reduce their costs typically through either removing or significantly reducing coverage and increasing the proportion that the employee has to pay (“co-pay”). These “out-of-pocket” costs for individuals have been rising to such an extent that they have now become a focus of politicians. There is a growing awareness that despite the high cost of healthcare to the US, outcomes are often worse than lower cost healthcare models. Cognizant of inefficiencies in the systems and disruption potential, new entrants are looking to better utilise data, analytics and technology to reduce the costs of healthcare. One such high profile entrant is Amazon who appear on the verge of deploying their skills in distribution and logistics to disintermediate parts of the prescription drug supply chain. Also high profile is the joint venture between Berkshire Hathaway, JP Morgan and Amazon which aims to develop an alternative healthcare delivery model for their employees. Given these pressures, one might ask, why would Veritas be invested in three companies in the US healthcare supply chain?

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The answer to this question is that we believe the companies we have selected to invest in represent an answer to the issues rather than representing the problem. Each of the three companies are embracing the idea of providing better, more coordinated healthcare for lower cost. They each have attributes which we believe will allow them to achieve this where others cannot. These attributes are related to scale and data (in itself partly related to scale) and vertical integration. However, these advantages on their own are insufficient – the management at the companies have to understand the problems and be willing to change the way the company operates to position themselves appropriately for the future. We believe that each of the managerial teams at our investees understand the issues well, as demonstrated by their actions over the past few years.

The best way to save costs in the US healthcare system would be to keep patients healthy and out of hospital (inpatient costs tend to spiral). Better health can be achieved via many routes including better diet, more exercise, improved sleep etc (which have all been proven to be difficult to achieve) but also through earlier diagnosis of conditions (especially chronic conditions) and persistent treatment to keep the condition under control (which includes ensuring that patients actually take their medicine). To achieve this healthcare providers need to be incentivised to keep patients healthy and out of hospital rather than simply treating them for whatever they present at the physician’s office with (traditional fee- for-service). This requires an holistic view of a person’s health together with good data and analytics which can be used for preventative intervention and to determine algorithms to work out the optimum treatment paradigm for every patient (regardless of co-morbidities).

A good example of the problem is hypertension. Around 30% of US adults suffer from hypertension but only about 40% of those have it under control. The cost of hypertension to the US is estimated at more than $50bn annually and yet it is relatively easy and cheap to treat with drugs. The majority of the $50bn cost comes from the patient population that do not have their hypertension under control and present at the emergency room when their health rapidly deteriorates. This is clearly not efficient. Obesity is yet another example – obese patients typically end up being extremely costly to the healthcare system due to co-morbidities such as diabetes, end stage renal disease, heart disease etc. It is estimated that around 34% of Medicare enrolees are obese and on average cost $1,964 more per year than an average weight individual. If these patients’ weight could be better controlled at an earlier stage then costs to the system in the future would fall dramatically. Unfortunately under a fee-for-service paradigm, there is little incentive for an insurer or a physician to reach out to the patient early. For the insurer in particular the cost of such an intervention (however low) will not repay itself in the typical length a policy holder stays with the insurer so the insurer is not incentivised to keep the patient healthy in the long term.

Our analysis indicates that the US healthcare system will now rapidly move to a value based care (VBC) system (away from fee-for-service). Under value based care there is a focus on the quality of care and outcomes, using incentives to the care provider to reward better health and lower costs. Under a VBC system there is a focus on collaboration rather than volumes and outcomes rather than outputs. Care providers are incentivised to look for problems rather than waiting for them to show up in the emergency room. Each of our investments in the US healthcare service sector are well placed in a VBC system:

UnitedHealth

UnitedHealth is one of the leading private health insurers in the US. The company is vertically integrated with health insurance, a pharmacy benefits manager (drug purchasing and mail order), a data analytics business and increasingly a care delivery business (e.g. primary care and local urgent care). This combination of businesses gives UnitedHealth advantages over their competition, particularly as a result of the data analytics business built over the last ten years.

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UnitedHealth is probably the leading proponent today of value based care and is also probably the best positioned. While this is somewhat reflected in its valuation, we believe that the company can capitalise on the shift in US healthcare and continue to take market share. Around one third of UnitedHealth plan participants now receive care from care providers in value based arrangements. This requires UnitedHealth to collaborate with the provider (e.g. an Accountable Care Organisation or ACO) using data-driven insights to sculpt contracts that incentivise high quality care which results in better outcomes and consequently lower costs. This is done through a variety of incentive schemes (including profit- sharing) for the provider. The data from UnitedHealth’s progress to date make a compelling argument for VBC:

• Better health – Value based care ACO’s are better on 87% of the top quality measures • Better care at lower cost – value based care ACO’s have 10% more physician visits but have 17% fewer hospital admissions

The competitive advantages of UnitedHealth are almost impossible for a new entrant to overcome and consequently we believe that the company will continue to take market share as it can demonstrate to employers, government plans and individuals that it can provide better care at lower cost. UnitedHealth also has the leading data-driven healthcare services business, Optum.

Cigna

Cigna is the fourth largest US health insurer with c. 15mn medical members primarily in the self-insured market. While lacking the scale of UnitedHealth, Cigna has built pockets of local strength in particular geographies and has a very strong business with middle market employers (250-5000 employees) due to their collaborative selling approach. Cigna spend a significant amount of time understanding the profile of each customer’s employee base and work together with each employer to design a health benefits plan that makes the most sense to them. Employers are also offered a range of specialty services including behavioural, pharmacy, dental, vision, disability and health coaching to enable more holistic patient care. Further, for almost ten years, CEO David Cordani has inspired Cigna to build accountable care relationships with physician groups, where reimbursements are tied to quality metrics, in their local markets. All of these factors, combined with their consumer engagement tools has enabled Cigna to deliver best in class medical cost trend (Cigna have consistently had the lowest medical cost inflation of all the major US health insurers since 2010) while improving the quality of care.

The pending acquisition of pharmacy benefit manager Express Scripts should further enhance CI’s ability to deliver leading medical cost trend. Pharmaceuticals account for >20% of medical spend today for employer customers and high cost specialty drugs are the single largest driver of overall medical trend. Express Scripts will meaningfully increase Cigna’s pharmaceutical purchasing power but perhaps even more significant than this is the specialty pharmacy capabilities the company will gain through Express Script’s leading specialty pharmacy business Accredo. Accredo’s clinical model is built around 14 disease specific Therapeutic Resource Centres staffed by pharmacists who spend all their time on that one particular disease and hence have unmatched expertise in helping patients manage their conditions. Given the significant interrelationship with the overall health of patients with chronic and complex conditions better management of specialty pharmacy should not only help control pharmacy cost but also improve patient health and reduce other associated medical costs for these patients. By combining pharmacy with medical management and forming deep, holistic relationships with employers, CIGNA can continue to gain share in markets where their value based relationships with providers can provide better outcomes.

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CVS Health (CVS)

Today CVS Health is the second largest retail pharmacy in the US with 9,847 stores and is the largest pharmacy benefit managers through their Caremark subsidiary. CVS also have strong capabilities in infusion and long term care pharmacy. Larry Merlo, CEO, has been repositioning CVS Health to be the “front door to healthcare” in the US, as evidenced by the 1,100 MinuteClinic walk-in health clinics staffed by nurse practitioners that have opened in CVS stores in the last few years.

Currently CVS are in the process of acquiring health insurer and service provider Aetna with the aim of vertically integrating the number three health insurer into their convenient consumer centric model. With 70% of the US population living within 3-5 miles of a CVS retail pharmacy, which also have convenient opening times, the stores are well positioned to be the initial point of access to the healthcare system. Also, people visit the pharmacy more frequently than their doctor (surveys suggest c. 65% of people visit a pharmacy once a month) so CVS can realistically help coordinate the patient’s journey through the healthcare system, guiding them to the most appropriate and cost effective site of care. Again, they are increasingly enabled to do so by combining data-driven insights that come from vertical integration of a payer with a PBM and patient care provider.

CVS Health pharmacies will becomes increasingly specialised to address local healthcare demands (e.g. vision care services, hearing care, drug infusion services etc) and whilst not all will require a MinuteClinic, assisted telehealth services to enable triage will be progressively adopted in stores. If CVS successfully demonstrate better outcomes and lower costs for Aetna members in this integrated system, the insurer will gain share. Additionally, it is then likely other health plans will also look to leverage CVS’s capabilities to help lower their costs as well.

To quote the current US Health Secretary, Alex M. Azar, speaking earlier this year:

“There is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward – for HHS to take bolder action, and for providers and payers to join us. This administration and this President are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.”

The payers and providers that we have discussed above and are invested in have foreseen this future and are leading the change.

Longer term perspective

Over a meaningful period for assessment, the Fund (USD A) has delivered a return of 60.45% over the past 5 years which can be compared against our dual mandate of OECD G7 CPI+6% p.a. (total return of 42.90% over the last 5 years) and the MSCI World Index (total return of 55.87%).

In the most recent year the Fund (USD A) has delivered a return on 8.67% which can be compared to an all equity global index (MSCI World) return of 11.24%.

Sources: HSBC/Veritas Asset Management/MSCI

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Risk appetite

‘Whenever you find yourself on the side of the majority, it is time to pause and reflect’ Mark Twain

It is common for credit analysts and equity analysts to have very different perspectives on the securities of a singular company. Maybe it’s the nature of the analysis but probably it’s the nature of the beast. Currently, however, there seems to be a great deal of agreement in the US regarding risk appetite. Those with a heightened sense of risk have not been in the majority and have not tended to perform well in the short term.

It’s probably a sense of enduring underpinning from policy making and politics, despite gentle adjustments to rates and language. The IMF points out that the lowest rating of investment grade bonds (BBB) pool 1.4 trillion dollars and is the largest component of the investment grade universe both in the US and Europe at circa 47%. Well up on past highs. Public and private debt appears to be capital markets with a lot of majority risk appetite. There is probably over issuance of corporate debt (which has occurred alongside the retirement of equity through buy backs), there is certainly a return to ‘gaming’ the grading system. Not only is circa 50% investment grade BBB but also junk bonds are single B not double B. Unlike the British education system – grade deflation not grade inflation.

Whilst the US economy appears to be strong, even buoyant, and the Fed on a gentle tightening track – surely there must be some kind of refinancing moment down the track for government and corporate debt? How long can you look ahead and do you care if you are a bond investor – let alone the equity investor seeking ‘quality and structural growth’.

The more prudent contrarian proceeds with scepticism and caution in this environment. Macro is unquestionably less understandable on the terms of the past (pre GFC) and is highly unpredictable and opaque. However, risks abound and they are not only from credit markets whether corporate or emerging markets. There is extreme complexity and ‘financialisation’ inter-linking capital markets and economies. There is unlikely to be any change in crowd behaviour in any correction in capital markets but there is certainly likely to be liquidity problems. There could be policy errors in the withdrawal of central bank easing policies. There is every chance of some disruption, fragility and softer economies on our investment time horizon.

Our approach has concentrated on the longer term company opportunities in this uncertain and fragile context. For some time we have explained to shareholders the demands of a diminishing opportunity set for premium asset class yield alongside quality of industry and company. Nonetheless, from time to time in these markets companies we follow adjust into our assessment of attractive value and we take the opportunity to enter. Reckitt Benckiser and Unilever being recent examples in consumer staples. We place time on our side alongside quality managements to navigate the future, having started with some margin of safety in our assessment of value.

We recently initiated an investment in Prudential plc, which is a UK-based international life insurance company with operations in Asia, the US and the UK. This stems from industry work we have done on the global life insurance sector, including visits to Prudential and its competitors in Asia last year, as well as from follow up meetings with the company itself in London.

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From a contextual point of view, life insurers are generally well positioned as interest rates rise. This is because their liabilities have a longer duration than their assets, and so as rates rise, their liabilities reduce more than their assets. Therefore book value, being the difference between the two, rises. It might also be the case that the pressure eases from guarantees that have been granted to policyholders, which have been a financial burden with low investment yields over recent years.

Prudential is a quality compounding company with strong earnings growth at decent returns, higher than at spread-based financials, such as banks, because Prudential has more valuable fee-based income. Compounding is demonstrated by Prudential being able to grow sales, profits, cash and dividends all at the same time and over the longer term; an endorsement of quality growth because it is difficult to grow all these together over time. This partly reflects strong industry positioning across its markets – it enjoys competitive advantages stemming from scale and distribution with high entry barriers, as well as political alignment with the costly provision of healthcare and retirement around the world. It is also thanks to disciplined growth with management being on top of risk, having avoided costly insurance guarantees, as well as other risks dependent on policyholder behaviour, that are difficult to hedge. This is in contrast to many of its competitors that are still finding their liabilities are escalating, without adequate reserves in place.

Asian life insurance has strong tailwinds and enduring structural growth. Asia has large and growing populations with low state healthcare and pension provision, so huge gaps exist in insurance protection and retirement needs that governments just cannot afford. As a leading provider of insurance and retirement products, Prudential’s growth is aligned with government aims. Meanwhile, the middle class is growing rapidly and as wealth increases, so too does demand for financial services. Asia is a highly- concentrated market, being dominated by AIA and Prudential outside of China – who have the largest tied agency forces to sell their products, which is a key barrier to entry. Advice is critical because life protection is an important one-off and non-discretionary purchase, which offers defence against digital disruption that is rife in non-life insurance, particularly commoditised lines such as motor insurance, although we expect some digital headway in simple term insurance The insurers have also formed partnerships with banks to secure further distribution and on terms that have increasingly favoured the insurers. Growth is strongly diversified, self-funded and persistent with 94% of premiums recurring each year. AIA and Prudential also have growth opportunities in the huge Chinese market that are unavailable to other Western companies.

The US has the largest retirement pool in the world. Prudential’s Jackson business has high returns thanks to successful execution of its contrarian but disciplined strategy. Before the GFC, Jackson stood aside while many of its competitors wrote business that was attractive for policyholders, but ultimately not for shareholders, and eventual losses forced many to exit the market. This allowed Jackson to step in and take lots of profitable market share, without the need to offer attractive guarantees that it is unable to hedge. Jackson is strongly differentiated from its peers that carry low but deserved valuations. While inflows remain positive, they have slowed lately. However longer-term growth should be secured by ageing populations and the continued shift to DC schemes. Jackson has remitted cash back to the Group over many years.

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Management has plans to demerge its UK business from its Asian and US businesses in an effort to extract value and remove the apparent conglomerate discount from its overall valuation. These UK businesses are in more mature market segments and have struggled to secure internal capital given the better alternatives elsewhere in the Group and, now that Asia is self-funded, management has taken the decision that it is not the natural owner for these assets.

Prudential has a lot of asset leverage. In the future, we would not be surprised to see weaker equity markets and this will reduce asset-based fees. We also expect the value of its investment portfolio to decline with lower markets, higher interest rates and wider credit spreads, all making a smaller contribution to book value. We model this, but without a compensatory reduction in liabilities, and so we believe our estimated book value is lower and our valuation more conservative than is likely. The business is also reasonably resilient (high recurring premiums in Asia; strong equity culture in the US; smoothed investment performance for the UK with-profit offering), supporting strong back-book profitability and the continued compounding nature of cash flows in the wake of market wobbles. Therefore, we believe that an embedded value (EV) approach is appropriate to value the company’s equity – this adds the discounted value of expected profits of the active business it has already written to book value. Even with our conservative assumptions, Prudential is trading at a 10% discount to prospective EV. We believe this offers huge value in a company that is strongly solvent.

Just as an aside, strong back-book profitability is very helpful in combating new entrants, who cannot sustain low pricing against incumbents with financial heft, as we saw with the banking sector seeing off internet start-ups in the 1990s when many heralded digital disruption as the death of conventional retail banking. Not so.

The opportunity for investment has arisen thanks to several factors. First, AIA trades at a large premium to its prospective NAV because of its fast and profitable Asian growth, matched by Prudential Asia at better margin, so this is a clear investment anomaly. However, Asian valuations have dipped lately. Elsewhere, US life insurers with shaky portfolios are trading at paltry valuations and, even though the prospective de-merger seeks to extract latent value, the process is complex and there are some doubts surrounding current shareholders being the natural shareholders of the standalone UK business. But progress is underway and the likelihood is that the conglomerate discount erodes.

We initiated your investment at an estimated IRR of +17%, higher than usual, to widen the margin of safety that we demand on entry, of which its net yield stands at 3%.

The end of September marks the end of our OEIC year and the second of two dividend payments in the year. During the past year we have aimed to consistently improve company and industry quality despite continuing challenges with the investible universe. We shall continue on this tack alongside delivering an asset class premium yield. We aim for a high conviction; low turnover selection of quality companies from around the world that will deliver a premium yield alongside protecting and growing the capital in real terms. The running yield of the share class in the Fund was 3.7% at the end of September.

The total return in the 12 months to September 2018 for VGEIF GBP A was 7.48%. The MSCI World Index (with net dividends reinvested) was up 14.44 in GBP terms and the OECD G7 CPI + 6% p.a.¹ was up 8.49%.

¹ OECD G7 CPI index shown to latest available date - 31 August 2018 Sources: HSBC/Veritas Asset Management/MSCI/OECD

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Macro headwinds chilling EM

Trade war or China containment?

US Tariffs on China

Value of Chinese Goods Impacted, $ Billion

Tariffs in place $50 0.2 ppt

Tariffs from 24 Sep $50 $20 0

0.5 ppt

Tariffs from 1 Jan $250

0.9 ppt Tariffs on further amount (threatened over $250 $267 uncertain horizon) 1.5 ppt

$0 $100 $20 0 $30 0 $400 $50 0 $600

Source: Bloomberg Economics; Note - assumed tariff level; boxes show cumulative impact on annual growth

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The globalisation of Chinese equities

Global Emerging All Cap All Cap All World Emerging China ex A shares ¹ 3.0 2% 32.17% 3.22% 33.79% China A ² 0 .57% 5.70 % 0 .57% 5.57% Total China ³ 3.56% 35.43% 3.77% 36.83%

¹ Data as at close 31 August 2018 ² Projected weight of China post the Country Classification changes for Poland (DM), Kuwait (EM) and Saudi Arabia (EM) ³ China A, B, H, N Share, P, Red and S Chip Source: FTSE

• MSCI increase China A inclusion factor from 5% to 20% would result in USD59b of net buying from global mandates, of which USD41b will come from EM mandates. • FTSE inclusion will result in USD8b incremental net inflows due to Phase 1 inclusion.

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Revisit of the Aspirational Asia Theme

• Tencent, Baidu, Netease, Weibo and Momo will be moved from the IT sector to the new Communication Services Sector (similarly for the US companies of Google and Facebook).

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• Alibaba will be reclassified into the Consumer Discretionary Sector from the IT sector (similarly for EBay). This brings it in line with Amazon which is already included in the Consumer Discretionary sector). • MSCI China’s biggest loser is the huge IT sector weighting which will fall from 37% to only 3%, and the winners are Consumer Discretionary sector (rising from 9% to 21%) and Communication Services (rising from 5% to 27%).

China consumption

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Consumer discretionary as % of MSCI country/region index cap

Outlook

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US healthcare

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UnitedHealth

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INVESTMENT MANAGER’S REPORT (CONTINUED)

Cigna

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CVS Health (CVS)

To quote the current US Health Secretary, Alex M. Azar, speaking earlier this year:

The payers and providers that we have discussed above and are invested in have foreseen this future and are leading the change.

Longer term perspective

Given the rise of markets driven by mostly ‘multiple re-rating’ with earnings growth not yet evident, we judge prospective returns for the market as being low on a multi-year view. Consequently, the Veritas Global Real Return Fund remains conservatively positioned with a net long exposure of 45.3% as at 30 September 2018. During the last 5 years, the Fund (GBP A) delivered 10.20% annualised which compares to our absolute return benchmark, the OECD G7 CPI + 4% p.a., of 5.38%.

In the most recent year the Fund (GBP A) has delivered a return on 7.47% which can be compared to the return of the OECD G7 CPI + 4% p.a. of 6.45%.

¹ OECD G7 CPI index shown to latest available date - 31 August 2018 Sources: HSBC/Veritas Asset Management/MSCI/OECD

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US healthcare

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The best way to save costs in the US healthcare system would be to keep patients healthy and out of hospital (inpatient costs tend to spiral). Better health can be achieved via many routes including better diet, more exercise, improved sleep etc (which have all been proven to be difficult to achieve) but also through earlier diagnosis of conditions (especially chronic conditions) and persistent treatment to keep the condition under control (which includes ensuring that patients actually take their medicine). To achieve this healthcare providers need to be incentivised to keep patients healthy and out of hospital rather than simply treating them for whatever they present at the physician’s office with (traditional fee- for-service). This requires a holistic view of a person’s health together with good data and analytics which can be used for preventative intervention and to determine algorithms to work out the optimum treatment paradigm for every patient (regardless of co-morbidities).

UnitedHealth

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INVESTMENT MANAGER’S REPORT (CONTINUED)

Cigna

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CVS Health (CVS)

To quote the current US Health Secretary, Alex M. Azar, speaking earlier this year:

The payers and providers that we have discussed above and are invested in have foreseen this future and are leading the change.

In the most recent year the Fund has delivered a return on 4.13% (USD C Class) which can be compared to the OECD G7 CPI +8% p.a. return of 10.53%.

¹ OECD G7 CPI index shown to latest available date - 31 August 2018 Sources: HSBC/Veritas Asset Management/MSCI

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SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 5,200,000 Aristocrat Leisure 107,004,401 5.09 1,000,000 BHP Billiton 25,056,546 1.19 4,775,676 Boral 23,877,101 1.13 230,000 Cochlear 33,389,819 1.59 772,459 CSL 112,402,975 5.34 400,000 REA Group 24,869,870 1.18 4,000,000 Sydney Airport 19,941,045 0.95 5,000,000 Treasury Wine Estates 63,274,470 3.01 409,816,227 19.48

China 463,915 Alibaba Group 76,434,635 3.63 600,000 BeiGene 8,028,218 0.38 59,955 Kweichow Moutai 6,360,950 0.30 5,000,000 Ping An Insurance Group Company of China 50,799,371 2.41 4,396,000 Shanghai Fosun Pharmaceutical Group 17,331,416 0.83 2,300,000 Tencent Holdings 94,999,297 4.52 253,953,887 12.07

Hong Kong 10,000,000 AIA Group 89,330,215 4.25 23,296,296 China Everbright International 20,125,875 0.96 35,578,000 CSPC Pharmaceutical 75,567,274 3.59 2,000,000 Hang Seng Bank 54,339,353 2.58 6,000,000 Prada 28,754,361 1.37 268,117,078 12.75

India 1,121,469 Apollo Hospitals Enterprise 16,124,308 0.77 2,200,000 Asian Paints 39,250,379 1.87 2,600,000 Axis Bank 21,995,448 1.04 3,000,000 Godrej Consumer Products 31,810,595 1.51 1,196,200 HDFC Bank 49,045,374 2.33 2,000,000 Indusind Bank 46,628,500 2.22 450,000 Maruti Suzuki 45,614,257 2.17 250,468,861 11.91

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SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities (continued)

Singapore 2,000,000 United Overseas Bank 39,638,453 1.89 2,100,000 Venture 27,096,278 1.28 66,734,731 3.17

South Korea 60,000 Amorepacific Corporation 14,117,647 0.67 55,235 LG Household & Healthcare 63,538,301 3.02 40,000 Samsung Biologics 19,256,254 0.92 1,750,000 Samsung Electronics 73,281,497 3.48 50,000 Samsung Fire & Marine Insurance 12,801,442 0.61 182,995,141 8.70

Taiwan 9,376,000 Taiwan Semiconductor Manufacturing 80,607,867 3.83 80,607,867 3.83

Thailand 36,000,000 CP All 76,808,906 3.65 3,300,000 Kasikornbank 22,040,816 1.05 98,849,722 4.70

Total Equities1 1,611,543,514 76.61

Equity Warrants*

China 5,870,944 Jiangsu Hengrui Medicine (Warrant 21/11/2018) 54,182,038 2.58 1,499,855 Zhejiang Supor (Warrant 15/07/2019) 11,766,731 0.56 65,948,769 3.14

Total Equity Warrants1 65,948,769 3.14

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SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Unrealised Gain on Contracts for Difference**

China 859,874 Kweichow Moutai 6,575,541 0.31 6,575,541 0.31

Total Unrealised Gain on Contracts for Difference2 6,575,541 0.31

Unrealised Gain on Forward Currency Contracts†

USD 100,000,000 / CNY 642,850,000 11/02/2019 7,099,204 0.33 USD 60,000,000 / CNY 399,480,000 27/06/2019 2,464,177 0.12 9,563,381 0.45

Total Unrealised Gain on Forward Currency Contracts2# 9,563,381 0.45

Total Financial assets at Fair Value through Profit or Loss 1,693,631,205 80.51

Net Financial assets and liabilities at Fair Value through Profit or Loss 1,693,631,205 80.51

Other Net Assets 410,067,381 19.49

Net assets attributable to Holders of Redeemable Participating Shares 2,103,698,586 100.00

*The counterparty for the warrants is UBS. **The counterparty for the contracts for difference is Morgan Stanley. †The counterparty for forward currency contracts is HSBC Bank plc.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock 1,677,492,283 78.05 exchange2Financial listing derivative instruments traded over-the-counter 16,138,922 0.75

