Eaton Vance International (Ireland) Funds Plc Annual
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EATON VANCE INTERNATIONAL (IRELAND) FUNDS PLC (Public limited liability investment company with variable capital incorporated in Ireland) ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS For the Financial Year Ended 31 December 2016 Eaton Vance International (Ireland) Funds plc For the Financial Year Ended 31 December 2016 TABLE OF CONTENTS Background Information . .2 Directors’ Report . .3 Depositary’s Report . .6 Independent Auditor’s Report . .7 Management Discussion. .9 Portfolio of Investments . .14 Statement of Financial Position . .84 Statement of Comprehensive Income . .86 Statement of Changes in Net Assets. .88 Notes to the Financial Statements . .90 Total Expense Ratios (Unaudited) . .121 Fund Performance (Unaudited) . .122 Statement of Changes in Composition of Portfolios (Unaudited) . .123 Additional Information (Unaudited) . .131 Directors and Other Information (Unaudited). .13 3 Eaton Vance International (Ireland) Funds plc For the Financial Year Ended 31 December 2016 BACKGROUND INFORMATION Principal activities and review of the operations Eaton Vance International (Ireland) Funds plc (the “Company”) is a public limited liability investment company with variable capital incorporated on 9 August 1999 in Ireland pursuant to the Companies Act 2014 (the “Companies Act”) and authorised by the Central Bank of Ireland (the “Central Bank”) as an investment company pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended) (the “UCITS Regulations”) 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”). The Company is an umbrella type open-ended investment company comprising of seven sub-funds (the “Sub-Funds”); • Eaton Vance International (Ireland) Global Macro Fund (“Global Macro Fund”) • Eaton Vance International (Ireland) Hexavest All-Country Global Equity Fund (“Hexavest All-Country Global Equity Fund”) • Eaton Vance International (Ireland) Hexavest Global Equity Fund (“Hexavest Global Equity Fund”) • Eaton Vance International (Ireland) Parametric Emerging Markets Core Fund (“Parametric Emerging Markets Core Fund”) • Eaton Vance International (Ireland) Parametric Emerging Markets Fund (“Parametric Emerging Markets Fund”) • Eaton Vance International (Ireland) U.S. High Yield Bond Fund (“U.S. High Yield Bond Fund”) • Eaton Vance International (Ireland) U.S. Value Fund (“U.S. Value Fund”) Shares of the Eaton Vance International (Ireland) Multi-Sector Income Fund (“Multi-Sector Income Fund”) were fully redeemed on 28 June 2016. The approval of the Eaton Vance International (Ireland) Hexavest European Equity Fund was revoked by the Central Bank, at the Company’s request, on 5 July 2016. The net asset values of the Sub-Funds are posted on the Eaton Vance Management (International) Ltd. website: http://global.eatonvance.com. Investment Objectives Global Macro Fund: The investment objective of the Global Macro Fund is to seek to return income plus capital appreciation. Hexavest All-Country Global Equity Fund and Hexavest Global Equity Fund (the “Hexavest Sub-Funds”): The investment objective of the Hexavest Sub-Funds is to seek long-term capital appreciation. Multi-Sector Income Fund: The investment objective of the Multi-Sector Income Fund was to achieve total return through a combination of current income and capital appreciation. Parametric Emerging Markets Core Fund and Parametric Emerging Markets Fund (the “Parametric Sub-Funds”): The investment objective of the Parametric Sub-Funds is to seek long-term capital appreciation. U.S. High Yield Bond Fund: The investment objective of the U.S. High Yield Bond Fund is to achieve a high level of current income. U.S. Value Fund: The investment objective of the U.S. Value Fund is to seek long-term capital growth. For additional information on how the Sub-Funds achieve their investment objectives, in accordance with the Central Bank UCITS Regulations, please consult the prospectus and relevant supplements. 2 Eaton Vance International (Ireland) Funds plc For the Financial Year Ended 31 December 2016 DIRECTORS’ REPORT The directors of the Company (the “Directors”) submit their annual report together with the audited financial statements for the financial year ended 31 December 2016. Directors’ Responsibilities Statement The Directors are responsible for preparing the Directors’ report and the financial statements in accordance with the Companies Act 2014 and the applicable regulations. Irish company law requires the Directors to prepare financial statements for each financial year. Under Irish company law, the Directors have elected to prepare the financial statements in accordance with FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland (“relevant financial reporting framework”). Under Irish company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company as at the financial year end date and of the profit or loss of the Company for the financial year and otherwise comply with the Companies Act 2014. In preparing the Company’s financial statements, the Directors are required to: • select suitable accounting policies for the Company’s financial statements and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether the financial statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; 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 are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy, enable them to ensure that the financial statements and Directors’ Report comply with the Companies Act 2014 and with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the “UCITS Regulations”) and Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015, and enable the financial statements to be audited. 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. Corporate Governance Statement The board of Directors (the “Board”) has adopted the voluntary Irish Funds (IF) (formerly Irish Funds Industry Association (IFIA)) Corporate Governance Code for Irish domiciled Collective Investment Schemes and Management Companies, issued 14 December 2011 (the “Code”) with effect from 31 December 2012. The Board has reviewed and assessed the measures included in the Code and considers its corporate governance practices and procedures since the adoption of the Code as consistent therewith. Approval of Reduced Disclosures The Company, as a qualifying entity, has taken advantage of the disclosures exemptions in paragraph 1.12 of FRS 102. An exemption has been taken in these financial statements in relation to the presentation of a statement of cash flows. Accounting Records The measures taken by the Directors to secure compliance with the Company’s obligation under section 281 to 285 of the Companies Act 2014 to keep adequate accounting records, are the use of appropriate systems and procedures and employment of competent persons. The accounting records are kept at Citibank Europe Plc, 1 North Wall Quay, Dublin 1, Ireland. Principal Activities The Company is organised as an investment company with variable capital under the laws of Ireland as a public limited liability investment company pursuant to the Companies Act 2014, and the UCITS Regulations. The Company is organised in the form of an umbrella fund with segregated liability between Sub-Funds. The Company had no employees during the financial year ended 31 December 2016 and 31 December 2015. 3 Eaton Vance International (Ireland) Funds plc For the Financial Year Ended 31 December 2016 DIRECTORS’ REPORT CONT’ D Review of the Business and Future Developments The business of the Company is reviewed in detail in the Management Discussion on pages 9 to 13. The performance of the various share classes on offer is detailed in the Fund Performance section on page 122. The Company intends to continue promoting and generating interest in its business in the future. Risk Management Objectives and Policies Details of the risks applicable to an investment in the Company are listed in Note 10 of the financial statements, “Derivatives and other financial information”, including market price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk. In order to manage such risks, the Company shall comply with the investment restrictions and diversification limits provided for in the prospectus and the UCITS Regulations. Results and Dividends The results for the financial year and particulars relating to distributions are stated on pages 84 to 87 of