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Arctic Funds Plc

Annual Report and Audited Financial Statements For the financial year ended 31 December 2015

Registered Number: 487003

Arctic Funds Plc Annual Report and Audited Financial Statements For the financial year ended 31 December 2015

Contents Page

1

Directors and Other Information 2

Directors’ Report 3

Investment Manager’s Report 6

Custodian’s Report 8

Portfolio of Investments 9

Independent Auditor’s Report 30

Statement of Financial Position 32

Statement of Comprehensive Income 36

Statement of Changes in Net Assets attributable to Redeemable Participating Shareholders 38

Notes to the Financial Statements 40

Statement of Portfolio Changes (unaudited) 71


Directors and Other Information

2

Registered Office

2nd Floor Beaux Lane House Mercer Street Lower Dublin 2 Ireland

Directors

John Fitzpatrick (Irish)* Tom Murray (Irish)* (resigned 2 November 2015) Bengt Arve Rem (Norwegian) Fiona Mulhall (Irish)* (appointed 2 November 2015) * Independent Director All Directors are Non Executive

Investment Manager and Distributor

Arctic Fund Management AS Haakon VIIs gate 5 7th Floor, NO-0161 Oslo Norway

Custodian

BNY Mellon Trust Company (Ireland) Limited Guild House Guild Street IFSC Dublin 1 Ireland

Administrator

BNY Mellon Investment Servicing (International) Limited Riverside Two Sir John Rogerson’s Quay Grand Canal Dock Dublin 2 Ireland

Independent Auditor

Deloitte Chartered Accountants and Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2 Ireland

Swedish Paying Agent

Skandinaviska Enskilda Banken AB Sergels Torg 2 SE-106 40 Stockholm Sweden

Irish Legal Adviser

Maples and Calder 75 St. Stephen's Green Dublin 2 Ireland

Norwegian Legal Adviser

Bugge, Arentz-Hansen and Rasmussen Stranden 1 P.O. Box 1524 Vika, N-0117 Oslo Norway

Secretary

MFD Secretaries Limited 2nd Floor Beaux Lane House Mercer Street Lower Dublin 2 Ireland

Promoter

Arctic Securities AS P.O. Box 1833 Vika N-0123 Oslo Norway

Distributor

Arctic Fund Management AS Haakon VIIs gate 5 7th Floor, NO-0161 Oslo Norway

Sub-Distributors

Fundsettle EOC Nominees Ltd 2 Lambs Passage ECIY 8BB London England Nordnet Bank AB Gustavslundsvägen 141 SE-167 14 Bromma Sweden UBS AG Bahnhofstrasse 45 CH-8098 Zurich Switzerland MFEX Mutual Funds Exchange AB Linnégatan 9-11 SE-114 47 Stockholm Sweden


Directors’ Report

3

The Board of Directors (the “Directors”) present their annual report together with the audited financial statements for the financial year ended 31 December 2015. Arctic Funds Plc (the “Company”) is an open ended umbrella investment company with registration number 487003.

The Company is a public limited liability investment company with variable capital and segregated liability between its sub-funds. The Company was authorised by the Central Bank of Ireland (the “Central Bank”) on 5 November 2010 as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (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”). As at 31 December 2015, there are five active sub-funds, Arctic Return, Arctic Global Equities, Arctic High Return, Arctic Investment Grade and Arctic Norwegian Equities (each a “Fund” and collectively the “Funds” ). Arctic Return has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class I NOK Shares and Class R NOK Shares. Arctic Global Equities has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class H Hedged NOK Shares and Class I NOK Shares. Arctic High Return has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class C NOK Shares and Class D NOK Shares. Arctic Investment Grade has three classes of share in issue designated as Class B NOK Shares, Class B SEK Shares and Class D NOK Shares. Arctic Norwegian Equities has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class D NOK Shares and Class I NOK Shares.

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 the law, the directors have elected to prepare the financial statements in accordance with FRS 102: The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (“relevant financial reporting framework”). Under 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 those financial statements, the Directors are required to:

select suitable accounting policies for the Company 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 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.

Review of Business and Future Developments

The Investment Manager’s Report contains a review of the factors which contributed to the performance for the financial year.

Arctic Covered changed its name and investment policy in February 2015. The new name of the Fund is Arctic Return. The main market for the Fund is the Nordic bond market. The Fund invests in bonds and money market instruments issued or guaranteed by governments in the Nordic countries or other governments within Europe, local authorities within Nordic countries or other European countries, as well as financial institutions and reputable and financially sound companies within Nordic countries and other countries in Europe.


Directors’ Report (Continued)

4

Review of Business and Future Developments (Continued)

The Directors do not anticipate any changes in the structure of the Company or investment objectives of the Funds in the immediate future.

Risk Management Objectives and Policies

Information in relation to the Company’s risk management objectives and policies are included in Note 10 to the financial statements.

Significant Events

See Note 15 for details of significant events during the financial year.

Post Balance Sheet Events

There were no significant events affecting the Company since the financial year end.

Results and Dividends

The results and distributions for the financial year are set out in the Statement of Comprehensive Income. See Note 5 for details of distributions made during the financial year.

Directors

The names of the persons who are Directors of the Company for the financial year ended 31 December 2015 are set out below:

John Fitzpatrick Tom Murray (resigned 2 November 2015) Bengt Arve Rem Fiona Mulhall (Irish) (appointed 2 November 2015)

Directors’ and Secretary’s Interests

The Directors are not aware of any shareholding in the Company by any Director, the Secretary or their families during the financial year ended and as at 31 December 2015 and 31 December 2014.

Accounting Records

The Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to the accounting records by employing the resources of an administrator, BNY Mellon Investment Servicing (International) Limited (the “Administrator”). During the financial year, the accounting records of the Company were maintained at the offices of the Administrator: Riverside Two, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2.

Transactions Involving Directors

The Directors are not aware of any other contracts or arrangements of any significance in relation to the business of the Company in which any Director had any beneficial interest as defined in the Companies Act 2014 at any time during the financial year ended 31 December 2015 and 31 December 2014.

Corporate Governance Statement

The Board has voluntarily adopted the Irish Funds Industry Association (IF) Corporate Governance Code for Irish domiciled Collective Investment Schemes and Management Companies, issued 14 December 2011 (the “Code”) with effect from 15 November 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.

Connected party transactions

In accordance with Section 41(1) of the Central Bank UCITS Regulations, any transactions carried out with a UCITS by a promoter, manager, trustee, investment manager and/or associated or group companies of these (“connected parties”) must be carried out as if negotiated at arm’s length and that all such transactions must be in the best interest of the shareholders. The Board of Directors is satisfied that transactions with connected parties entered into during the financial year complied with the obligations set out in UCITS Regulation 41(1).


Investment Manager’s Report

6

Arctic Return

Arctic Return (the “Fund”) returned 0.79% for the financial year 2015. The 3-month Norwegian Treasury Bills Index (ST1X) returned 0.88% during the same period.

2015 was the first financial year for the Fund under the new mandate, where up to 30% of the portfolio can be invested in High Yield (HY) bonds. The first half of the financial year was thus coined by the change in mandate and the building up of HY positions. In the second half of the financial year, the Fund was influenced by the adverse developments in the Investment Grade and High Yield market. The Fund was able to achieve a reasonable performance due to limited energy exposure and short maturities in the HY part of the portfolio.

The running yield stood at 3.5% at the end of the financial year, up from 2.8% at the end of June.

Arctic Global Equities

Arctic Global Equities (the “Fund”) returned 14.57% for the financial year 2015, in comparison to the benchmark MSCI All Country World Index which yielded 15.98%. The stocks contributing most to the Fund’s performance last year were large companies such as Renault SA, Alphabet Inc (formerly Google), and Dow Chemical Co. Conversely, Volkswagen AG, Micron Technology Inc and Nippon Steel & Sumitomo Metal Corp were the weakest performers.

The Fund had significant overweight against the industrial sector during 2015. On the other hand, the Fund had a small overweight in materials – but stock selection contributed positively to return. Healthcare and financial sectors had small underweights during the financial year, and there were no exposure against utilities.

Arctic High Return

Arctic High Return (the “Fund”) yielded -4.27% for the financial year 2015. The 3-month Government Certificate Index (ST1X) had returned 0.88% in the same period.

2015 turned out to be the weakest financial year for the Fund since 2008. European and American HY indices returned 0.5% and -5.0% in 2015. Margins for the European HY Index iTraxx Crossover tightened by 31 basis points (bps) from 345bps to 314bps.

Driven by an ever lower oil price, the Norwegian HY market repriced sharply after the summer in a similar manner than 2014. However, throughout the period of spread widening, liquidity in the market was better than the financial year before. The energy sector was once again most affected, where we further reduced exposure. With spread levels almost at par with what we experienced during the financial crisis, increasing exposure for long term investors now look attractive and the running yield of the Fund is now 11.7%.

Arctic Investment Grade

Arctic Investment Grade (the “Fund”) returned 0.22% for the financial year 2015. The 3-month Norwegian Treasury Bills Index (ST1X) returned in the same period 0.88%.

The Investment Grade segment saw a sharp repricing after the summer that lead to the first month of negative returns in the history of the Fund. The spread widening, which was among other reasons caused by lower liquidity in the market, occurred across all segments. Since June 2015, spreads in covered bonds have widened around 30bps and in all other segments between 70bps and 100bps. Most investment grade bonds now trade substantially over their post-financial crisis average and they are attractively priced based on fundamentals. However, negative market sentiment, weak liquidity and high NOK EUR basis swap weigh on the short term potential of the market.

The 10 years NOK interest rate swaps started the financial year at 1.92% and ended at 1.87%, the 5 years went from 1.40% to 1.26%, while the 3 months NIBOR decreased from 1.46% to 1.13%. The US 10 years interest rate swaps tightened from 2.28% to 2.19% and the EUR 10 years interest swaps widened from 0.81% to 1.00%.


Investment Manager’s Report (continued)

7

Arctic Norwegian Equities

Arctic Norwegian Equities (the “Fund”) returned 10.19% for the financial year 2015, while the Oslo Stock Exchange Mutual Fund Index (OSEFX) benchmark returned 6.70%.

The best position in 2015 relative to the benchmark index was the Fund’s underweight in drilling company Seadrill Ltd. Overweights in Protector Forsikring ASA, NEL ASA and XXL ASA also contributed to solid relative performance. Underweight in energy was the Fund’s best relative sector. The Fund’s worst relative position were overweights in Weifa ASA and Opera Software ASA, as well as underweight in Royal Caribbean Cruises Ltd. Healthcare was the Fund’s weakest sector relative to index in 2015.

Arctic Fund Management AS

January 2016


Portfolio of Investments as at 31 December 2015 Arctic Return

The accompanying notes are an integral part of the Financial Statements. 9

Coupon Rate % Maturity Date Quantity

Fair Value NOK

% of Net

AssetValue

FINANCIAL ASSETS AT FAIR VALUE Corporate Bonds - 96.72% (2014 : 98.75%)

Basic Materials - 1.83% (2014 : 0.00%) Finland Forchem Oy 4.90% 2/7/2020 1,000,000 9,628,197 0.91 Norway Yara International ASA 1.76% 18/12/2019 10,000,000 9,767,000 0.92 Communications - 3.49% (2014 : 0.00%) Norway Schibsted ASA 2.18% 6/5/2021 22,000,000 21,386,200 2.02 Sweden Bonnier Finans AB 1.32% 17/6/2018 14,000,000 14,606,908 1.38Tele2 AB 3.55% 24/2/2017 1,000,000 1,013,300 0.09 15,620,208 1.47

Consumer, Cyclical - 1.61% (2014 : 0.00%) Norway Color Group AS 6.45% 25/8/2016 14,000,000 14,172,200 1.33Norwegian Air Shuttle ASA 4.88% 3/7/2017 3,000,000 2,947,500 0.28 17,119,700 1.61

Consumer, Non-cyclical - 4.76% (2014 : 0.00%) Faroe Islands Bakkafrost P/F 5.31% 14/2/2018 8,000,000 8,358,400 0.79 Norway Austevoll Seafood ASA 5.09% 7/2/2017 13,500,000 13,770,000 1.30Marine Harvest ASA 4.58% 12/3/2018 13,000,000 13,300,300 1.25Nortura SA 3.82% 11/7/2017 2,000,000 2,044,600 0.19Nortura SA 2.77% 25/1/2019 11,000,000 11,058,300 1.04TINE SA 2.38% 4/4/2018 2,000,000 2,005,400 0.19 42,178,600 3.97

Energy - 2.76% (2014 : 0.00%) Cyprus Prosafe SE 4.70% 25/2/2016 11,000,000 10,989,000 1.04Prosafe SE 4.84% 8/2/2017 5,000,000 4,797,000 0.45 15,786,000 1.49

Norway Det Norske Oljeselskap ASA 7.63% 2/7/2020 9,000,000 8,604,000 0.81Fred Olsen Energy ASA 5.40% 12/5/2016 5,000,000 4,901,000 0.46 13,505,000 1.27

Financial - 66.83% (2014 : 98.75%) Denmark Danske Bank A/S 1.43% 1/7/2019 10,000,000 9,831,000 0.92Danske Bank A/S 3.75% 6/12/2023 8,000,000 8,041,600 0.76Tryg Forsikring A/S 3.91% 13/11/2045 10,000,000 9,839,000 0.93 27,711,600 2.61

Finland Pohjola Bank Oyj 1.21% 25/8/2025 15,000,000 15,470,949 1.46Sampo Oyj 0.35% 28/5/2020 10,000,000 10,333,889 0.97 25,804,838 2.43


Portfolio of Investments as at 31 December 2015 (Continued) Arctic Return (Continued)



Fair Value NOK

% of Net

AssetValue

FINANCIAL ASSETS AT FAIR VALUE (continued) Corporate Bonds - 96.72% (2014 : 98.75%) (continued)

Financial - 66.83% (2014 : 98.75%) (continued) Iceland Arion Banki HF 4.08% 7/7/2020 6,000,000 6,037,800 0.57Arion Banki HF 4.08% 7/7/2020 14,000,000 14,123,200 1.33Islandsbanki HF 4.00% 16/12/2017 10,000,000 10,912,713 1.03Islandsbanki HF 3.77% 16/10/2018 3,000,000 2,996,400 0.28Islandsbanki HF 3.10% 13/2/2019 5,000,000 5,356,740 0.51 39,426,853 3.72

Netherlands Citycon Treasury BV 2.71% 1/3/2021 20,000,000 19,640,000 1.85LeasePlan Corp NV 1.79% 7/5/2018 5,000,000 4,919,500 0.47LeasePlan Corp NV 2.24% 7/8/2020 15,000,000 15,288,000 1.44 39,847,500 3.76