VERITAS FUNDS PLC

VERITAS ASIAN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 2,400,000 ALS 14,726,306 1.82 1,750,000 Aristocrat Leisure 28,835,878 3.57 1,000,000 BHP Billiton 20,228,270 2.51 4,175,676 Boral 22,181,520 2.75 220,000 CSL 23,124,569 2.86 150,000 Macquarie Group 10,701,053 1.33 400,000 Rio Tinto 20,881,099 2.59 2,800,000 Treasury Wine Estates 30,077,194 3.73 170,755,889 21.16

China 135,000 Alibaba Group 23,315,850 2.89 10,300,000 Brilliance China 27,429,039 3.40 13,000,000 Changsha Zoomlion 5,725,479 0.71 60,000 NetEase 15,828,600 1.96 3,300,000 Ping An Insurance Group Company of China 25,328,716 3.14 1,000,000 Sunny Optical Technology 15,901,264 1.97 700,000 Tencent Holdings 30,130,462 3.74 9,444,849 Weichai Power 10,350,917 1.28 150,000 Zhongan Online P & C 1,218,521 0.15 155,228,848 19.24

Hong Kong 3,500,000 AIA Group 25,810,747 3.20 15,500,000 CSPC Pharmaceutical 25,956,70025,810,747 3.21 400,000 Hang Seng Bank 25,956,700 9,750,727 1.21

7,000,000 Samsonite International 25,956,70030,022,917 3.72 91,541,091 11.34

India 150,000 HDFC Bank 14,455,500 1.79 14,455,500 1.79

VERITAS FUNDS PLC

VERITAS ASIAN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities (continued)

South Korea 19,015 LG Household & Healthcare 15,539,390 1.93 80,000 N C Soft 32,444,231 4.02 16,000 Samsung Electronics 35,817,872 4.43 83,801,493 10.38

Taiwan 2,100,000 Catcher Technology 19,563,712 2.42 4,500,000 Hon Hai Precision Industry 15,581,718 1.93 3,002,000 Taiwan Semiconductor 21,432,957 2.66 56,578,387 7.01

Thailand 12,500,000 CP All 25,018,741 3.10 25,018,741 3.10

Total Equities1 597,379,949 74.02

Equity Warrants*

China 4,299,667 Hangzhou (Warrant 20/06/2018) 20,679,549 2.56 3,331,667 Jiangsu Hengrui Medicine (Warrant 22/11/2017) 30,034,778 3.72 319,990 Kweichow Moutai (Warrants 09/11/2017) 24,889,232 3.08 2,999,920 Midea Group (Warrant 13/05/2019) 19,980,187 2.48 95,583,746 11.84

India 301,469 Apollo Hospitals Enterprise (Warrant 08/02/2018) 4,655,667 0.58 550,000 Asian Paints (Warrant 09/06/2020) 9,530,472 1.18 600,000 Axis Bank (Warrant 19/05/2020) 4,677,540 0.58 526,200 HDFC Bank (Warrant 08/02/2018) 14,510,586 1.80 750,000 Indusind Bank (Warrant 14/10/2019) 19,317,870 2.39 900,000 Larsen & Toubro (Warrant 08/02/2018) 15,726,231 1.95 68,418,366 8.48

Total Equity Warrants1 164,002,112 20.32

VERITAS FUNDS PLC

VERITAS ASIAN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Unrealised Gain on Contracts for Difference**

India 400,000 Axis Bank 31,155 0.01 150,000 Larsen & Toubro 22,676 0.00 53,831 0.01

Total Unrealised Gain on Contracts for Difference2 53,831 0.01

Total Financial assets at Fair Value through Profit or Loss 761,435,892 94.35

Financial liabilities at Fair Value through Profit o r Loss

Unrealised Loss on Contracts for Difference**

Taiwan 90,000 Largan Precision (207,618) (0.02) (207,618) (0.02)

Total Unrealised Loss on Contracts for Difference (207,618) (0.02)

Total Financial liabilities at Fair Value through Profit or Loss (207,618) (0.02)

Net Financial assets and liabilities at Fair Value 761,228,274 94.33 through Profit or Loss

Other Net Assets 45,770,620 5.67

Net assets attributable to Holders of Redeemable Participating Shares 806,998,894 100.00

*The counterparties for the warrants are UBS, Morgan Stanley, Citigroup and CLSA. **The counterparty for the contracts for difference is UBS.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing 761,382,061 92.67 2Financial derivative instruments traded over-the-counter 53,831 0.01

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 4,487,432 Sonic Healthcare 80,879,845 2.28 80,879,845 2.28

China 338,526 Baidu 77,414,126 2.19 77,414,126 2.19

France 597,184 Airbus Group 75,036,779 2.12 968,960 Safran SA 135,841,404 3.84 2,210,100 Unilever 123,127,601 3.47 334,005,784 9.43

HongKong 9,421,780 REEF China Commercial # - - - - Spain 393,858 Aena SA 68,391,150 1.93 68,391,150 1.93

United Kingdom 38,051,625 Capita Group 70,908,704 2.00 1,461,300 Reckitt Benckiser 133,697,434 3.78 10,984,674 Rolls Royce 141,440,702 3.99 346,046,840 9.77

United States 673,522 Allergan 128,292,471 3.62 110,204 Alphabet 133,025,044 3.76 1,251,838 American Express 133,308,229 3.76 944,047 Baxter International 72,776,583 2.06 543,823 Black Knight 28,251,605 0.80 873,170 Cerner 56,240,880 1.59 775,860 Charter Communications 252,837,257 7.14 825,900 Cigna 171,993,675 4.86 3,319,576 Comcast 117,546,186 3.32 2,025,740 CVS Caremark 159,466,253 4.50

# Unquoted security

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities (continued)

United States (continued) 2,377,157 Dentsply Sirona 89,713,905 2.53 451,600 Facebook 74,270,136 2.10 979,574 Microsoft 112,033,878 3.16 1,481,555 Oracle 76,388,976 2.15 1,183,047 Qualcomm 85,214,876 2.41 603,022 Thermo Fisher Scientific 147,185,610 4.16 531,301 United Health Group 141,347,318 3.99 324,427 Waters 63,159,448 1.78 2,043,052,330 57.69

Total Equities1 2,949,790,075 83.29

Total Financial assets at Fair Value through Profit or Loss 2,949,790,075 83.29

Net Financial assets and liabilities at Fair Value through Profit or Loss 2,949,790,075 83.29

Other Net Assets 591,528,808 16.71

Net assets attributable to Holders of Redeemable Participating Shares 3,541,318,883 100.00

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market. 2,949,790,075 82.72

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 6,679,072 Sonic Healthcare 109,583,708 2.95 109,583,708 2.95

China 640,093 Baidu 158,544,635 4.26 158,544,635 4.26

Denmark 1,083,439 Dong Energy 62,030,790 1.67 62,030,790 1.67

France 2,072,784 Airbus Group 197,040,200 5.30 2,001,993 Safran SA 204,582,293 5.50 401,622,493 10.80

Hong Kong 9,421,780 REEF China Commercial # - - - -

Israel 789,632 Check point Software Technology 90,033,841 2.42 90,033,841 2.42

Spain 406,511 Aena SA 73,408,145 1.98 73,408,145 1.98

Sweden 973,224 Millicom International Cellular SA 64,087,904 1.72 64,087,904 1.72

United Kingdom 16,461,977 Capita Group 124,787,074 3.36 2,731,450 London Stock Exchange Group 140,356,067 3.78 11,789,359 Rolls Royce 140,298,483 3.77 405,441,624 10.91 # Unquoted security 48

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities (continued)

United States 661,503 Allergan 135,575,040 3.65 111,837 Alphabet 108,897,924 2.93 2,006,759 American Express 181,531,419 4.88 2,087,777 Baxter International 131,008,007 3.52 659,176 Cerner 47,012,432 1.26 495,634 Charter Communications 180,123,308 4.84 5,938,605 Comcast 228,517,520 6.15 1,461,091 CVS Caremark 118,815,920 3.19 1,239,416 Dentsply Sirona 74,129,471 1.99 1,520,053 Express Scripts Holdings 96,249,756 2.59 1,715,751 Microsoft 127,806,292 3.44 1,527,757 Oracle 73,867,051 1.99 2,230,434 QUALCOMM 115,625,699 3.11 652,202 Thermo Fisher Scientific 123,396,618 3.32 574,631 United Health Group 112,541,481 3.03 472,236 Waters 84,775,807 2.28 1,939,873,745 52.17

Total Equities1 3,304,626,885 88.88

Total Financial assets at Fair Value through Profit or Loss 3,304,626,885 88.88

Net Financial assets and liabilities at Fair Value through Profit or Loss 3,304,626,885 88.88

Other Net Assets 413,544,367 11.12

Net assets attributable to Holders of Redeemable Participating Shares 3,718,171,252 100.00

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market. 3,304,626,885 87.95

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities

Australia 2,033,300 Sonic Healthcare 28,102,797 4.36 28,102,797 4.36

France 147,900 Airbus Group 14,250,832 2.21 141,200 Safran SA 15,179,834 2.35 453,100 Sanofi 30,897,337 4.80 143,500 Unibail-Rodamco-Westfield 22,139,866 3.44 389,900 Unilever 16,657,229 2.59 99,125,098 15.39

HongKong 9,738,050 REEF China Commercial # - - - -

Italy 1,230,100 ENI 17,839,112 2.77 17,839,112 2.77

Singapore 18,919,400 Ascendas Real Estate Investment Trust 28,032,060 4.35 14,282,237 Fortune Real Estate Investment Trust 13,002,861 2.02 75,287,635 Netlink NBN Trust 32,958,086 5.11 15,315,400 Singapore Telecommunications 27,849,479 4.32 1,385,100 United Overseas Bank 21,051,038 3.27 122,893,524 19.07

Spain 116,200 Aena SA 15,472,924 2.40 15,472,924 2.40

Sweden 416,900 Millicom International Cellular SA 18,351,660 2.85 18,351,660 2.85

Switzerland 289,100 Novartis 19,155,375 2.97 19,155,375 2.97

# Unquoted security

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities (continued)

United Kingdom 5,204,192 BP 30,668,303 4.76 655,600 British American Tobacco 23,499,982 3.65 14,137,750 Capita Group 20,202,845 3.14 10,996,040 Convatec group 25,554,797 3.97 1,100,000 Prudential 19,354,500 3.00 325,600 Reckitt Benckiser 22,844,096 3.54 142,124,523 22.06

United States 366,100 CVS Caremark 22,099,913 3.43 170,700 Microsoft 14,971,020 2.32 1,212,000 Pfizer 40,959,195 6.36 460,500 Qualcomm 25,436,000 3.95 283,300 Stericycle 12,748,011 1.98 712,400 Welltower 35,137,892 5.45 151,352,031 23.49

Total Equities1 614,417,044 95.36

Unrealised Gain on Forward Currency Contracts*

GBP 42,135 / USD 54,599 04/10/2018 277 - USD 46,830 / GBP 35,682 04/10/2018 220 - 497 -

Total Unrealised Gain on Forward Currency Contracts2# 497 -

Total Financial assets at Fair Value through Profit or Loss 614,417,541 95.36

Unrealised Loss on Forward Currency Contracts*#

USD 3,616,651 / GBP 2,801,492 04/10/2018 (28,825) (0.01) USD 66,782 / GBP 51,700 04/10/2018 (503) - (29,328) (0.01)

Total Unrealised Loss on Forward Currency Contracts# (29,328) (0.01)

Total Financial liabilities at Fair Value through Profit or Loss (29,328) (0.01)

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss GBP Asset Value

Net Financial assets and liabilities at Fair Value through Profit or Loss 614,388,213 95.35

Other Net Assets 29,913,316 4.65

Net assets attributable to Holders of Redeemable Participating Shares 644,301,529 100.00

*The counterparty for the forward currency contracts is Brown Brothers Harriman & Co.

% of Total Analysis of Gross Investments Assets

1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 614,417,044 92.62 2Financial derivative instruments traded over-the-counter 497 -

#Forward Contracts are held at Class level for hedging

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities

Australia 21,709,122 2.06 7,575,469 Aurizon Holdings 44,635,823 4.24 3,650,000 Sonic Healthcare 66,344,945 6.30

France 690,400 Airbus Group 48,917,295 4.65 767,200 Safran SA 58,435,255 5.55 460,000 Sanofi 34,051,826 3.24 171,100 Unibail Rodamco 31,019,975 2.95 172,424,351 16.39

Hong Kong 9,738,050 REEF China Commercial # - - - -

Italy 3,711,700 ENI 45,788,086 4.35 45,788,086 4.35

Singapore 22,550,000 Ascendas Real Estate Investment Trust 32,923,430 3.13 15,276,600 Global Logistic Properties 27,670,534 2.63 89,735,035 Netlink NBN Trust 40,634,309 3.86 24,024,500 Singapore Telecommunications 48,526,512 4.61 3,249,600 United Overseas Bank 41,915,501 3.99 191,670,286 18.22

Spain 226,400 Aena SA 30,472,580 2.90 2,095,400 Red Electrica Corporacion 32,828,443 3.12 63,301,023 6.02

Sweden 848,000 Millicom International Cellular SA 41,621,705 3.96 41,621,705 3.96

Switzerland 614,900 Novartis 39,266,643 3.73 39,266,643 3.73 # Unquoted security

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities (continued)

United Kingdom 9,350,800 BP 44,631,368 4.24 577,200 British American Tobacco 26,966,784 2.56 6,740,100 Capita Group 38,081,565 3.62 12,217,822 Convatec group 33,464,615 3.18 3,801,229 HSBC Holdings 28,018,859 2.66 790,400 London Stock Exchange Group 30,272,320 2.88 201,435,511 19.14

United States 458,900 CVS Caremark 27,814,816 2.64 549,200 Microsoft 30,492,236 2.90 1,444,600 Pfizer 38,439,399 3.65 1,110,200 QUALCOMM 42,897,006 4.08 745,700 Welltower 39,062,196 3.71 178,705,653 16.98

Total Equities1 1,000,558,203 95.09

Bond

United States 742,000 Stericycle 5.25% 15/09/2018 31,789,334 3.02 31,789,334 3.02

Total Bond1 31,789,334 3.02

Unrealised Gain on Forward Currency Contracts*

GBP 65,375 / USD 85,525 05/10/2017 1,642 - 1,642 -

Total Unrealised Gain on Forward Currency Contracts2# 1,642 -

Total Financial assets at Fair Value through Profit or Loss 1,032,349,179 98.11

Unrealised Loss on Forward Currency Contracts*#

GBP 82,456 / USD 112,039 05/10/2017 (1,036) - USD 5,002,053 / GBP 3,839,042 05/10/2017 (111,487) (0.01) USD 84,474 / GBP 64,858 05/10/2017 (1,907) - (114,430) (0.01)

Total Unrealised Loss on Forward Currency Contracts2# (114,430) (0.01) 54

VERITAS FUNDS PLC

VERITAS GLOBAL EQUITY INCOME FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss GBP Asset Value

Total Financial liabilities at Fair Value through Profit or Loss (114,430) (0.01)

Net Financial assets and liabilities at Fair Value through Profit or Loss 1,032,234,749 98.10

Other Net Assets 19,953,785 1.90

Net assets attributable to Holders of Redeemable Participating Shares 1,052,188,534 100.00

*The counterparty for the forward currency contracts is Brown Brothers Harriman & Co.

% of Total Analysis of Gross Investments Assets

1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 1,032,347,537 95.51 2Financial derivative instruments traded over-the-counter 1,642 -

#Forward Contracts are held at Class level for hedging

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

China 10,000 China Biologic Products Holdings 800,000 3.53 180,000 Shanghai Fosun Pharmaceutical Group 709,657 3.13 40,000 Tencent Holdings 1,652,161 7.30 3,161,818 13.96

Hong Kong 100,000 AIA Group 893,302 3.94 200,000 Dah Sing Banking Group 402,305 1.78 1,295,607 5.72

Total Equities1 4,457,425 19.68

Bond

China 583,000 Ctrip.Com International 1.25% 15/09/2022 571,690 2.52 571,690 2.52

Total Bond1 571,690 2.52

Unrealised Gain on Contracts for Difference*

China 149,975 Hangzhou Hikvision Digital Technology Co Ltd 2,081 0.01 2,081 0.01

Total Unrealised Gain on Contracts for Difference2 2,081 0.01

Unrealised Gain on Forward Currency Contracts**

GBP 4,456,832 / USD 5,753,650 04/10/2018 59,813 0.27 GBP 522,359 / USD 674,351 04/10/2018 7,010 0.03 USD 1,610 / EUR 1,382 04/10/2018 4 - USD 2,245 / EUR 1,929 04/10/2018 3 - USD 2,973 / EUR 2,552 04/10/2018 7 - USD 4,150 / EUR 3,567 04/10/2018 6 - 66,843 0.30

Total Unrealised Gain on Forward Currency Contracts2 66,843 0.30

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Total Financial assets at Fair Value through Profit or Loss 5,098,039 22.51

Unrealised Loss on Contracts for Difference*

China 119,997 Midea Group Co Ltd (35,878) (0.16) (35,878) (0.16)

Total Unrealised Loss on Contracts for Difference (35,878) (0.16)

Unrealised Loss on Forward Currency Contracts**

EUR 1,997 / USD 2,347 04/10/2018 (27) - EUR 179,321 / USD 208,782 04/10/2018 (403) - EUR 3,621 / USD 4,256 04/10/2018 (48) - EUR 329,253 / USD 383,346 04/10/2018 (740) - EUR 5,928 / USD 6,978 04/10/2018 (90) - GBP 150 / USD 197 04/10/2018 (1) - GBP 188 / USD 247 04/10/2018 (2) - GBP 250 / USD 328 04/10/2018 (2) - GBP 49,484 / USD 64,710 04/10/2018 (163) - GBP 5,712 / USD 7,469 04/10/2018 (19) - USD 1,187 / GBP 917 04/10/2018 (9) - USD 105,216 / GBP 81,455 04/10/2018 (1,034) (0.01) USD 12,860 / GBP 9,956 04/10/2018 (126) - USD 2,082 / EUR 1,794 04/10/2018 (3) - USD 3,847 / EUR 3,315 04/10/2018 (6) - USD 57,111 / GBP 43,861 04/10/2018 (102) - USD 6,717 / GBP 5,159 04/10/2018 (12) - USD 60,476 / GBP 46,671 04/10/2018 (400) - USD 7,136 / GBP 5,507 04/10/2018 (47) - (3,234) (0.01)

Total Unrealised Loss on Forward Currency Contracts (3,234) (0.01)

Total Financial liabilities at Fair Value through Profit or Loss (39,112) (0.17)

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss USD Asset Value

Net Financial assets and liabilities at Fair Value through Profit or Loss 5,058,927 22.34

Other Net Assets 17,590,865 77.66

Net assets attributable to Holders of Redeemable Participating Shares 22,649,792 100.00

*The counterparties for the contracts for difference are UBS and Morgan Stanley. **The counterparty for the forward currency contracts is Brown Brothers Harriman & Co.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 5,029,115 22.01 2Financial derivative instruments traded over-the-counter 29,812 0.13

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

China 500,000 Brilliance China 1,331,507 5.43 3,000 NetEase 791,430 3.22 10,000 New Oriental Education and Technology 882,600 3.60 95,000 Sunny Optical Technology 1,510,620 6.15 4,516,157 18.40

Hong Kong 100,000 AIA Group 737,450 3.01 983,000 Chow Tai Fook Jewellery 1,179,243 4.81 1,000,000 CSPC Pharmaceutical 1,674,626 6.82 200,000 Dah Sing Banking Group 439,397 1.79 150,000 Samsonite International 643,348 2.62 1,000,000 Shangri-La Asia 1,853,867 7.55 1,500,000 Xingda International Holdings 562,690 2.29 7,090,621 28.89

Singapore 600,000 Fortune Real Estate Investment Trust 704,418 2.87 704,418 2.87

Total Equities1 12,311,196 50.16

Bond China 583,000 Ctrip.com International 1.25% 15/09/2022 629,275 2.56 629,275 2.56

Total Bond1 629,275 2.56

Unrealised Gain on Contracts for Difference*

Taiwan 100,000 President Chain Store 1,648 0.01 1,648 0.01

Total Unrealised Gain on Contracts for Difference2 1,648 0.01

Unrealised Gain on Forward Currency Contracts**2

GBP 04 / USD 05 05/10/2017 - - GBP 1,527 / USD 2,049 05/10/2017 - - GBP 12,958 / USD 17,216 05/10/2017 172 - GBP 148 / USD 193 05/10/2017 5 -

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Unrealised Gain on Forward Currency Contracts**2 (continued)

GBP 163 / USD 219 05/10/2017 - - GBP 180 / USD 240 05/10/2017 2 - GBP 6,346,032 / USD 8,268,517 05/10/2017 247,299 1.01 GBP 6,920 / USD 9,168 05/10/2017 118 - GBP 62,228 / USD 82,439 05/10/2017 1,065 - GBP 668,138 / USD 870,546 05/10/2017 26,037 0.11 GBP 75 / USD 99 05/10/2017 1 - USD 01 / GBP 01 05/10/2017 - - USD 02 / GBP 01 05/10/2017 - - USD 03 / GBP 02 05/10/2017 - - USD 100,148 / GBP 74,451 05/10/2017 241 - USD 11,306 / GBP 8,405 05/10/2017 27 - USD 4,868 / EUR 4,109 05/10/2017 9 - USD 750 / GBP 556 05/10/2017 4 - USD 847 / EUR 715 05/10/2017 2 - 274,982 1.12

Total Financial assets at Fair Value through Profit or Loss 13,217,101 53.85

Financial liabilities at Fair Value through Profit or Loss

Unrealised Loss on Forward Currency Contracts**

EUR 130 / USD 155 05/10/2017 (1) - EUR 2,900 / USD 3,479 05/10/2017 (50) - EUR 234,767 / USD 279,987 05/10/2017 (2,357) (0.01) EUR 25,000 / USD 29,778 05/10/2017 (213) - EUR 3,012 / USD 3,589 05/10/2017 (28) - EUR 4,531 / USD 5,443 05/10/2017 (85) - EUR 51,251 / USD 61,123 05/10/2017 (515) - EUR 6,400 / USD 7,646 05/10/2017 (77) - EUR 642 / USD 765 05/10/2017 (6) - EUR 661 / USD 788 05/10/2017 (7) - EUR 793 / USD 953 05/10/2017 (15) - GBP 83,448 / USD 113,268 05/10/2017 (1,288) (0.01) GBP 9,283 / USD 12,600 05/10/2017 (143) - USD 136,423 / GBP 104,743 05/10/2017 (4,133) (0.02) USD 14,419 / GBP 11,071 05/10/2017 (437) - USD 31,081 / GBP 23,725 05/10/2017 (756) - (10,111) (0.04)

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss USD Asset Value

Total Financial liabilities at Fair Value through Profit or Loss (10,111) (0.04)

Net Financial assets and liabilities at Fair Value through Profit or Loss 13,206,990 53.81

Other Net Assets 11,335,580 46.19

Net assets attributable to Holders of Redeemable Participating Shares 24,542,570 100.00

*The counterparty for the contracts for difference is UBS. **The counterparties for the forward currency contracts is Brown Brothers Harriman & Co.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 12,940,471 50.89 2Financial derivative instruments traded over-the-counter 276,630 1.09

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities

Australia 367,700 Sonic Healthcare 5,082,082 2.12 5,082,082 2.12

Canada 123,600 Franco-Nevada 5,928,592 2.47 5,928,592 2.47

China 27,500 Baidu 4,822,438 2.01 4,822,438 2.01

France 50,900 Airbus Group 4,904,444 2.05 80,200 Safran SA 8,621,974 3.59 188,400 Unilever 8,048,786 3.36 21,575,204 9.00

HongKong 4,654,000 REEF China Commercial # - - - -

Spain 33,710 Aena SA 4,488,746 1.87 4,488,746 1.87

United Kingdom 2,488,750 Capita Group 3,556,424 1.48 2,300,692 Convatec group 5,346,808 2.23 124,500 Reckitt Benckiser 8,734,920 3.65 937,259 Rolls Royce 9,254,495 3.87 26,892,647 11.23

United States 57,700 Allergan 8,428,125 3.51 9,400 Alphabet 8,701,010 3.63 105,000 American Express 8,574,403 3.58 79,400 Baxter International 4,693,797 1.95 46,675 Black Knight 1,859,412 0.78 74,900 Cerner 3,699,482 1.54 60,999 Charter Communications 15,243,552 6.36

# Unquoted security

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities (continued)

United States (continued) 70,400 Cigna 11,242,514 4.69 261,200 Comcast 7,092,590 2.96 168,100 CVS Caremark 10,147,488 4.24 201,197 Dentsply Sirona 5,822,763 2.43 38,700 Facebook 4,880,642 2.04 85,800 Microsoft 7,524,977 3.14 127,100 Oracle 5,025,326 2.10 104,600 Qualcomm 5,777,645 2.41 49,900 Thermo Fisher Scientific 9,339,820 3.90 44,400 United Health Group 9,058,070 3.78 28,000 Waters 4,180,085 1.74 131,291,701 54.78

Total Equities1 200,081,410 83.48

Unrealised Gain on Forward Currency Contracts*

EUR 15,008 / GBP 13,368 04/10/2018 2 - EUR 88,769 / GBP 78,976 04/10/2018 106 - GBP 102,620 / EUR 114,612 04/10/2018 516 - GBP 11,657 / EUR 13,069 04/10/2018 15 - GBP 235,418 / USD 304,413 04/10/2018 2,043 - GBP 302,111 / USD 391,025 04/10/2018 2,336 - GBP 33,516 / EUR 37,432 04/10/2018 168 - GBP 36,086 / EUR 40,303 04/10/2018 181 - GBP 444,487 / USD 574,755 04/10/2018 3,858 - GBP 52,243 / USD 67,697 04/10/2018 344 - GBP 542,286 / USD 704,712 04/10/2018 2,026 - GBP 792 / USD 1,029 04/10/2018 3 - USD 298,090 / GBP 227,951 04/10/2018 576 - USD 50,026 / GBP 38,051 04/10/2018 301 - USD 571,509 / GBP 437,036 04/10/2018 1,105 - USD 80,000 / GBP 60,799 04/10/2018 533 - USD 83,144 / GBP 63,351 04/10/2018 391 - USD 95,026 / GBP 72,020 04/10/2018 830 - 15,334 -

Total Unrealised Gain on Forward Currency Contracts2# 15,334 -

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED) Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Total Financial assets at Fair Value through Profit or Loss 200,096,744 83.48

Unrealised Loss on Forward Currency Contracts*

EUR 10,043,469 / GBP 9,056,998 04/10/2018 (109,598) (0.05) EUR 123,709 / GBP 111,155 04/10/2018 (946) - EUR 189,997 / GBP 170,218 04/10/2018 (956) - EUR 3,021,880 / GBP 2,725,070 04/10/2018 (32,976) (0.01) EUR 3,286,654 / GBP 2,963,838 04/10/2018 (35,865) (0.01) EUR 34,586 / GBP 31,192 04/10/2018 (381) - EUR 36,622 / GBP 32,905 04/10/2018 (280) - EUR 37,143 / GBP 33,498 04/10/2018 (409) - EUR 41,957 / GBP 37,699 04/10/2018 (321) - EUR 830 / GBP 743 04/10/2018 (4) - EUR 98,058 / GBP 88,437 04/10/2018 (1,080) - GBP 11,864 / USD 15,600 04/10/2018 (96) - GBP 167 / USD 220 04/10/2018 (2) - GBP 2,392 / USD 3,127 04/10/2018 (5) - GBP 23,504 / EUR 26,389 04/10/2018 (5) - GBP 40,072 / USD 52,658 04/10/2018 (297) - GBP 76,243 / USD 100,000 04/10/2018 (420) - GBP 856 / USD 1,134 04/10/2018 (13) - GBP 9,126 / USD 12,000 04/10/2018 (74) - GBP 91,434 / USD 120,616 04/10/2018 (1,035) - USD 121,498 / GBP 94,060 04/10/2018 (915) - USD 24,482,354 / GBP 18,964,263 04/10/2018 (195,130) (0.08) USD 442,435 / GBP 342,520 04/10/2018 (3,332) - USD 46,369,972 / GBP 35,918,619 04/10/2018 (369,580) (0.15) USD 58,789 / GBP 45,126 04/10/2018 (56) - USD 6,645,079 / GBP 5,147,341 04/10/2018 (52,963) (0.02) USD 877,334 / GBP 679,206 04/10/2018 (6,607) - (813,346) (0.32)

Total Unrealised Loss on Forward Currency Contracts2# (813,346) (0.32)

Future Contracts** (670) EUX EURO Stoxx 50 Future December 2018 (208,858) (0.09) (165) ICF FTSE 100 Index Future December 2018 (309,375) (0.13) (105) CME S&P 500 Index Futures December 2018 (40,259) (0.02) (558,492) (0.24)

Total Future Contracts (558,492) (0.24)

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss GBP Asset Value

Total Financial liabilities at Fair Value through Profit or Loss (1,371,838) (0.56)

Net Financial assets and liabilities at Fair Value through Profit or Loss 198,724,906 82.92

Other Net Assets 40,873,812 17.08

Net assets attributable to Holders of Redeemable Participating Shares 239,598,718 100.00

*The counterparty for the forward currency contracts is Brown Brothers Harriman & Co. **The counterparty for the future contracts is UBS.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 200,081,410 82.87 2Financial derivative instruments traded over-the-counter 15,334 0.01

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities

Australia 537,000 Sonic Healthcare 6,566,969 2.91 6,566,969 2.91

Canada 61,000 Franco-Nevada 3,522,737 1.56 3,522,737 1.56

China 48,200 Baidu 8,898,489 3.94 8,898,489 3.94

Denmark 73,796 Dong Energy 3,149,173 1.40 3,149,173 1.40

France 177,000 Airbus Group 12,541,079 5.56 158,400 Safran SA 12,064,839 5.34 24,605,918 10.90

Hong Kong 4,654,000 REEF China Commercial # - - - -

Israel 70,021 Check point Software Technology 5,950,728 2.64 5,950,728 2.64

Spain 25,410 Aena SA 3,420,090 1.52 3,420,090 1.52

Sweden 42,000 Millicom International Cellular SA 2,061,452 0.91 2,061,452 0.91

United Kingdom 995,500 Capita Group 5,624,575 2.49 1,290,492 Convatec group 3,534,658 1.57 175,600 London Stock Exchange Group 6,725,480 2.98 899,559 Rolls Royce 7,979,088 3.54 23,863,801 10.58

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Equities (continued)

United States 61,200 Allergan 9,348,891 4.14 7,800 Alphabet 5,660,952 2.51 161,300 American Express 10,875,562 4.82 99,600 Baxter International 4,658,369 2.07 56,000 Cerner 2,976,872 1.32 38,199 Charter Communications 10,347,170 4.59 528,900 Comcast 15,169,435 6.72 114,400 CVS Caremark 6,934,005 3.07 75,797 Dentsply Sirona 3,378,987 1.50 149,000 Express Scripts Holdings 7,032,147 3.12 140,800 Microsoft 7,817,383 3.46 121,100 Oracle 4,364,167 1.93 180,500 QUALCOMM 6,974,338 3.09 52,100 Thermo Fisher Scientific 7,347,162 3.26 46,400 United Health Group 6,773,331 3.00 28,000 Waters 3,746,551 1.66 113,405,322 50.26

Total Equities1 195,444,679 86.62

Unrealised Gain on Forward Currency Contracts*

EUR 09 / GBP 09 05/10/2017 - - GBP 1,027 / USD 1,332 05/10/2017 34 - GBP 1,504 / EUR 1,671 05/10/2017 31 - GBP 13 / EUR 14 05/10/2017 1 - GBP 135,739 / EUR 149,287 05/10/2017 4,178 - GBP 143,997 / EUR 159,780 05/10/2017 3,189 - GBP 145,147 / EUR 161,056 05/10/2017 3,215 - GBP 17 / USD 23 05/10/2017 - - GBP 170 / EUR 187 05/10/2017 5 - GBP 180,747 / EUR 197,757 05/10/2017 6,472 0.01 GBP 181,293 / USD 237,171 05/10/2017 4,553 - GBP 183,612 / EUR 200,890 05/10/2017 6,575 - GBP 198,540 / USD 263,720 05/10/2017 2,014 - GBP 219,260 / USD 289,528 05/10/2017 3,502 - GBP 26,555 / EUR 29,466 05/10/2017 588 - GBP 260,535 / USD 346,068 05/10/2017 2,644 - GBP 295 / USD 386 05/10/2017 7 - GBP 3,502 / EUR 3,827 05/10/2017 129 - GBP 322,791 / USD 422,280 05/10/2017 8,106 0.01 GBP 33,144 / EUR 36,263 05/10/2017 1,187 - GBP 52,031 / USD 69,113 05/10/2017 528 - 67

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED) Fair Value % of Net Holdings Financial assets at fair value through profit or loss GBP Asset Value

Unrealised Gain on Forward Currency Contracts*2# (continued)

GBP 598 / USD 803 05/10/2017 - - GBP 63 / USD 84 05/10/2017 1 - GBP 64,857 / USD 84,847 05/10/2017 1,629 - USD 03 / GBP 02 05/10/2017 - - USD 07 / GBP 05 05/10/2017 - - USD 102,824 / GBP 76,525 05/10/2017 100 - USD 130,000 / GBP 96,015 05/10/2017 861 - USD 162,017 / GBP 119,957 05/10/2017 779 - USD 189,504 / GBP 141,106 05/10/2017 113 - USD 25,000 / GBP 18,539 05/10/2017 91 - USD 34,000 / GBP 25,092 05/10/2017 245 - USD 37,000 / GBP 27,550 05/10/2017 22 - USD 40,000 / GBP 29,495 05/10/2017 313 - USD 40,000 / GBP 29,666 05/10/2017 142 - USD 50,017 / GBP 36,882 05/10/2017 391 - USD 67,000 / GBP 49,863 05/10/2017 65 - USD 69 / GBP 51 05/10/2017 - - USD 71,000 / GBP 52,245 05/10/2017 665 - USD 75,000 / GBP 55,846 05/10/2017 45 - 52,420 0.02

Total Unrealised Gain on Forward Currency Contracts2# 52,420 0.02

Future Contracts**3 (165) ICF FTSE 100 Index Future December 2017 22,275 0.01 22,275 0.01

Total Financial assets at Fair Value through Profit or Loss 195,519,374 86.65

Financial liabilities at Fair Value through Profit or Loss

Unrealised Loss on Forward Currency Contracts*#

EUR 110,000 / GBP 101,037 05/10/2017 (4,097) - EUR 12,800 / GBP 11,710 05/10/2017 (430) - EUR 13,617,941 / GBP 12,463,596 05/10/2017 (462,626) (0.22) EUR 13,959,371 / GBP 12,776,085 05/10/2017 (474,225) (0.21) EUR 2,500,024 / GBP 2,288,105 05/10/2017 (84,930) (0.05) EUR 224 / GBP 201 05/10/2017 (4) - EUR 244,219 / GBP 223,700 05/10/2017 (8,479) - EUR 260,768 / GBP 238,858 05/10/2017 (9,052) - EUR 28 / GBP 25 05/10/2017 (1) - EUR 4,061 / GBP 3,730 05/10/2017 (151) - EUR 48,219 / GBP 44,168 05/10/2017 (1,674) - EUR 5,700 / GBP 5,152 05/10/2017 (129) - 68

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss GBP Asset Value

Unrealised Loss on Forward Currency Contracts*# (continued)

EUR 61,000 / GBP 54,834 05/10/2017 (1,077) - EUR 75,287 / GBP 67,676 05/10/2017 (1,329) - GBP 12,208 / USD 16,542 05/10/2017 (119) - GBP 131,656 / USD 177,519 05/10/2017 (632) - GBP 206,400 / USD 277,017 05/10/2017 (35) - GBP 221,000 / EUR 250,907 05/10/2017 (113) - GBP 223,170 / EUR 253,370 05/10/2017 (116) - GBP 306,853 / USD 416,944 05/10/2017 (3,857) - GBP 41,747 / EUR 47,396 05/10/2017 (22) - GBP 425,973 / USD 578,803 05/10/2017 (5,354) - GBP 51,185 / USD 69,016 05/10/2017 (246) - GBP 707 / USD 954 05/10/2017 (2) - GBP 82,714 / USD 112,391 05/10/2017 (1,040) - USD 14,930 / GBP 11,237 05/10/2017 (111) - USD 160,000 / GBP 120,545 05/10/2017 (1,312) - USD 167,017 / GBP 126,482 05/10/2017 (2,020) - USD 2,108 / GBP 1,596 05/10/2017 (26) - USD 22,448,109 / GBP 17,228,775 05/10/2017 (500,328) (0.22) USD 245,033 / GBP 187,637 05/10/2017 (5,037) - USD 29,612,355 / GBP 22,727,287 05/10/2017 (660,006) (0.29) USD 36,100 / GBP 27,244 05/10/2017 (343) - USD 36,386 / GBP 27,775 05/10/2017 (660) - USD 360,033 / GBP 271,250 05/10/2017 (2,952) - USD 365,700 / GBP 280,778 05/10/2017 (8,257) - USD 399,991 / GBP 308,347 05/10/2017 (10,272) - USD 40,000 / GBP 30,835 05/10/2017 (1,027) - USD 473,607 / GBP 363,627 05/10/2017 (10,693) (0.01) USD 5,892,538 / GBP 4,522,484 05/10/2017 (131,334) (0.07) USD 95,959 / GBP 73,675 05/10/2017 (2,167) - USD 971,448 / GBP 733,146 05/10/2017 (9,218) - (2,405,503) (1.07)

Total Financial liabilities at Fair Value through Profit or Loss (2,405,503) (1.07)

Future Contracts** (85) CME S&P 500 Index Future December 2017 (340,857) -0.15 (670) EUX EURO Stoxx 50 Future December 2017 (430,972) -0.19 (771,829) (0.34)

Total Financial liabilities at Fair Value through Profit or Loss (3,177,332) (1.41)

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial liabilities at fair value through profit or loss GBP Asset Value

Net Financial assets and liabilities at Fair Value through Profit or Loss 192,342,042 85.24

Other Net Assets 33,315,846 14.76

Net assets attributable to Holders of Redeemable Participating Shares 225,657,888 100.00

*The counterparty for the forward currency contracts is Brown Brothers Harriman & Co. **The counterparty for the future contracts is UBS.

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to an official stock exchange listing or dealt in on another regulated market 195,444,679 84.86 2Financial derivative instruments traded over-the-counter 52,420 0.02 3Financial derivative instruments dealt on a regulated market 22,275 0.01

#Forward Contracts are held at Class level for hedging

VERITAS FUNDS PLC

VERITAS IZOARD FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 74,500 Sonic Healthcare 1,342,761 2.14 1,342,761 2.14

France 16,500 Safran SA 2,313,184 3.69 38,000 Unilever 2,117,030 3.38 4,430,214 7.07

Spain 8,390 Aena SA 1,456,875 2.32 1,456,875 2.32

United Kingdom 40,900 British American Tobacco 1,911,816 3.05 639,500 Capita Group 1,191,700 1.90 25,100 Reckitt Benckiser 2,296,452 3.66 5,399,968 8.61

United States 13,000 Allergan 2,476,240 3.95 1,800 Alphabet 2,172,744 3.47 21,000 American Express 2,236,290 3.57 17,259 Charter Communications 5,624,363 8.97 16,600 Cigna 3,456,950 5.51 52,200 Comcast 1,848,402 2.95 34,200 CVS Caremark 2,692,224 4.30 17,300 Microsoft 1,978,601 3.16 21,100 Qualcomm 1,519,833 2.42 24,005,647 38.30

Total Equities1 36,635,465 58.44

Total Financial assets at Fair Value through Profit or Loss 36,635,465 58.44

VERITAS FUNDS PLC

VERITAS IZOARD FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2018 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Net Financial assets and liabilities at Fair Value through Profit or Loss 36,635,465 58.44

Other Net Assets 26,050,558 41.56

Net assets attributable to Holders of Redeemable Participating Shares 62,686,023 100.00

% of Total Assets

Analysis of Gross Investments 1Transferable securities admitted to official stock exchange listing or dealt in on another regulated market 36,635,465 57.86

VERITAS FUNDS PLC

VERITAS IZOARD FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Equities

Australia 103,400 Sonic Healthcare 1,696,487 2.95 1,696,487 2.95

Denmark 34,120 Dong Energy 1,953,493 3.40 1,953,493 3.40

France 37,500 Safran SA 3,832,099 6.67 3,832,099 6.67

Spain 8,390 Aena SA 1,515,074 2.64 1,515,074 2.64

United Kingdom 40,900 British American Tobacco 2,563,689 4.47 255,800 Capita Group 1,939,046 3.38 42,400 London Stock Exchange Group 2,178,732 3.79 6,681,467 11.64

United States 13,000 Allergan 2,664,350 4.64 1,800 Alphabet 1,752,696 3.05 36,000 American Express 3,256,560 5.67 11,959 Charter Communications 4,346,140 7.57 114,200 Comcast 4,394,416 7.66 26,100 CVS Caremark 2,122,452 3.70 28,000 Microsoft 2,085,720 3.63 46,500 Qualcomm 2,410,560 4.20 23,032,894 40.12

Total Equities1 38,711,514 67.42

Total Financial assets at Fair Value through Profit or Loss 38,711,514 67.42

VERITAS FUNDS PLC

VERITAS IZOARD FUND

SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2017 (CONTINUED)

Fair Value % of Net Holdings Financial assets at fair value through profit or loss USD Asset Value

Net Financial assets and liabilities at Fair Value through Profit or Loss 38,711,514 67.42

Other Net Assets 18,704,709 32.58

Net assets attributable to Holders of Redeemable Participating Shares 57,416,223 100.00

% of Total Analysis of Gross Investments Assets 1Transferable securities admitted to official stock exchange listing or dealt in on another regulated market 38,711,514 67.02

VERITAS FUNDS PLC

STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2017

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2017 Note USD USD GBP USD GBP USD USD ASSETS Financial assets at fair value through profit or loss 7 761,435,892 3,304,626,885 1,032,349,179 13,217,101 195,519,374 38,711,514 5,765,361,236 Cash and cash equivalents 8 45,936,381 437,528,125 38,813,035 8,484,049 28,654,085 18,985,376 601,451,193 Margin cash held with brokers 8 9,292,220 - - 3,708,083 3,863,175 - 18,183,332 Due from brokers 2 5 69,346 6,529,919 3,562 425 - 8,834,349 Due from shareholders 2,976,100 11,393,874 1,394,289 2,268 2,092,800 - 19,050,695 Dividends receivable 1,928,941 2,732,151 1,111,528 12,182 158,821 - 6,377,638 Other debtors 18,132 958,419 695,423 2,061 24,102 60,977 2,004,940 TOTAL ASSETS 821,587,671 3,757,308,800 1,080,893,373 25,429,306 230,312,782 57,757,867 6,421,263,383

LIABILITIES Financial liabilities at fair value through profit or loss 7 207,618 - 114,430 10,111 3,177,332 - 4,634,121 Due to brokers 2 6,571,697 - 4,695 319,692 - - 6,897,688 Due to shareholders 2,012,171 33,699,291 2,199,027 - 1,140,052 - 40,191,337 Management fee payable 3 592,497 2,431,608 727,797 19,576 174,914 22,996 4,277,799 Performance fee payable 3 - - - 142,923 - - 142,923 Dividends payable 5 4,441,686 1,861,144 25,264,677 19,147 85,720 298,691 40,632,028 Other creditors 763,108 1,145,505 394,213 375,287 76,876 19,957 2,935,894

LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTCIPATING SHARES) 14,588,777 39,137,548 28,704,839 886,736 4,654,894 341,644 99,711,790

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES 806,998,894 3,718,171,252 1,052,188,534 24,542,570 225,657,888 57,416,223 6,321,551,593

The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2018

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2018 Note USD USD GBP USD GBP USD USD INCOME Interest income 2 4,019,664 6,371,552 35,782 139,383 31,176 317,511 10,938,326 Dividend income 23,565,210 45,374,094 30,109,575 142,325 2,889,207 780,191 114,322,614 Other income 106,982 24,751 58,397 3,360 1,165 1,010 216,354 Net (loss)/gain on financial assets and liabilties at fair value through profit or loss 6 (47,598,852) 287,781,917 31,089,979 941,139 18,631,400 2,045,691 310,161,822 Net (loss)/gain on foreign exchange (9,637,669) (1,278,280) 184,861 (315,474) 67,590 (5,876) (10,897,160) TOTAL INVESTMENT (LOSS)/INCOME (29,544,665) 338,274,034 61,478,594 910,733 21,620,538 3,138,527 424,741,956

EXPENSES Investment management fees 3 13,805,842 28,000,100 6,315,580 238,290 2,120,636 292,245 53,702,983 Performance fees 3 - - - 431,549 - - 431,549 Administration fees 3 978,480 2,141,835 456,730 27,657 180,037 41,251 4,047,169 Depositary fees 3 846,046 1,414,031 353,351 28,052 117,515 26,119 2,948,668 Directors' fees 3 10,673 26,581 5,277 193 1,935 442 47,606 Audit fees 3 34,027 57,280 10,086 366 3,751 1,014 111,330 Legal fees 72,299 69,110 5,540 1,013 5,167 351 157,199 Amortisation of formation expenses - - - - - 2,283 2,283 Other expenses 587,397 731,994 133,742 28,927 122,154 45,534 1,738,632 TOTAL EXPENSES 16,334,764 32,440,931 7,280,306 756,047 2,551,195 409,239 63,187,419

NET (LOSS)/INCOME (45,879,429) 305,833,103 54,198,288 154,686 19,069,343 2,729,288 361,554,537

FINANCE COSTS Distributions to redeemable participating shareholders 5 (3,803,284) (2,237,345) (22,041,854) - (35,005) (596,121) (36,381,929) Interest expense (2,226,570) (96,357) (22,771) (51,131) (100,500) (62) (2,540,209)

(LOSS)/GAIN FOR THE FINANCIAL YEAR BEFORE WITHHOLDING TAX (51,909,283) 303,499,401 32,133,663 103,555 18,933,838 2,133,105 322,632,399 Less: Capital withholding tax (160,735) - - - - - (160,735) Less: Withholding tax (2,111,928) (8,000,709) (3,465,635) (8,663) (503,882) (121,912) (15,591,527) (LOSS)/GAIN FOR THE FINANCIAL YEAR AFTER WITHHOLDING TAX (54,181,946) 295,498,692 28,668,028 94,892 18,429,956 2,011,193 306,880,137

(DECREASE)/INCREASE IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES FROM OPERATIONS (54,181,946) 295,498,692 28,668,028 94,892 18,429,956 2,011,193 306,880,137

Gains and losses arose solely from continuing activities. There were no gains and losses other than those dealt with in the statements of comprehensive income. The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2017

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2017 Note USD USD GBP USD GBP USD USD INCOME Interest income 2 620,268 3,338,006 182,579 52,865 3,953 144,024 4,392,676 Dividend income 11,588,292 47,374,289 45,957,869 362,311 2,379,624 586,143 121,459,573 Other income 8,291 19,238 10,546 5,604 11,116 9,416 70,131 Net gain on financial assets and liabilties at fair value through profit or loss 6 120,164,783 670,470,017 116,991,812 3,732,357 15,668,100 6,324,817 969,608,959 Net (loss)/gain on foreign exchange (113,332) 7,487,850 (1,908,091) (11,991) (155,940) 6,141 4,740,520 TOTAL INVESTMENT INCOME 132,268,302 728,689,400 161,234,715 4,141,146 17,906,853 7,070,541 1,100,271,859

EXPENSES Investment management fees 3 5,533,451 28,787,227 9,414,649 214,039 1,790,968 269,201 49,072,125 Performance fees 3 - - - 142,923 - - 142,923 Administration fees 3 403,628 2,197,994 699,133 62,974 126,456 40,677 3,756,502 Depositary fees 3 319,195 1,414,140 498,839 49,309 100,516 22,106 2,567,914 Directors' fees 3 5,041 29,182 9,379 179 1,544 447 48,757 Audit fees 3 10,795 24,688 48,167 352 3,365 949 102,401 Legal fees 37,113 54,419 31,114 760 12,411 869 148,582 Amortisation of formation expenses - - - - - 3,189 3,189 Other expenses 207,038 664,872 199,648 49,325 100,939 30,678 1,334,652 TOTAL EXPENSES 6,516,261 33,172,522 10,900,929 519,861 2,136,199 368,116 57,177,045

NET INCOME 125,752,041 695,516,878 150,333,786 3,621,285 15,770,654 6,702,425 1,043,094,814

FINANCE COSTS Distributions to redeemable participating shareholders 5 (4,446,496) (1,864,213) (37,011,724) (19,160) (85,668) (299,164) (53,865,455) Interest expense (50,626) (137,112) (51,717) (6,502) (67,436) - (345,959)

GAIN FOR THE FINANCIAL YEAR BEFORE WITHHOLDING TAX 121,254,919 693,515,553 113,270,345 3,595,623 15,617,550 6,403,261 988,883,400 Less: Capital withholding tax (340,967) - - (346,148) - - (687,115) Less: Withholding tax (919,987) (8,252,932) (5,271,423) (27,444) (411,137) (79,000) (16,515,015) GAIN FOR THE FINANCIAL YEAR AFTER WITHHOLDING TAX 119,993,965 685,262,621 107,998,922 3,222,031 15,206,413 6,324,261 971,681,270

INCREASE IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES FROM OPERATIONS 119,993,965 685,262,621 107,998,922 3,222,031 15,206,413 6,324,261 971,681,270

VERITAS FUNDS PLC

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES FOR THE YEAR ENDED 30 SEPTEMBER 2018

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2018 Note USD USD GBP USD GBP USD USD

Net Assets attributable to holders of redeemable participating shares at the start of the year 806,998,894 3,718,171,252 1,052,188,534 24,542,570 225,657,888 57,416,223 6,321,551,593

Foreign exchange movement arising on aggregation 2(a) ------(30,990,527)

(Decrease)/increase in net assets attributable to holders of redeemable participating shares from operations (54,181,946) 295,498,692 28,668,028 94,892 18,429,956 2,011,193 306,880,137

Proceeds from redeemable participating shares issued 1,951,866,087 610,643,722 93,102,958 2,036,336 105,848,329 3,258,607 2,835,861,078