Norway Aker ASA 4.65% 6/6/2018 20,000,000 19,762,000 1.86Bank Norwegian AS 2.32% 23/5/2018 13,000,000 12,950,600 1.22BN Bank ASA 3.15% 11/3/2025 15,000,000 14,679,000 1.38Brage Finans AS 1.91% 18/9/2017 20,000,000 19,810,000 1.87Bustadkreditt Sogn og Fjordane AS 1.47% 15/6/2020 10,000,000 9,823,000 0.93DNB Bank ASA 2.76% 19/6/2023 20,000,000 19,840,000 1.87DNB Bank ASA 0.98% 28/5/2025 8,000,000 8,160,574 0.77DNB Boligkreditt AS 1.35% 11/11/2021 25,000,000 24,322,500 2.29Eika Boligkreditt AS 1.40% 10/2/2022 20,000,000 19,404,000 1.83Eika Forsikring AS 4.55% 11/12/2045 9,000,000 8,927,100 0.84Evje og Hornnes Sparebank 1.73% 12/2/2018 5,000,000 4,924,000 0.46Flekkefjord Sparebank 1.94% 30/3/2017 10,000,000 9,986,000 0.94Gjensidige Bank Boligkreditt AS 1.44% 12/5/2021 10,000,000 9,718,000 0.92Helgeland Boligkreditt AS 1.66% 4/3/2019 10,000,000 9,919,000 0.93Hoenefoss Sparebank 1.99% 26/2/2020 20,000,000 19,346,000 1.82Jernbanepersonalets Sparebank 2.93% 11/11/2024 5,000,000 4,871,500 0.46Kistefos AS 8.35% 16/12/2016 8,000,000 7,952,000 0.75KLP Boligkreditt AS 1.33% 12/9/2019 10,000,000 9,841,000 0.93Kommunal Landspensjonskasse Gjensidig Forsikringsselskap 4.25% 10/6/2045 1,000,000 9,320,372 0.88Kommunal Landspensjonskasse Gjensidig Forsikringsselskap 5.25% perpetual 500,000 4,846,324 0.46Landkreditt Boligkreditt AS 1.75% 25/2/2020 20,000,000 19,700,000 1.86Melhus Sparebank 2.70% 16/9/2024 7,000,000 6,756,400 0.64Nordea Eiendomskreditt AS 1.30% 17/6/2021 25,000,000 24,355,000 2.29Norwegian Property ASA 2.11% 7/10/2019 15,000,000 14,674,500 1.38OBOS BBL 2.47% 21/11/2016 10,000,000 10,022,000 0.94Obos-banken AS 1.70% 30/1/2020 10,000,000 9,687,000 0.91Pareto Bank ASA 2.45% 30/1/2018 4,000,000 3,992,800 0.38Pareto Bank ASA 3.10% 3/9/2024 5,000,000 4,843,500 0.46Pioneer Public Properties III AS 5.73% 27/6/2019 18,000,000 18,079,200 1.70Sandnes Sparebank 3.18% 24/6/2023 10,000,000 9,849,000 0.93Santander Consumer Bank AS 1.93% 19/2/2018 12,000,000 11,857,200 1.12Skandiabanken ASA 3.21% 13/10/2025 10,000,000 9,838,000 0.93Skandiabanken Boligkreditt AS 1.41% 14/10/2021 10,000,000 9,682,000 0.91SpareBank 1 Boligkreditt AS 1.63% 17/6/2020 10,000,000 9,968,000 0.94Sparebank 1 Hallingdal Valdres 2.32% 26/10/2016 5,000,000 5,018,500 0.47SpareBank 1 Nord Norge 2.58% 12/6/2024 3,000,000 2,926,500 0.27Sparebanken More 3.67% 22/2/2023 10,000,000 10,088,000 0.95Sparebanken Ost 1.65% 18/12/2019 5,000,000 4,873,000 0.46Sparebanken Soer Boligkreditt AS 1.37% 16/6/2021 10,000,000 9,735,000 0.92





Fair Value NOK

% of Net

AssetValue


Financial - 66.83% (2014 : 98.75%) (continued) Norway (continued) Sparebanken Sor 2.67% 3/6/2025 10,000,000 9,623,000 0.91Sparebanken Sor 2.75% 25/8/2025 10,000,000 9,611,000 0.91Sparebanken Vest 2.43% 13/11/2017 10,000,000 10,071,000 0.95SSB Boligkreditt AS 1.44% 3/9/2020 15,000,000 14,580,000 1.37Thon Holding AS 1.70% 17/3/2020 5,000,000 4,852,000 0.46Totens Sparebank Boligkreditt AS 1.56% 6/6/2019 10,000,000 9,843,000 0.93Vardar AS 3.13% 14/12/2017 15,000,000 14,832,000 1.40Vardar AS 3.25% 11/12/2019 5,000,000 4,849,500 0.46 522,610,070 49.26

Sweden Akelius Residential Property AB 2.40% 27/3/2019 15,000,000 15,905,067 1.50D Carnegie & Co AB 3.75% 23/4/2018 7,000,000 7,483,288 0.71Nordax Bank AB 3.00% 21/3/2016 10,000,000 10,529,976 0.99Resurs Bank AB 1.69% 3/4/2018 9,000,000 9,502,460 0.90Sagax AB 3.20% 18/6/2020 10,000,000 10,133,608 0.95 53,554,399 5.05

Industrial - 13.61% (2014 : 0.00%) Bermuda BW Offshore Ltd 5.36% 15/3/2017 10,000,000 9,808,000 0.93Hoegh LNG Holdings Ltd 7.13% 3/10/2017 13,000,000 13,292,500 1.25Ship Finance International Ltd 6.12% 19/10/2017 5,000,000 4,995,000 0.47Ship Finance International Ltd 5.27% 19/3/2019 10,000,000 9,230,000 0.87Stolt-Nielsen Ltd 5.95% 22/6/2016 19,000,000 19,117,800 1.80 56,443,300 5.32

Denmark DFDS A/S 4.60% 2/5/2016 8,000,000 8,060,000 0.76DFDS A/S 4.07% 21/3/2018 9,000,000 9,090,000 0.86 17,150,000 1.62

Estonia Tallink Grupp AS 6.17% 18/10/2018 15,000,000 15,469,500 1.46 Marshall Islands Golar LNG Partners LP 6.31% 12/10/2017 4,000,000 4,037,600 0.38Teekay LNG Partners LP 6.34% 3/5/2017 10,000,000 10,191,000 0.96Teekay Offshore Partners LP 5.12% 25/1/2016 5,000,000 4,995,000 0.47 19,223,600 1.81

Norway Bonheur ASA 5.62% 10/2/2017 6,000,000 5,887,200 0.55Ocean Yield ASA 5.13% 26/3/2019 4,000,000 3,905,200 0.37Ocean Yield ASA 5.11% 29/4/2020 8,000,000 7,695,200 0.73Solstad Offshore ASA 5.60% 25/2/2016 4,000,000 3,970,000 0.37Wilh Wilhelmsen ASA 9.00% 2/11/2016 6,000,000 6,300,000 0.59 27,757,600 2.61

Sweden Nibe Industrier AB 0.88% 28/5/2020 8,000,000 8,351,838 0.79





Fair Value NOK

% of Net

AssetValue


Utilities - 1.83% (2014 : 0.00%) Norway Statkraft AS 1.72% 8/7/2020 20,000,000 19,396,000 1.83 Total Corporate Bonds 1,026,096,403 96.72

Government Bond - 1.39% (2014 : 0.00%)

Government - 1.39% (2014 : 0.00%) Norway Trondheim Kommune 1.59% 19/6/2020 15,000,000 14,739,000 1.39 Total Government Bond 14,739,000 1.39

Total Financial Assets at Fair Value 1,040,835,403 98.11

FINANCIAL LIABILITIES AT FAIR VALUE

Interest Rate Swaps - (0.01)% (2014 : (0.00)%) European Union Counterparty 3 Month EURIBOR Danske Bank (0.13)% 30/6/2019 1,000,000 (111,006) (0.01)Total Interest Rate Swaps (111,006) (0.01)

Cross Currency Swaps - (0.11)% (2014 : (0.00)%) European Union Counterparty Fund pays Fixed 4.25% and receives Floating NOK-NIBOR-NIBR 3 Month Fokus Bank 10/6/2025 7,855,800 (1,117,906) (0.11)Total Cross Currency Swaps (1,117,906) (0.11)

Forward Foreign Currency Contracts - (0.36)% (2014 : (0.00)%)

Date Counterparty Amount

Sold Amount Bought

16 March 2016 BNY Mellon EUR 1,550,000 NOK 14,767,857 (182,790) (0.02)16 March 2016 BNY Mellon SEK121,480,000 NOK124,082,709 (3,678,366) (0.34)Total Forward Foreign Currency Contracts (3,861,156) (0.36)

Total Financial Liabilities at Fair Value (5,090,068) (0.48)

Net Investments at Fair Value 1,035,745,335 97.63

Cash at bank 14,435,732 1.36

Other assets in excess of liabilities 10,663,626 1.01

Total Net Assets 1,060,844,693 100.00

Analysis of Total Assets % of Total

AssetsTransferable securities admitted to an official exchange listing or traded on a regulated market 97.60%Other assets 2.40%Total Assets 100.00%


Portfolio of Investments as at 31 December 2015 (Continued) Arctic Global Equities


Quantity Fair Value

NOK

% of Net AssetValue

FINANCIAL ASSETS AT FAIR VALUE Common Stock - 98.81% (2014 : 98.68%)

Basic Materials - 5.65% (2014 : 7.82%) Australia BHP Billiton Ltd 75,000 8,640,041 0.87 8,640,041 0.87

Japan Nippon Steel & Sumitomo Metal Corp 60,200 10,711,030 1.08 10,711,030 1.08

Portugal Corticeira Amorim SGPS SA 210,000 12,015,574 1.21Portucel SA 400,000 13,836,746 1.39 25,852,320 2.60

United States Dow Chemical Co 24,000 10,936,391 1.10 10,936,391 1.10

Communications - 12.17% (2014 : 7.31%) Hong Kong China Mobile Ltd 145,000 14,490,914 1.46 14,490,914 1.46

United States Alphabet Inc 3,350 22,503,089 2.27Expedia Inc 10,000 11,002,601 1.11Facebook Inc 12,000 11,116,964 1.12Palo Alto Networks Inc 6,000 9,354,778 0.94Splunk Inc 27,000 14,055,269 1.41Verizon Communications Inc 37,000 15,137,561 1.52Walt Disney Co 25,000 23,253,285 2.34 106,423,547 10.71

Consumer, Cyclical - 11.24% (2014 : 13.41%) Cayman Islands CK Hutchison Holdings Ltd 120,000 14,336,154 1.44 France Cie Generale des Etablissements Michelin 12,000 10,146,690 1.02Renault SA 10,000 8,910,580 0.90 19,057,270 1.92

Ireland Ryanair Holdings Plc 97,500 14,077,955 1.42 Japan Mitsubishi Corp 53,100 7,930,495 0.80Toyota Motor Corp 36,000 19,852,087 2.00 27,782,582 2.80

Panama Carnival Corp 42,000 20,253,992 2.04 20,253,992 2.04

Sweden Scandic Hotels Group AB 50,000 3,539,003 0.35


Portfolio of Investments as at 31 December 2015 (Continued) Arctic Global Equities (Continued)


Quantity Fair Value

NOK

% of Net AssetValue

FINANCIAL ASSETS AT FAIR VALUE (continued) Common Stock - 98.81% (2014 : 98.68%) (continued)

Consumer, Cyclical - 11.24% (2014 : 13.41%) (continued) United States PulteGroup Inc 80,000 12,618,912 1.27 12,618,912 1.27

Consumer, Non-cyclical - 23.52% (2014 : 18.29%) France Sanofi 10,000 7,560,958 0.76 Germany Bayer AG 18,000 20,050,968 2.02Beiersdorf AG 15,000 12,143,706 1.22Henkel AG & Co KGaA Preferred 15,000 14,891,047 1.50 47,085,721 4.74

Spain Prosegur Cia de Seguridad SA 200,000 8,176,609 0.82 8,176,609 0.82

Sweden Elekta AB 150,000 11,340,539 1.14 United Kingdom Reckitt Benckiser Group Plc 27,000 22,129,582 2.23 22,129,582 2.23

United States Amgen Inc 12,000 17,242,660 1.74Baxter International Inc 30,000 10,130,714 1.02General Mills Inc 30,000 15,311,584 1.54Johnson & Johnson 19,000 17,275,588 1.74Kroger Co 25,000 9,256,613 0.93Merck & Co Inc 50,000 23,377,208 2.35PepsiCo Inc 28,000 24,764,792 2.49Pfizer Inc 70,000 20,001,188 2.02 137,360,347 13.83

Diversified - 1.79% (2014 : 4.00%) Bermuda Jardine Matheson Holdings Ltd 30,000 12,940,227 1.30 Singapore Keppel Corp Ltd 120,000 4,876,867 0.49 4,876,867 0.49

Energy - 5.22% (2014 : 4.63%) Curacao Schlumberger Ltd 18,000 11,113,247 1.12 11,113,247 1.12

United Kingdom Royal Dutch Shell Plc 60,525 12,281,986 1.23 12,281,986 1.23

United States EOG Resources Inc 18,000 11,278,949 1.13Exxon Mobil Corp 25,000 17,249,653 1.74 28,528,602 2.87




Quantity Fair Value

NOK

% of Net AssetValue


Financial - 15.41% (2014 : 18.54%) Germany Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen 11,000 19,528,146 1.97 19,528,146 1.97

Italy UniCredit SpA 200,000 9,879,267 0.99 9,879,267 0.99

Japan Bank of Yokohama Ltd 260,000 14,285,920 1.44 14,285,920 1.44

Netherlands ING Groep NV 135,000 16,168,041 1.63 16,168,041 1.63

Norway DNB ASA 100,000 10,980,000 1.11 Singapore DBS Group Holdings Ltd 100,000 10,419,214 1.05 10,419,214 1.05

Sweden Investor AB 25,000 8,194,758 0.82 United States Capital One Financial Corp 23,000 14,694,978 1.48MetLife Inc 30,000 12,802,142 1.29Travelers Cos Inc 15,000 14,984,958 1.50US Bancorp 56,000 21,151,195 2.13 63,633,273 6.40

Industrial - 17.75% (2014 : 17.78%) Bermuda Golar LNG Ltd 20,000 2,795,351 0.28Orient Overseas International Ltd 250,000 10,636,188 1.07 13,431,539 1.35

Germany Deutsche Post AG 70,000 17,477,260 1.76GEA Group AG 40,000 14,390,831 1.45Jungheinrich AG Preferred 15,000 11,000,905 1.11 42,868,996 4.32

Japan Hitachi Ltd 300,000 15,277,464 1.54Komatsu Ltd 70,000 10,268,931 1.03 25,546,395 2.57

Netherlands Boskalis Westminster 30,000 10,859,498 1.09 10,859,498 1.09

Spain ACS Actividades de Construccion y Servicios SA 40,000 10,394,874 1.04




Quantity Fair Value

NOK

% of Net AssetValue


Industrial - 17.75% (2014 : 17.78%) (continued) Spain (continued) Tecnicas Reunidas SA 26,000 8,716,265 0.88 19,111,139 1.92

Switzerland ABB Ltd 120,000 19,227,011 1.94 United States 3M Co 8,000 10,667,300 1.08General Electric Co 70,000 19,301,023 1.94United Parcel Service Inc 18,000 15,332,297 1.54 45,300,620 4.56

Technology - 6.06% (2014 : 7.08%) Israel Mellanox Technologies Ltd 23,000 8,579,196 0.86 United States Apple Inc 15,000 13,975,870 1.41Citrix Systems Inc 14,000 9,374,783 0.94Cognizant Technology Solutions Corp 19,000 10,094,245 1.02Microsoft Corp 37,000 18,170,313 1.83 51,615,211 5.20

Total Common Stock 981,743,020 98.81

Forward Foreign Currency Contracts - 0.00% (2014 : 0.00%)


Sold Amount Bought

20 January 2016 BNY Mellon GBP 225,000 NOK 2,958,361 21,516 0.00Total Forward Foreign Currency Contracts 21,516 0.00

Total Financial Assets at Fair Value 981,764,536 98.81




Sold Amount Bought

20 January 2016 BNY Mellon EUR 3,400,000 NOK32,468,810 (261,026) (0.03)20 January 2016 BNY Mellon EUR 400,000 NOK 3,803,480 (47,089) (0.00)20 January 2016 BNY Mellon JPY143,000,000 NOK10,303,007 (234,827) (0.02)20 January 2016 BNY Mellon SEK 3,900,000 NOK 3,988,822 (104,066) (0.01)20 January 2016 BNY Mellon USD 9,000,000 NOK78,337,800 (1,343,671) (0.14)20 January 2016 BNY Mellon USD 100,000 NOK 876,520 (8,830) (0.00)Total Forward Foreign Currency Contracts (1,999,509) (0.20)


Net Investments at Fair Value 979,765,027 98.61

Cash at bank 22,012,654 2.22

Liabilities in excess of other assets (8,237,471) (0.83)

Total Net Assets 993,540,210 100.00





AssetsTransferable securities admitted to an official exchange listing or traded on a regulated market 97.71%Financial derivative instruments 0.00%Other assets 2.29%Total Assets 100.00%


Portfolio of Investments as at 31 December 2015 (Continued) Arctic High Return



Fair Value NOK

% of Net

AssetValue


Energy - 0.17% (2014 : 0.00%) Norway Norwegian Energy Co ASA 81,574 2,169,869 0.17 Total Common Stock 2,169,869 0.17

Corporate Bonds - 99.24% (2014 : 97.68%)