Redemption of redeemable participating shares (600,984,449) (1,082,994,783) (529,657,991) (4,024,006) (110,337,455) - (2,550,298,880)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES AT THE END OF THE YEAR 2,103,698,586 3,541,318,883 644,301,529 22,649,792 239,598,718 62,686,023 6,883,003,401

The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES FOR THE YEAR ENDED 30 SEPTEMBER 2017

Veritas Veritas Veritas Veritas Veritas Veritas Asian Global Focus Global Equity China Global Real Izoard Total Fund Fund Income Fund Fund Return Fund Fund 2017 Note USD USD GBP USD GBP USD USD

Net Assets attributable to holders of redeemable participating shares at the start of the year 476,583,880 3,321,129,068 1,103,205,584 21,221,824 120,273,694 51,058,054 5,459,292,410

Foreign exchange movement arising on aggregation 2(a) ------55,896,927

Increase in net assets attributable to holders of redeemable participating shares from operations 119,993,965 685,262,621 107,998,922 3,222,031 15,206,413 6,324,261 971,681,270

Proceeds from redeemable participating shares issued 541,932,575 901,396,637 76,085,983 1,196,971 142,964,374 33,908 1,723,478,759

Redemption of redeemable participating shares (331,511,526) (1,189,617,074) (235,101,955) (1,098,256) (52,786,593) - (1,888,797,773)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES AT THE END OF THE YEAR 806,998,894 3,718,171,252 1,052,188,534 24,542,570 225,657,888 57,416,223 6,321,551,593

The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2018

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2018 USD USD GBP USD GBP USD USD

Cash flows from operating activities Purchase of financial assets and settlement of financial liabilities (2,293,947,112) (821,887,622) (105,366,074) (76,283,129) (55,347,029) (9,708,451) (3,418,362,555) Proceeds from sale of financial assets and of financial liabilities 1,245,893,132 1,464,506,349 554,302,589 84,562,069 67,595,565 13,830,190 3,646,704,060 Realised gain (37,894,019) (421,014,646) (118,787,615) (3,599,831) (12,651,425) (4,358,819) (643,961,249) Unrealised (loss)/gain 153,545,068 133,232,729 87,697,636 3,468,954 (5,979,975) 2,313,129 402,661,887 (Increase)/decrease in debtors (92,120,398) (6,729,228) 6,263,577 325,483 (1,938,689) (295,410) (92,992,430) Increase/(decrease) in creditors 12,922,993 (480,357) (10,722,979) (715,309) (64,523) 293,316 (2,513,860) Interest expense (2,226,570) (96,357) (22,771) (51,131) (100,500) (62) (2,540,209) (Decrease)/increase in net assets attributable to holders of redeemable participating shares from operations (48,152,092) 297,832,394 50,732,653 146,023 18,565,461 2,607,376 345,802,274 Net cash (outflow)/inflow from operating activities (1,061,978,998) 645,363,262 464,097,016 7,853,129 10,078,885 4,681,269 234,797,918

Cash flows from financing activities Proceeds from redeemable participating shares issued 1,945,915,634 615,788,320 93,597,929 1,023,698 107,406,977 3,258,607 2,836,809,521 Payment on redemption of redeemable participating shares (582,814,784) (1,097,011,935) (528,461,972) (4,024,006) (111,271,257) - (2,545,793,070) Distributions to holders of redeemable participating shares (3,803,284) (2,237,345) (22,041,854) - (35,005) (596,121) (36,381,929) Net cash inflow/(outflow) from financing activities 1,359,297,566 (483,460,960) (456,905,897) (3,000,308) (3,899,285) 2,662,486 254,634,522

Net increase/(decrease) in cash and cash equivalents 297,318,568 161,902,302 7,191,119 4,852,821 6,179,600 7,343,755 489,432,440

Cash and cash equivalents at beginning of year 45,936,381 437,528,125 38,813,035 8,484,049 28,654,085 18,985,376 601,451,193 Exchange adjustment due to currency conversion ------(3,115,672)

Cash and cash equivalents at end of year 343,254,949 599,430,427 46,004,154 13,336,870 34,833,685 26,329,131 1,087,767,961

The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2017

Veritas Veritas Veritas Global Veritas Veritas Veritas Asian Global Focus Equity Income China Global Real Izoard Total Fund Fund Fund Fund Return Fund Fund 2017 USD USD GBP USD GBP USD USD

Cash flows from operating activities Purchase of financial assets and settlement of financial liabilities (1,125,095,074) (803,438,819) (416,007,299) (108,468,661) (109,154,700) (9,134,581) (2,714,830,339) Proceeds from sale of financial assets and of financial liabilities 926,000,864 1,152,898,190 576,919,208 108,504,139 31,628,941 5,993,085 2,968,265,771 Realised gain (38,077,749) (251,927,987) (64,164,378) (1,768,915) (5,328,937) (1,690,850) (381,951,924) Unrealised (loss)/gain (60,384,576) (463,352,847) (98,692,255) 4,074,106 (11,569,998) (4,633,967) (664,695,140) (Increase)/decrease in debtors (10,863,122) (1,720,589) 9,793,520 (3,707,317) (1,953,242) (34,811) (6,342,747) Increase/(decrease) in creditors 8,744,728 (711,924) (4,161,217) 412,355 58,446 126,061 3,347,127 Interest expense (50,626) (137,112) (51,717) (6,502) (67,436) - (345,959) Increase in net assets attributable to holders of redeemable participating shares from operations 124,491,087 687,263,946 145,062,363 3,247,693 15,359,517 6,623,425 1,025,892,684 Net cash (outflow)/inflow from operating activities (175,234,468) 318,872,858 148,698,225 2,286,898 (81,027,409) (2,751,638) 229,339,473

Cash flows from financing activities Proceeds from redeemable participating shares issued 542,081,311 895,095,591 75,375,774 1,194,703 146,454,648 33,908 1,720,864,061 Payment on redemption of redeemable participating shares (336,229,924) (1,159,772,432) (247,036,552) (1,098,256) (51,742,855) - (1,877,538,952) Distributions to holders of redeemable participating shares (4,446,496) (1,864,213) (37,011,724) (19,160) (85,668) (299,164) (53,865,455) Net cash inflow/(outflow) from financing activities 201,404,891 (266,541,054) (208,672,502) 77,287 94,626,125 (265,256) (210,540,346)

Net (decrease)/increase in cash and cash equivalents 26,170,423 52,331,804 (59,974,277) 2,364,185 13,598,716 (3,016,894) 18,799,127

Cash and cash equivalents at beginning of year 19,765,958 385,196,321 98,787,312 6,119,864 15,055,369 22,002,270 580,966,056 Exchange adjustment due to currency conversion ------1,686,010

Cash and cash equivalents at end of year 45,936,381 437,528,125 38,813,035 8,484,049 28,654,085 18,985,376 601,451,193

The notes on pages 83 to 142 form part of these financial statements.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018

1. General

Veritas Funds Plc (the “Company”) was incorporated in Ireland on 24 April 2001 with registered number 342215, as an open-ended investment company with variable capital and limited liability under the Companies Act, 2014 . The Company is authorised by the Central Bank (Supervision and Enforcement Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the “Central Bank UCITS Regulations”). The Company was listed on the Irish Stock Exchange up to 13 July 2017. Listing and trading of all the share classes of the Company on the Irish Stock Exchange was cancelled with effect from 14 July 2017. The Company has implemented a remuneration policy pursuant to Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards to depositary functions, remuneration policies and sanctions (the “UCITS V Directive”).

The Company is an umbrella type structure with segregated liability between sub-funds (the “Sub- Funds”), in which different Sub-Funds may be issued from time to time with the prior approval of the Central Bank of Ireland. The Company is a public company, and the registered office is located in 25-28 North Wall Quay, IFSC, Dublin 1, Ireland. As at 30 September 2018, the Company has six Sub Funds in existence, Veritas Asian Fund (which has a functional currency of US Dollars),Veritas Global Focus Fund (which has a functional currency of US Dollars), Veritas Global Equity Income Fund (which has a functional currency of GBP), Veritas China Fund (which has a functional currency of US Dollars) Veritas Global Real Return Fund (which has a functional currency of GBP) and Veritas Izoard Fund (which has a functional currency of US Dollars). The Company has adopted US Dollars as the presentation currency.

2. Principal accounting policies

The significant accounting policies adopted by the Company are as follows:

Basis of preparation

These financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standard Board (IASB) as adopted for use in the European Union and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB. The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and these differences may be material. The accounting policies have been applied consistently by the Company and are consistent with those used in the previous period.

The format and certain wordings on the financial statements have been adapted from those contained in IFRS’s and adopted by the EU and the Companies Act 2014 so that, in the opinion of the Directors, they more appropriately reflect the nature of the Company’s business as an investment fund.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

All investments of the Funds, for dealing purposes, are valued in accordance with the valuation policies outlined in the Company’s offering documents, at prices as at 12 noon Irish time.

For these Financial Statements a separate valuation was prepared for each Fund at last traded prices to close of business 30 September 2018. A reconciliation between the last dealing NAV of the year, 30 September 2018 and the NAV used for Financial Statements purposes is provided in note 14.

Accounting standards in issue and effective from 1 October 2017

Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses’ (effective 1 January, 2017): The IASB has issued IAS 12 to clarify how to account for deferred tax assets related to debt instruments measured at fair value. IAS 12 provides requirements on the recognition and measurement of current or deferred tax liabilities or assets. The amendments clarify the requirements on recognition of deferred tax assets for unrealised losses, to address diversity in practice. It is effective for annual periods beginning on or after 1 January 2017. This standard did not have a material impact on the Company.

Amendments to IAS 7, ‘Statements of cash flows’ (effective 1 January, 2017): The IASB requires that the following changes in liabilities arising from financing activities are disclosed (to the extent necessary): (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes. The amendments state that one way to fulfil the new disclosure requirement is to provide a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. Finally, the amendments state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and liabilities. It is effective for annual periods beginning on or after 1 January 2017. This standard did not have a material impact on the Company.

Accounting standards in issue but not yet effective and have not been early adopted

IFRS 9, 'Financial Instruments' (effective 1 January, 2018): IFRS 9, published in July 2014, will replace the existing guidance in IAS 39. It includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39.

IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. Based on the initial assessment, this standard is not expected to have a material impact on the Company.

IFRS 15, 'Revenue from Contracts with Customers' (effective 1 January, 2018): IFRS 15 requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is achieved through a five step methodology that is required to be applied to all contracts with customers. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. Based on the initial assessment, this standard is not expected to have a material impact on the Company.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

Foreign currency translation

(a) Functional and presentation currency Items included in the Company’s financial statements are measured using the currency of the primary economic environment in which it operates. This is United States Dollar for Veritas Asian Fund, Veritas Global Focus Fund, Veritas China Fund and Veritas Izoard Fund and Pound Sterling for Veritas Global Equity Income Fund and Veritas Global Real Return Fund. The Company has also adopted these currencies as the presentation currency of the Sub-Funds. The overall Company total is presented in United States Dollars.

For the purpose of aggregating the financial statements of the Sub-Funds, the Statement of Financial Position figures for Veritas Global Equity Income Fund and Veritas Global Real Return Fund have been translated to US Dollars at the exchange rate ruling at year end. Statement of Comprehensive Income movements and capital transactions have been translated at the average exchange rate for the year. The resulting notional gain or loss has no effect on the Net Asset Value per Share attributable to the individual Sub-Funds.

(b) Transactions and balances Monetary assets and liabilities denominated in currencies other than the functional currency are translated to the functional currency at the closing rates of exchange at year end. Non-monetary assets and liabilities denominated in currencies other than the functional currency are translated using the exchange rates at the date when the fair value was determined. Transactions during the year are translated at the rate of exchange prevailing on the date of the transaction.

Income from investments Interest income is recognised in the Statement of Comprehensive Income for all debt instruments using the effective interest method.

Dividend income is credited to the Statement of Comprehensive Income on the date on which the relevant securities are listed as “ex-dividend”. Dividend income is shown gross of any non- recoverable withholding taxes, which is disclosed separately in the Statement of Comprehensive Income, and net of any tax credits.

Cash and cash equivalents Cash and cash equivalents include cash in hand, money market investments and other short term highly liquid investments with original maturities of three months or less and bank overdrafts.

Margin Cash Margin cash provided by the Company is identified separately in the Statement of Financial Position as margin cash and is not included as a component of cash and cash equivalents.

Due from/to brokers Amounts due from/to brokers represent receivables for securities sold and payables for securities purchased that have been contracted for but not yet delivered by the end of the year.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss

(i) Classification The Company has designated its investments into the financial assets and liabilities at fair value through profit or loss category. This category has two sub-categories: financial assets and liabilities held for trading, and those designated by management at fair value through profit or loss at inception. All financial assets and liabilities at fair value through profit or loss are measured at fair value.

Financial assets or liabilities held for trading are acquired or incurred principally for the purpose of selling or repurchasing in the short term.

All investments have been categorised as financial assets and liabilities at fair value through profit or loss.

(ii) Recognition Purchases and sales of financial instruments are accounted for at trade date - the date on which the Company commits to purchase or sell the asset. Realised gains and losses on disposals of financial instruments are calculated using the first-in-first-out (FIFO) method.

(iii) Measurement Financial instruments categorised at fair value through profit or loss are measured initially at fair value, with transaction costs for such instruments being recognised in the income statement. Gains and losses arising from changes in the fair value of financial assets and liabilities at fair value through profit or loss are included in the income statement in the period in which they arise.

(iv) Fair value measurement principles The fair value of financial instruments is based on their quoted market prices at noon at the statement of financial position date without any deduction for estimated future selling costs. Financial assets and financial liabilities are priced at last traded prices.

If a quoted market price is not available on a recognised stock exchange or from a broker/dealer for non-exchange-traded financial instruments, the fair value of the instrument is estimated using valuation techniques, including use of recent arm’s length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow techniques, option pricing models or any other valuation technique that provides a reliable estimate of prices obtained in actual market transactions.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate used is a market rate at the Statement of Financial Position date applicable to an instrument with similar terms and conditions.

Where other pricing models are used, inputs are based on market data at the Statement of Financial Position date. Fair values for unquoted equity investments are estimated, if possible, using applicable price/earnings ratios for similar listed companies adjusted to reflect the specific circumstances of the issuer using applicable price/earnings ratios for similar listed companies adjusted to reflect the specific circumstances of the issuer.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss (continued)

(v) Derecognition A financial asset is derecognised when the Company no longer has control over the contractual rights that comprise that asset. This occurs when the rights are realised, expire or are surrendered. A financial liability is derecognised when it is extinguished or when the obligation specified in the contract is discharged, cancelled or expired.

Distributions to holders of redeemable participating shares

Distributions to holders of redeemable participating shares are recorded in the Statement of Comprehensive Income as finance costs when authorised.

Contracts for Difference

Contracts for difference (“CFD”) are agreements between the Company and third parties which allow the Company to acquire an exposure to the price movement of specific securities without actually purchasing the securities. Upon entering into a CFD, the Company is required to deposit with a broker initial cash margin equal to a certain percentage of the contract amount. Variation margin payments are made or received by the Company depending upon the fluctuation in the value of the underlying securities. The changes in contract values are recorded as unrealised gains or losses and the Company recognises a realised gain or loss when the contract is closed or when the contract is re-set. CFDs are fair valued as the change in market value of the underlying security applied to the notional amount of the CFD held at the end of the year, representing the unrealised gain or loss on these CFDs. The market value of the underlying security is determined by reference to the quoted market price available on a recognised stock exchange.

All income accruing to the underlying securities in the CFDs and the financing charges associated with the CFD trading are accrued by the Company on an accruals basis and is recognised in the Statement of Comprehensive Income as part of the net gain/(loss) on financial assets and financial liabilities at fair value through profit or loss.

Forward foreign exchange contracts

All forward foreign exchange contracts are fair valued using forward exchange rates prevailing at the relevant valuation date for the remaining period to maturity and any resulting unrealised gains and losses are recorded as assets and losses as liabilities in the Statement of Financial Position. Realised gains and losses are recorded in the Statement of Comprehensive Income at the time the forward foreign exchange contract settles. Realised and unrealised gains and losses applicable to forward foreign exchange contracts entered into at Sub-Fund level are allocated at Sub-fund level. In relation to class specific forward foreign exchange contracts, the realised and unrealised gains and losses and transaction costs are allocated solely to those share classes.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss (continued)

Futures

Futures are valued at fair value based on the settlement price on the relevant valuation date.

Futures are contracts for delayed delivery of commodities in which the seller agrees to make delivery at a specific future date of a specific commodity, at a specified price or yield. Gains and losses on futures are recorded by the Sub-Funds based on market fluctuations and are recorded as realised or unrealised gains/(losses) or other income dependent upon settlement terms of the contracts held.

Options

An option is a contractual agreement under which the seller (writer) grants the purchaser (seller) the right, but not the obligation, to either buy (a call option) or sell (a put option) at or by a set date or during a set period, a specific amount of securities or a financial instrument at a predetermined price.

The seller receives a premium from the purchaser in consideration for the assumption of future securities price. Options held by the Company can be exchange-traded or privately negotiated over- the-counter ("OTC"). The Company is exposed to credit risk on purchased options only to the extent of their amount, which is their fair value. Options are settled on gross basis.

Warrants

Warrants are valued at fair value based on the quoted market price as provided by electronic feed from one or more reputable price vendors. The change in fair value, if any, is recorded as an unrealised gain or loss in the Statement of Comprehensive Income. Realised gains or losses on warrants are shown in the Statement of Comprehensive Income. On the expiry of a warrant the amount previously recognised in the Statement of Financial Position is recognised in the Statement of Comprehensive Income as a realised gain or loss.

Offsetting of financial assets and liabilities

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position and Statement of Comprehensive Income where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the assets and settle the liabilities simultaneously.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

2. Principal accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss (continued)

Redeemable participating shares

Redeemable participating shares are redeemable at the shareholder’s option and are classified as financial liabilities. The redeemable participating shares can be put back to the Company at any time for cash equal to a proportionate share of the particular Sub-Fund’s net asset value. The redeemable participating share is carried at the redemption amount that is payable at the year end date if the shareholder exercised its right to put the share back to the Sub-Fund.

Equalisation is operated in connection with the issue and redemption of shares. It represents the income element included in the price for the issue and redemption of shares.

Listed investments and investments with prices quoted in over the counter markets or by market makers are stated at the last traded prices as at 12 noon on the valuation day for the purpose of determining net asset value per share for subscriptions and redemptions and for various fee calculations. The Company has adopted IFRS 13 and changed its valuation input for financial assets and liabilities measured at fair value, based on a quoted price in an active market, to last traded prices in cases where the last traded price falls within the bid-ask spread (last traded price cannot be used where it falls outside of the bid-ask spread). As all of the last traded prices for the Company’s financial assets and liabilities fall within the bid-ask spread, there is no variance between the Net Assets per the financial statements and the published Net Asset Value.

Transaction costs

Transaction costs are incremental costs, which are separately identifiable and directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. Transaction costs include fees and commissions paid to brokers and counterparties, fees paid to the Depositary on trade settlement and any capital gains taxes. Transaction costs are accounted for as incurred and are recorded in the Statement of Comprehensive Income. The transaction costs are included in net gain or loss on financial assets and liabilities at fair value through profit or loss, in the Statement of Comprehensive Income.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

3. Fees and expenses

Investment management fees

The Investment Manager is entitled to the following annual fees. These fees are all based on the Net Asset Value of the Sub-Fund as at the Valuation Point prior to the last Dealing Day of each month. The fees shall be paid monthly in arrears.

Veritas Veritas Veritas Veritas Global Global Veritas Global Veritas Asian Focus Equity China Real Izoard Fund Fund Income Fund Return Fund A Class Shares1 1.00% 1.00% 1.00%Fund 1.00% 1.00%Fund 1.00% B Class Shares2 1.50% 1.50% 1.50% 1.50% 1.50% 0.65% C Class Shares3 0.75% 0.75% 0.75% N/A N/A 0.50% D Class Shares4 0.75% 0.75% 0.75% N/A 0.85% N/A E Class Shares5 N/A N/A 1.50% N/A 0.85% N/A

1This represents the GBP A Class Shares, the USD A Class Shares and the EUR A Class Shares (together “A Class Shares”). 2This represents the GBP B Class Shares, the USD B Class Shares and the EUR B Class Shares (together “B Class Shares”). 3This represents the GBP C Class Shares, the USD C Class Shares and the EUR C Class Shares (together “C Class Shares”). 4This represents the GBP D Class Shares, the USD D Class Shares and the EUR D Class Shares (together “D Class Shares”). 5This represents the GBP E Class Shares, the USD E Class Shares and the EUR E Class Shares (together “E Class Shares”).

The Investment Manager is also entitled to be paid out of the assets of the Sub-Funds reasonable out-of-pocket expenses (plus VAT if any). The Investment Manager has not claimed any out-of- pocket expense during the year. The Investment Management fees for the year amounted to USD 53,702,983 (2017: USD 49,072,125) of which USD 4,330,278 (2017: USD 4,277,799) was payable at the year end.

Performance fees

Up to 2 July 2018, for the Veritas China Fund, the Investment Manager was entitled to a performance fee in respect of the shares of each class in issue on any Dealing Day (before taking into account issues and repurchases of shares of each class made on that Dealing Day) equal to 20% of the amount by which the Net Asset Value per share of each class on such a Dealing Day before deduction of the applicable performance fee exceeded the High Water Mark.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

3. Fees and expenses (continued)

Performance fees (continued)

The performance fee accrued daily and crystallised and was payable in arrears at the end of each Performance Fee Period. The accrual for the relevant Performance Fee Period was the performance fee per Share multiplied by the average number of Shares in issue for that Class over the period from the start of the Performance Fee Period to the relevant Dealing Day.

On each Dealing Day the accounting provision made on the immediately preceding Dealing Day was adjusted to reflect the relevant Class performance, positive or negative, calculated as described above.

If the Net Asset Value per Share for that Class was lower than the High Water Mark or the Hypothetical Net Asset Value per Share the provision already made was returned to that Class. No performance fee was accrued/paid until the Net Asset Value per Share exceeded the High Water Mark and Hurdle Rate and the performance fee was only payable on the increase over the High Water Mark and Hurdle Rate. For the avoidance of doubt, the accounting provision was never negative and under no circumstances was the Investment Manager to pay money into the Class or to any Shareholder for any underperformance.

The calculation of such performance fees was verified by the Depositary. The performance fee for the year amounted to USD 431,549 (2017: USD 142,923) of which USD 43,548 (2017: USD 142,923) was payable at the year end.

From 2 July 2018, the Investment Manager was no longer entitled to a performance fee.

Depositary fees

HSBC Institutional Trust Services (Ireland) DAC, the “Depositary” is entitled to fees which will be based on the Net Asset Value of each Sub-Fund as of each Valuation Day.

The depositary fees will be charged at a rate which shall not exceed 0.05 % per annum of the Net Asset Value of the Sub-Fund calculated and accruing as of each Valuation Point subject to a minimum annual fee of USD 32,000 together with custody transactions fees of USD 30 per external wire transaction. The fees shall be paid monthly in arrears. Where it is necessary to open segregated custody accounts, an additional fee based on time and charges will be made in respect of each account opened subject to a maximum charge of USD 1,000 per account.

Sub-depositary fees and agent charges will also be recoverable out of the assets of the Sub-Fund and are at normal commercial rates. The Depositary is also entitled to be paid out of the assets of the Sub-Fund reasonable out-of-pocket expenses (plus VAT, if any).

The depositary fee for the year amounted to USD 2,948,668 (2017: USD 2,567,914) of which USD 158,801 (2017: USD 153,983) was payable at the year end.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

3. Fees and expenses (continued)

Administration fees

HSBC Securities Services (Ireland) DAC, the “Administrator” is entitled to fees which will be a based on the Net Asset Value of each Sub-Fund as of each Valuation Day.

The rate of Administration fees shall not exceed 0.12% per annum of the Net Asset Value of the Sub-Fund calculated and accruing as of each Valuation Point, subject to a minimum annual charge of USD 40,000 for one Share class and USD 4,000 per additional Share class, together with shareholder service transactions fees (which are charged at normal commercial rates) with all other reasonable out of pocket expenses. Additional services and management information will be subject to a fee based on time and charges. The Administrator is also entitled to be paid out of the assets of the Sub-Fund reasonable out-of-pocket expenses (plus VAT, if any).

The Administration fee for the year amounted to USD 4,047,169 (2017: USD 3,756,502) of which USD 327,412 (2017: USD 309,454) was payable at the year end.

Directors’ fees

The Directors are entitled to an annual fee as remuneration for their services per annum plus reasonable out of pocket expenses. The total of such remuneration for the current year is USD 47,606 (2017: USD 48,757) of which USD 46,460 (2017: USD 47,289) is payable at year end. Mr Mike Kirby and Mr Brian Wilkinson are entitled to receive a maximum of €20,000 each per annum as remuneration for their services. Mr Richard Grant and Mr Ian Barnes, being partners of the Investment Manager, have waived their entitlement to Directors’ fees.

Transaction costs

The below table provides an analysis of the total transaction costs for the year ended 30 September 2018 and 30 September 2017.

Veritas Veritas Global Veritas Asian Global Focus Equity Income Fund Fund Fund USD USD GBP 30 Sep 2018 30 Sep 2018 30 Sep 2018 Total transaction costs 1,966,776 753,671 471,579

Veritas Global Veritas China Real Return Veritas Izoard Fund Fund Fund USD GBP USD 30 Sep 2018 30 Sep 2018 30 Sep 2018 Total transaction costs 53,810 66,767 8,402

Total USD 30 Sep 2018 Total transaction costs 3,507,998

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

3. Fees and expenses (continued)

Transaction costs (continued)

The below table provides an analysis of the total transaction costs for the year ended 30 September 2018 and 30 September 2017 (continued).

Veritas Veritas Global Veritas Asian Global Focus Equity Income Fund Fund Fund USD USD GBP 30 Sep 2017 30 Sep 2017 30 Sep 2017 Total transaction costs 1,119,653 1,021,705 1,333,528

Veritas Global Veritas China Real Return Veritas Izoard Fund Fund Fund USD GBP USD 30 Sep 2017 30 Sep 2017 30 Sep 2017 Total transaction costs 139,241 128,469 12,354

Total USD 30 Sep 2017 Total transaction costs 4,154,525

Auditors’ fees

Audit fees for the year ended 30 September 2018 amounted to USD 111,330 (2017: USD 102,401), of which USD 108,576 (2017: USD 109,059) is payable at the year end for services to the Company. Fees and expenses earned by the statutory auditors, PricewaterhouseCoopers, in respect of the financial period are as follows:

30 Sep 2018 30 Sep 2017 USD USD Audit of financial statements 111,330 102,401 Tax advisory services 84,596 83,338 Total 195,926 185,739

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

4. Taxation

Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997,ended. On that basis, it is not chargeable to Irish tax on its income or gains.

However, Irish tax may arise on the happening of a "chargeable event". A chargeable event includes any distribution payments to shareholders or any encashment, redemption, cancellation or transfer of shares and the holding of shares at the end of each eight year period beginning with the acquisition of such shares.

No Irish tax will arise on the Company in respect of chargeable events in respect of:

(a) a shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax purposes, at the time of the chargeable event, provided appropriate valid declarations in accordance with the provisions of the Taxes Consolidation Act, 1997, are held by the Company or the Company has been authorised by the Irish Revenue to make gross payments in the absence of appropriate declarations; and

(b) certain exempted Irish tax resident shareholders who have provided the Company with the necessary signed statutory declarations.

Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to withholding taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its shareholders.

India’s Central Board of Direct Taxes has withdrawn the exemptions provided under Section 10 of the Income-tax Act, 1961 and has introduced a new section, 112A in the Act through clause 31 of the Finance Bill, 2018.

Accordingly, long-term capital gains arising from transfer of long-term capital asset exceeding INR100,000 will be taxed at a concessional rate of 10%. The tax will be imposed only on long-term capital asset transfers that take place after 1 April 2018 and will be calculated by subtracting the cost of acquisition (on or before 31 January 2018) from the full value of the consideration on the asset transfer. Gains accrued up to 31 January 2018 will continue to be exempted.

5. Distributions

In accordance with the Sub-Funds’ constitution, the Sub-Funds may distribute its distributable income to shareholders and may declare dividends on class of Shares. Distributions will not be paid without prior notice to Shareholders.

The Directors have obtained confirmation from HM Revenue & Customs that the entry of the Company into the Reporting Fund regime was accepted with effect from 1 October 2010.

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

5. Distributions (continued)

It is intended that the Company will conduct its affairs so as to ensure that the shares will qualify for reporting fund status throughout its life. However, though the Directors will endeavour to ensure that the Shares qualify for reporting fund status throughout its life, this cannot be guaranteed.

Under the reporting status regime, UK resident holders of an interest in a reporting fund will be subject to UK income tax or corporation tax on the share of the reporting Sub-Funds’ income attributable to their holding in the Sub-Funds’, whether or not distributed, but any gains will continue to be subject to capital gains tax or corporation tax on chargeable gains.

Distributions made are also subject to equalisation. Equalisation is operated in connection with the issue and redemption of shares. It represents the income element included in the price for the issue and redemption of shares.

Veritas Veritas Veritas Global Distribution for the year ended Asian Global Focus Equity Income 30 September 2018 Fund Fund Fund USD USD GBP Net distribution for the year 1,833,665 2,676,725 24,313,188 Add: Equalisation income received on issue of shares 2,544,355 633,962 1,009,345 Deduct: Equalisation income paid on redemption of shares (574,736) (1,073,342) (3,280,679) Total distributions paid 3,803,284 2,237,345 22,041,854

Veritas Global Veritas Real Return Veritas China Fund Fund Izoard Fund USD GBP USD Net distribution for the year 18 32,881 575,139 Add: Equalisation income received on issue of shares 13 14,183 20,982 Deduct: Equalisation income paid on redemption of shares (31) (12,059) - Total distributions paid - 35,005 596,121

30 Sep 2018 Total USD Net distribution for the year 37,888,138 Add: Equalisation income received on issue of shares 4,578,359 Deduct: Equalisation income paid on redemption of shares (6,084,568) Total distributions paid 36,381,929

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

5. Distributions (continued)

Veritas Veritas Veritas Global Distribution for the year ended Asian Global Focus Equity Income 30 September 2017 Fund Fund Fund USD USD GBP Net distribution for the year 3,734,382 1,740,513 38,286,921 Add: Equalisation income received on issue of shares 1,068,148 335,064 652,494 Deduct: Equalisation income paid on redemption of shares (356,034) (211,364) (1,927,691) Total distributions paid 4,446,496 1,864,213 37,011,724

Veritas Global Distribution for the year ended Veritas Real Return Veritas 30 September 2017 (continued) China Fund Fund Izoard Fund USD GBP USD Net distribution for the year 18,921 58,429 299,155 Add: Equalisation income received on issue of shares 477 29,917 9 Deduct: Equalisation income paid on redemption of shares (238) (2,678) - Total distributions paid 19,160 85,668 299,164

30 Sep 2017 Total USD Net distribution for the year 54,618,428 Add: Equalisation income received on issue of shares 2,272,618 Deduct: Equalisation income paid on redemption of shares (3,025,591) Total distributions paid 53,865,455

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

5. Distributions (continued)

The dividends paid for the year ended 30 September 2018 were as follows (Share Class represents the names of the Share Classes in existence as at the year ended 30 September 2018):

Fund Share Class Date Gross Amount Veritas Asian Fund GBP A Class Shares 30 September 2018 GBP 726,284 Veritas Asian Fund EUR A Class Shares 30 September 2018 EUR 74,475 Veritas Asian Fund USD A Class Shares 30 September 2018 USD 313,795 Veritas Asian Fund GBP D Class Shares 30 September 2018 GBP 1,103,672 Veritas Asian Fund USD D Class Shares 30 September 2018 USD 1,002,257 Veritas Global Focus Fund GBP A Class Shares 30 September 2018 GBP 211,180 Veritas Global Focus Fund EUR A Class Shares 30 September 2018 EUR 67,691 Veritas Global Focus Fund USD A Class Shares 30 September 2018 USD 172,570 Veritas Global Focus Fund USD D Class Shares 30 September 2018 USD 154,297 Veritas Global Focus Fund EUR D Class Shares 30 September 2018 EUR 1,936 Veritas Global Focus Fund GBP D Class Shares 30 September 2018 GBP 1,183,485 Veritas Global Equity Income GBP A Class Shares 31 March 2018 GBP 2,132,471 VeritasFund Global Equity Income EUR A Class Shares 31 March 2018 EUR 90,945 VeritasFund Global Equity Income USD A Class Shares 31 March 2018 USD 160,952 VeritasFund Global Equity Income GBP B Class Shares 31 March 2018 GBP 139,677 VeritasFund Global Equity Income EUR B Class Shares 31 March 2018 EUR 21,229 VeritasFund Global Equity Income USD B Class Shares 31 March 2018 USD 423,377 VeritasFund Global Equity Income GBP D Class Shares 31 March 2018 GBP 3,971,782 VeritasFund Global Equity Income EUR D Class Shares 31 March 2018 EUR 28,305 VeritasFund Global Equity Income USD D Class Shares 31 March 2018 USD 135,742 VeritasFund Global Equity Income USD E Class Shares 31 March 2018 USD 53,005 VeritasFund Global Equity Income GBP A Class Shares 30 September 2018 GBP 3,790,835 VeritasFund Global Equity Income EUR A Class Shares 30 September 2018 EUR 193,682 VeritasFund Global Equity Income USD A Class Shares 30 September 2018 USD 344,496 VeritasFund Global Equity Income GBP B Class Shares 30 September 2018 GBP 287,490 VeritasFund Global Equity Income USD B Class Shares 30 September 2018 USD 780,432 Veritas Global Equity Income EUR B Class Shares 30 September 2018 EUR 45,651 Veritas Global Equity Income USD D Class Shares 30 September 2018 USD 297,153 Veritas Global Equity Income EUR D Class Shares 30 September 2018 EUR 58,680 Veritas Global Equity Income GBP D Class Shares 30 September 2018 GBP 9,627,756 Veritas Global Equity Income USD E Class Shares 30 September 2018 USD 93,203 Veritas Global Real Return GBP D Class Shares 30 September 2018 GBP 34,523 VeritasFund Global Real Return EUR E Class Shares 30 September 2018 EUR 674 VeritasFund Izoard Fund GBP C Class Shares 30 September 2018 GBP 320,677 Veritas Izoard Fund USD C Class Shares 30 September 2018 USD 175,498

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

5. Distributions (continued)

The dividends paid for the year ended 30 September 2017 were as follows (Share Class represents the names of the Share Classes in existence as at the year ended 30 September 2017):

Fund Share Class Date Gross Amount

Veritas Asian Fund GBP A Class Shares 30 September 2017 GBP 1,257,124 Veritas Asian Fund EUR A Class Shares 30 September 2017 EUR 109,721 Veritas Asian Fund USD A Class Shares 30 September 2017 USD 573,394 Veritas Asian Fund GBP B Class Shares 30 September 2017 GBP 9,894 Veritas Asian Fund USD B Class Shares 30 September 2017 USD 39,654 Veritas Asian Fund EUR B Class Shares 30 September 2017 EUR 484 Veritas Asian Fund GBP D Class Shares 30 September 2017 GBP 561,734 Veritas Asian Fund USD D Class Shares 30 September 2017 USD 1,244,809 Veritas Global Focus Fund GBP A Class Shares 30 September 2017 GBP 421,038 Veritas Global Focus Fund EUR A Class Shares 30 September 2017 EUR 58,734 Veritas Global Focus Fund USD A Class Shares 30 September 2017 USD 96,281 Veritas Global Focus Fund USD D Class Shares 30 September 2017 USD 146,259 Veritas Global Focus Fund EUR D Class Shares 30 September 2017 EUR 1,355 Veritas Global Focus Fund GBP D Class Shares 30 September 2017 GBP 732,442 Veritas Global Equity Income GBP A Class Shares 31 March 2017 GBP 2,432,735 Veritas Global Equity Income EUR A Class Shares 31 March 2017 EUR 94,131 Veritas Global Equity Income USD A Class Shares 31 March 2017 USD 248,876 Veritas Global Equity Income GBP B Class Shares 31 March 2017 GBP 161,877 Veritas Global Equity Income EUR B Class Shares 31 March 2017 EUR 29,169 Veritas Global Equity Income USD B Class Shares 31 March 2017 USD 585,656 Veritas Global Equity Income GBP D Class Shares 31 March 2017 GBP 4,990,601 Veritas Global Equity Income EUR D Class Shares 31 March 2017 EUR 3,767,816 Veritas Global Equity Income USD D Class Shares 31 March 2017 USD 148,932 Veritas Global Equity Income USD E Class Shares 31 March 2017 USD 52,394 Veritas Global Equity Income GBP A Class Shares 30 September 2017 GBP 5,382,562 VeritasFund Global Equity Income EUR A Class Shares 30 September 2017 EUR 214,617 VeritasFund Global Equity Income USD A Class Shares 30 September 2017 USD 474,342 VeritasFund Global Equity Income GBP B Class Shares 30 September 2017 GBP 341,399 VeritasFund Global Equity Income USD B Class Shares 30 September 2017 USD 1,078,418 VeritasFund Global Equity Income EUR B Class Shares 30 September 2017 EUR 53,417 VeritasFund Global Equity Income USD D Class Shares 30 September 2017 USD 272,751 VeritasFund Global Equity Income EUR D Class Shares 30 September 2017 EUR 8,363,925 VeritasFund Global Equity Income GBP D Class Shares 30 September 2017 GBP 10,478,931 VeritasFund Global Equity Income USD E Class Shares 30 September 2017 USD 127,535 VeritasFund China Fund GBP A Class Shares 30 September 2017 GBP 3,828 Veritas China Fund EUR A Class Shares 30 September 2017 EUR 61 Veritas China Fund USD A Class Shares 30 September 2017 USD 12,606 Veritas China Fund GBP B Class Shares 30 September 2017 GBP 994 Veritas Global Real Return GBP D Class Shares 30 September 2017 GBP 66,765 VeritasFund Global Real Return EUR D Class Shares 30 September 2017 EUR 4,474 VeritasFund Global Real Return USD D Class Shares 30 September 2017 USD 20,141 VeritasFund Izoard Fund GBP C Class Shares 30 September 2017 GBP 166,139 Veritas Izoard Fund USD C Class Shares 30 September 2017 USD 75,791

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

6. Gains and losses from financial assets and liabilities at fair value through profit and loss

Veritas Global Veritas Veritas Global Equity Income 30 September 2018 Asian Fund Focus Fund Fund USD USD GBP Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 37,757,064 421,014,646 118,748,742 - Forward contracts 136,955 - 38,873 - Futures contracts - - - Change in unrealised gains/(losses) - Equity and debt investments and contracts for difference (95,056,252) (133,232,729) (87,781,593) - Forward contracts 9,563,381 - 83,957 Net (loss)/gain from financial assets and liabilities at fair value through profit or loss (47,598,852) 287,781,917 31,089,979

Veritas Global Veritas Real Return Veritas 30 September 2018 China Fund Fund Izoard Fund USD GBP USD Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 3,707,683 18,569,798 4,358,819 - Forward contracts (107,852) 942,611 - - Futures contracts - (7,052,046) - Change in unrealised gains/(losses) - Equity, debt investments and contracts for difference (2,457,430) 4,424,904 (2,313,128) - Forward contracts (201,262) 1,555,071 - - Futures contracts - 191,062 - Net (loss)/gain from financial assets and liabilities at fair value through profit or loss 941,139 18,631,400 2,045,691

30 September 2018 Total USD Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 651,853,870 - Forward contracts 1,351,502 - Futures contracts (9,501,550) Change in unrealised gains/(losses) - Equity, debt investments and contracts for difference (345,369,885) - Forward contracts 11,570,458 - Futures contracts 257,427 Net (loss)/gain from financial assets and liabilities at fair value through profit or loss 310,161,822

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

6. Gains and losses from financial assets and liabilities at fair value through profit and loss (continued)

Veritas Global Veritas Veritas Global Equity Income 30 September 2017 Asian Fund Focus Fund Fund USD USD GBP Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 37,193,185 251,927,987 63,941,370 - Forward contracts 884,564 - 223,008 Change in unrealised gains/(losses) - Equity and debt investments and contracts for difference 82,087,034 418,542,030 53,073,830 - Forward contracts - - (246,396) Net gain from financial assets and liabilities at fair value through profit or loss 120,164,783 670,470,017 116,991,812

Veritas Global Veritas Real Return Veritas 30 September 2017 China Fund Fund Izoard Fund USD GBP USD Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 2,143,136 12,416,308 1,690,850 - Forward contracts (374,221) 1,151,124 - - Futures contracts - (8,238,495) - Change in unrealised gains/(losses) - Equity, debt investments, futures contracts and contracts for difference 1,353,805 13,309,333 4,633,967 - Forward contracts 609,637 (2,929,133) - - Futures contracts - (41,037) - Net gain from financial assets and liabilities at fair value through profit or loss 3,732,357 15,668,100 6,324,817

30 September 2017 Total USD Financial assets and liabilities at fair value through profit or loss Realised gains/(losses) - Equity and debt investments and contracts for difference 390,182,034 - Forward contracts 2,260,036 - Futures contracts (10,490,145) Change in unrealised gains/(losses) - Equity, debt investments, futures contracts and contracts for difference 591,143,078 - Forward contracts (3,433,791) - Futures contracts (52,253) Net gain from financial assets and liabilities at fair value through profit or loss 969,608,959

100

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss

The following table presents the financial instruments carried on the Statement of Financial Position by caption and by level within the valuation hierarchy as at 30 September 2018:

Veritas Asian Fund

30 September 2018 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 1,611,543,514 - - 1,611,543,514 Equity warrants - 65,948,769 - 65,948,769 Contracts for difference - 6,575,541 - 6,575,541 Forward foreign exchange contracts - 9,563,381 - 9,563,381 Total 1,611,543,514 82,087,691 - 1,693,631,205

Veritas Global Focus Fund

30 September 2018 Level 1 Level 2 Level 3* Total USD USD USD USD Financial assets at fair value through profit or loss Equities 2,949,790,075 - - 2,949,790,075 Total 2,949,790,075 - - 2,949,790,075

Veritas Global Equity Income Fund

30 September 2018 Level 1 Level 2 Level 3* Total GBP GBP GBP GBP Financial assets at fair value through profit or loss Equities 614,417,044 - - 614,417,044 Forward foreign exchange contract - 497 - 497 Total 614,417,044 497 - 614,417,541

Financial liabilities at fair value through profit or loss Forward foreign exchange contracts - (29,328) - (29,328) Total - (29,328) - (29,328)

*REEF China Commercial with Nil investment value is classified under Level 3. It has been priced at Nil as all distributions relating to the investment have been disbursed to shareholders.

101

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Veritas China Fund

30 September 2018 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 4,457,425 - - 4,457,425 Bond - 571,690 - 571,690 Contracts for difference - 2,081 - 2,081 Forward foreign exchange contracts - 66,843 - 66,843 Total 4,457,425 640,614 - 5,098,039

Financial liabilities at fair value through profit or loss Contracts for difference - (35,878) - (35,878) Forward foreign exchange contracts - (3,234) - (3,234) Total - (39,112) - (39,112)

Veritas Global Real Return Fund

30 September 2018 Level 1 Level 2 Level 3* Total GBP GBP GBP GBP Financial assets at fair value through profit or loss Equities 200,081,410 - - 200,081,410 Forward foreign exchange contracts - 15,334 - 15,334 Total 200,081,410 15,334 - 200,096,744

Financial liabilities at fair value through profit or loss Forward foreign exchange contracts - (813,346) - (813,346) Future contracts (558,492) - - (558,492) Total (558,492) (813,346) - (1,371,838)

Veritas Izoard Fund

30 September 2018 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 36,635,465 - - 36,635,465 Total 36,635,465 - - 36,635,465

*REEF China Commercial with Nil investment value is classified under Level 3. It has been priced at Nil as all distributions relating to the investment have been disbursed to shareholders.

102

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

The following table presents the financial instruments carried on the Statement of Financial Position by caption and by level within the valuation hierarchy as at 30 September 2017:

Veritas Asian Fund

30 September 2017 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 597,379,949 - - 597,379,949 Equity warrants - 164,002,112 - 164,002,112 Contract for difference - 53,831 - 53,831 Total 597,379,949 164,055,943 - 761,435,892

Financial liabilities at fair value through profit or loss Contract for difference - (207,618) - (207,618) Total - (207,618) - (207,618)

Veritas Global Focus Fund

30 September 2017 Level 1 Level 2 Level 3* Total USD USD USD USD Financial assets at fair value through profit or loss Equities 3,304,626,885 - - 3,304,626,885 Total 3,304,626,885 - - 3,304,626,885

Veritas Global Equity Income Fund

30 September 2017 Level 1 Level 2 Level 3* Total GBP GBP GBP GBP Financial assets at fair value through profit or loss Equities 1,000,558,203 - - 1,000,558,203 Bond - 31,789,334 - 31,789,334 Forward foreign exchange contracts - 1,642 - 1,642 Total 1,000,558,203 31,790,976 - 1,032,349,179

Financial liabilities at fair value through profit or loss Forward foreign exchange contracts - (114,430) - (114,430) Total - (114,430) - (114,430)

*RREEF China Commercial with Nil investment value is classified under Level 3. It has been priced at Nil as all distributions relating to the investment have been disbursed to shareholders.

103

VERITAS FUNDS PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Veritas China Fund

30 September 2017 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 12,311,196 - - 12,311,196 Bond - 629,275 - 629,275 Contracts for difference - 1,648 - 1,648 Forward foreign exchange contracts - 274,982 - 274,982 Total 12,311,196 905,905 - 13,217,101

Financial liabilities at fair value through profit or loss Forward foreign exchange contracts - (10,111) - (10,111) Total - (10,111) - (10,111)

Veritas Global Real Return Fund

30 September 2017 Level 1 Level 2 Level 3* Total GBP GBP GBP GBP Financial assets at fair value through profit or loss Equities 195,444,679 - - 195,444,679 Forward foreign exchange contracts - 52,420 - 52,420 Future contract 22,275 - - 22,275 Total 195,466,954 52,420 - 195,519,374

Financial liabilities at fair value through profit or loss Forward foreign exchange contracts - (2,405,503) - (2,405,503) Future contracts (771,829) - - (771,829) Total (771,829) (2,405,503) - (3,177,332)

Veritas Izoard Fund

30 September 2017 Level 1 Level 2 Level 3 Total USD USD USD USD Financial assets at fair value through profit or loss Equities 38,711,514 - - 38,711,514 Total 38,711,514 - - 38,711,514

*RREEF China Commercial with Nil investment value is classified under Level 3. It has been priced at Nil as all distributions relating to the investment have been disbursed to shareholders.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

In determining an instrument's placement within the hierarchy, the Directors separate the Company's investment portfolio into two categories: investments and derivative instruments. Each of these categories can further be divided between financial assets or financial liabilities.

Investments Investments whose values are based on quoted market prices in active markets, and are therefore classified within level 1.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2.

Investments classified within level 3 have significant unobservable inputs, as they trade infrequently or not at all. When observable prices are not available for these securities, the Directors uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within level 3, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

The inputs used by the Directors in estimating the value of investments in collective investment schemes classified as level 3 includes the redemption value based on the net asset value of the respective collective investment scheme, as indicated by the management of the underlying collective investment schemes. Level 3 investments may also be adjusted to reflect illiquidity and/or non- transferability, with the amount of such discount estimated by the Directors in the absence of market information. The fair value measurement of level 3 investments does not include transaction costs that may have been capitalised as part of the security's cost basis. Assumptions used by the Directors due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company's results of operations.

Derivative Instruments Derivative instruments can be exchange-traded or privately negotiated over-the-counter ("OTC"). OTC derivatives, such as generic forward foreign exchange contracts and CFD’s have inputs which can generally be corroborated by market data and are therefore classified within level 2. Futures are exchange traded and are therefore classified as level 1.

The Company considers the transfers between different levels to occur when there is a change in significant observable and unobservable inputs for a particular investment. There were no transfers between different level of investments during the year ended 30 September 2018 (30 September 2017: Nil).

The Company's assets and liabilities (by class) not measured at fair value but for which fair value is disclosed are level 1. These assets and liabilities are carried at amortised cost, their carrying values are a reasonable approximation of fair value.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments

Veritas Asian Fund

30 September 2018

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Gross Gross amounts not amounts of Net amount offset in the statement financial of financial of financial position Gross liabilities assets amount of offset in the presented in Description of recognized statement of the statement Cash type of financial financial of financial Financial collateral Net financial assets assets position position instrument* received* amount USD USD USD USD USD USD Forwards HSBC Bank Plc 9,563,381 - 9,563,381 - - 9,563,381

Contracts for difference Morgan Stanley 6,575,541 - 6,575,541 - - 6,575,541 16,138,922 - 16,138,922 - - 16,138,922

106

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas Global Equity Income Fund

30 September 2018

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Forwards Brown Brothers Harriman & Co 497 - 497 (497) - - 497 - 497 (497) - -

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Gross Gross amounts not amounts of Net amount offset in the statement financial of financial of financial position Gross assets liabilities Description of amount of offset in the presented in type of recognized statement of the statement Cash financial financial financial of financial Financial collateral Net liabilities liabilities position position instrument* pledged* amount GBP GBP GBP GBP GBP GBP

Forwards Brown Brothers Harriman & Co 29,328 - 29,328 (497) - 28,831 29,328 - 29,328 (497) - 28,831

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas China Fund

30 September 2018

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Gross Gross amounts not amounts of Net amount offset in the statement financial of financial of financial position Gross liabilities assets amount of offset in the presented in Description of recognized statement of the statement Cash type of financial financial of financial Financial collateral Net financial assets assets position position instrument* received* amount USD USD USD USD USD USD Contract s for difference UBS 2,081 - 2,081 - (2,081) -

Forwards Brown Brothers Harriman & Co 66,843 - 66,843 (3,234) - 63,609 68,924 - 68,924 (3,234) (2,081) 63,609

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Contracts for difference Morgan Stanley 35,878 - 35,878 - (35,878) -

Forwards Brown Brothers Harriman & Co 3,234 - 3,234 (3,234) - - 39,112 - 39,112 (3,234) (35,878) -

108

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas Global Real Return Fund

30 September 2018

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Gross Gross amounts not amounts of Net amount of offset in the statement financial financial of financial position Gross liabilities assets amount of offset in the presented in Description of recognized statement of the statement Cash type of financial financial of financial Financial collateral Net financial assets assets position position instrument* received* amount GBP GBP GBP GBP GBP GBP

Forwards Brown Brothers Harriman & Co 15,334 - 15,334 (15,334) - - 15,334 - 15,334 (15,334) - -

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Future Contracts UBS 558,492 - 558,492 - (558,492) -

Forwards Brown Brothers Harriman & Co 813,346 - 813,346 (15,334) - 798,012 1,371,838 - 1,371,838 (15,334) (558,492) 798,012

109

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

*Cash collateral and other financial instruments amounts disclosed in the above tables have been limited to the net amount of financial assets or liabilities presented in the Statement of Financial Position to eliminate the effect of over collateralization. The net amount represents the net amount due to the counterparty in the event of a default based on contractual set-off rights under the applicable ISDA/Master-Netting agreement. The actual value of collateral may be more or less than the amount presented.