Basic Materials - 3.52% (2014 : 1.89%) Finland Forchem Oy 4.90% 2/7/2020 1,500,000 14,442,295 1.13 Sweden Dannemora Mineral AB 11.75% 22/3/2016 1,378,000 71,966 –Northland Resources AB 15.00% 15/7/2019 3,541,990 470,287 0.04WA Wallvision AB 9.00% 5/12/2017 16,000,000 16,834,540 1.31 17,376,793 1.35

United Kingdom TiZir Ltd 9.00% 28/9/2017 1,800,000 13,410,781 1.04 13,410,781 1.04

Communications - 0.61% (2014 : 2.05%) Norway Northern Alliance AS 8.17% 20/12/2018 8,000,000 7,880,000 0.61 7,880,000 0.61

Consumer, Cyclical - 7.67% (2014 : 8.60%) Denmark Jacob Holm & Sonner Holding A/S 5.25% 3/4/2019 5,500,000 5,969,119 0.47 5,969,119 0.47

Norway Color Group AS 6.45% 25/8/2016 5,500,000 5,567,650 0.43Color Group AS 5.56% 18/12/2017 3,000,000 3,020,700 0.24Color Group AS 6.31% 18/9/2019 40,000,000 40,160,000 3.13Color Group AS 6.03% 2/6/2020 10,000,000 9,775,000 0.76Norwegian Air Shuttle ASA 4.88% 3/7/2017 34,500,000 33,896,250 2.64 92,419,600 7.20

Consumer, Non-cyclical - 8.16% (2014 : 8.75%) Norway Curato Holding AS 6.42% 22/11/2018 12,075,000 12,487,965 0.97Infratek Group AS 6.15% 20/5/2019 22,000,000 22,182,600 1.73Norlandia Care Group AS 6.12% 10/4/2018 11,000,000 11,055,000 0.86Personalhuset AS 7.30% 11/9/2019 20,500,000 18,860,000 1.47Volstad Shipping AS 7.16% 30/5/2018 15,000,000 4,500,000 0.35 69,085,565 5.38

Sweden Candyking Holding AB 5.00% 29/1/2018 15,000,000 7,392,585 0.58Orexo AB 4.00% 9/5/2018 21,000,000 19,538,758 1.52YA Holding AB 7.00% 18/6/2019 10,000,000 8,736,881 0.68 35,668,224 2.78

Diversified - 1.92% (2014 : 2.85%) Norway B2Holding AS 7.50% 8/12/2020 1,000,000 9,697,458 0.76


Portfolio of Investments as at 31 December 2015 (Continued) Arctic High Return (Continued)



Fair Value NOK

% of Net

AssetValue


Diversified - 1.92% (2014 : 2.85%) (continued) Norway (continued) Island Offshore Shipholding LP 6.38% 5/4/2016 21,000,000 14,884,800 1.16 24,582,258 1.92

Energy - 13.23% (2014 : 16.66%) Cayman Islands Polarcus Ltd 8.00% 7/6/2018 1,400,000 1,441,225 0.11Polarcus Ltd 8.37% 8/7/2019 17,000,000 1,970,300 0.16Siem Offshore Inc 5.85% 30/1/2018 17,000,000 12,559,600 0.98 15,971,125 1.25

Norway Beerenberg Holdco II AS 6.23% 27/6/2018 16,000,000 13,907,200 1.08Det Norske Oljeselskap ASA 7.63% 2/7/2020 35,000,000 33,460,000 2.61Det Norske Oljeselskap ASA 10.25% 27/5/2022 1,800,000 14,618,500 1.14DOF Subsea AS 6.13% 22/5/2018 42,000,000 35,296,800 2.75Electromagnetic Geoservices ASA 7.23% 27/6/2019 10,982,301 6,740,936 0.53Fred Olsen Energy ASA 5.40% 12/5/2016 7,000,000 6,861,400 0.53Noreco Norway AS 6.50% 6/3/2018 5,338,170 3,896,864 0.30Petroleum Geo-Services ASA 7.38% 15/12/2018 4,400,000 30,484,021 2.38 145,265,721 11.32

Sweden Solor Bioenergi Holding AB 7.50% 2/11/2017 10,000,000 8,500,000 0.66 Financial - 18.05% (2014 : 9.74%) Denmark Tryg Forsikring A/S 3.91% 13/11/2045 5,000,000 4,919,500 0.39 4,919,500 0.39

Iceland Arion Banki HF 4.08% 7/7/2020 12,000,000 12,105,600 0.94Islandsbanki HF 3.77% 16/10/2018 12,000,000 11,985,600 0.93Islandsbanki HF 3.10% 13/2/2019 10,000,000 10,713,480 0.84 34,804,680 2.71

Norway Aker ASA 5.10% 16/3/2017 10,000,000 10,057,000 0.78Aker ASA 4.66% 29/5/2020 12,000,000 11,415,600 0.89Aker ASA 6.15% 7/9/2022 19,000,000 18,323,600 1.43Handelseiendom II AS 4.11% 16/1/2017 2,526,047 2,557,622 0.20Hospitality Invest AS 7.15% 12/2/2019 22,000,000 21,698,600 1.69Kistefos AS 8.35% 16/12/2016 8,000,000 7,952,000 0.62Kommunal Landspensjonskasse Gjensidig Forsikringsselskap 4.25% 10/6/2045 1,000,000 9,320,372 0.72Pareto Bank ASA 7.24% perpetual 4,500,000 4,573,800 0.36Pioneer Public Properties II AS 6.13% 5/4/2018 18,000,000 18,180,000 1.42Pioneer Public Properties III AS 5.73% 27/6/2019 10,000,000 10,044,000 0.78Protector Forsikring ASA 7.12% 19/4/2022 10,000,000 10,385,000 0.81Vardar AS 3.25% 11/12/2019 5,000,000 4,849,500 0.38 129,357,094 10.08

Sweden D Carnegie & Co AB 3.75% 23/4/2018 8,000,000 8,552,329 0.66Hoist Kredit AB 3.75% 2/10/2017 1,000,000 9,732,088 0.76Marginalen Bank Bank AB 7.50% 9/10/2024 9,000,000 9,607,214 0.75Nordlys AB 5.75% 12/9/2018 11,880,000 12,611,762 0.98





Fair Value NOK

% of Net

AssetValue


Financial - 18.05% (2014 : 9.74%) (continued) Sweden (continued) Stendorren Fastigheter AB 5.00% 18/2/2018 21,000,000 22,029,273 1.72 62,532,666 4.87

Industrial - 45.99% (2014 : 43.76%) Bermuda BW Offshore Ltd 5.36% 15/3/2017 5,000,000 4,904,000 0.38BW Offshore Ltd 5.32% 21/3/2018 19,000,000 18,080,400 1.41GasLog Ltd 6.73% 27/6/2018 20,000,000 20,284,000 1.58Hoegh LNG Holdings Ltd 7.13% 3/10/2017 18,000,000 18,405,000 1.43Hoegh LNG Holdings Ltd 5.45% 5/6/2020 3,400,000 29,018,187 2.26Ship Finance International Ltd 6.12% 19/10/2017 15,000,000 14,985,000 1.17Ship Finance International Ltd 5.27% 19/3/2019 25,000,000 23,075,000 1.80Stolt-Nielsen Ltd 5.95% 22/6/2016 21,500,000 21,633,300 1.69Stolt-Nielsen Ltd 6.16% 4/9/2019 14,000,000 14,168,000 1.10Stolt-Nielsen Ltd 4.41% 18/3/2021 14,000,000 12,950,000 1.01 177,502,887 13.83

Estonia Tallink Grupp AS 6.17% 18/10/2018 3,000,000 3,093,900 0.24 3,093,900 0.24

Marshall Islands Golar LNG Partners LP 6.31% 12/10/2017 22,000,000 22,206,800 1.73Golar LNG Partners LP 4.78% 22/5/2020 1,600,000 13,250,566 1.03Navigator Holdings Ltd 9.00% 18/12/2017 3,200,000 29,033,412 2.26Teekay LNG Partners LP 6.34% 3/5/2017 10,500,000 10,700,550 0.83Teekay LNG Partners LP 5.50% 3/9/2018 4,000,000 3,961,600 0.31Teekay Offshore Partners LP 6.87% 27/1/2017 20,000,000 19,370,000 1.51Teekay Offshore Partners LP 5.87% 25/1/2018 10,000,000 8,588,000 0.67 107,110,928 8.34

Netherlands Bluewater Holding BV 10.00% 10/12/2019 1,700,000 7,922,669 0.62 7,922,669 0.62

Norway Atlantic Offshore AS 8.60% 16/5/2018 1,000,000 397,500 0.03BOA OCV AS 6.75% 7/10/2019 9,750,000 6,144,450 0.48BOA Offshore AS 7.81% 18/12/2018 5,500,000 1,663,750 0.13Boa Sbl AS 6.62% 19/4/2018 14,320,423 6,193,583 0.48Bonheur ASA 5.62% 10/2/2017 23,500,000 23,058,200 1.80Bonheur ASA 6.12% 10/2/2019 8,000,000 7,603,200 0.59DOF ASA 8.34% 7/2/2017 3,000,000 2,273,100 0.18DOF ASA 5.84% 7/2/2018 25,500,000 16,177,200 1.26DOF ASA 8.08% 12/9/2019 26,000,000 16,697,200 1.30E Forland AS 7.91% 4/9/2018 6,035,705 4,003,483 0.31Farstad Shipping ASA 5.36% 15/2/2017 6,000,000 3,870,000 0.30Farstad Shipping ASA 4.56% 29/5/2018 6,500,000 3,483,350 0.27Havila Shipping ASA 4.85% 8/11/2016 8,517,601 5,153,148 0.40Klaveness Ship Holding AS 5.42% 20/3/2020 25,000,000 24,162,500 1.88Ocean Yield ASA 5.13% 26/3/2019 33,500,000 32,706,050 2.55Odfjell SE 6.87% 11/4/2017 5,000,000 4,875,000 0.38Odfjell SE 7.65% 3/12/2018 4,000,000 3,864,800 0.30Olympic Ship AS 7.22% 21/9/2017 5,000,000 2,715,000 0.21Olympic Ship AS 6.06% 18/6/2019 20,000,000 8,756,000 0.68





Fair Value NOK

% of Net

AssetValue


Industrial - 45.99% (2014 : 43.76%) (continued) Norway (continued) Rem Offshore ASA 6.83% 14/3/2018 17,000,000 7,905,000 0.62Rem Offshore ASA 6.48% 25/9/2019 3,000,000 1,260,000 0.10Solstad Offshore ASA 5.60% 25/2/2016 39,500,000 39,203,750 3.05Vestland Offshore Invest AS 11.12% 15/1/2016 8,000,000 6,893,600 0.54Viking Supply Ships AS 9.42% 21/3/2017 20,500,000 9,479,200 0.74Volstad Subsea AS 7.63% 5/7/2016 7,023,566 4,941,079 0.39VV Holding AS 6.37% 10/7/2019 17,000,000 16,418,600 1.28Western Bulk ASA 7.87% 19/4/2017 7,000,000 5,003,600 0.39 264,902,343 20.64

Sweden AR Packaging Group AB 5.75% 9/7/2017 1,100,000 10,853,438 0.85West Atlantic AB 6.50% 21/12/2019 18,000,000 18,874,684 1.47 29,728,122 2.32

Technology - 0.09% (2014 : 3.38%) Norway Dolphin Group AS 8.65% 5/3/2019 26,000,000 1,222,000 0.09 1,222,000 0.09

Total Corporate Bonds 1,273,668,270 99.24



Interest Rate Swaps - (0.01)% (2014 : (0.00)%) European Union Counterparty 3 Month EURIBOR Danske Bank (0.13)% 30/6/2019 1,500,000 (166,509) (0.01)Total Interest Rate Swaps (166,509) (0.01)




Sold Amount Bought

16 March 2016 BNY Mellon EUR 1,000,000 NOK 9,300,480 (345,099) (0.03)16 March 2016 BNY Mellon EUR 3,700,000 NOK 35,252,305 (436,338) (0.03)16 March 2016 BNY Mellon SEK129,130,000 NOK131,896,610 (3,910,005) (0.30)16 March 2016 BNY Mellon SEK 6,820,000 NOK 6,968,430 (204,195) (0.02)16 March 2016 BNY Mellon USD 15,350,000 NOK133,031,850 (2,939,735) (0.23)16 March 2016 BNY Mellon USD 315,000 NOK 2,751,966 (38,331) (0.00)Total Forward Foreign Currency Contracts (7,873,703) (0.61)





Fair Value

NOK

% of Net

AssetValue


Cash at bank 18,147,993 1.41

Liabilities in excess of other assets (1,460,551) (0.11)

Total Net Assets 1,283,367,463 100.00




Portfolio of Investments as at 31 December 2015 (Continued) Arctic Investment Grade



Fair Value NOK

% of Net

AssetValue

FINANCIAL ASSETS AT FAIR VALUE Corporate Bonds - 96.71% (2014 : 95.49%)

Basic Materials - 3.29% (2014 : 3.15%) Norway Borregaard ASA 2.14% 26/2/2019 9,000,000 8,905,500 0.76Yara International ASA 1.76% 18/12/2019 12,000,000 11,720,400 1.01Yara International ASA 2.55% 17/12/2021 18,000,000 17,794,800 1.52 38,420,700 3.29

Communications - 2.57% (2014 : 4.08%) Norway Atea ASA 3.27% 19/6/2018 21,000,000 20,947,500 1.79 20,947,500 1.79

Sweden Tele2 AB 3.55% 24/2/2017 9,000,000 9,119,700 0.78 9,119,700 0.78

Consumer, Non-cyclical - 9.80% (2014 : 9.37%) Denmark Arla Foods Finance A/S 1.27% 4/6/2018 23,000,000 24,436,005 2.09 24,436,005 2.09

Norway Felleskjopet Agri SA 3.36% 13/2/2018 18,000,000 18,091,800 1.55Mollergruppen AS 1.99% 26/11/2019 13,000,000 12,646,400 1.08 30,738,200 2.63

Sweden ICA Gruppen AB 1.68% 25/6/2018 10,000,000 10,740,744 0.92ICA Gruppen AB 1.10% 17/6/2019 12,000,000 12,633,455 1.08Loomis AB 1.25% 18/12/2019 25,000,000 26,416,693 2.26Molnlycke Holding AB 1.50% 28/2/2022 1,000,000 9,659,941 0.82 59,450,833 5.08

Financial - 61.32% (2014 : 60.54%) Denmark Danske Bank A/S 3.75% 6/12/2023 15,000,000 15,078,000 1.29 15,078,000 1.29

Finland Pohjola Bank Oyj 1.21% 25/8/2025 5,000,000 5,156,983 0.44 5,156,983 0.44

Iceland Islandsbanki HF 3.77% 16/10/2018 10,000,000 9,988,000 0.85Islandsbanki HF 3.10% 13/2/2019 10,000,000 10,713,480 0.92 20,701,480 1.77

Netherlands Citycon Treasury BV 2.71% 1/3/2021 18,000,000 17,676,000 1.51LeasePlan Corp NV 1.98% 7/8/2018 10,000,000 9,857,000 0.84LeasePlan Corp NV 1.91% 7/8/2019 20,000,000 19,454,000 1.67 46,987,000 4.02

Norway Bank Norwegian AS 1.76% 16/2/2018 5,000,000 4,932,500 0.42Bank Norwegian AS 2.32% 23/5/2018 8,000,000 7,969,600 0.68Bank Norwegian AS 1.90% 9/9/2019 10,000,000 9,735,000 0.83Bank Norwegian AS 3.70% 11/12/2023 13,000,000 12,948,000 1.11BN Bank ASA 3.15% 11/3/2025 10,000,000 9,786,000 0.84


Portfolio of Investments as at 31 December 2015 (Continued) Arctic Investment Grade (Continued)