Veritas Asian Fund

30 September 2017

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Gross amounts not Gross Net amount of offset in the statement amounts of financial of financial position financial liabilities Gross assets presented in Description of amount of offset in the the statement type of recognized statement of statement of Cash financial financial financial financial Financial collateral Net liabilities liabilities position position instrument* pledged* amount USD USD USD USD USD USD

Contracts for difference UBS 207,618 - 207,618 (53,831) (153,787) - 207,618 - 207,618 (53,831) (153,787) -

110

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas Global Equity Income Fund

30 September 2017

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Forwards Brown Brothers Harriman & Co 1,642 - 1,642 (1,642) - - 1,642 - 1,642 (1,642) - -

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Forwards Brown Brothers Harriman & Co 114,430 - 114,430 (1,642) - 112,788 114,430 - 114,430 (1,642) - 112,788

111

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas China Fund

30 September 2017

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Forwards Brown Brothers Harriman & Co. 274,982 - 274,982 (10,111) - 264,871 276,630 - 276,630 (10,111) - 266,519

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Forwards Brown Brothers Harriman & Co. 10,111 - 10,111 (10,111) - - 10,111 - 10,111 (10,111) - -

112

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

Veritas Global Real Return Fund

30 September 2017

The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.

Financial assets which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Future contracts UBS 22,275 - 22,275 (22,275) - -

Forwards Brown Brothers Harriman & Co 52,420 - 52,420 (52,420) - - 74,695 - 74,695 (74,695) - -

Financial liabilities which are subject to enforceable master netting arrangements or similar agreements are detailed in the following table.

Future contracts UBS 771,829 - 771,829 (22,275) (341,306) 408,248

Forwards Brown Brothers Harriman & Co 2,405,503 - 2,405,503 (52,420) - 2,353,083 3,177,332 - 3,177,332 (74,695) (341,306) 2,761,331

113

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

7. Financial assets and liabilities at fair value through profit or loss (continued)

Offsetting Financial Instruments (continued)

8. Cash and cash equivalents, margin cash held with brokers and bank overdraft

As at 30 September 2018 Veritas Veritas Veritas Global Asian Global Focus Equity Income Fund Fund Fund USD USD GBP Cash and cash equivalents HSBC Bank plc 84,813,711 81,098,108 20,982,679 UBS 6,031 - - Close Brothers Ltd, London - 62,055,949 - Sumitomo - 55,993,842 - Clydesdale 55,052,000 132,173,267 - JPMorgan 86,910,967 112,695,525 5,005,231 Morgan Stanley 116,472,240 155,413,736 20,016,244 343,254,949 599,430,427 46,004,154

Cash Margins UBS - - - Morgan Stanley 84,789,950 - - 84,789,950 - -

Veritas Veritas Global Veritas China Real Return Izoard Fund Fund Fund USD GBP USD Cash and cash equivalents HSBC Bank plc 3,240,660 12,812,077 5,509,938 UBS 903,547 15 - Close Brothers Ltd, London - - 8,248,523 Sumitomo 3,256,667 - - Clydesdale 3,927,263 - 7,543,534 JPMorgan - 7,006,188 - Morgan Stanley 2,008,733 15,015,405 5,027,136 13,336,870 34,833,685 26,329,131

Cash Margins UBS 2,554,763 5,382,531 - Morgan Stanley 839,950 - - 3,394,713 5,382,531 -

114

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

8. Cash and cash equivalents, margin cash held with brokers and bank overdraft (continued)

As at 30 September 2018

Total USD Cash and cash equivalents HSBC Bank plc 218,732,469 UBS 909,597 Close Brothers Ltd, London 70,304,472 Sumitomo 59,250,509 Clydesdale 198,696,064 JPMorgan 215,269,983 Morgan Stanley 324,604,867 1,087,767,961

Cash Margins UBS 9,573,853 Morgan Stanley 85,629,900 95,203,753

As at 30 September 2017

Veritas Veritas Veritas Global Asian Global Focus Equity Income Fund Fund Fund USD USD GBP Cash and cash equivalents HSBC Bank plc 45,936,381 54,204,896 38,813,031 UBS - 3 4 Close Brothers Ltd, London - 60,984,684 - Sumitomo - 165,713,504 - Clydesdale - 156,625,038 - 45,936,381 437,528,125 38,813,035

Cash Margins UBS 9,292,220 - - 9,292,220 - -

115

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

8. Cash and cash equivalents, margin cash held with brokers and bank overdraft (continued)

As at 30 September 2017

Veritas Veritas Global Veritas China Real Return Izoard Fund Fund Fund USD GBP USD Cash and cash equivalents HSBC Bank plc 4,730,866 28,654,085 1,817,424 UBS - - - Close Brothers Ltd, London - - 8,111,169 Sumitomo - - - Clydesdale 3,753,183 - 9,056,783 8,484,049 28,654,085 18,985,376

Cash Margins UBS 3,708,083 3,863,175 - 3,708,083 3,863,175 -

Total USD Cash and cash equivalents HSBC Bank plc 197,206,824 UBS 8 Close Brothers Ltd, London 69,095,853 Sumitomo 165,713,504 Clydesdale 169,435,004 601,451,193

Cash Margins UBS 18,183,332 18,183,332

116

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks

The Company’s investing activities expose it to various types of risk which are associated with the financial instruments and markets in which it invests. The most significant types of financial risk to which the Company is exposed are market risk, credit risk, liquidity risk. Market risk includes other price risk, currency risk and interest rate risk.

The Company maintains positions in a variety of derivative and non-derivative financial instruments as dictated by its investment management strategy. Asset allocation is determined by the Company’s Investment Manager who manages the distribution of the assets to achieve the investment objectives. Divergence from target asset allocations and the composition of the portfolio is monitored by the Company’s Investment Manager.

The nature and extent of the financial instruments outstanding at the date of the Statement of Financial Position and the risk management policies employed by the Company are discussed below: a) Market risk

Market risk is the risk that changes in interest rates, foreign exchange rates or equity and commodity prices will make an instrument less valuable or more onerous. All financial instruments are recognised at fair value, and all changes in market conditions directly affect net income.

The Company uses the absolute value at risk (“VaR”) model to calculate the global exposure. The global exposure, using the absolute VaR approach, is calculated as described in the next paragraph.

The Company’s market risk is managed on a daily basis by the Investment Manager within a rigorous risk management framework through diversification of the investment portfolio across countries and industries. In addition the Investment Manager uses a risk analysis system, Excerpt, to calculate ex- ante risk. The system has been developed by EM Applications, and is a well tested robust and accurate predictive model. On a monthly basis, the Investment Manager’s Head of Performance & Risk produces reports across the entire fund range of the Company, containing decomposition of risk across asset class, currencies, sectors, countries and individual positions. The risk is separated into systematic and specific risk, allowing for accurate analysis of the composition of the relevant fund. The report also contains stress tests based on historic events which moved markets significantly, and potential events which the Investment Manager judges could affect the funds. Value at Risk is calculated using 25,000 Monte Carlo simulations, and is reported at 99% confidence levels. This is reported in conjunction with Conditional Value-at-Risk (VaR) in order to examine potential extreme events and the impact on the funds. VaR is calculated daily in accordance with UCITS rules. Minuted meetings are then held with the portfolio managers to discuss the reports. Back testing of the model used is conducted and the results are reported to the Board of Directors on a quarterly basis.

The Company, may employ techniques and instruments including but not limited to futures, options, FX forwards, Contracts for Difference (CFDs) and equity swaps (all as described in detail below) relating to transferable securities and/or other financial instruments in which it invests for Efficient Portfolio Management purposes and for investment purposes.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) a) Market risk (continued)

The below table provides an analysis of the VaR measures and leverage levels for the sub-funds of the Company for the year ended 30 September 2018 and 30 September 2017.

Veritas Asian Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (7.98%) (9.22%) Lowest VaR limit utilized during the year (7.84%) (7.46%) Highest VaR limit utilized during the year (9.87%) (9.61%) Average VaR limit utilized during the year (8.93%) (8.94%) Lowest leverage level employed during the year - - Highest leverage level employed during the year - - Average leverage level employed during the year - -

Veritas Global Focus Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (6.05%) (6.72%) Lowest VaR limit utilized during the year (6.05%) (6.01%) Highest VaR limit utilized during the year (6.90%) (7.23%) Average VaR limit utilized during the year (6.66%) (6.82%) Lowest leverage level employed during the year - - Highest leverage level employed during the year - - Average leverage level employed during the year - -

Veritas Global Equity Income Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (6.95%) (7.28%) Lowest VaR limit utilized during the year (6.37%) (6.90%) Highest VaR limit utilized during the year (7.45%) (8.06%) Average VaR limit utilized during the year (7.18%) (7.40%) Lowest leverage level employed during the year - - Highest leverage level employed during the year - - Average leverage level employed during the year - -

Veritas China Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (3.88%) (6.79%) Lowest VaR limit utilized during the year (3.77%) (6.07%) Highest VaR limit utilized during the year (11.78%) (11.46%) Average VaR limit utilized during the year (8.21%) (8.62%) Lowest leverage level employed during the year - - Highest leverage level employed during the year - 24.89% Average leverage level employed during the year - 3.67%

Veritas Global Real Return Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (4.20%) (4.66%) Lowest VaR limit utilized during the year (4.18%) (3.49%) Highest VaR limit utilized during the year (5.53%) (5.39%) Average VaR limit utilized during the year (4.82%) (4.79%) Lowest leverage level employed during the year - 9.79% Highest leverage level employed during the year - 20.54% Average leverage level employed during the year - 16.14%

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) a) Market risk (continued)

The below table provides an analysis of the VaR measures and leverage levels for the sub-funds of the Company for the year ended 30 September 2018 and 30 September 2017 (continued).

Veritas Izoard Fund 30 Sep 2018 30 Sep 2017 VaR as at the year end (4.22%) (5.15%) Lowest VaR limit utilized during the year (4.21%) (3.88%) Highest VaR limit utilized during the year (5.37%) (5.35%) Average VaR limit utilized during the year (4.84%) (4.97%) Lowest leverage level employed during the year - - Highest leverage level employed during the year - - Average leverage level employed during the year - -

To achieve the Company’s investment aims the Investment Manager employs a global thematic and unconstrained investment approach with the ability to hold a level of cash if insufficient compelling equity opportunities are identified. The Investment Manager seeks investment opportunities regardless of where the company is domiciled (i.e. globally). As a result the theoretical investment universe is all global companies. However, as the investment criteria utilised for selecting equities involves quality measures, liquidity/size constraints as well as valuation measures, investments in most developing countries will not be considered. As examples, in Latin America only a selected few Mexican and Brazilian companies would qualify under our investment criteria. In Asia a number of investment opportunities are available in countries including Hong Kong, South Korea, Malaysia and Singapore. The Investment Manager does not attempt to manipulate the portfolio to deliver a certain country and sector weighting and allocations are therefore solely a function of bottom up analysis. However the Investment Manager does ensure a satisfactory level of diversification by way of both sector and geography although this is not based on index weightings.

Details of the Company’s investment portfolio and derivatives at the Statement of Financial Position date are disclosed in the schedule of investments.

The Company uses the commitment approach for Veritas Global Focus Fund, Veritas Asian Fund, Veritas Global Equity Income Fund and Veritas Izoard Fund and VaR approach for Veritas China Fund* and Veritas Global Real Return Fund to calculate the global exposure to ensure that the use of financial derivative instruments is within the limits specified by the Central Bank. Where the commitment approach is used to calculate the global exposure no leverage should arise.

*From 1 October 2018, the Company will use the commitment approach for the Veritas China Fund.

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9. Financial instruments and associated risks (continued) a) Market risk (continued)

Other price risk

Other price risk is the risk that the fair values of equities or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk). The Investment Manager attempts to mitigate this risk through the construction of a well-diversified portfolio.

In accordance with the Company’s policies and procedures in place, the Investment Manager monitors the Company’s overall other price risk on a daily basis, and the Board of Directors reviews it on a quarterly basis. There were no changes in the other price risk management policies and procedures from the prior year ended 30 September 2017.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company may invest in financial instruments and enter into transactions denominated in currencies other than its functional currency. Consequently, the Company is exposed to risks that the exchange rate of its currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s assets or liabilities denominated in currencies other than the Sub-Funds’ respective functional currency.

Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Monetary assets and liabilities include cash and cash equivalents, marketable debt securities, trade receivables and payables including due to/from brokers, and monies due to/from brokers.

All assets and liabilities that do not meet the definition of monetary items are classified as non- monetary. Marketable equity investments are considered non-monetary assets. The currency risk associated with equities is included in other price risk. Once paid in or accumulated, all elements of net assets attributable to holders of redeemable participating shares are non-monetary.

The Sub-Funds are authorised for purposes of efficient portfolio management to enter into forward foreign exchange contracts for the purpose of managing the foreign currency exposure arising from the Sub-Funds’ investment or anticipated investment in securities denominated in foreign currencies.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) a) Market risk (continued)

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The majority of the Company’s financial assets and liabilities in Veritas Asian Fund, Veritas Global Focus Fund, Veritas Global Equity Income Fund, Veritas Global Real Return Fund and Veritas Izoard Fund are non-interest bearing and as a result, these Sub-Funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any cash and cash equivalents, time deposits and bank overdrafts held by these Sub-Funds are held at short term market rates and therefore are not exposed to significant amounts of interest rate risk.

In accordance with the Company’s policies and procedures in place, the Investment Manager monitors the Company’s overall interest rate risk on a daily basis, and the Board of Directors reviews it on a quarterly basis. The following tables set out the interest profile of Sub-Funds which hold interest bearing financial assets as at 30 September 2018 and 30 September 2017. An estimate is also given of the effects of a hypothetical 100 basis points increase and decrease in interest rates on assets that are subject to interest rate risk.

Veritas China Fund as of 30 September 2018

Financial assets Floating rate Fixed rate on which no Total financial assets financial assets interest is paid Currency USD USD USD USD US Dollar 571,690 - 571,690 -

Fixed rate financial Fixed rate financial assets weighted assets weighted average period for Currency average interest rate which rate is fixed US Dollar 1.25% 4.02 years

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) a) Market risk (continued)

Interest rate risk

Veritas Global Equity Income Fund as of 30 September 2017

Financial assets Floating rate Fixed rate on which no Total financial assets financial assets interest is paid Currency USD USD USD USD US Dollar 31,789,334 - 31,789,334 -

Fixed rate financial Fixed rate financial assets weighted assets weighted average period for Currency average interest rate which rate is fixed US Dollar 5.25% 0.72 years

Veritas China Fund as of 30 September 2017

Financial assets Floating rate Fixed rate on which no Total financial assets financial assets interest is paid Currency USD USD USD USD US Dollar 629,275 - 629,275 -

Fixed rate financial Fixed rate financial assets weighted assets weighted average period for Currency average interest rate which rate is fixed US Dollar 1.25% 4.78 years b) Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. Credit risk is generally higher when a non- exchange traded financial instrument is involved because the counterparty for non-exchange traded financial instruments is not backed by an exchange clearing house.

Credit risk associated with investing activities is managed by the Investment Manager as part of the overall investment process. To reduce the Company’s counterparty credit exposures, securities trading is primarily conducted on recognised exchanges and on a delivery-versus-payment basis.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) b) Credit risk (continued)

The risk of default is considered minimal, as delivery of securities sold is only made once the depositary has received payment. Payment is made on a purchase once the securities have been received by the depositary. The trade will fail if either party fails to meet its obligation. In addition, the Investment Manager seeks to enter into netting agreements with counterparties that would allow receivables and payables to that counterparty to be offset.

The exposure of debt securities as at 30 September 2018 based on credit rating is as follows:

Veritas China Fund Credit rating Agency Debt Securities Held Long USD Non rated N/A 571,690 Total 571,690

The exposure of debt securities as at 30 September 2017 based on credit rating is as follows:

Veritas Global Equity Income Fund Credit rating Agency Debt Securities Held Long USD A- S&P 31,789,334 Total 31,789,334

Veritas China Fund Credit rating Agency Debt Securities Held Long USD Non rated N/A 629,275 Total 629,275

123

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

9. Financial instruments and associated risks (continued) b) Credit risk (continued)

All financial instruments, other than derivatives, are cleared through and held in custody by HSBC. The Company is subject to credit risk to the extent that this institution may be unable to fulfil its obligations either to return the Company’s securities or repay amounts owed. Management does not anticipate any losses as a result of this concentration. Substantially all of the cash of the Company is held by UBS, HSBC Bank plc, Morgan Stanley, JPMorgan, Clydesdale Bank Plc and Sumitomo Mitsui Trust Bank Limited with credit rating of A-, AA-, BBB+,A+, BBB- and A- (30 September 2017: UBS, HSBC Bank plc, Clydesdale Bank Plc and Sumitomo Mitsui Trust Bank Limited with credit rating of A-, AA- , BBB- and A) respectively as provided by Standard & Poor’s and Close Brothers Limited with credit rating of A3 (30 September 2017: Aa3) as provided by Moody’s. These institutions are rated by prominent credit rating agencies. Bankruptcy or insolvency of UBS, HSBC Bank plc and Morgan Stanley may cause the Company’s rights with respect to cash held by UBS, HSBC Bank plc and Morgan Stanley to be delayed or limited as the cash is not held on a segregated basis. The Company’s investments in derivative financial instruments including forward contracts, contract for differences and participatory notes are also subject to credit risk. The risk that counterparties to both derivative and other instruments might default on their obligations is monitored on an on-going basis. To manage the level of credit risk, the Company deals with counterparties of good credit standing.

The Company’s credit risk exposure is represented by the carrying amounts of cash and cash equivalents, margin cash, due from brokers, debt investments and open gains on contracts for difference and forward currency contracts at the Statement of Financial Position date. c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s constitution provides for the daily creation and cancellation of shares and it is therefore exposed to the liquidity risk of meeting shareholder redemptions at any time.

The Company’s financial instruments include investments in derivative contracts traded over-the- counter, which are not traded in an organised public market and which generally may be illiquid.

As a result, the Company may not be able to liquidate quickly some of its investments in these instruments at an amount close to its fair value in order to meet its liquidity requirements, or to respond to specific events such as deterioration in the credit worthiness of any particular issuer.

The Company’s listed securities are considered to be readily realisable as they are all listed on major global stock exchanges. The Company has also obtained overdraft facilties in order to manage its liquidity. Details of the Company’s overdraft facilities are outlined in note 10. In accordance with the Company’s policies and procedures in place, the Investment Manager monitors the Company’s overall liquidity risk on a daily basis, and the Board of Directors reviews it on a quarterly basis. Substantially all of the Company's liabilities included in the Statement of Financial Position at 30 September 2018 and 2017 on pages 75 to 76 are payable within one month.

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9. Financial instruments and associated risks (continued) c) Liquidity risk (continued)

The following tables shows the contractual, undiscounted cash flows of the Company’s derivative financial assets and liabilities settled gross at at 30 September 2018 and 2017.

Veritas Asian Fund

Less than 1 to 3 3 months to 30 September 2018 1 month months 1 year USD USD USD Derivative financial assets and liabilities settled gross - Forward contracts Outflows - - (150,436,619) Inflows - - 160,000,000 Total - - 9,563,381

30 September 2017

The Veritas Asian Fund did not have any derivative financial assets and liabilities settled gross as at 30 September 2017.

Veritas Global Focus Fund

The Veritas Global Focus Fund did not have any derivative financial assets and liabilities settled gross as at 30 September 2018 and 30 September 2017.

Veritas Global Equity Income Fund

Less than 1 to 3 3 months to 30 September 2018 1 month months 1 year GBP GBP GBP Derivative financial assets and liabilities settled gross - Forward contracts Outflows (2,930,731) - - Inflows 2,901,900 - - Total (28,831) - -

Less than 1 to 3 3 months to 30 September 2017 1 month months 1 year GBP GBP GBP Derivative financial assets and liabilities settled gross - Forward contracts Outflows (4,051,125) - - Inflows 3,938,337 - - Total (112,788) - -

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9. Financial instruments and associated risks (continued) c) Liquidity risk (continued)

Veritas China Fund

Less than 1 to 3 3 months to 30 September 2018 1 month months 1 year USD USD USD Derivative financial assets and liabilities settled gross - Forward contracts Outflows (7,376,560) - - Inflows 7,440,169 - - Total 63,609 - -

Less than 1 to 3 3 months to 30 September 2017 1 month months 1 year USD USD USD Derivative financial assets and liabilities settled gross - Forward contracts Outflows (10,075,158) - - Inflows 10,340,029 - - Total 264,871 - -

Veritas Global Real Return Fund

Less than 1 to 3 3 months to 30 September 2018 1 month months 1 year GBP GBP GBP Derivative financial assets and liabilities settled gross - Forward contracts Outflows (79,442,176) - - Inflows 78,644,164 - - Total (798,012) - -

Less than 1 to 3 3 months to 30 September 2017 1 month months 1 year GBP GBP GBP Derivative financial assets and liabilities settled gross - Forward contracts Outflows (79,902,451) - - Inflows 77,549,368 - - Total (2,353,083) - -

Veritas Izoard Fund

The Veritas Izoard Fund did not have any derivative financial assets and liabilities settled gross as at 30 September 2018 and 30 September 2017.

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10. Overdraft facility

The Company has entered into the following overdraft facilities with HSBC Bank plc:

30 September 2018 30 September 2017

Veritas Asian Fund lower of USD100,000,000 or lower of USD60,000,000 or 10% of the NVAC 10% of the NVAC

Veritas Global Focus Fund lower of USD100,000,000 or lower of USD100,000,000 or 10% of the NVAC 10% of the NVAC

Veritas Global Equity lower of USD100,000,000 or lower of USD170,000,000 or Income Fund 10% of the NVAC 10% of the NVAC

Veritas China Fund lower of USD2,500,000 or lower of USD3,000,000 or 10% of the NVAC 10% of the NVAC

Veritas Global Real Return lower of USD20,000,000 or lower of USD20,000,000 or Fund 10% of the NVAC 10% of the NVAC

Veritas Izoard Fund lower of USD5,000,000 or lower of USD5,000,000 or 10% of the NVAC 10% of the NVAC

NVAC represents the net value of assets under custody with the Depositary, HSBC Institutional Trust Services (Ireland) DAC. The assets and cash balances held by the Depositary are held as collateral for the above overdraft facilities.

Interest is charged on the facility at the HSBC Bank plc’s currency overdraft rate plus 2%, calculated on a per annum basis.

These facilities were entered into to overcome any potential shortages of liquidity caused by timing differences on the settlement of trades, or the need to satisfy requests by investors for the redemption of shares in the Company.

11. Exchange rates

The following exchange rates were used to translate assets and liabilities into the functional currency (United States Dollar) at 30 September 2018 and 30 September 2017 for the Veritas Asian Fund, Veritas Global Focus Fund, Veritas China Fund and the Veritas Izoard Fund.

30 September 30 September 2018 2017 Australian Dollar 1.38207 1.27445 Brazilian Real 3.99355 - British Pound 0.76684 0.74535 Chinese Yuen 6.88060 6.64280 Danish Krona 6.42035 6.29480 Euro 0.86096 0.84588 Hong Kong Dollar 7.82490 7.81070 Indonesian Rupiah 14,901.50000 13,469.00000 Indian Rupee 72.49000 65.32000 Korean Won 1,109.25000 1,145.35000 New Taiwanese Dollar 30.53300 30.32400

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11. Exchange rates (continued)

30 September 30 September 2018 2017 Singapore Dollar 1.36635 - South African Rand 14.15125 13.50250 Swedish Krona - 8.16235 Swiss Franc 0.97680 0.96760 Thai Baht 32.34000 33.35000

The following exchange rates were used to translate assets and liabilities into the functional currency (GBP) at 30 September 2018 and 30 September 2017 for the Veritas Global Equity Income Fund and Veritas Global Real Return Fund.