Fair Value NOK

% of Net

AssetValue


Financial - 61.32% (2014 : 60.54%) (continued) Norway (continued) Brage Finans AS 1.91% 18/9/2017 8,000,000 7,924,000 0.68Brage Finans AS 1.97% 20/4/2018 14,000,000 13,783,000 1.18Bustadkreditt Sogn og Fjordane AS 1.53% 16/6/2021 5,000,000 4,891,500 0.42DNB Bank ASA 2.76% 19/6/2023 18,000,000 17,856,000 1.53DNB Boligkreditt AS 1.46% 18/5/2016 500,000 500,400 0.04DNB Boligkreditt AS 1.71% 22/11/2019 22,000,000 21,980,200 1.88Drangedal Sparebank 2.22% 4/9/2018 5,000,000 4,957,500 0.42Eika Boligkreditt AS 1.64% 16/12/2020 10,000,000 9,894,000 0.85Gjensidige Bank ASA 2.63% 17/6/2024 8,000,000 7,789,600 0.67Gjensidige Bank Boligkreditt AS 1.44% 12/5/2021 15,000,000 14,577,000 1.25Gjensidige Forsikring ASA 2.63% 3/10/2044 19,000,000 17,647,200 1.51Jernbanepersonalets Sparebank 2.93% 11/11/2024 15,000,000 14,614,500 1.25Kommunal Landspensjonskasse Gjensidig Forsikringsselskap 4.25% 10/6/2045 1,000,000 9,320,372 0.80Kredittforeningen for Sparebanker 1.77% 9/12/2019 10,000,000 9,703,000 0.83Landkreditt Finans AS 2.42% 21/10/2016 10,000,000 10,014,000 0.86Landkreditt Finans AS 2.36% 13/2/2017 8,000,000 7,998,400 0.68Landkreditt Finans AS 2.07% 22/8/2017 10,000,000 9,923,000 0.85Nordea Eiendomskreditt AS 1.48% 17/6/2020 15,000,000 14,842,500 1.27Nordea Eiendomskreditt AS 1.30% 17/6/2021 15,000,000 14,613,000 1.25Norwegian Property ASA 2.63% 5/1/2018 5,000,000 5,025,000 0.43OBOS BBL 2.47% 21/11/2016 10,000,000 10,022,000 0.86OBOS BBL 1.93% 9/12/2019 17,000,000 16,569,900 1.42Obos-banken AS 1.78% 26/8/2019 10,000,000 9,732,000 0.83Olav Thon Eiendomsselskap ASA 2.30% 31/10/2018 25,000,000 25,002,500 2.14Pareto Bank ASA 1.80% 3/11/2017 10,000,000 9,877,000 0.84Pareto Bank ASA 2.10% 4/11/2019 10,000,000 9,708,000 0.83Pareto Bank ASA 3.10% 3/9/2024 15,000,000 14,530,500 1.24Sandnes Sparebank 3.18% 24/6/2023 10,000,000 9,849,000 0.84Santander Consumer Bank AS 2.41% 18/11/2016 13,000,000 13,035,100 1.11Skandiabanken Boligkreditt AS 1.60% 4/10/2018 10,000,000 9,970,000 0.85Skandiabanken Boligkreditt AS 1.58% 14/8/2020 5,000,000 4,918,000 0.42SpareBank 1 Boligkreditt AS 1.69% 10/9/2019 10,000,000 10,029,000 0.86SpareBank 1 Nord Norge 3.92% 19/12/2022 10,000,000 10,134,000 0.87SpareBank 1 Nord Norge 1.77% 22/6/2020 10,000,000 9,684,000 0.83SpareBank 1 Ringerike Hadeland 2.63% 12/6/2024 10,000,000 9,738,000 0.83SpareBank 1 SMN 2.13% 21/2/2018 1,800,000 17,903,886 1.53SpareBank 1 SMN 1.50% 20/5/2019 500,000 4,907,889 0.42SpareBank 1 SR-Bank ASA 2.13% 14/4/2021 2,500,000 25,044,471 2.14Sparebanken Ost 2.97% 24/10/2023 10,000,000 9,911,000 0.85Sparebanken Soer Boligkreditt AS 1.53% 24/6/2020 10,000,000 9,824,000 0.84Sparebanken Sor 2.75% 30/1/2025 10,000,000 9,711,000 0.83Sparebanken Sor 2.75% 25/8/2025 15,000,000 14,416,500 1.23Sparebanken Vest 2.97% 10/10/2023 13,000,000 12,886,900 1.10Sparebanken Vest 2.73% 27/6/2024 8,000,000 7,803,200 0.67Steen & Strom AS 2.39% 21/2/2019 5,000,000 4,972,000 0.42Storebrand ASA 1.91% 10/9/2019 16,000,000 15,276,800 1.31Surnadal Sparebank 2.78% 2/10/2024 5,500,000 5,288,800 0.45Thon Reitan AS 2.57% 17/10/2016 10,000,000 10,017,000 0.86Totens Sparebank 4.38% 14/9/2022 6,500,000 6,617,650 0.57Totens Sparebank 2.57% 21/10/2024 8,000,000 7,733,600 0.66Vardar AS 3.13% 14/12/2017 5,000,000 4,944,000 0.42 603,282,968 51.60





Fair ValueNOK

% of Net

AssetValue


Financial - 61.32% (2014 : 60.54%) (continued) Sweden Ikano Bank AB 0.67% 16/6/2020 15,000,000 15,588,916 1.34Stadshypotek AB 1.88% 16/5/2019 10,000,000 10,068,000 0.86 25,656,916 2.20

Industrial - 9.88% (2014 : 10.20%) Denmark AP Moeller - Maersk A/S 3.30% 22/3/2017 10,000,000 10,134,000 0.87DFDS A/S 4.60% 2/5/2016 15,500,000 15,616,250 1.34DFDS A/S 4.07% 21/3/2018 10,000,000 10,100,000 0.86 35,850,250 3.07

Norway Sporveien Oslo AS 1.79% 5/11/2019 9,000,000 8,860,500 0.76Veidekke ASA 2.91% 4/6/2018 15,000,000 15,165,000 1.30 24,025,500 2.06

Sweden Hexagon AB 0.95% 26/11/2019 25,000,000 26,212,217 2.24NCC Treasury AB 0.67% 18/3/2019 20,000,000 20,762,152 1.78Skanska Financial Services AB 1.54% 12/3/2018 8,000,000 8,596,790 0.73 55,571,159 4.75

Utilities - 9.85% (2014 : 5.07%) Norway Agder Energi AS 1.84% 29/3/2022 20,000,000 19,006,000 1.62Eidefoss AS 4.10% 14/10/2026 20,000,000 19,414,000 1.66Fredrikstad Energi AS 3.25% 30/10/2017 28,000,000 28,302,400 2.42Helgeland Kraftlag AS 1.81% 25/9/2019 19,000,000 18,422,400 1.58Statkraft AS 1.72% 8/7/2020 16,000,000 15,516,800 1.33Statkraft AS 2.03% 15/12/2021 15,000,000 14,470,500 1.24 115,132,100 9.85

Total Corporate Bonds 1,130,555,294 96.71

Government Bond - 1.26% (2014 : 1.62%)

Government - 1.26% (2014 : 1.04%) Norway Trondheim Kommune 1.59% 19/6/2020 15,000,000 14,739,000 1.26 14,739,000 1.26

Total Government Bond 14,739,000 1.26

Forward Foreign Currency Contracts - 0.07% (2014 : 0.41%)


Sold Amount Bought

20 January 2016 BNY Mellon NOK 31,348,054 SEK 30,650,000 817,851 0.07Total Forward Foreign Currency Contracts 817,851 0.07






Fair ValueNOK

% of Net

AssetValue


Interest Rate Swaps - (0.16)% (2014 : (0.11)%) European Union Counterparty 3 Month EURIBOR Swedbank 1.03% 21/2/2018 1,800,000 (433,024) (0.04)3 Month EURIBOR Swedbank 0.68% 20/5/2019 500,000 (112,433) (0.01)3 Month EURIBOR Swedbank 1.29% 14/4/2021 2,500,000 (1,326,467) (0.11)Total Interest Rate Swaps (1,871,924) (0.16)




Sold Amount Bought

20 January 2016 BNY Mellon SEK 910,000 NOK 937,986 (17,021) (0.00)16 March 2016 BNY Mellon EUR 5,840,000 NOK 55,641,476 (688,706) (0.06)16 March 2016 BNY Mellon SEK154,680,000 NOK157,994,019 (4,683,649) (0.40)Total Forward Foreign Currency Contracts (5,389,376) (0.46)



Cash at bank 29,315,816 2.51


Total Net Assets 1,169,055,956 100.00


AssetsTransferable securities admitted to an official exchange listing or traded on a regulated market 97.17%Financial derivative instruments 0.07%Other assets 2.76%Total Assets 100.00%


Portfolio of Investments as at 31 December 2015 Arctic Norwegian Equities


Quantity Fair Value

NOK

% of Net AssetValue


Basic Materials - 15.07% (2014 : 14.36%) Norway Borregaard ASA 500,948 24,746,831 0.98Norsk Hydro ASA 2,600,775 86,163,676 3.39Yara International ASA 548,880 210,166,152 8.27 321,076,659 12.64

Sweden Nickel Mountain Group 30,937,195 61,874,390 2.43 61,874,390 2.43

Communications - 12.29% (2014 : 12.02%) Norway Atea ASA 479,912 35,273,532 1.39Schibsted ASA - Class A 161,048 47,058,226 1.85Schibsted ASA - Class B 53,848 15,190,521 0.60Telenor ASA 1,448,857 214,865,493 8.45 312,387,772 12.29

Consumer, Cyclical - 8.83% (2014 : 10.82%) Norway Europris ASA 775,664 33,353,552 1.31Norwegian Air Shuttle ASA 213,628 69,151,384 2.72XXL ASA 1,194,650 121,854,300 4.80 224,359,236 8.83

Consumer, Non-cyclical - 18.18% (2014 : 13.96%) Denmark Napatech A/S 240,000 14,400,000 0.57 Faroe Islands Bakkafrost P/F 101,430 26,554,374 1.04 26,554,374 1.04

Ireland Strongbridge Biopharma Plc 383,418 25,793,503 1.01 Norway Bionor Pharma ASA 7,266,718 11,699,416 0.46Havfisk ASA 600,000 16,920,000 0.67Leroy Seafood Group ASA 79,889 26,363,370 1.04Marine Harvest ASA 950,902 113,727,879 4.47NRC Group ASA 737,338 41,290,928 1.62Orkla ASA 1,652,270 115,824,127 4.56Salmar ASA 230,640 35,749,200 1.41Targovax AS 907,000 15,419,000 0.61Weifa ASA 22,074,117 20,905,670 0.82 397,899,590 15.66

Diversified - 1.73% (2014 : 1.99%) Norway B2Holding AS 3,033,300 43,982,850 1.73 43,982,850 1.73

Energy - 9.35% (2014 : 10.84%) Luxembourg Subsea 7 SA 231,377 14,588,320 0.57 14,588,320 0.57


Portfolio of Investments as at 31 December 2015 (Continued) Arctic Norwegian Equities (Continued)


Quantity Fair Value

NOK

% of Net AssetValue


Energy - 9.35% (2014 : 10.84%) (continued) Norway Det Norske Oljeselskap ASA 223,992 12,375,558 0.49NEL ASA 13,742,603 65,964,494 2.60Petroleum Geo-Services ASA 175,000 6,361,250 0.25Statoil ASA 1,037,280 128,311,536 5.05TGS Nopec Geophysical Co ASA 70,900 10,025,260 0.39 223,038,098 8.78

Financial - 17.90% (2014 : 19.85%) Norway DNB ASA 2,008,282 220,509,364 8.68Gjensidige Forsikring ASA 846,765 120,325,306 4.73Norwegian Finans Holding ASA 320,000 15,936,000 0.63Protector Forsikring ASA 1,160,975 85,621,906 3.37SpareBank 1 Nord Norge 338,443 12,420,858 0.49 454,813,434 17.90

Industrial - 6.64% (2014 : 6.23%) Bermuda Frontline Ltd 538,050 14,240,264 0.56Hoegh LNG Holdings Ltd 617,659 58,214,361 2.29 72,454,625 2.85

Norway AF Gruppen ASA 106,900 14,912,550 0.59Aqualis ASA 813,105 3,146,717 0.12Multiconsult ASA 156,877 16,942,716 0.67Tomra Systems ASA 290,300 27,723,650 1.09Veidekke ASA 309,220 33,550,370 1.32 96,276,003 3.79

Liberia - 4.08% (2014 : 0.00%) Norway Royal Caribbean Cruises Ltd 114,609 103,606,536 4.08 Technology - 3.07% (2014 : 5.42%) Norway Cxense ASA 95,000 10,165,000 0.40Nordic Semiconductor ASA 670,614 29,004,055 1.14Opera Software ASA 767,907 38,817,699 1.53 77,986,754 3.07

Total Common Stock 2,471,092,144 97.24

Private Placements - 0.07% (2014 : 0.38%)

Consumer, Non-cyclical - 0.07% (2014 : 0.15%) Norway Vaccibody A/S 28,500 1,710,000 0.07

Total Private Placements 1,710,000 0.07



Portfolio of Investments as at 31 December 2015 (Continued) Arctic Norwegian Equities (Continued)


Fair Value

NOK

% of Net AssetValue


Cash at bank 65,827,447 2.59


Total Net Assets 2,541,129,408 100.00




Statement of Financial Position as at 31 December 2015

32

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKAssets Notes Financial assets at fair value through profit or loss 2,10 1,040,835,403 981,764,536 1,275,838,139 1,146,112,145 2,472,802,144 6,917,352,367Cash at bank 8 14,435,732 22,012,654 18,147,993 29,315,816 65,827,447 149,739,642Interest receivable 4,183,101 – 12,083,168 3,145,720 – 19,411,989Dividend receivable – 884,218 – – 380,430 1,264,648Receivable for subscriptions 7,000,000 4,309 18,873 – 12,618,817 19,641,999Receivable from investments sold – – – – 14,838,147 14,838,147Other assets 24,260 57,704 57,088 68,407 32,336 239,795Total Assets 1,066,478,496 1,004,723,421 1,306,145,261 1,178,642,088 2,566,499,321 7,122,488,587

Liabilities Financial liabilities at fair value through profit or loss 2,10 5,090,068 1,999,509 9,158,118 8,379,206 – 24,626,901Payable for investments purchased 0 – 8,216,108 – – 14,186,737 22,402,845Investment management fees 3 56,058 513,982 597,037 310,647 3,374,776 4,852,500Performance fees 3 – – – 99,141 1,222,733 1,321,874Payable for redemptions – – 98,386 65,000 5,243,977 5,407,363Administration fees 3 125,804 220,680 511,259 233,325 409,832 1,500,900Custodian fees 3 62,925 54,514 471,348 262,120 542,634 1,393,541Audit fees 3 27,915 40,748 164,814 61,186 102,213 396,876Directors' fees 3 3,247 – 30,652 – – 33,899Distributions payable – – 11,127,348 – – 11,127,348Other payables and accrued expenses 267,786 137,670 618,836 175,507 287,011 1,486,810Total Liabilities (excluding Net Assets attributable to holders of redeemable participating shares) 5,633,803 11,183,211 22,777,798 9,586,132 25,369,913 74,550,857 Net Assets attributable to holders of redeemable participating shares 1,060,844,693 993,540,210 1,283,367,463 1,169,055,956 2,541,129,408 7,047,937,730

Number of shares issued Class A NOK 6 39,163 26,560 53,209 – 48,670Class B NOK 6 109,612 66,720 452,351 814,691 103,598Class B SEK 6 – – – 27,280 –Class C NOK 6 – – 175,037 – –Class D NOK 6 – – 574,907 164,988 1,073,420Class H Hedged NOK 6 – 151,090 – – –Class I NOK 6 795,941 427,893 – – 362,214Class R NOK 6 2,000 – – – –


Statement of Financial Position as at 31 December 2014

34

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKAssets Notes Financial assets at fair value through profit or loss 2,10 599,815,700 621,652,706 1,205,582,114 1,708,090,602 1,796,172,409 5,931,313,531Cash at bank 8 6,855,267 7,115,917 18,936,985 44,281,018 81,233,561 158,422,748Interest receivable 1,316,129 – 11,590,401 5,911,805 – 18,818,335Dividend receivable – 338,646 – – 344,655 683,301Receivable for subscriptions – – 389,676 75,000 4,484 469,160Receivable from investments sold – – – – 5,379,408 5,379,408Other assets 6,354 – 33,348 – 183,723 223,425Total Assets 607,993,450 629,107,269 1,236,532,524 1,758,358,425 1,883,318,240 6,115,309,908

Liabilities Financial liabilities at fair value through profit or loss 2,10 – – 1,586,359 2,616,701 – 4,203,060Investment management fees 3 26,522 224,553 265,791 455,614 3,553,618 4,526,098Performance fees 3 – – 1,293,508 2,368,997 – 3,662,505Payable for redemptions – 75,000 – 500,000 5,002,690 5,577,690Administration fees 3 273,318 303,848 462,666 297,904 728,009 2,065,745Custodian fees 3 87,557 88,519 234,860 102,971 212,415 726,322Audit fees 3 40,368 4,024 148,676 55,753 92,923 341,744Directors' fees 3 26,400 17,727 64,281 21,037 35,611 165,056Interest payable – – – 365,534 – 365,534Distributions payable – – 1,371,839 – – 1,371,839Other payables and accrued expenses 111,049 50,986 197,101 82,126 185,593 626,855Total Liabilities (excluding Net Assets attributable to holders of redeemable participating shares) 565,214 764,657 5,625,081 6,866,637 9,810,859 23,632,448 Net Assets attributable to holders of redeemable participating shares 607,428,236 628,342,612 1,230,907,443 1,751,491,788 1,873,507,381 6,091,677,460

Represented by: Net Assets attributable to holders of redeemable participating shares based on dealing NAV (at last traded market prices) 607,495,573 628,409,950 1,230,974,406 1,751,559,126 1,873,574,716 6,092,013,771FRS 102 adjustment in relation to organisational costs 2 (67,337) (67,338) (66,963) (67,338) (67,335) (336,311)

Net Assets attributable to holders of redeemable participating shares 607,428,236 628,342,612 1,230,907,443 1,751,491,788 1,873,507,381 6,091,677,460

Number of shares issued Class A NOK 6 – 14,179 95,587 – 41,675Class B NOK 6 –* 61,022 615,836 880,501 94,718Class B SEK 6 – – – 28,115 –Class C NOK 6 – – 173,592 – –Class D NOK 6 – – 192,406 669,628 845,511Class I NOK 6 536,058* 363,349 – – 296,427


Statement of Financial Position as at 31 December 2014 (Continued)

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

35

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade EquitiesDealing Net Asset Value per share Class A NOK NOK – 1,310.93 1,224.71 – 1,467.33Class B NOK NOK –* 1,384.19 1,233.56 1,190.50 1,576.92Class B SEK SEK – – – 1,103.14 –Class C NOK NOK – – 949.71 – –Class D NOK NOK – – 984.23 1,006.04 1,404.71Class I NOK NOK 1,133.26* 1,445.87 – – 1,603.64

*Arctic Covered was renamed as Arctic Return in February 2015. Class B NOK was renamed as Class I NOK on this sub-fund only.


Statement of Comprehensive Income for the financial year ended 31 December 2015

36

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKIncome Notes Interest income 26,187,159 42,326 100,901,575 41,131,065 166,571 168,428,696Dividend income – 22,241,144 – – 68,052,652 90,293,796Other income 12,584 – 4,022 (455,192) – (438,586)Net realised gain/(loss) on: - investments (1,759,342) 87,268,915 (53,567,431) 16,051,908 60,035,194 108,029,244- foreign currency (11,020,040) (17,228,164) (29,484,425) (7,832,271) 116,719 (65,448,181)Net change in unrealised appreciation/(depreciation) on: - investments (3,929,396) 15,090,524 (59,840,695) (24,429,723) 103,692,018 30,582,728- foreign currency (3,812,337) (1,795,368) (9,497,176) (11,009,175) (1,178) (26,115,234)Total investment income/(loss) 5,678,628 105,619,377 (51,484,130) 13,456,612 232,061,976 305,332,463 Expenses Investment management fees 3 914,198 8,121,163 6,424,574 5,091,637 33,538,139 54,089,711Performance fees 3 – – – 99,141 1,222,733 1,321,874Administration fees 3 377,918 394,734 1,124,552 916,659 919,506 3,733,369Custodian fees 3 295,039 429,345 857,090 700,634 1,498,356 3,780,464Audit fees 0 29,638 78,814 100,318 110,658 156,605 476,033Legal expenses 35,174 173,462 618,955 237,683 353,860 1,419,134Directors' fees 3 35,841 38,538 104,049 91,456 133,030 402,914Interest expense 1,866 13,598 2,277 2,024 1,297 21,062Other expenses 219,628 74,621 17,778 72,395 59,392 443,814Total expenses 1,909,302 9,324,275 9,249,593 7,322,287 37,882,918 65,688,375 Net income/(loss) from operations before finance costs 3,769,326 96,295,102 (60,733,723) 6,134,325 194,179,058 239,644,088 Distribution to holders of redeemable participating shares 5 – – 11,127,348 – – 11,127,348 Taxation Withholding tax 2,387 5,149,787 5,933 7,957 13,310,455 18,476,519 Net increase/(decrease) in Net Assets attributable to holders of redeemable participating shares resulting from operations 3,766,939 91,145,315 (71,867,004) 6,126,368 180,868,603 210,040,221 FRS 102 adjustment in relation to organisational costs 2 (67,337) (67,338) (66,963) (67,338) (67,335) (336,311)Net increase/(decrease) in Net Assets attributable to holders of redeemable participating shares resulting from operations 3,699,602 91,077,977 (71,933,967) 6,059,030 180,801,268 209,703,910

Income and results arose solely from continuing operations. There were no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income. *Arctic Covered was renamed as Arctic Return in February 2015.


Statement of Comprehensive Income for the financial year ended 31 December 2014

37

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKIncome Notes Interest income 15,304,565 13,000 136,294,638 32,232,478 249,682 184,094,363Dividend income 11 13,663,326 – – 54,241,449 67,904,786Other income 21,525 – 1,391,260 72,254 – 1,485,039Net realised gain/(loss) on: - investments 3,935,211 33,859,993 (8,525,917) 8,214,880 165,039,613 202,523,780- foreign currency – 138,491 (43,243,678) (16,787,455) 179,658 (59,712,984)Net change in unrealised appreciation/(depreciation) on: - investments 112,354 71,656,939 (99,029,609) 11,985,198 (7,047,418) (22,322,536)- foreign currency – 96,120 (254,247) 8,951,400 33,487 8,826,760Total investment income/(loss) 19,373,666 119,427,869 (13,367,553) 44,668,755 212,696,471 382,799,208 Expenses Investment management fees 3 634,880 4,337,816 6,899,203 2,613,116 24,288,012 38,773,027Performance fees 3 – – 1,300,711 2,368,997 – 3,669,708Administration fees 3 628,199 673,526 974,413 671,507 1,541,816 4,489,461Custodian fees 3 300,938 299,607 869,575 408,130 712,569 2,590,819Audit fees 0 39,491 7,616 151,097 58,178 95,343 351,725Legal expenses 205,537 141,837 577,921 229,274 404,686 1,559,255Directors' fees 3 44,658 35,986 100,797 42,339 62,999 286,779Interest expense – 1,798 1,935 578,596 – 582,329Other expenses 65,769 96,314 118,457 67,605 137,692 485,837Total expenses 1,919,472 5,594,500 10,994,109 7,037,742 27,243,117 52,788,940 Net income/(loss) from operations before finance costs 17,454,194 113,833,369 (24,361,662) 37,631,013 185,453,354 330,010,268 Distribution to holders of redeemable participating shares 5 – – 1,371,839 – – 1,371,839 Taxation Withholding tax – 2,787,724 (1,244) – 11,451,466 14,237,946 Net increase/(decrease) in Net Assets attributable to holders of redeemable participating shares resulting from operations 17,454,194 111,045,645 (25,732,257) 37,631,013 174,001,888 314,400,483 FRS 102 adjustment in relation to organisational costs 2 (85,260) (85,259) (85,634) (85,259) (85,262) (426,674)Net increase/(decrease) in Net Assets attributable to holders of redeemable participating shares resulting from operations 17,368,934 110,960,386 (25,817,891) 37,545,754 173,916,626 313,973,809

Income and results arose solely from continuing operations. There were no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income. *Arctic Covered was renamed as Arctic Return in February 2015.


Statement of Changes in Net Assets attributable to Redeemable Participating Shareholders for the financial year ended

31 December 2015


38

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKNet assets attributable to holders of redeemable participating shares at beginning of financial year 607,428,236 628,342,612 1,230,907,443 1,751,491,788 1,873,507,381 6,091,677,460Proceeds for redeemable shares issued 658,818,596 804,619,914 748,960,086 782,001,716 1,051,898,007 4,046,298,319Payments for redeemable shares redeemed (209,169,078) (530,567,631) (624,633,062) (1,370,563,916) (565,144,583) (3,300,078,270)Net increase/(decrease) in net assets attributable to holders of redeemable participating shares from operations 3,766,939 91,145,315 (71,867,004) 6,126,368 180,868,603 210,040,221Net assets attributable to holders of redeemable participating shares at end of financial year 1,060,844,693 993,540,210 1,283,367,463 1,169,055,956 2,541,129,408 7,047,937,730

*Arctic Covered was renamed as Arctic Return in February 2015.


Statement of Changes in Net Assets attributable to Redeemable Participating Shareholders for the financial year ended

31 December 2014


39

Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities Total NOK NOK NOK NOK NOK NOKNet assets attributable to holders of redeemable participating shares at beginning of financial year 648,342,543 504,864,919 1,857,439,045 910,188,089 1,176,153,279 5,096,987,875Proceeds for redeemable shares issued 176,500,400 37,399,269 876,371,092 1,298,192,370 944,065,172 3,332,528,303Payments for redeemable shares redeemed (234,868,901) (24,967,221) (1,477,170,437) (494,519,684) (420,712,958) (2,652,239,201)Net increase/(decrease) in net assets attributable to holders of redeemable participating shares from operations 17,454,194 111,045,645 (25,732,257) 37,631,013 174,001,888 314,400,483Net assets attributable to holders of redeemable participating shares at end of financial year 607,428,236 628,342,612 1,230,907,443 1,751,491,788 1,873,507,381 6,091,677,460

*Arctic Covered was renamed as Arctic Return in February 2015.


Notes to the Financial Statements

40

1. General

Arctic Funds Plc (the “Company”) was incorporated on 26 July 2010 under the laws of the Republic of Ireland as a public limited company under the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (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 was established as an open-ended umbrella investment company with variable capital and segregated liability between its sub-funds. The Company was authorised by the Central Bank of Ireland (the “Central Bank”) on 5 November 2010. The Company commenced trading on 16 November 2010.

The Company is structured as an umbrella fund in that different sub-funds thereof may be established with the prior approval of the Central Bank. In addition, each sub-fund may have more than one share class allocated to it.

The assets of each sub-fund will be separate from one another and will be invested in accordance with the investment objectives and policies applicable to each sub-fund.

As at 31 December 2015, there are five active sub-funds, Arctic Return, Arctic Global Equities, Arctic High Return, Arctic Investment Grade and Arctic Norwegian Equities (each a “Fund” and collectively the “Funds” ). Arctic Return has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class I NOK Shares and Class R NOK Shares. Arctic Global Equities has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class H Hedged NOK Shares and Class I NOK Shares. Arctic High Return has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class C NOK Shares and Class D NOK Shares. Arctic Investment Grade has three classes of share in issue designated as Class B NOK Shares, Class B SEK Shares and Class D NOK Shares. Arctic Norwegian Equities has four classes of share in issue designated as Class A NOK Shares, Class B NOK Shares, Class D NOK Shares and Class I NOK Shares.

Investment Objective and Policies

Arctic Return

The investment objective is to achieve capital appreciation through investments in a diversified portfolio of bonds and money market instruments.

The main market for the Fund is the Nordic bond market. The Fund invests in bonds and money market instruments issued or guaranteed by governments in the Nordic countries or other governments within Europe, local authorities within Nordic countries or other European countries, as well as financial institutions and reputable and financially sound companies within Nordic countries and other countries in Europe. Arctic Fund Management AS (the “Investment Manager”) uses Standard & Poor's rating scale. "Investment Grade" means rating from AAA to BBB-. The Investment Manager will, in cases where no official rating exists, use unofficial ratings issued by a number of third party banks/credit analysts in order to estimate an average rating for each prospective investment and determine whether it is equivalent to the rating required.


The investment objective is to achieve long-term capital appreciation primarily through equity investments.

Through active portfolio management, company studies and research, the Investment Manager attempts to achieve the Fund’s investment objective by utilising industry, sector and company knowledge together with an assessment of macro-economic outlook to find selective investments within the investment universe.

Arctic High Return

The investment objective is to achieve capital appreciation with a focus on consistent, steady returns through investments in a varied portfolio of primarily high yield bonds.The Fund invests in bonds (which may be fixed and/or floating rate) issued by companies that are deemed attractively priced compared to the underlying credit risk of the issuer and certain macro-economic variables. The Investment Manager reviews the commercial and legal terms of the bond itself (e.g. corporate matters and sector-related issues) and considers various factors (e.g. credit risk/margins, collateral, the need for foreign exchange hedging and loan agreement clauses) in deciding whether or not that bond is a potentially attractive investment before making an investment. The Investment Manager will primarily select high yield bonds, but from time to time (such as during periods of market uncertainty) may invest alternatively in higher quality (i.e. lower yield) bonds which have the potential to increase in value.


Notes to the Financial Statements (Continued)

41

1. General (continued)

Investment Objective and Policies (continued)


The investment objective is to achieve capital appreciation through investments in a diversified portfolio of Investment Grade or Investment Grade equivalent bonds and money market instruments.

The main market for the Fund is the Norwegian bond market. The Investment Manager uses the Standard & Poor's rating scale. This means that the best rating is AAA and the lowest rating is BBB- (the “Investment Grade”). The Fund only invests in Investment Grade or Investment Grade equivalent bonds (which may be fixed and/or floating rate) and money market instruments (such as commercial paper). However, since most Norwegian issuers do not have any rating from a rating agency, the Investment Manager, in cases where no such rating exists, uses unofficial ratings issued by a number of third party banks/credit analysts in order to estimate an average rating for each prospective investment and determine whether it is equivalent to Investment Grade.


The investment objective is to achieve long-term capital appreciation through investments mainly in companies listed or traded on markets in Norway. The Fund may be considered as a focused equity fund – a “stock picker”.

Through active portfolio management, company studies and research, the Investment Manager attempts to achieve the Fund’s investment objective by utilising industry, sector and company knowledge together with an assessment of macro-economic outlook to find selective investments within the investment universe. The composition of the Fund's portfolio is determined based on the prospective company's specific valuation and earning prospects in relation to the outlook for the relevant sectors involved, together with an assessment of macro-economic outlook. There is no limit on the industry sectors in the Norwegian equity universe in which the Fund may invest.

2. Significant Accounting Policies

The following is a summary of the significant accounting policies adopted by the Company:

Statement of Compliance

The financial statements for the financial year ended 31 December 2015 have been prepared in accordance with Financial Reporting Standard (“FRS”) 102: “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS 102”) and Irish statute comprising the Companies Act 2014, the UCITS Regulations and the Central Bank UCITS Regulations. Effective 1 January 2015, the Company transitioned to FRS 102 as discussed overleaf.

Basis of Preparation

The financial statements have been prepared on a going concern basis for the Company under the historical cost convention as modified by the revaluation of financial assets and liabilities held at fair value through profit or loss.

The format and certain wordings of the financial statements has been adapted from those contained in Irish statute so that, in the opinion of the Directors, they more appropriately reflect the nature of the Company’s business as an investment fund.

The Company has availed of the exemption available to open-ended investment funds under Section 7 “Statement of Cash Flows” of FRS 102 not to prepare a cash flow statement.

The Company is organised into five Funds with each Fund operating as one main business segment. No additional disclosure is included in relation to segment reporting, as each Fund activities are limited to one main business and geographic segment.

Management makes estimates and assumptions concerning the future. The resulting estimates may differ from the actual results.