30 September 30 September 2018 2017 Australian Dollar 1.80229 1.70987 Brazilian Real 5.20779 4.24384 Danish Krona 8.37246 8.44542 Euro 1.12273 1.13488 Hong Kong Dollar 10.20406 10.47923 Norwegian Krone - 10.67994 Singapore Dollar 1.78179 1.82189 South African Rand 18.45394 18.11563 Swedish Krona 11.59718 10.95102 Swiss Franc 1.27380 1.29818 US Dollar 1.30405 1.34165

12. Related parties and connected persons

Mr Richard Grant and Mr Ian Barnes are partners of the Investment Manager and as such have an interest in the relationship between the Company and the Investment Manager. Mr Richard Grant and Mr Ian Barnes are also directors of Veritas Asset Management (Asia) Ltd, a sub-advisor to the Investment Manager on Veritas Asian Fund and Veritas China Fund. Mr Richard Grant held shares 16,655 (2017: 16,057) in Veritas Global Equity Income Fund, 5,561 shares (2017: 5,557) in Veritas China Fund, 204,198 shares (2017: 204,198) in Veritas Global Real Return Fund and 10,086 shares (2017: 10,035) in Veritas Izoard Fund. Mrs Catherine Grant, wife of Director Mr Richard Grant held 5,271 shares (2017: 5,267) in Veritas Global Focus Fund.

The Company uses the services of KB Associates for the provision of a Money Laundering Reporting Officer. Mr Mike Kirby who is a Director of the Company, is the Managing Principle of KB Associates.

Veritas Asset Management LLP, the Investment Manager, is a related party under the IAS 24 “Related Party Disclosures”. Please refer note 3 for the fees payable to these parties and the amounts due at the year end.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

13. Share capital

The authorised share capital of the Company is €38,100 divided into 38,100 Management Shares of €1 each and 500,000,000,000 Shares of no par value initially designated as unclassified shares. The issued share capital of the Company is €38,100 divided into Management Shares of €1 each of which one quarter has been paid up and which are beneficially owned as to 38,093 Management Shares by Veritas Asset Management LLP and as to one Management Share each by seven nominees of Veritas Asset Management LLP.

The unclassified shares are available for issue as Shares.

Management Shares do not entitle the holders to any dividend and on a winding-up entitle the holder to receive the amount paid up thereon but not otherwise to participate in the assets of the Company.

The movement in the number of participating redeemable shares during the years ended 30 September 2018 and 30 September 2017 is as follows:

Veritas Asian Fund

2017 2017 2017 EUR A Class GBP A Class USD A Class At 1 October 2016 41,868 280,159 621,468 Issued 14,082 221,313 173,385 Redeemed (11,676) (149,292) (475,336) At 30 September 2017 44,274 352,180 319,517

2018 2018 2018 EUR A Class GBP A Class USD A Class At 1 October 2017 44,274 352,180 319,517 Issued 44,070 281,594 237,063 Redeemed (20,599) (130,147) (185,648) At 30 September 2018 67,745 503,627 370,932

2017 2017 2017 EUR B Class GBP B Class USD B Class At 1 October 2016 994 19,380 184,061 Issued 1 4,412 59,597 Redeemed (1) (6,417) (95,694) At 30 September 2017 994 17,375 147,964

2018 2018 2018 EUR B Class GBP B Class USD B Class At 1 October 2017 994 17,375 147,964 Issued 17 3,909 141,132 Redeemed (241) (3,081) (112,087) At 30 September 2018 770 18,203 177,009

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13. Share capital (continued)

Veritas Asian Fund (continued)

2017 2017 2017 GBP C Class USD C Class GBP D Class At 1 October 2016 - - - Issued 64,253 115,391 114,578 Redeemed (3,341) (415) (7,676) At 30 September 2017 60,912 114,976 106,902

2018 2018 2018 GBP C Class USD C Class GBP D Class At 1 October 2017 60,912 114,976 106,902 Issued 199,020 2,155,002 233,113 Redeemed (35,612) (531,448) (25,851) At 30 September 2018 224,320 1,738,530 314,164

2017 USD D Class At 1 October 2016 - Issued 428,990 Redeemed (109,241) At 30 September 2017 319,749

2018 2018 USD D Class EUR C Class At 1 October 2017 319,749 - Issued 237,664 154 Redeemed (86,206) - At 30 September 2018 471,207 154

Veritas Global Focus Fund

2017 2017 2017 GBP A Class USD A Class EUR A Class At 1 October 2016 12,766,320 8,120,794 4,028,075 Issued 6,282,664 3,814,302 465,778 Redeemed (5,792,735) (6,073,160) (249,556) At 30 September 2017 13,256,249 5,861,936 4,244,297

2018 2018 2018 GBP A Class USD A Class EUR A Class At 1 October 2017 13,256,249 5,861,936 4,244,297 Issued 1,051,246 1,792,885 100,459 Redeemed (8,782,221) (2,852,698) (665,898) At 30 September 2018 5,525,274 4,802,123 3,678,858

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13. Share capital (continued)

Veritas Global Focus Fund (continued)

2017 2017 2017 GBP B Class USD B Class EUR B Class At 1 October 2016 259,994 31,549 16,071 Issued 22,897 1,376,483 1,479 Redeemed (127,048) (1,163,695) (6,723) At 30 September 2017 155,843 244,337 10,827

2018 2018 2018 GBP B Class USD B Class EUR B Class At 1 October 2017 155,843 244,337 10,827 Issued 23,391 313,587 9 Redeemed (30,023) (216,341) (3,802) At 30 September 2018 149,211 341,583 7,034

2017 2017 2017 GBP C Class USD C Class EUR C Class At 1 October 2016 36,602,575 10,750,291 5,069,457 Issued 2,825,197 6,280,529 813,060 Redeemed (9,974,054) (3,388,735) (1,319,438) At 30 September 2017 29,453,718 13,642,085 4,563,079

2018 2018 2018 GBP C Class USD C Class EUR C Class At 1 October 2017 29,453,718 13,642,085 4,563,079 Issued 1,891,025 3,248,127 1,780,522 Redeemed (3,236,956) (3,649,096) (1,722,157) At 30 September 2018 28,107,787 13,241,116 4,621,444

2017 2017 2017 GBP D Class USD D Class EUR D Class At 1 October 2016 4,642,744 1,030,746 76,361 Issued 1,769,524 680,393 5,805 Redeemed (586,824) (241,564) (66,113) At 30 September 2017 5,825,444 1,469,575 16,053

2018 2018 2018 GBP D Class USD D Class EUR D Class At 1 October 2017 5,825,444 1,469,575 16,053 Issued 3,376,856 88,168 4,580 Redeemed (1,754,335) (293,014) (2,331) At 30 September 2018 7,447,965 1,264,729 18,302

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13. Share capital (continued)

Veritas Global Equity Income Fund

2017 2017 2017 GBP A Class USD A Class EUR A Class At 1 October 2016 1,224,978 199,056 41,692 Issued 80,585 10,398 6,715 Redeemed (196,864) (62,371) (9,860) At 30 September 2017 1,108,699 147,083 38,547

2018 2018 2018 GBP A Class USD A Class EUR A Class At 1 October 2017 1,108,699 147,083 38,547 Issued 66,105 2,758 2,234 Redeemed (436,252) (52,363) (7,129) At 30 September 2018 738,552 97,478 33,652

2017 2017 2017 GBP B Class USD B Class EUR B Class At 1 October 2016 93,234 543,071 13,075 Issued 3,926 4,019 139 Redeemed (19,410) (207,142) (2,601) At 30 September 2017 77,750 339,948 10,613

2018 2018 2018 GBP B Class USD B Class EUR B Class At 1 October 2017 77,750 339,948 10,613 Issued 2,268 2,739 61 Redeemed (17,649) (118,534) (1,824) At 30 September 2018 62,369 224,153 8,850

2017 2017 2017 GBP C Class USD C Class EUR C Class At 1 October 2016 137,597 279,945 3,654 Issued 5,334 300 461 Redeemed (15,931) (848) (1,514) At 30 September 2017 127,000 279,397 2,601

2018 2018 2018 GBP C Class USD C Class EUR C Class At 1 October 2017 127,000 279,397 2,601 Issued 5,090 45,197 92 Redeemed (23,623) (32,520) (259) At 30 September 2018 108,467 292,074 2,434

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13. Share capital (continued)

Veritas Global Equity Income Fund (continued)

2017 2017 2017 GBP D Class USD D Class EUR D Class At 1 October 2016 2,519,605 121,362 1,486,470 Issued 148,685 17,193 127,049 Redeemed (616,856) (54,195) (169,097) At 30 September 2017 2,051,434 84,360 1,444,422

2018 2018 2018 GBP D Class USD D Class EUR D Class At 1 October 2017 2,051,434 84,360 1,444,422 Issued 313,670 17,174 37,198 Redeemed (589,955) (21,289) (1,471,823) At 30 September 2018 1,775,149 80,245 9,797

2017 USD E Class At 1 October 2016 51,361 Issued 6,098 Redeemed (24,317) At 30 September 2017 33,142

2018 USD E Class At 1 October 2017 33,142 Issued 400 Redeemed (9,650) At 30 September 2018 23,892

Veritas China Fund

2017 2017 2017 GBP A Class USD A Class EUR A Class At 1 October 2016 45,939 102,255 375 Issued 1,610 300 - Redeemed (5,293) (796) - At 30 September 2017 42,256 101,759 375

2018 2018 2018 GBP A Class USD A Class EUR A Class At 1 October 2017 42,256 101,759 375 Issued 2,831 6,867 1,370 Redeemed (16,141) (1,697) (375) At 30 September 2018 28,946 106,929 1,370

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13. Share capital (continued)

Veritas China Fund (continued)

2017 2017 GBP B Class EUR B Class At 1 October 2016 1,770 - Issued 3,162 2,475 Redeemed (304) (500) At 30 September 2017 4,628 1,975

2018 2018 GBP B Class EUR B Class At 1 October 2017 4,628 1,975 Issued 685 358 Redeemed (1,782) - At 30 September 2018 3,531 2,333

Veritas Global Real Return Fund

2017 2017 2017 GBP A Class USD A Class EUR A Class At 1 October 2016 6,524,175 997,077 181,343 Issued 2,500,582 695,622 749,673 Redeemed (2,459,714) (541,774) (68,018) At 30 September 2017 6,565,043 1,150,925 862,998

2018 2018 2018 GBP A Class USD A Class EUR A Class At 1 October 2017 6,565,043 1,150,925 862,998 Issued 1,294,589 1,298,483 235,596 Redeemed (3,435,779) (841,710) (878,734) At 30 September 2018 4,423,853 1,607,698 219,860

2017 2017 2017 GBP B Class USD B Class EUR B Class At 1 October 2016 96,603 129,438 132,575 Issued 123,872 133,525 20,074 Redeemed (8,992) (17,328) - At 30 September 2017 211,483 245,635 152,649

2018 2018 2018 GBP B Class USD B Class EUR B Class At 1 October 2017 211,483 245,635 152,649 Issued 111,716 41,970 24,210 Redeemed (84,823) (45,336) (230) At 30 September 2018 238,376 242,269 176,629

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13. Share capital (continued)

Veritas Global Real Return Fund (continued)

2017 2017 2017 GBP D Class EUR D Class USD D Class At 1 October 2016 323,378 - - Issued 3,218,664 942,977 857,838 Redeemed (122,296) (72,904) (40,295) At 30 September 2017 3,419,746 870,073 817,543

2018 2018 2018 GBP D Class EUR D Class USD D Class At 1 October 2017 3,419,746 870,073 817,543 Issued 2,885,052 281,133 243,526 Redeemed (988,053) (535,482) (234,991) At 30 September 2018 5,316,745 615,724 826,078

2018 EUR E Class At 1 October 2017 - Issued 116,156 Redeemed (35,860) At 30 September 2018 80,296

Veritas Izoard Fund

2017 2017 GBP C Class USD C Class At 1 October 2016 234,759 125,582 Issued 210 - Redeemed - - At 30 September 2017 234,969 125,582

2018 2018 GBP C Class USD C Class At 1 October 2017 234,969 125,582 Issued 304 28,499 Redeemed - - At 30 September 2018 235,273 154,081

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14. Net asset value

The Company has adopted IFRS 13 and changed its valuation input for financial assets and liabilities measured at fair value, based on a quoted price in an active market, to last traded prices. As all of the last traded prices for the Company’s financial assets and liabilities fall within the bid- ask spread, there is no variance, other than those due to timing between the Net Assets per the financial statements and the published Net Asset Value.

Net assets attributable to holders of redeemable participating shares represent a liability in the Statement of Financial Position, carried at the redemption amount that would be payable at the Statement of Financial Position date if the shareholder exercised the right to redeem the share to the Company.

Reconciliation between dealing NAV as at 12pm on 30 September 2018 and Financial Statements NAV as at close of business 30 September 2018:

Veritas Veritas Veritas Global Asian Global Focus Equity Income 2018 Fund Fund Fund USD USD GBP Dealing NAV (30 September 2018) at Mid prices at 12 pm 2,118,594,832 3,540,696,359 644,159,658 Adjustment for as of dealing (14,968,591) 868,827 (1,086,239) Change in Net Asset value due to price change from 12 pm to close of business 72,345 (246,303) 1,228,110 NAV as per Valuations (30 September 2018) at last traded prices at close of business 2,103,698,586 3,541,318,883 644,301,529

Veritas Veritas Global Veritas China Real Return Izoard 2018 Fund Fund Fund USD GBP USD Dealing NAV (30 September 2018) at Mid prices at 12 pm 21,641,582 239,404,517 62,632,618 Adjustment for as of dealing 1,007,450 143,299 - Change in Net Asset value due to price change from 12 pm to close of business 760 50,902 53,405 NAV as per Valuations (30 September 2018) at last traded prices at close of business 22,649,792 239,598,718 62,686,023

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14. Net asset value (continued)

Reconciliation between dealing NAV as at 12pm on 30 September 2017 and Financial Statements NAV as at close of business 30 September 2017:

Veritas Veritas Veritas Global Asian Global Focus Equity Income 2017 Fund Fund Fund USD USD GBP Dealing NAV (30 September 2017) at Mid prices at 12 pm 805,989,541 3,721,628,842 1,052,873,555 Adjustment for as of dealing 69,973 (25,546,373) (25,817) Change in Net Asset value due to price change from 12 pm to close of business 939,380 22,088,783 (659,204) NAV as per Valuations (30 September 2017) at last traded prices at close of business 806,998,894 3,718,171,252 1,052,188,534

Veritas Veritas Global Veritas China Real Return Izoard 2017 Fund Fund Fund USD GBP USD Dealing NAV (30 September 2017) at Mid prices at 12 pm 24,491,844 224,948,998 57,201,171 Adjustment for as of dealing - 329,155 - Change in Net Asset value due to price change from 12 pm to close of business 50,726 379,735 215,052 NAV as per Valuations (30 September 2018) at last traded prices at close of business 24,542,570 225,657,888 57,416,223

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

15. Comparative net asset value

Veritas Asian Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD A Class Shares 441.64 163,817,399 424.91 135,765,692 GBP A Class Shares 628.95 316,754,456 588.44 207,235,886 EUR A Class Shares 433.27 29,351,731 409.85 18,145,574 USD B Class Shares 306.74 54,295,624 296.05 43,804,136 GBP B Class Shares 463.03 8,428,540 434.38 7,547,228 EUR B Class Shares 319.08 245,757 302.57 300,877 USD C Class Shares 446.33 775,954,933 427.55 49,157,681 GBP C Class Shares 637.43 142,987,653 593.53 36,152,685 EUR C Class Shares 434.58 66,925 - - USD D Class Shares 440.10 207,379,565 423.64 135,459,626 GBP D Class Shares 627.99 197,291,450 588.02 62,860,171

NAV Per Share Total NAV Share Class 2016 2016 USD A Class Shares 353.87 219,919,434 GBP A Class Shares 507.13 142,075,680 EUR A Class Shares 359.74 15,061,659 USD B Class Shares 246.98 45,458,695 GBP B Class Shares 374.43 7,256,592 EUR B Class Shares 265.72 264,137

Veritas Global Focus Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD A Class Shares 34.25 164,485,447 31.55 184,962,690 GBP A Class Shares 44.60 246,437,649 39.93 529,287,463 EUR A Class Shares 17.93 65,960,583 16.23 68,873,745 USD B Class Shares 24.48 8,362,793 22.66 5,535,450 GBP B Class Shares 33.78 5,040,152 30.36 4,731,928 EUR B Class Shares 21.16 148,844 19.23 208,167 USD C Class Shares 37.71 499,270,294 34.61 472,176,282 GBP C Class Shares 48.96 1,376,224,491 43.68 1,286,728,507 EUR C Class Shares 32.77 151,426,792 29.55 134,851,005 USD D Class Shares 35.48 44,870,194 32.68 48,024,432 GBP D Class Shares 46.17 343,853,972 41.33 240,784,232 EUR D Class Shares 30.76 562,972 27.84 446,897

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

15. Comparative net asset value (continued)

Veritas Global Focus Fund (continued) NAV Total Per Share NAV Share Class 2016 2016 USD A Class Shares 26.14 212,271,560 GBP A Class Shares 34.17 436,226,888 EUR A Class Shares 14.15 56,978,444 USD B Class Shares 18.85 594,796 GBP B Class Shares 26.08 6,779,037 EUR B Class Shares 16.83 270,452 USD C Class Shares 28.58 307,276,154 GBP C Class Shares 37.26 1,363,862,446 EUR C Class Shares 25.67 130,146,813 USD D Class Shares 27.07 27,903,570 GBP D Class Shares 35.37 164,191,254 EUR D Class Shares 24.25 1,851,964

Veritas Global Equity Income Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD A Class Shares 132.07 12,873,613 131.28 19,308,980 GBP A Class Shares 195.93 144,707,240 189.31 209,885,809 EUR A Class Shares 222.46 7,486,045 217.26 8,374,460 USD B Class Shares 129.06 28,930,460 128.94 43,834,264 GBP B Class Shares 177.68 11,081,628 172.54 13,415,104 EUR B Class Shares 201.22 1,780,925 197.52 2,096,199 USD C Class Shares 178.21 52,049,827 170.11 47,529,436 GBP C Class Shares 266.03 28,855,906 246.84 31,348,179 EUR C Class Shares 301.87 734,855 283.11 736,481 USD D Class Shares 138.22 11,091,124 137.04 11,560,098 GBP D Class Shares 205.90 365,505,051 198.43 407,067,029 EUR D Class Shares 230.46 2,257,834 224.65 324,486,989 USD E Class Shares 150.43 3,593,907 144.43 4,786,848

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

15. Comparative net asset value (continued)

Veritas Global Equity Income Fund (continued) NAV Total Per Share NAV Share Class 2016 2016 USD A Class Shares 116.05 23,099,917 GBP A Class Shares 172.84 211,730,342 EUR A Class Shares 202.04 8,423,674 USD B Class Shares 114.56 62,213,500 GBP B Class Shares 158.33 14,761,841 EUR B Class Shares 184.62 2,413,939 USD C Class Shares 144.65 40,494,543 GBP C Class Shares 216.78 29,828,728 EUR C Class Shares 253.26 925,306 USD D Class Shares 120.84 14,665,149 GBP D Class Shares 180.72 455,343,200 EUR D Class Shares 208.40 309,773,518 USD E Class Shares 132.30 6,796,625

Veritas China Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD A Class Shares 147.35 15,756,334 145.42 14,797,970 GBP A Class Shares 149.43 4,325,416 149.32 6,309,612 EUR A Class Shares 137.39 188,164 139.15 52,154 GBP B Class Shares 143.05 505,157 143.87 665,803 EUR B Class Shares 138.29 322,694 138.64 273,746

NAV Total Per Share NAV Share Class 2016 2016 USD A Class Shares 127.33 13,020,678 GBP A Class Shares 131.65 6,047,748 EUR A Class Shares 123.30 46,215 GBP B Class Shares 127.17 225,144

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018

(CONTINUED)

15. Comparative net asset value (continued)

Veritas Global Real Return Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD A Class Shares 29.27 47,063,463 26.99 31,057,659 GBP A Class Shares 16.37 72,413,045 15.23 99,988,967 EUR A Class Shares 16.50 3,627,799 15.56 13,430,293 USD B Class Shares 28.04 6,793,329 25.98 6,381,495 GBP B Class Shares 15.87 3,781,954 14.84 3,137,453 EUR B Class Shares 17.44 3,081,105 16.53 2,523,535 USD D Class Shares 29.33 24,226,104 26.99 22,063,515 GBP D Class Shares 16.42 87,278,302 15.26 52,175,115 EUR D Class Shares 16.54 10,186,500 15.58 13,559,727 EUR E Class Shares 16.77 1,346,911 - -

NAV Total Per Share NAV Share Class 2016 2016 USD A Class Shares 24.26 24,186,766 GBP A Class Shares 13.73 89,599,911 EUR A Class Shares 14.21 2,577,496 USD B Class Shares 23.47 3,038,447 GBP B Class Shares 13.44 1,298,663 EUR B Class Shares 15.17 2,011,528 GBP D Class Shares 13.75 4,446,438

Veritas Izoard Fund NAV Total NAV Total Per Share NAV Per Share NAV Share Class 2018 2018 2017 2017 USD C Class Shares 119.59 18,426,165 115.95 14,560,640 GBP C Class Shares 144.26 33,940,308 135.94 31,942,446

NAV Total Per Share NAV Share Class 2016 2016 USD C Class Shares 103.17 12,956,776 GBP C Class Shares 124.94 29,331,238

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

16. Significant matters arising during the year

Euro E Class Shares of the Veritas Global Real Return Fund and Euro C Class Shares of the Veritas Asian Fund were launched on 14 November 2017 and 24 July 2018, respectively.

From 2 July 2018, the Investment Manager was no longer entitled to a performance fee for the Veritas China Fund.

On 1 August 2018, ownership of HSBC Institutional Trust Services (Ireland) DAC (the “Depositary”) transferred to HSBC France. It is the intention that the Depositary will merge into HSBC France in April 2019 and its business will operate from a Dublin branch of HSBC France.

17. Soft commissions

The Company has not entered into any soft commission arrangements during the year. The Investment Manager makes use of commission sharing arrangements with brokerage firms that sell shares or that provide research and advisory services to the Company. This may include situations where the dealing commission on a particular trade or a series of trades is shared between one or more providers of execution and/or research services. In this case a portion of the commission paid by the Investment Manager to the executing broker is used to purchase third party research or execution services.

18. Cross liability

Each Sub-Fund is segregated and there are no cross liabilities between the Sub-Funds.

19. Subsequent events

An updated prospectus was issued on 1 October 2018 to reflect the change in investment objective and policies, risk management process and removal of performance fee for the Veritas China Fund.

There were no other significant events subsequent to the year-end.

20. Approval of financial statements

The Financial Statements were approved by the Board of Directors on 25 January 2019.

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VERITAS ASIAN FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (USD) AIA Group 7,100,000 59,029,644 Alibaba Group 373,915 69,897,660 Aristocrat Leisure 3,700,000 75,276,037 Asian Paints 2,200,000 41,135,191 Axis Bank 2,600,000 22,488,252 Bank Central Asia 16,000,000 27,253,601 BHP Billiton 1,750,000 42,045,195 Boral 5,600,000 31,331,748 China Everbright International 17,000,000 25,671,009 Cochlear 230,000 34,107,206 CP All 23,500,000 54,712,154 CSL 552,459 72,623,068 CSPC Pharmaceutical 20,178,000 47,524,281 Geely Automobiles 7,500,000 24,977,172 Godrej Consumer Products 2,000,000 32,706,838 Gree Electric Appliances (Warrant 16/07/2018) 4,199,833 32,317,791 Hang Seng Bank 1,600,000 39,979,612 Hangzhou Hikvision Digital (Warrant 18/06/2019) 8,049,552 47,013,806 Han's Laser Technology (Warrant 11/03/2019) 2,999,858 26,933,148 HDFC Bank 1,286,200 61,604,238 Indusind Bank 2,000,000 52,107,591 Jiangsu Hengrui Medicine (Warrant 21/11/2018) 4,631,496 47,351,873 Kasikornbank 3,300,000 24,275,911 LG Household & Healthcare 36,220 41,180,561 Maruti Suzuki 450,000 61,364,903 Ping An Insurance Group Company of China 6,200,000 60,675,995 Prada 6,000,000 27,114,697 REA Group 400,000 25,691,212 Samsung Biologics 66,000 27,069,141 Samsung Electronics 759,000 52,387,614 Shanghai Fosun Pharmaceutical Group 4,576,000 26,078,085 Sunny Optical Technology 4,250,000 73,769,764 Sydney Airport 6,000,000 32,875,510 Taiwan Semiconducter 7,374,000 57,983,288 TAL Education Group 1,300,000 49,386,059 Tencent Holdings 1,600,000 80,821,776 Treasury Wine Estates 2,450,000 31,355,653 United Overseas Bank 2,000,000 40,289,177 Venture Corporation 2,300,000 42,631,480 Yum China Holdings 700,000 29,426,303

The Schedule of Changes in Investments reflects the aggregate purchases of a security exceeding one percent of the total value of purchases for the year and aggregate sales of a security exceeding one percent of the total sales for the year.