42

2. Significant Accounting Policies (continued)

Transition to FRS 102

The Directors of the Company have adopted FRS 102 for its annual financial statements effective 1 January 2015. Accordingly, these are the Company’s first annual financial statements presented in accordance with FRS 102. Other than those listed below, the Company has consistently applied the accounting policies used in the preparation of its opening FRS 102 Statement of Financial Position at 1 January 2014 throughout all periods presented, as if these policies had always been in effect. This note discloses the impact of transition to FRS 102 on the Company’s reported financial position and financial performance, including the nature and effect of significant changes in accounting policies from those used in the Company’s financial statements for the financial year ended 31 December 2014 prepared in accordance with the previous accounting standards generally accepted in Ireland (“Irish GAAP”). The transition to FRS 102 had no impact to the Statement of Financial Position, the Statement of Comprehensive Income and the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders. Change in accounting policies Under previous Irish GAAP, the quoted market price used for financial assets held was the current bid price and the appropriate quoted market price for financial liabilities was the current ask price. Under FRS 102, in accounting for all of its financial instruments, an entity is required to apply either of the following: a) the full requirements of Section 11 “Basic Financial Instruments” and Section 12 “Other Financial Instruments Issues” of FRS 102; b) the recognition and measurement provisions of International Accounting Standards (“IAS”) 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”) as adopted for use in the European Union and the disclosure requirements of Sections 11 and 12 of FRS 102; or c) the recognition and measurement provisions of International Financial Reporting Standards (“IFRS”) 9 “Financial Instruments” (“IFRS 9”) and the disclosure requirements of Sections 11 and 12 of FRS 102. The Company has elected to apply the recognition and measurement provisions of IAS 39 and the disclosure requirements of Sections 11 and 12 of FRS 102. Under IAS 39, financial assets and liabilities are valued at last traded price, consistent with the prospectus. This policy change is recognised prospectively and therefore has no effect on each Fund’s trading net assets nor on the profit or loss for the financial year.

Investments at Fair Value

Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed as incurred in the Statement of Comprehensive Income. Financial assets at fair value through profit or loss are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the Statement of Comprehensive Income in the financial year in which they arise.

The fair value of financial instruments traded in active markets (such as listed equities and publicly traded derivatives) is based on quoted market prices at the Statement of Financial Position date. The quoted market price used for financial assets held by the Company under FRS 102 is the current last traded price.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses a variety of methods and makes assumptions that are based on market conditions existing at each Statement of Financial Position date. Valuation techniques used include the use of comparable recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants. Unlisted securities and thinly traded securities are valued in good faith by the Directors based on quotations received from third parties including relevant brokers.



43


Realised Gains and Losses on Sales of Investments

The computation of realised gains and losses on sales of investments are calculated using the First-In-First-Out (“FIFO”) basis.

Private Placements

A private placement is the raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors. Investors involved in private placements are usually large banks, mutual funds, insurance companies, and pension funds.

Since a private placement is offered to a few, select individuals, the placement does not have to be registered with the Securities and Exchange Commission (“SEC”). In many cases detailed financial information is not disclosed and the need for a prospectus is waived. Finally, since the placements are private rather than public, the average investor is only made aware of the placement usually after it has occurred. Private Placements are fair valued in good faith by the Investment Manager and the change in fair value is included in the Net change in unrealised appreciation/(depreciation) on investments in the Statement of Comprehensive Income.

Forward Foreign Currency Contracts

A forward foreign currency contract involves an obligation to purchase or sell a specific currency at a future date at a price set at the time the contract is made. Forward foreign currency contracts are valued by reference to the forward price at which a new forward foreign currency contract of the same size and maturity could be undertaken at the valuation date. The unrealised gain or loss on open forward foreign currency contracts is calculated as the difference between the contract rate and this forward price and recognised in the Statement of Comprehensive Income. Where a forward foreign currency contract is purchased to hedge the currency risk of a specific class which is issued in a currency other than the measurement currency of the Fund, all gains or losses on that contract are allocated to that class. All gains and losses from trading in forward foreign currency contracts are included in the Net realised appreciation/(depreciation) on foreign currency in the Statement of Comprehensive Income.

Interest Rate Swaps

An interest rate swap involves the exchange by a Fund with another party of their respective commitments to pay or receive cash flows e.g., an exchange of floating rate payments for fixed-rate payments in base or foreign currencies. The purchase of a cap entitles the purchaser, to the extent that a specified index exceeds a predetermined value, to receive payments on a notional principal amount from the party selling the cap. The purchase of a floor entitles the purchaser, to the extent that a specified index falls below a predetermined value, to receive payments on a notional principal amount from the party selling the floor. A collar combines elements of buying a cap and selling a floor. Spread locks are contracts that guarantee the ability to enter into an interest rate swap at a predetermined rate above some benchmark rate. Interest rate swaps are fair valued based upon quotations from counterparties or an independent pricing service. Movements in fair value are included in the Net change in unrealised appreciation/(depreciation) on investments in the Statement of Comprehensive Income.

Cross Currency Swaps

Certain Funds may enter into cross currency swap agreements to gain or mitigate exposure to currency risk. Cross currency swap agreements involve two parties exchanging two different currencies with an agreement to reverse the exchange at a later date at specified exchange rates. The exchange of currencies at the inception date of the contract takes place at the current spot rate. The re-exchange at maturity may take place at the same exchange rate, a specified rate, or the then current spot rate. Interest payments, if applicable, are made between the parties based on interest rates available in the two currencies at the inception of the contract. The terms of cross currency swap contracts may extend for many years. Cross currency swaps are usually negotiated with commercial and investment banks. Some cross currency swaps may not provide for exchanging principal cash flows, but only for exchanging interest cash flows. Movements in fair value are included in the Net change in unrealised appreciation/(depreciation) on investments in the Statement of Comprehensive Income.



44


Income

Dividends on securities are recognised as income on the date that these securities are first quoted ex-dividend to the extent information thereon is reasonably available. Interest income is recognised on an effective interest basis.

Taxation

Under current law and practice, there is no income, gains or other taxes payable by the Funds. The Funds currently incur withholding taxes imposed by certain countries on investment income and capital gains. Withholding taxes are disclosed separately in the Statement of Comprehensive Income and net of any tax credits.

Foreign Exchange 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 (the "functional currency") which is Norwegian Krone (“NOK”). The Company has adopted the functional currency of the Fund as the presentation currency for these financial statements.

b) Transactions in foreign currencies are translated into the functional currency at the exchange rates ruling at the dates of the transactions. The resulting gain or loss arising on translation of securities and other assets and liabilities is included in unrealised gains and losses on investments/foreign currency. Realised gains and losses arising between the transaction and settlement dates on purchases or sales of securities denominated in the non-base currencies are included in realised gains and losses on investments/foreign currency.

Expenses

Expenses are accounted for on an accrual basis.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position 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 asset and settle the liability simultaneously.

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 Fund at any dealing date for cash equal to a proportionate share of the Fund’s Net Asset Value. The redeemable participating share is carried at the redemption amount that is payable at the Statement of Financial Position date if the shareholder exercised its right to put the share back to the Fund.

Receivable from Investments Sold/Payable for Investments Purchased

Receivable from investments sold/payable for investments purchased represent receivables for securities sold and payables for securities purchased, respectively that have been contracted for but not yet delivered by the end of the financial year. These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment for amounts due from brokers.

Published Net Asset Value

The Net Asset Value (“NAV”) differs slightly from the published Net Asset Value. This difference is due to the variation in principles in relation to the accounting for organisational expenses. As outlined in the prospectus the Company may amortise organisational expenses for up to 60 months which is a divergence from accounting standards generally accepted in Ireland, therefore appropriate adjustments have been made to account for organisational expenses in accordance with Section 18 “Intangible Assets other than Goodwill” of FRS102. This has no impact on the ongoing valuation; calculation of NAV based fees or shareholder transactions of the Fund.



45


Transactions Costs

Transaction costs are costs incurred to acquire transferable securities, derivatives or other eligible assets. They include fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the Statement of Comprehensive Income as an expense.

Transaction costs on bonds, forward foreign currency contracts and swaps are included in the purchase and sale price of the investments. They cannot be practically or reliably gathered as they are embedded in the cost of investment and cannot be separately verified and disclosed. Transaction costs for purchases and sales of equities are included in Net realised appreciation/(depreciation) on investments in the Statement of Comprehensive Income.

Distribution to Holders of Redeemable Participating Shares

The Directors do not anticipate distributing dividends from net investment income in respect of the Funds but reserves the right to pay dividends or to make other distributions in the future except for Class C NOK of Arctic High Return. The Directors are entitled to declare dividends out of the relevant distributing share class being: (i) the accumulated revenue (consisting of all revenue accrued including interest and dividends) less expenses and/or (ii) realised and unrealised accumulated capital gains on the disposal/valuation of investments less realised and unrealised accumulated capital losses of the relevant Fund. Dividends will be declared on an annual basis and will be paid within four months. The Distribution to Holders of Redeemable Participating Shares is recognised as a finance cost, when declared, in the Statement of Comprehensive Income. 3. Fees and Expenses

Investment Management Fees

Arctic Return

Class A Shares; Class B Shares; Class I Shares; Class R Shares The Fund pays the Investment Manager a fee of up to 0.2% per annum of the Net Asset Value of the Fund attributable to the Class A Shares, 0.15% per annum of the Net Asset Value of the Fund attributable to the Class B Shares, 0.1% per annum of the Net Asset Value of the Fund attributable to the Class I Shares and 0.4% per annum of the Net Asset Value of the Fund attributable to the Class R Shares.


Class A Shares; Class B Shares; Class H Hedged Shares; Class I Shares The Fund pays the Investment Manager a fee of up to 1.75% per annum of the Net Asset Value of the Fund attributable to the Class A Shares and Class H Hedged Shares, 1% per annum of the Net Asset Value of the Fund attributable to the Class B Shares and 0.75% per annum of the Net Asset Value of the Fund attributable to Class I Shares.

Arctic High Return

Class A Shares; Class B Shares; Class C Shares; Class D Shares The Fund pays the Investment Manager a fee of up to 0.5% per annum of the Net Asset Value of the Fund attributable to the Class A Shares, 0.25% per annum of the Net Asset Value of the Fund attributable to the Class B Shares and Class C Shares and 0.75% of the Net Asset Value of the Fund attributable to the Class D Shares.


Class A Shares; Class B Shares, Class D Shares The Fund pays the Investment Manager a fee of up to 0.4% per annum of the Net Asset Value of the Fund attributable to the Class A Shares, 0.2% per annum of the Net Asset Value of the Fund attributable to the Class B Shares and 0.5% per annum of the Net Asset Value of the Fund attributable to the Class D Shares.



46

3. Fees and Expenses (continued)

Investment Management Fees (continued)


Class A Shares; Class B Shares; Class D Shares, Class I Shares The investment management fee equals 10% of the aggregate appreciation in value of the average number of shares in issue during the calendar year (the "Investment Management Fee"). The Investment Management Fee shall be calculated and accrued on a daily basis, but payable on the earliest of (i) the end of a calendar year, and (ii) on redemption of the relevant Shares. Notwithstanding the above, the Investment Management Fee shall equal a minimum of 1.75% per annum of the Net Asset Value of the Fund attributable to the Class A Shares, 1% per annum of the Net Asset Value of the Fund attributable to the Class B Shares, 1.75% per annum of the Net Asset Value of the Fund attributable to the Class D Shares and 0.75% per annum of the Net Asset Value of the Fund attributable to the Class I Shares. A minimum shall be applied pro rata for Shares subscribed during the course of the calendar year.

On 31 December of each financial year, a year end calculation and, where necessary, adjustment shall be made to the Investment Management Fee described above, in order to reflect a maximum Investment Management Fee of 5% of the average Net Asset Value of the Fund attributable to the shares during that calendar year. However, shares redeemed during the course of a calendar year shall not benefit from such maximum for that particular calendar year.

For all Funds, the Investment Manager shall also be entitled to be repaid out of the assets of the Funds all costs, expenses, outgoings and liabilities reasonably and properly incurred by or on behalf of the Investment Manager on behalf of the Funds.

The Investment Management Fee shall be accrued on a daily basis and at the beginning of each week an account payment of 1/52 of the minimum Investment Management Fee will be made.

The Investment Management Fees charged during the financial year ended 31 December 2015 amounted to NOK54,089,711 (31 December 2014: NOK38,773,027) and the fees owing as at 31 December 2015 amounted to NOK4,852,500 (31 December 2014: NOK4,526,098).

Performance Fees

Arctic Global Equities, Arctic High Return, Arctic Investment Grade and Arctic Norwegian Equities

A performance fee equal to 10% of any New Net Appreciation (as defined below) is payable to the Investment Manager (the "Performance Fee"). The Performance Fee is calculated in respect of each calendar year ending 31 December (a “Calculation Period”). However, the first Calculation Period in respect of any Class of Shares will be the financial year commencing on the business day immediately following the close of the initial offer year for that Class and ending on 31 December of that calendar year.

The Performance Fee is calculated and accrued as at each valuation point. The Performance Fee shall normally be payable to the Investment Manager in arrears within 14 calendar days of the end of each Calculation Period. However, in the case of Shares redeemed during a Calculation Period, the accrued Performance Fee in respect of those Shares shall be payable within 14 calendar days after the date of redemption. Crystallised Performance Fees shall remain in the relevant Class (but shall not participate in subsequent gains and losses of the relevant Class) and shall not be used or made available to satisfy redemptions or pay any fees and expenses of the relevant Class. In the event of a partial redemption, Shares shall be treated as redeemed on a First-In-First-Out, (“FIFO”) basis.

The Performance Fee in respect of each Calculation Period is be calculated by reference to the Net Asset Value before deduction for any accrued Performance Fee. If the Investment Management Agreement is terminated during a Calculation Period, the Performance Fee in respect of the then current Calculation Period shall be calculated and paid as though the date of termination were the end of the relevant Calculation Period.

The "New Net Appreciation" shall equal the amount, if any, by which the net asset value of the relevant Class (prior to any deduction for accrued Performance Fee payable in respect of the financial year) as of the end of the relevant Calculation Period exceeds the high water mark as increased by the Hurdle Rate (each as defined below).

The "High Water Mark" is the greater of:



47


Performance Fees (continued)

(a) the Net Asset Value of the relevant Class as of the end of the most recent Calculation Period in respect of which a Performance Fee was paid in respect of such relevant Class (after the deduction for the Performance Fee then paid). The Net Asset Value referred to in the previous sentence shall be increased when additional subscriptions are made to the relevant Class, by an amount equal to such subscriptions and shall be reduced proportionately whenever redemptions are made from the relevant Class by being multiplied by the fraction, the numerator of which is the Net Asset Value of the relevant Class immediately after, and the denominator of which is the Net Asset Value of the relevant Class immediately prior to, any such redemption (the Net Asset Value of the relevant Class in each case to be calculated prior to deduction for any accrued Performance Fee); or

(b) if no Performance Fee has ever been paid, then the initial capital of the relevant Class immediately following the close of the initial offer period.

For the avoidance of doubt, a Performance Fee is only payable where the Net Asset Value of the relevant class exceeds the High Water Mark. The "Hurdle Rate" in this context is the percentage change in the value of the reference index at the end of the Calculation Period versus the value of the reference index at the start of the Calculation Period.

The value of the reference index at the start of the Calculation Period will be the value of the reference index at the end of the last Calculation Period or, in the case of the first Calculation Period, the value of the reference index at the time of the initial issue of Shares. Investors should be aware that the Hurdle Rate may be negative and that a Performance Fee may still be payable in such circumstances. The Performance Fee will be verified by BNY Mellon Trust Company (Ireland) Limited (the “Custodian”). The Performance Fee is based on net realised and net unrealised gains and losses as at the end of each Calculation Period and, as a result, a Performance Fee may be paid on unrealised gains which may subsequently never be realised.

The Performance Fees charged during the financial year ended 31 December 2015 were NOK1,321,874 (31 December 2014: NOK3,669,708) and the fees owing as at 31 December 2015 amounted to NOK1,321,874 (31 December 2014: NOK3,662,505).

Administration Fees

Arctic Return

BNY Mellon Investment Servicing (International) Limited (the ”Administrator”) is entitled to receive out of the net assets of the Fund an annual fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.1% of the Net Asset Value of the relevant Fund subject to a minimum monthly fee of up to EUR6,500 per month plus VAT if any.