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VERITAS ASIAN FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

Largest sales Units Proceeds (USD) ALS 4,000,000 22,807,685 Bank Central Asia 16,000,000 25,055,628 BHP Billiton 1,750,000 41,944,660 Boral 5,000,000 23,840,634 Briilliance China Auto 14,500,000 29,148,458 Catcher Technology 3,050,000 33,528,001 Ctrip Com International 300,000 13,666,277 DBS Group 800,000 15,269,694 Geely Automobiles 7,500,000 24,434,602 Gree Electric Appliances (Warrant 12/07/2019) 2,699,833 18,137,853 Gree Electric Appliances (Warrant 16/07/2018) 4,199,833 28,508,044 Hangzhou Hikvision Digital (Warrant 18/06/2019) 8,049,552 37,607,107 Han's Laser Technology (Warrant 11/03/2019) 2,999,858 24,121,972 HDFC Bank 240,000 21,869,048 HDFC Bank (Warrant 08/02/2018) 526,200 15,386,035 Hengan International Group 1,500,000 13,689,953 Hon Hai Precision Industry 7,500,000 24,160,637 Hotel Shilla 180,000 14,395,400 Indusind Bank (Warrant 14/10/2019) 900,000 23,238,903 Jiangsu Hengrui Medicine (Warrant 22/11/2017) 3,331,667 34,709,880 Kweichow Moutai (Warrant 09/11/2017) 439,990 41,707,087 Larsen And Toubro (Warrant 08/02/2018) 900,000 16,793,470 Macquarie Group 300,000 23,454,108 Midea Group (Warrant 13/05/2019) 2,999,920 21,364,805 N C Soft 98,000 33,583,089 NetEase 72,000 21,335,824 Ping An Insurance Group Company of China 4,500,000 41,289,219 Rio Tinto 700,000 42,148,455 Samsonite International 7,000,000 30,560,428 Samsung Biologics 26,000 12,682,216 Samsung Electronics 5,000 12,054,022 Samsung Life Insurance 120,000 13,515,647 Sunny Optical Technology 5,250,000 67,045,199 Sydney Airport 2,000,000 11,118,713 TAL Education Group 1,300,000 52,498,267 Weichai Power 14,944,849 17,113,727 Yum China Holdings 700,000 29,498,631

144

VERITAS FUNDS PLC

VERITAS GLOBAL FOCUS FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (USD) Aena SA 18,000 3,237,299 Allergan 61,900 11,070,073 Alphabet 6,800 7,717,294 American Express 215,600 21,251,958 Black Knight 543,823 25,784,744 Cerner 263,700 15,484,381 Charter Communications 317,600 89,019,975 Cigna 825,900 140,371,819 Comcast 404,800 14,718,557 CVS Caremark 713,100 49,032,248 Dentsply Sirona 1,231,200 63,342,190 Express Scripts Holdings 122,000 7,854,165 Facebook 451,600 78,047,393 Microsoft 66,800 5,636,664 Oracle 69,000 3,138,571 Qualcomm 340,000 19,740,599 Reckitt Benckiser 1,461,300 123,164,365 Rolls Royce 84,300 1,092,622 Unilever 2,210,100 120,860,745

Largest sales Units Proceeds (USD) Airbus Group 1,475,600 170,732,268 American Express 970,521 95,827,960 Baidu 301,567 75,343,907 Baxter International 1,143,730 82,399,810 Charter Communications 37,374 12,646,801 Check Point Software Technology 789,632 79,764,115 Comcast 3,023,829 97,855,871 CVS Caremark 148,451 10,448,724 Express Scripts Holdings 1,642,053 115,110,106 London Stock Exchange Group 2,731,450 160,249,619 Microsoft 802,977 79,694,998 Millicom International Cellular SA 973,224 63,767,844 Orsted 1,083,439 68,873,221 Qualcomm 1,387,387 101,746,863 Rolls Royce 888,985 10,496,592 Safran SA 1,033,033 105,971,410 Sonic Healthcare 2,191,640 39,457,677 Thermo Fisher Scientific 49,180 9,389,937 United Health 43,330 9,113,599 Waters 147,809 29,644,100

145

VERITAS FUNDS PLC VERITAS GLOBAL EQUITY INCOME FUND SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (GBP) British American Tobacco 171,400 6,621,299 CVS Caremark 275,600 14,453,060 Fortune Real Estate Investment Trust 14,282,237 12,741,953 Prudential 1,100,000 19,497,766 Reckitt Benckiser 325,600 19,903,279 Sanofi 200,900 11,772,641 Unilever 389,900 14,998,125 Welltower 103,400 5,377,643

Largest sales Units Proceeds (GBP) Aena SA 110,200 15,612,658 Airbus Group 542,500 43,167,241 Aurizon Holdings 7,575,469 21,815,706 BP 4,146,608 21,160,337 CVS Caremark 368,400 18,493,080 ENI 2,481,600 31,978,360 Global Logistic Properties 15,276,600 28,074,709 HSBC Holdings 3,801,229 29,184,086 London Stock Exchange Group 790,400 31,946,946 Microsoft 378,500 24,351,761 Millicom International Cellular SA 431,100 20,733,550 NetLink NBN Trust 14,447,400 6,673,809 Novartis 325,800 19,643,059 Pfizer 232,600 6,185,499 Qualcomm 649,700 34,403,934 Express Scripts Holdings 2,095,400 33,252,077 Safran SA 626,000 50,884,526 Sanofi 207,800 13,071,875 Singapore Telecommunications 8,709,100 18,140,376 Sonic Healthcare 1,616,700 20,899,208 Stericycle 356,000 12,193,505 United Overseas Bank 1,864,500 28,305,568 Welltower 136,700 7,053,239

146

VERITAS FUNDS PLC

VERITAS CHINA FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (USD) AAC Technologies Holdings 105,000 2,145,559 AIA Group 290,000 2,245,368 Aier Eye Hospital Group (Warrant 29/01/2019) 150,000 833,064 Alibaba Group 11,000 1,940,741 BeiGene 10,000 1,691,057 Bitauto Holdings 20,000 633,170 BYD 100,000 946,420 China Biologic Products Holdings 10,000 993,986 China Lodging Group 12,000 1,560,440 China Molybdenum 1,000,000 794,266 Geely Automobiles 500,000 1,697,002 Hangzhou Hikvision Digital (Warrant 20/06/2018) 179,975 1,093,751 Han's Laser Technology (Warrant 11/03/2019) 99,986 913,688 Hengan International Group 80,000 813,873 Jiangsu Hengrui Medicine (Warrant 21/11/2018) 99,993 1,001,265 Kweichow Moutai (Warrant 09/11/2017) 30,000 2,393,928 NetEase 3,000 998,307 Ping An Insurance Group Company of China 80,000 875,391 Qudian 20,000 633,866 Shanghai Fosun Pharmaceutical Group 180,000 1,168,229 Shenzou International Group 50,000 572,196 Sinopec Shanghai Petrochemical 1,000,000 617,678 Sunny Optical Technology 85,000 1,308,574 TAL Education Group 70,000 2,337,075 Tencent Holdings 90,000 4,241,859 Tingyi 650,000 1,352,808 Vipshop Holdings 60,000 1,099,404 Weibo Corporation 18,000 1,981,244 WuXi Biologics 100,000 1,021,225 Wuxi Lead Intelligent Equipment (Warrant 14/11/2018) 100,000 1,182,533 Yum China Holdings 20,000 855,610 Zhuzhou CRRC Times Electric 100,000 558,097

147

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VERITAS CHINA FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

Largest sales Units Proceeds (USD) AAC Technologies Holdings 105,000 1,695,742 AIA Group 290,000 2,473,602 Aier Eye Hospital Group (Warrant 29/01/2019) 224,991 1,113,219 Alibaba Group 11,000 2,027,243 BeiGene 10,000 1,663,217 Briilliance China Auto 500,000 1,372,868 BYD 100,000 595,257 China Lodging Group 36,000 2,143,401 China Molybdenum 1,000,000 629,825 Chow Tai Fook Jewellery Company 983,000 1,056,290 CSPC Pharmaceutical 1,000,000 2,367,921 Fortune Real Estate Investment Trust 600,000 737,921 Geely Automobiles 500,000 1,681,826 Hangzhou Hikvision Digital (Warrant 20/06/2018) 179,975 1,037,978 Han's Laser Technology (Warrant 11/03/2019) 99,986 803,991 Hengan International Group 80,000 846,079 Jiangsu Hengrui Medicine (Warrant 21/11/2018) 99,993 987,777 Kweichow Moutai (Warrant 09/11/2017) 30,000 2,803,384 NetEase 6,000 1,807,080 New Oriental Education and Technology 10,000 825,382 Ping An Insurance Group Company of China 80,000 776,393 Qudian 20,000 536,812 Samsonite International 150,000 609,525 Shangri-La Asia 1,100,000 2,167,559 Shenzou International Group 50,000 613,372 Sinopec Shanghai Petrochemical 1,000,000 640,893 Sunny Optical Technology 180,000 3,093,131 TAL Education Group 70,000 2,642,628 Tencent Holdings 50,000 2,619,906 Tingyi 650,000 1,395,523 Vipshop Holdings 60,000 1,067,663 Weibo Corporation 18,000 1,989,178 WuXi Biologics 100,000 1,103,208 Wuxi Lead Intelligent Equipment (Warrant 14/11/2018) 100,000 895,721 Xingda International Holdings 1,500,000 546,066 Yum China Holdings 20,000 906,967

148

VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (GBP) Aena SA 8,300 1,138,521 Allergan 4,000 567,450 Alphabet 1,600 1,314,138 American Express 15,600 1,098,430 Black Knight 46,675 1,584,157 Cerner 18,900 799,019 Charter Communications 22,800 4,768,046 Cigna 72,900 8,926,517 ConvaTec group 1,010,200 1,980,528 CVS Caremark 59,400 3,065,752 Dentsply Sirona 125,400 4,882,285 Facebook 38,700 4,832,966 Franco-Nevada 62,600 3,027,505 Microsoft 1,400 87,270 Oracle 6,000 195,438 Qualcomm 35,600 1,564,284 Reckitt Benckiser 124,500 7,661,778 Rolls Royce 37,700 370,459 Unilever 188,400 7,482,186

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VERITAS FUNDS PLC

VERITAS GLOBAL REAL RETURN FUND

SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

Largest sales Units Proceeds (GBP) Airbus Group 126,100 10,816,929 Allergan 7,500 851,055 American Express 71,900 5,389,857 Baidu 20,700 3,742,361 Baxter International 20,200 1,155,334 Check point Software Technology 70,021 5,312,948 Cigna 2,500 319,414 Comcast 267,700 6,329,818 CVS Caremark 5,700 273,191 Express Scripts Holdings 149,000 7,450,307 London Stock Exchange Group 175,600 7,816,850 Microsoft 56,400 4,309,115 Millicom International Cellular 42,000 2,017,184 Orsted 73,796 3,637,064 Qualcomm 111,500 6,154,143 Safran SA 78,200 6,139,466 Sonic Healthcare 169,300 2,323,423 Thermo Fisher Scientific 2,200 348,331 United Health Group 2,000 363,185

150

VERITAS FUNDS PLC

VERITAS IZOARD FUND SCHEDULE OF CHANGES IN INVESTMENTS (UNAUDITED) FOR THE YEAR ENDED 30 SEPTEMBER 2018

Largest purchases Units Cost (USD) Charter Communications 5,300 1,485,535 Cigna 16,600 3,088,759 CVS Caremark 8,100 557,452 Reckitt Benckiser 25,100 2,146,336 Unilever 38,000 2,072,029

Largest sales Units Proceeds (USD) American Express 15,000 1,494,439 Comcast 62,000 1,965,950 London Stock Exchange Group 42,400 2,517,530 Microsoft 10,700 1,082,766 Orsted 34,120 2,195,500 Qualcomm 25,400 1,886,806 Safran SA 21,000 2,154,870 Sonic Healthcare 28,900 534,446

A full list is available free of charge from the administrator.

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SUPPLEMENTARY INFORMATION (UNAUDITED)

1. Total expense ratio

The total expense ratio for each share class of each Sub-Fund for the year ended 30 September 2018 is as follows:

Veritas Asian Fund USD A Class Shares 1.16% GBP A Class Shares 1.16% EUR A Class Shares 1.16% USD B Class Shares 1.66% GBP B Class Shares 1.66% EUR B Class Shares 1.66% USD C Class Shares 0.91% GBP C Class Shares 0.91% EUR C Class Shares 0.91% USD D Class Shares 0.91% GBP D Class Shares 0.91%

Veritas Global Focus Fund USD A Class Shares 1.12% GBP A Class Shares 1.12% EUR A Class Shares 1.12% USD B Class Shares 1.62% GBP B Class Shares 1.62% EUR B Class Shares 1.62% USD C Class Shares 0.87% GBP C Class Shares 0.87% EUR C Class Shares 0.87% USD D Class Shares 0.87% GBP D Class Shares 0.87% EUR D Class Shares 0.87%

Veritas Global Equity Income Fund USD A Class Shares 1.13% GBP A Class Shares 1.13% EUR A Class Shares 1.13% USD B Class Shares 1.63% GBP B Class Shares 1.63% EUR B Class Shares 1.63% USD C Class Shares 0.88% GBP C Class Shares 0.88% EUR C Class Shares 0.88% USD D Class Shares 0.88% GBP D Class Shares 0.88% EUR D Class Shares 0.88% USD E Class Shares 1.63%

Veritas China Fund USD A Class Shares 1.36% GBP A Class Shares 1.37% EUR A Class Shares 1.34% GBP B Class Shares 1.87% EUR B Class Shares 1.86%

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SUPPLEMENTARY INFORMATION (UNAUDITED) (CONTINUED)

1. Total expense ratio (continued)

Veritas Global Real Return Fund USD A Class Shares 1.16% GBP A Class Shares 1.17% EUR A Class Shares 1.17% USD B Class Shares 1.66% GBP B Class Shares 1.66% EUR B Class Shares 1.66% USD D Class Shares 1.01% GBP D Class Shares 1.01% EUR D Class Shares 1.02% EUR E Class Shares 1.00%

Veritas Izoard Fund USD C Class Shares 0.67% GBP C Class Shares 0.67%

2. Fund performance data

The percentage total return of one share, of each share class from inception is calculated in accordance with the Swiss Funds Association and is detailed below:

12 month period Inception to to 30 September 30 September Share Class 2018 2018

Veritas Asian Fund USD A Class Shares 3.94% 341.64% GBP A Class Shares 6.88% 528.94% EUR A Class Shares 5.71% 333.27% USD B Class Shares 3.61% 206.74% GBP B Class Shares 6.60% 363.03% EUR B Class Shares 5.45% 219.08% USD C Class Shares 4.39% 42.27% GBP C Class Shares 7.40% 32.73% EUR C Class Shares - (6.11%) USD D Class Shares 3.89% 38.37% GBP D Class Shares 6.80% 30.63%

Veritas Asian Fund Benchmark MSCI AC Asia Pacific ex Japan (USD A Class Shares) MSCI AC Asia Pacific ex Japan (GBP A Class Shares) MSCI AC Asia Pacific ex Japan (EUR A Class Shares) MSCI AC Asia Pacific ex Japan (USD B Class Shares) MSCI AC Asia Pacific ex Japan (GBP B Class Shares) MSCI AC Asia Pacific ex Japan (EUR B Class Shares) MSCI AC Asia Pacific ex Japan (USD C Class Shares) MSCI AC Asia Pacific ex Japan (GBP C Class Shares) MSCI AC Asia Pacific ex Japan (EUR C Class Shares) MSCI AC Asia Pacific ex Japan (USD D Class Shares) MSCI AC Asia Pacific ex Japan (GBP D Class Shares)

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SUPPLEMENTARY INFORMATION (UNAUDITED) (CONTINUED)

2. Fund performance data (continued)

12 month period Inception to to 30 September 30 September Share Class 2018 2018

Veritas Global Focus Fund USD A Class Shares 8.56% 242.53% GBP A Class Shares 11.71% 346.02% EUR A Class Shares 10.49% 79.30% USD B Class Shares 8.07% 144.82% GBP B Class Shares 11.25% 237.79% EUR B Class Shares 10.06% 111.60% USD C Class Shares 8.94% 277.06% GBP C Class Shares 12.08% 389.62% EUR C Class Shares 10.88% 227.66% USD D Class Shares 8.57% 254.78% GBP D Class Shares 11.70% 361.68% EUR D Class Shares 10.50% 207.61%

Veritas Global Equity Income Fund USD A Class Shares 0.60% 32.07% GBP A Class Shares 3.50% 95.93% EUR A Class Shares 2.39% 122.46% USD B Class Shares 0.09% 29.06% GBP B Class Shares 2.98% 77.68% EUR B Class Shares 1.88% 101.22% USD C Class Shares 4.76% 78.21% GBP C Class Shares 7.78% 166.03% EUR C Class Shares 6.62% 201.87% USD D Class Shares 0.86% 38.22% GBP D Class Shares 3.76% 105.90% EUR D Class Shares 2.59% 130.46% USD E Class Shares 4.15% 50.43%

Veritas China Fund USD A Class Shares 1.33% 47.35% GBP A Class Shares 0.07% 49.43% EUR A Class Shares (1.27%) 37.39% USD B Class Shares N/A N/A GBP B Class Shares (0.57%) 43.05% EUR B Class Shares (0.25%) 38.29%

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SUPPLEMENTARY INFORMATION (UNAUDITED) (CONTINUED)

2. Fund performance data (continued)

12 month period Inception to to 30 September 30 September Share Class 2018 2018

Veritas Global Real Return Fund USD A Class Shares 8.48% 192.74% GBP A Class Shares 7.47% 63.69% EUR A Class Shares 6.03% 65.00% USD B Class Shares 7.93% 180.40% GBP B Class Shares 6.94% 58.66% EUR B Class Shares 5.52% 74.44% USD D Class Shares 8.67% 21.45% GBP D Class Shares 7.59% 64.16% EUR D Class Shares 6.16% 16.36% EUR E Class Shares - 6.99%

Veritas Izoard Fund USD C Class Shares 3.14% 19.59% GBP C Class Shares 6.12% 44.26%

12 month period Inception to to 30 September 30 September Share Class 2017 2017

Veritas Asian Fund USD A Class Shares 20.07% 324.91% GBP A Class Shares 16.03% 488.44% EUR A Class Shares 13.93% 309.85% USD B Class Shares 19.87% 196.05% GBP B Class Shares 16.01% 334.38% EUR B Class Shares 13.87% 202.57% USD C Class Shares 0.00% 36.29% GBP C Class Shares 0.00% 23.59% USD D Class Shares 0.00% 33.19% GBP D Class Shares 0.00% 22.31%

Veritas Asian Fund Benchmark MSCI AC Asia Pacific ex Japan (USD A Class Shares) MSCI AC Asia Pacific ex Japan (GBP A Class Shares) MSCI AC Asia Pacific ex Japan (EUR A Class Shares) MSCI AC Asia Pacific ex Japan (USD B Class Shares) MSCI AC Asia Pacific ex Japan (GBP B Class Shares) MSCI AC Asia Pacific ex Japan (EUR B Class Shares) MSCI AC Asia Pacific ex Japan (USD C Class Shares) MSCI AC Asia Pacific ex Japan (GBP C Class Shares) MSCI AC Asia Pacific ex Japan (USD D Class Shares) MSCI AC Asia Pacific ex Japan (GBP D Class Shares)

155

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SUPPLEMENTARY INFORMATION (UNAUDITED) (CONTINUED)

2. Fund performance data (continued)

12 month period Inception to to 30 September 30 September Share Class 2017 2017

Veritas Global Focus Fund USD A Class Shares 20.71% 215.53% GBP A Class Shares 16.85% 299.28% EUR A Class Shares 14.72% 62.27% USD B Class Shares 20.17% 126.55% GBP B Class Shares 16.44% 203.63% EUR B Class Shares 14.24% 92.26% USD C Class Shares 21.09% 246.12% GBP C Class Shares 17.24% 336.84% EUR C Class Shares 15.10% 195.50% USD D Class Shares 20.71% 226.79% GBP D Class Shares 16.88% 313.33% EUR D Class Shares 14.78% 178.38%

Veritas Global Equity Income Fund USD A Class Shares 13.13% 31.28% GBP A Class Shares 9.53% 89.31% EUR A Class Shares 7.53% 117.26% USD B Class Shares 12.56% 28.94% GBP B Class Shares 8.98% 72.54% EUR B Class Shares 6.99% 97.52% USD C Class Shares 17.60% 70.11% GBP C Class Shares 13.86% 146.84% EUR C Class Shares 11.79% 183.11% USD D Class Shares 13.41% 37.04% GBP D Class Shares 9.80% 98.43% EUR D Class Shares 7.80% 124.65% USD E Class Shares 9.17% 44.43%

Veritas China Fund USD A Class Shares 14.20% 45.42% GBP A Class Shares 13.42% 49.32% EUR A Class Shares 12.85% 39.15% USD B Class Shares N/A N/A GBP B Class Shares 13.13% 43.87% EUR B Class Shares N/A N/A

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SUPPLEMENTARY INFORMATION (UNAUDITED) (CONTINUED)

2. Fund performance data (continued)

12 month period Inception to to 30 September 30 September Share Class 2017 2017

Veritas Global Real Return Fund USD A Class Shares 11.25% 169.86% GBP A Class Shares 10.90% 52.31% EUR A Class Shares 9.49% 55.62% USD B Class Shares 10.67% 159.80% GBP B Class Shares 10.36% 48.36% EUR B Class Shares 8.96% 65.32% USD D Class Shares 0.00% 11.77% GBP D Class Shares 10.96% 52.57% EUR D Class Shares 0.00% 9.62%

Veritas Izoard Fund USD C Class Shares 12.38% 15.95% GBP C Class Shares 8.81% 35.94%

Past performance is no indication of current or future performance and that the performance data do not take account of commissions and costs incurred on the issue and redemption of units.

The Extract Prospectus, the documents of the Company listed in the Extract Prospectus, the yearly and half-yearly reports as well as the Articles and the simplified Extract Prospectus, can be obtained, or be ordered free of charge, from the Zurich branch of the Swiss Representative during normal business hours.

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APPENDIX

The Securities Financing Transaction Regulation Disclosure

The Securities Financing Transactions Regulation (SFTR) introduces mandatory reporting for Securities Financing Transactions (SFTs) and sets minimum disclosure and consent requirements on the re-use of collateral with the aim of improving transparency in the SFT market.

A Securities Financing Transaction (SFT) is defined as per Article 3(11) of the SFTR as:

 a repurchase transaction;  securities or commodities lending and securities or commodities borrowing;  any transaction having an equivalent economic effect, in particular a buy-sell back transaction or sell-buy back transaction; or  a margin lending transaction.

As at 30 September 2018 and 30 September 2017 the Sub-funds held no SFTs’ and therefore SFT reporting requirements do not apply to the Company.

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VERITAS FUNDS PLC

ADDITIONAL INFORMATION

UCITS V – Disclosure of Remuneration Policy

Veritas Funds Plc (the “Company”) has implemented a remuneration policy pursuant to Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards to depositary functions, remuneration policies and sanctions (the “UCITS V Directive”).

This remuneration policy has been adopted by the Board of Directors in their supervisory function and who will be responsible for (i) reviewing the general principles of the remuneration policy on an annual basis and (ii) ensuring that the implementation of the remuneration policy is subject to review on an annual basis. Any revisions to the remuneration policy will also require their approval.

The Company is a self-managed investment company with no employees, other than the Board of Directors. This remuneration policy addresses the remuneration requirements of the UCITS V Directive as they apply to the Company. The Company will ensure that appropriate contractual arrangements are put in place with entities to which investment management is delegated to ensure that the UCITS remuneration rules are not circumvented or that such delegates are subject to regulatory requirements on remuneration which are equally effective as those applicable under the ESMA Guidelines on Sound Remuneration Policies under the UCITS Directive ESMA 2016/575 (the “ESMA Guidelines”). Contractual arrangements relate to any payments made to delegates’ identified staff as compensation for performance of investment management activities on behalf of the Company.

The Board of Directors of the Company consists of only non-executive Directors. The members of the Board of Directors receive a fixed fee only and do not receive performance-based remuneration therefore avoiding a potential conflict of interest. The basic fee of a Board member is set at a level that is on par with the rest of the market and reflects the qualifications and contribution required in view of the Company’s business strategy, objectives, values and the values of its Shareholders, the extent of the responsibilities of the Board and the number of board meetings. No pension contributions are payable on Board members’ fees.

Taking into account the Company’s size, internal organisation nature, the scope and complexity of its activities, the Board of Directors has decided to dis-apply the remuneration committee requirement. The Board is satisfied that this disapplication is reconcilable with the risk profile, risk appetite and the strategy of the Company and its Sub-Funds.

Additionally as the Company does not pay any variable remuneration to any of the Directors appointed by the Company, the “pay out process rules” as set out in the UCITS V Directive are not applicable to the Company and an assessment of whether they need to be dis-applied is not required.

Remuneration of Veritas Asset Management LLP (the “Investment Manager”) split into fixed and variable is detailed in Note 3 of the financial statements. During the period, remuneration of USD 54,134,532 was paid by the Company to the Investment Manager of which USD 4,373,826 remained outstanding at period end.

The Investment Manager is regulated by the UK Financial Conduct Authority ("FCA") and complies with the Remuneration Code of the FCA ("the Code"). As part of the Code, the Investment Manager discloses on an annual basis, its remuneration policies and procedures, and the proportion of overall remuneration (both fixed and variable) that is assigned to senior management (including executives) and members of staff of the Investment Manager whose actions have a material impact on the risk profile of the Company and other investment mandates run by the Investment Manager ("Code Staff"). In the most recent disclosure, the proportion of overall remuneration assigned to Code Staff was over 90%.

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