Arctic High Return, Arctic Investment Grade

The Administrator is entitled to receive out of the net assets of each of the Funds an annual fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.04% of the Net Asset Value of the relevant Fund subject to a minimum monthly fee of up to EUR6,500 per month plus VAT if any.

Arctic Global Equities, Arctic Norwegian Equities

The Administrator is entitled to receive out of the net assets of each of the Funds an annual fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.105% of the Net Asset Value of the relevant Fund subject to a minimum monthly fee of up to EUR6,500 per month plus VAT if any.

For all Funds, the Administrator is also entitled to receive a fee of EUR1,875 per share class (other than the NOK class) per month for the provision of investor services, a financial statement production fee of EUR3,000 per Fund, per set of financial statements produced, an investor account fee of EUR25 per account per month and an investor transaction fee of EUR25 per subscription or redemption.

The Company and each of its Funds are responsible for all disbursements and reasonable out-of-pocket expenses incurred by the Administrator in the proper performance of its duties inclusive of third party brokerage fees and costs incurred by the Company in relation to its own investment activities.



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Administration Fees (continued)

The administration fees charged during the financial year ended 31 December 2015 amounted to NOK3,733,369 (31 December 2014: NOK4,489,461) and the fees owing as at 31 December 2015 amounted to NOK1,500,900 (31 December 2014: NOK2,065,745).

Custodian Fees

Arctic Return

The Custodian is entitled to receive out of the net assets of the Funds an annual trustee and custodial fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.05% of the Net Asset Value of the Fund. Arctic High Return, Arctic Investment Grade

The Custodian is entitled to receive out of the net assets of each of the Funds an annual trustee and custodial fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.01% of the Net Asset Value of the Fund subject to a minimum monthly fee of up to EUR1,000 per month plus VAT if any.

Arctic Global Equities, Arctic Norwegian Equities

The Custodian is entitled to receive out of the net assets of each of the Funds an annual trustee and custodial fee, accrued and calculated at each valuation point and payable monthly in arrears at an annual rate not exceeding 0.02% of the Net Asset Value of the Fund subject to a minimum monthly fee of up to EUR1,000 per month plus VAT if any.

For all Funds, the Custodian shall also be reimbursed all of its reasonable out-of-pocket expenses out of the assets of the relevant Fund and shall also be refunded its sub-custodian fees and expenses at normal commercial rates.

The custodian fees charged during the financial year ended 31 December 2015 amounted to NOK3,780,464 (31 December 2014:NOK2,590,819) and the fees owing as at 31 December 2015 amounted to NOK1,393,541 (31 December 2014: NOK726,322.)

Directors’ Fees

Directors’ fees charged during the financial year ended 31 December 2015 were NOK402,914 (31 December 2014 : NOK286,779) of which NOK33,899 was outstanding as at 31 December 2015 (31 December 2014 : NOK 165,056).

Auditors’ Remuneration Fees and expenses paid to our statutory auditors, Deloitte, in respect of the financial year, entirely relate to the audit of the financial statements of the Company. There were no fees and expenses paid in respect of other assurance, tax advisory or non-audit services. Auditors’ remuneration received during the financial year ended 31 December 2015 was NOK408,829 (31 December 2014: NOK360,740).

Transaction Costs

For the financial year ended 31 December 2015, all transactions costs for each Fund are disclosed below:

Arctic

Covered Arctic Global

Equities

Arctic High

Return

Arctic Investment

Grade

Arctic Norwegian

Equities

NOK NOK NOK NOK NOK

Transaction Costs - 2,192,669 - - 4,058,082



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Transaction Costs (continued)

For the financial year ended 31 December 2014, all transactions costs for each Fund are disclosed below:

Arctic

Covered Arctic Global

Equities

Arctic High

Return

Arctic Investment

Grade

Arctic Norwegian

Equities

NOK NOK NOK NOK NOK

Transaction Costs - 621,229 6,248 - 4,728,707

4. Taxation

The Company as an investment undertaking as defined in section 739 B of the Taxes Consolidation Act, 1997 (as amended). Therefore, the Company will not be liable to taxation in respect of its income and gains, other than on the occurrence of a chargeable event. Generally a chargeable event arises on any distribution, redemption, repurchase, cancellation, transfer of shares or on the ending of a ‘Relevant Period’, a ‘Relevant Period’ being an eight year period beginning with the acquisition of the shares by the shareholders and each subsequent period of eight years beginning immediately after the preceding Relevant Period.

A chargeable event does not include:

any transactions in relation to shares held in a recognised clearing system as designated by order of the Revenue Commissioners of Ireland; or

an exchange of shares representing the Fund for another fund; or

an exchange of shares arising on a qualifying amalgamation or reconstruction of the Fund with another fund; or

certain exchanges of shares between spouses and former spouses.

A chargeable event will not occur in respect of shareholders who are neither resident nor ordinarily resident in Ireland and who have provided the Company with a relevant declaration to that effect.

In the absence of an appropriate declaration, the Company will be liable to Irish Tax on the occurrence of a chargeable event. There were no chargeable events during the financial year under review.

Capital gains, dividends and interest received may be subject to withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its shareholders.

5. Distribution to Holders of Redeemable Participating Shares The 31 December 2015 distribution is detailed below.

Fund Share Class NOK Rate

Arctic High Return Class C NOK 11,127,348 6.441

The 31 December 2014 distribution is detailed below.

Fund Share Class NOK Rate

Arctic High Return Class C NOK 1,371,839 7.903



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6. Share Capital

The authorised share capital of the Company is 300,002 redeemable non-participating shares of no par value and 500,000,000,000 participating shares of no par value.

The minimum issued share capital of the Company is EUR 2 or its equivalent in another currency. The maximum issued share capital of the Company is EUR 500,000,300,002 or its equivalent in any other currency.

The issue price is payable in full on acceptance. There are no rights of pre-emption attaching to the shares in the Company.

The Fund has seven classes available for issue Class A, Class B, Class C, Class D, Class H, Class I and Class R Shares.

The existing Class B shares of Arctic Return were renamed as Class I Shares and the Fund launched a new Class B shares on 2 February 2015. The Investment Manager may apply an anti-dilution levy in relation to applications for purchases of shares. The levy is an allowance for market spreads (the difference between the prices at which assets are valued and/or bought), duties and charges and other dealing costs relating to the acquisition of assets for a Fund in the event of receipt of net subscriptions on a dealing day. The levy is intended to be used to ensure that all investors in the relevant Fund are treated equitably by allocating transaction costs to the investors whose transactions give rise to those costs.

The Company may issue voting shares and non-voting shares. The non-voting shares carry no right to notice of, attend or vote at general meetings of the Company or any Fund. In respect of the voting shares, subject to any rights or restrictions for the time being attached to any class or classes of voting shares, on a show of hands every holder who is present in person or by proxy shall have one vote and the holder(s) of subscriber shares present in person or by proxy shall have one vote in respect of all the subscriber shares in issue and on a poll every holder present in person or by proxy shall have one vote for every voting share of which he is the holder and every holder of a subscriber share present in person or by proxy shall have one vote in respect of his holding of subscriber shares. On a poll of all the Holders of shares in a Fund, where there is more than one class of shares in existence in that Fund, the voting rights of such holders may at the discretion of the Directors be adjusted in such manner, determined by the Directors, so as to reflect the most recently calculated price at which the shares of each of the classes in question may be repurchased by the Company. Holders who hold a fraction of a voting share may not exercise any voting rights, whether on a show of hands or on a poll, in respect of such fraction of a voting share.

In accordance with the requirements of the Central Bank, the decision to subscribe for any class of shares in respect of which the voting rights are restricted shall be made solely by the investor and any shareholder of non-voting shares shall have the right to switch their holding to voting shares without incurring any fee or charge on such exchange.

The Net Asset Value per share is determined by dividing the value of net assets of the respective Fund by the total number of redeemable participating shares in issue at 31 December 2015 and 31 December 2014 .



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6. Share Capital (continued)

The movement in shares for the financial year ended 31 December 2015 was as follows: Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities

Number of

Shares Number of

Shares Number of

Shares Number of

Shares Number of

Shares

Class A NOK

Shares as at beginning of financial year – 14,179 95,587 – 41,675Shares issued 44,739 323,376 56,050 – 15,890Shares redeemed (5,576) (310,995) (98,428) – (8,895)Shares as at end of financial year 39,163 26,560 53,209 – 48,670

Class B NOK

Shares as at beginning of financial year – 61,022 615,836 880,501 94,718Shares issued 125,954 44,018 104,211 318,909 66,422Shares redeemed (16,342) (38,320) (267,696) (384,719) (57,542)Shares as at end of financial year 109,612 66,720 452,351 814,691 103,598

Class B SEK

Shares as at beginning of financial year – – – 28,115 –Shares issued – – – – –Shares redeemed – – – (835) –Shares as at end of financial year – – – 27,280 –

Class C NOK

Shares as at beginning of financial year – – 173,592 – –Shares issued – – 1,445 – –Shares redeemed – – – – –Shares as at end of financial year – – 175,037 – –

Class D NOK

Shares as at beginning of financial year – – 192,406 669,628 845,511Shares issued – – 560,846 393,126 382,338Shares redeemed – – (178,345) (897,766) (154,429)Shares as at end of financial year – – 574,907 164,988 1,073,420

Class H Hedged NOK

Shares as at beginning of financial year – – – – –Shares issued – 301,182 – – –Shares redeemed – (150,092) – – –Shares as at end of financial year – 151,090 – – –

Class I NOK

Shares as at beginning of financial year 536,058 363,349 – – 296,427Shares issued 423,731 71,253 – – 206,225Shares redeemed (163,848) (6,709) – – (140,438)Shares as at end of financial year 795,941 427,893 – – 362,214

Class R NOK

Shares as at beginning of financial year – – – – –Shares issued 2,000 – – – –Shares redeemed – – – – –Shares as at end of financial year 2,000 – – – –



52

6. Share Capital (continued)

The movement in shares for the financial year ended 31 December 2014 was as follows: Arctic Arctic Arctic Arctic Global Arctic High Investment Norwegian Return* Equities Return Grade Equities

Number of

Shares Number of

Shares Number of

Shares Number of

Shares Number of

Shares

Class A NOK

Shares as at beginning of financial year – 7,421 116,235 – 16,379Shares issued – 19,657 44,922 – 44,715Shares redeemed – (12,899) (65,570) – (19,419)Shares as at end of financial year – 14,179 95,587 – 41,675

Class B NOK

Shares as at beginning of financial year – 57,112 1,179,652 786,529 163,040Shares issued – 12,266 408,083 517,784 40,508Shares redeemed – (8,356) (971,899) (423,812) (108,830)Shares as at end of financial year –* 61,022 615,836 880,501 94,718

Class B SEK

Shares as at beginning of financial year – – – 9,700 –Shares issued – – – 18,415 –Shares redeemed – – – – –Shares as at end of financial year – – – 28,115 –

Class C NOK

Shares as at beginning of financial year – – – – –Shares issued – – 173,592 – –Shares redeemed – – – – –Shares as at end of financial year – – 173,592 – –

Class D NOK

Shares as at beginning of financial year – – 219,468 – 529,266Shares issued – – 106,570 669,628 484,815Shares redeemed – – (133,632) – (168,570)Shares as at end of financial year – – 192,406 669,628 845,511

Class H Hedged NOK

Shares as at beginning of financial year – – – – –Shares issued – – – – –Shares redeemed – – – – –Shares as at end of financial year – – – – –

Class I NOK

Shares as at beginning of financial year 587,916 363,991 – – 186,975Shares issued 156,887 – – – 110,148Shares redeemed (208,745) (642) – – (696)Shares as at end of financial year 536,058* 363,349 – – 296,427

Class R NOK

Shares as at beginning of financial year – – – – –Shares issued – – – – –Shares redeemed – – – – –Shares as at end of financial year – – – – –

*Arctic Covered was renamed as Arctic Return in February 2015. Class B NOK was renamed as Class I NOK on this sub-fund only.



53

7. Exchange Rates The following exchange rates have been used to translate assets and liabilities in other currencies to Norwegian Krone:

Exchange Rates against NOK 31 December 2015 31 December 2014 Australian Dollar 6.4502 6.0846 British Pound 13.0491 11.6163 Danish Krone 1.2890 1.2110 Euro 9.6195 9.0185 Hong Kong Dollar 1.1421 0.9611 Japanese Yen 0.0736 0.0622 Singapore Dollar 6.2428 5.6264 Swedish Krona 1.0486 0.9561 Swiss Franc 8.8375 7.4965 United States Dollar 8.8517 7.4530

8. Cash at bank

As at 31 December 2015 and 31 December 2014, cash at bank consists of cash on hand and bank balances held via BNY Mellon Trust Company (Ireland) Limited and DNB NOR. 9. Efficient Portfolio Management

The Company may engage in transactions in Financial Derivative Instruments (“FDI”) on behalf of a Fund either for investment purposes or for the purposes of efficient portfolio management. Where considered appropriate, the Company may invest in FDIs and/or utilise techniques and instruments for investment purposes, for efficient portfolio management, to gain currency exposure and/or to protect against foreign exchange risks, subject to the conditions and within the limits laid down by the Central Bank. Gains and losses on these transactions are reflected in the Statement of Comprehensive Income.

During the financial year ended 31 December 2015, the financial instruments utilised for efficient portfolio management purposes are detailed in the Portfolio of Investments of the Funds.

In accordance with the Central Bank UCITS Regulations, the revenues arising from repurchase agreements and stock lending transactions for the entire reporting period, together with the direct and indirect operational costs and fees incurred, should be disclosed in the financial statements of the Company. During the financial year ended 31 December 2015 and 31 December 2014, the Funds did not enter into any repurchase agreements and stock lending transactions.

10. Risk Management Policies and Procedures

Introduction

The Funds primarily invest in securities and instruments selected by the Investment Manager in accordance with its respective investment objective and policies. The value of investments and the income from them, and therefore the value of and income from shares relating to each Fund, are closely linked to the performance of such underlying securities and instruments.

The Company, on behalf of the Funds, has filed with the Central Bank its risk management policy which enables it to accurately measure, monitor and manage the various risks associated with the use of financial derivative instruments. The Company on request, provides supplementary information to shareholders relating to the risk management methods employed, including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments.

The paragraphs overleaf outline procedures undertaken to manage the market, credit and liquidity risks of the Company:



54

10. Risk Management Policies and Procedures (continued)

Market Risk

Market risk arises mainly from uncertainty about future values of financial instruments held specifically from price, currency and interest rate movements. It represents the potential loss the Funds might suffer through holding market positions in the face of market movements. The Investment Manager uses the commitment approach to calculate global exposure.

(i) Market Price Risk

Market price risk is the risk that the fair value 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), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the market. The Funds are exposed to market price risk arising from its investments in securities. By diversifying the portfolio, the risk that a price change of a particular investment will have a material impact on the Funds is minimised. The Investment Manager manages the Funds market risk on a daily basis. As at 31 December 2015, the overall market exposures were as follows:

Arctic ReturnArctic Global

Equities Arctic High

Return Fair Value Fair Value Fair Value NOK NOK NOK Financial assets at fair value through profit or loss - held for trading 1,040,835,403 981,764,536 1,275,838,139Financial liabilities at fair value through profit or loss - held for trading (5,090,068) (1,999,509) (9,158,118) 1,035,745,335 979,765,027 1,266,680,021

Arctic Investment

Grade

Arctic Norwegian

Equities Fair Value Fair Value NOK NOK Financial assets at fair value through profit or loss - held for trading 1,146,112,145 2,472,802,144 Financial liabilities at fair value through profit or loss - held for trading (8,379,206) – 1,137,732,939 2,472,802,144

As at 31 December 2014, the overall market exposures were as follows:

Arctic ReturnArctic Global

Equities Arctic High

Return Fair Value Fair Value Fair Value NOK NOK NOK Financial assets at fair value through profit or loss - held for trading 599,815,700 621,652,706 1,205,582,114Financial liabilities at fair value through profit or loss - held for trading – – (1,586,359) 599,815,700 621,652,706 1,203,995,755



55


Market Risk (continued)

(i) Market Price Risk (continued)

Arctic Investment

Grade

Arctic Norwegian

Equities Fair Value Fair Value NOK NOK Financial assets at fair value through profit or loss - held for trading 1,708,090,602 1,796,172,409 Financial liabilities at fair value through profit or loss - held for trading (2,616,701) – 1,705,473,901 1,796,172,409

The tables below present a scenario analysis, in which a 5% change is applied to each of the benchmarks against which each Fund is managed. Based on the BETA values and fund valuations at 31 December 2015, estimated monetary changes are provided:

Impact on Net Asset Value of a movement in Market Prices

Index as at 31 December 2015 as at 31 December 2014

NOK NOK

Arctic Return ST1X Index

Increase of 5% 46,719,316 23,083,323

Decrease of 5% (46,719,316) (23,083,323)

Arctic Global Equities MSCI All Country World Index

Increase of 5% 41,223,207 26,331,371

Decrease of 5% (41,223,207) (26,331,371)

Arctic High Return ST1X Index

Increase of 5% 309,535,730 120,697,863

Decrease of 5% (309,535,730) (120,697,863)

Arctic Investment Grade ST1X Index

Increase of 5% 14,316,179 224,226,987

Decrease of 5% (14,316,179) (224,226,987)

Arctic Norwegian Equities OSEFX Index

Increase of 5% 102,621,289 77,745,538

Decrease of 5% (102,621,289) (77,745,538) The sensitivity analysis set out above is based on likely predicted outcomes but is not guaranteed and should not be used as an indication of future performance.



56



(ii) Foreign Currency Risk

Foreign currency risk is the risk that a fair value of a financial instrument will fluctuate because of changes in foreign exchange rates. The risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. Although shares in the Funds are denominated in a particular base currency (NOK), the Funds may invest its assets in securities denominated in a wide range of currencies, some of which may not be freely convertible. The net asset value of the Funds as expressed in the base currency will fluctuate in accordance with the changes in the foreign exchange rate between the base currency and the currencies in which the Funds investments are denominated. The Funds may, therefore, be exposed to a foreign exchange/currency risk. It may not be possible or practicable to hedge against the consequent foreign exchange/currency risk exposure. The Investment Manager may or may not try to mitigate this risk by using financial instruments. The amounts in the table below are based on the carrying value of financial assets and liabilities as at 31 December 2015: Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency

Investments in Non-Interest

Bearing Assets

Investments in Non-Interest Bearing

Liabilities

Investments in Interest

Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/

(Liabilities)Total Net

Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Return Euro – (1,228,912) 23,794,893 (182,790) 1,386 397,351 22,781,928Norwegian Krone – – 890,292,500 – 13,974,063 9,906,026 914,172,589Swedish Krona – – 126,748,010 (3,678,366) 240,865 360,249 123,670,758United States Dollar – – – – 219,418 – 219,418Total – (1,228,912) 1,040,835,403 (3,861,156) 14,435,732 10,663,626 1,060,844,693

Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Global Equities Australian Dollar 8,640,041 – – – 1,144,097 – 9,784,138British Pound 22,129,582 – – 21,516 1,199 – 22,152,297Danish Krone – – – – 21 – 21Euro 252,507,906 – – (308,115) 16,057,059 – 268,256,850Hong Kong Dollar 39,463,256 – – – 1 – 39,463,257Japanese Yen 78,325,927 – – (234,827) 822,609 – 78,913,709Norwegian Krone 10,980,000 – – – 3,812,724 (905,581) 13,887,143Singapore Dollar 15,296,081 – – – 18,911 – 15,314,992Swedish Krona 42,301,311 – – (104,066) 7,194 (8,216,108) 33,988,331Swiss Franc – – – – 1,430 – 1,430United States Dollar 512,098,916 – – (1,352,501) 147,409 884,218 511,778,042Total 981,743,020 – – (1,977,993) 22,012,654 (8,237,471) 993,540,210



57



(ii) Foreign Currency Risk (continued)


Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic High Return British Pound – – – – 36,081 – 36,081Danish Krone – – – – 5,230 – 5,230Euro – (1,284,415) 54,045,651 (781,437) 5,664 604,941 52,590,404Norwegian Krone 2,169,869 – 939,040,380 – 15,675,697 (4,227,059) 952,658,887Swedish Krona – – 140,860,625 (4,114,200) 1,105,909 1,054,663 138,906,997United States Dollar – – 139,721,614 (2,978,066) 1,319,412 1,106,904 139,169,864Total 2,169,869 (1,284,415) 1,273,668,270 (7,873,703) 18,147,993 (1,460,551) 1,283,367,463


Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Investment Grade British Pound – – – – 3,915 – 3,915Euro – (2,989,830) 66,836,559 (688,706) 37,954 443,024 63,639,001Norwegian Krone – – 917,200,300 817,851 28,737,212 1,426,098 948,181,461Swedish Krona – – 161,257,435 (4,700,670) 267,162 138,079 156,962,006United States Dollar – – – – 269,573 – 269,573Total – (2,989,830) 1,145,294,294 (4,571,525) 29,315,816 2,007,201 1,169,055,956 Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Norwegian Equities Euro – – – – 3 – 3Norwegian Krone 2,432,768,377 – – – 65,173,072 2,119,387 2,500,060,836Swedish Krona – – – – 361 – 361United States Dollar 40,033,767 – – – 654,011 380,430 41,068,208Total 2,472,802,144 – – – 65,827,447 2,499,817 2,541,129,408



58




The amounts in the below table are based on the carrying value of financial assets and liabilities as at 31 December 2014: Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Return Euro – – – – 1 – 1Norwegian Krone – – 599,815,700 – 6,855,266 757,269 607,428,235Total – – 599,815,700 – 6,855,267 757,269 607,428,236


Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Global Equities Australian Dollar 11,615,868 – – – 12 – 11,615,880British Pound 13,696,353 – – – 169,106 – 13,865,459Danish Krone – – – – 22,887 – 22,887Euro 175,737,487 – – – 258,994 – 175,996,481Hong Kong Dollar 29,911,858 – – – 159,850 – 30,071,708Japanese Yen 55,645,661 – – – 417,144 – 56,062,805Norwegian Krone 495,000 – – – 5,479,662 (764,657) 5,210,005Singapore Dollar 12,397,192 – – – – – 12,397,192Swedish Krona 11,824,050 – – – – – 11,824,050Swiss Franc – – – – 1,213 – 1,213United States Dollar 310,329,237 – – – 607,049 338,646 311,274,932Total 621,652,706 – – – 7,115,917 (426,011) 628,342,612 Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic High Return British Pound – – – – 32,119 – 32,119Danish Krone – – 16,595,730 313,245 774 97,860 17,007,609Euro – – 21,694,115 402,028 100,713 162,353 22,359,209Norwegian Krone – – 943,078,154 (229,057) 18,498,913 5,340,587 966,688,597Swedish Krona – – 108,209,495 2,488,079 270,293 830,290 111,798,157United States Dollar – – 112,787,645 (1,343,679) 34,173 1,543,613 113,021,752Total – – 1,202,365,139 1,630,616 18,936,985 7,974,703 1,230,907,443



59





Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Investment Grade British Pound – – – – 3,485 – 3,485Euro – (1,890,531) 63,911,471 1,354,566 28,797 493,213 63,897,516Norwegian Krone – – 1,339,221,450 (664,635) 43,934,811 835,367 1,383,326,993Swedish Krona – – 297,781,747 5,759,833 311,871 408,289 304,261,740United States Dollar – – – – 2,054 – 2,054Total – (1,890,531) 1,700,914,668 6,449,764 44,281,018 1,736,869 1,751,491,788 Non-Monetary Assets/Liabilities Monetary Assets/Liabilities

Currency


Bearing Assets


Liabilities


Bearing Assets

Forward Foreign

Currency Contracts

Cash at Bank

Net Other Assets/


Asset Value NOK NOK NOK NOK NOK NOK NOKArctic Norwegian Equities Euro – – – – 3 – 3Norwegian Krone 1,796,172,409 – – – 81,233,558 (9,622,652) 1,867,783,315United States Dollar – – – – – 5,724,063 5,724,063Total 1,796,172,409 – – – 81,233,561 (3,898,589) 1,873,507,381

The following table sets out a sensitivity analysis in relation to foreign currency risk and its effect on the net asset value of the Funds where foreign currency risk is deemed significant. A snapshot of the underlying positions for the Funds was taken as at 31 December 2015 and 31 December 2014. Exchange rates were appreciated/depreciated by +/- 5% (given the nature of the markets that the Funds are invested in, a 5% increase/decrease has been applied); the corresponding impact was estimated for all equities and bonds, foreign cash and foreign currency settlement positions. Other net assets/(liabilities) are not significant and are assumed unchanged. All other market parameters are also assumed unchanged.

For Arctic Return, Arctic Global Equities, Arctic High Return and Arctic Investment Grade, forward foreign currency contracts are being used for hedging purposes to protect against exchange risks/currency exposure. For Arctic Return, Arctic High Return, Arctic Investment Grade and Arctic Norwegian Equities, the majority of investments are NOK based. Therefore, for the afore mentioned Funds, sensitivity analysis in relation to foreign currency risk and its effect on the net asset value is not deemed significant.



60




The scenarios used in this section are hypothetical, and provided only to illustrate potential losses that could be caused through currency movements.

Impact on Net Asset Value of a movement in

foreign exchange rates as at 31 December 2015 Positive 5% Negative 5%

Arctic Global Equities Australian Dollar (432,002) 432,002 British Pound (1,106,479) 1,106,479 Euro (12,625,395) 12,625,395 Hong Kong Dollar (1,973,163) 1,973,163 Japanese Yen (3,916,296) 3,916,296 Singapore Dollar (764,804) 764,804 Swedish Krona (2,115,066) 2,115,066 United States Dollar (25,604,946) 25,604,946

Impact on Net Asset Value of a movement in

foreign exchange rates

as at 31 December 2014

Positive 5% Negative 5%


Australian Dollar (580,451) 580,451

British Pound (662,709) 662,709

Euro (8,801,675) 8,801,675

Hong Kong Dollar (1,490,807) 1,490,807

Japanese Yen (2,781,019) 2,781,019

Singapore Dollar (619,549) 619,549

Swedish Krona (593,082) 593,082

United States Dollar (15,471,647) 15,471,647

(iii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing interest rates.

For Arctic Return, Arctic High Return and Arctic Investment Grade (the “Bond Funds”), the interest rate risk changes with the average modified duration of the portfolio. For Arctic Return, the average modified duration of the Fund’s portfolio of assets shall be within the range of 0 – 12 months. For Arctic High Return, the average modified duration of the Fund’s portfolio of assets shall be within the range of 0 – 3 years. For Arctic Investment Grade, the average modified duration of the Fund’s, portfolio of assets shall be within the range of 0 – 5 years. For the above mentioned Bond Funds the value of the Funds are capable of fluctuation and may be affected by the substantial adverse movements in interest rates. For each of the Bond Funds, the majority of investments are in variable rate bonds.



61



(iii) Interest Rate Risk (continued)

The following table sets out a sensitivity analysis in relation to interest rate risk on the net asset value of each Fund where interest rate risk is deemed to be significant.

31 December 2015

Impact on Net Asset Value Due to Changes in

Interest Rates Fund Currency Positive 1% Negative 1% Arctic Return NOK -0.79% 0.79% Arctic High Return NOK -4.27% 4.27% Arctic Investment Grade NOK -0.22% 0.22%

31 December 2014

Impact on Net Asset Value Due to Changes in

Interest Rates Fund Currency Positive 1% Negative 1% Arctic Return NOK -2.74% 2.74% Arctic High Return NOK -2.30% 2.30% Arctic Investment Grade NOK -3.98% 3.98%

Arctic Global Equities and Arctic Norwegian Equities invest only in equities, for which the relationship between asset prices and interest rates is not well defined as with fixed-income securities. The Funds have direct exposure to interest rate changes on the valuation and cash flows of its interest bearing assets e.g. cash. However, it may also be indirectly affected by the impact of interest rate changes on the earnings of certain companies in which the Funds invest that use interest rates as an input in their valuation model.

Counterparty Risk/Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Company is exposed to a credit risk to parties with whom it trades and will bear the risk of settlement default. When dealing through brokers, transactions are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. Exposure to credit risk in respect of the financial statements approximates the carrying value as recorded in the Statement of Financial Position.

All of the assets held by the Company are held with the Custodian with the exception of the interest rate swaps whose counterparties are Swedbank and Danske Bank and cross currency swaps whose counterparty is Fokus Bank and all cash is held via the Custodian and DnB NOR. Hence, bankruptcy or insolvency by the Custodian may cause the Company’s rights with respect to the cash held by the Custodian to be delayed or limited. The short term Standard & Poors credit rating of the Custodian’s ultimate parent company is A-1 (2014: A-1) (the Custodian itself is not a rated entity). The short term Standard & Poors credit rating of DnB NOR is A-1 (2014: A-1). If the credit quality or financial position of the Custodian deteriorates significantly the Investment Manager will move the cash holdings to another custodian.

Liquidity Risk

The Company’s assets comprise mainly of realisable securities which can be readily sold.

The main liability of the Company is the redemption of any shares that investors wish to sell. The Fund may borrow in order to fund redemptions. This exposes the Funds to a risk of loss if the value of its investments should fall between the date on which the borrowing is undertaken to fund redemption and the date on which the Funds is able to sell those holdings to repay that borrowing. Accordingly, shareholders who remain in the Funds could suffer a disadvantage compared to shareholders whose redemption was funded by the borrowing in question. However, it is expected that during the normal course of business the Funds would not need such borrowing to fund redemptions. The expectation is to keep a large holding of cash over the next financial year.



62


Liquidity Risk (continued)

The following table details the Company’s liquidity analysis for its financial liabilities. The below tables have been drawn up based on the undiscounted gross cash flows on the financial liabilities that settle on a net basis as of 31 December 2015 and 31 December 2014: As at 31 December 2015:

TotalNOK

Less than 1 month

NOK1-3 months

NOK

3 months - 1 yearNOK

Arctic Return Liabilities Financial liabilities at fair value through profit or loss 5,090,068 5,090,068 – –Investment management fees 56,058 56,058 – –Administration fees 125,804 125,804 – –Custodian fees 62,925 62,925 – –Audit fees 27,915 – 27,915 –Directors' fees 3,247 3,247 – –Other payables and accrued expenses 267,786 206,423 61,363 –Redeemable participating shares 1,060,844,693 1,060,844,693 – –Total Liabilities 1,066,478,496 1,066,389,218 89,278 –

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Global Equities Liabilities Financial liabilities at fair value through profit or loss 1,999,509 1,999,509 – –Payable for investments purchased 8,216,108 8,216,108 – –Investment management fees 513,982 513,982 – –Administration fees 220,680 220,680 – –Custodian fees 54,514 54,514 – –Audit fees 40,748 – 40,748 –Other payables and accrued expenses 137,670 13,974 123,696 –Redeemable participating shares 993,540,210 993,540,210 – –Total Liabilities 1,004,723,421 1,004,558,977 164,444 –

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic High Return Liabilities Financial liabilities at fair value through profit or loss 9,158,118 9,158,118 – –Investment management fees 597,037 597,037 – –Payable for redemptions 98,386 98,386 – –Administration fees 511,259 511,259 – –Custodian fees 471,348 471,348 – –Audit fees 164,814 – 164,814 –Directors' fees 30,652 30,652 – –Distributions payable 11,127,348 11,127,348 – –Other payables and accrued expenses 618,836 18,064 600,772 –Redeemable participating shares 1,283,367,463 1,283,367,463 – –Total Liabilities 1,306,145,261 1,305,379,675 765,586 –



63



TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Investment Grade Liabilities Financial liabilities at fair value through profit or loss 8,379,206 8,379,206 – –Investment management fees 310,647 310,647 – –Performance fees 99,141 99,141 – –Payable for redemptions 65,000 65,000 – –Administration fees 233,325 233,325 – –Custodian fees 262,120 262,120 – –Audit fees 61,186 – 61,186 –Other payables and accrued expenses 175,507 11,200 164,307 –Redeemable participating shares 1,169,055,956 1,169,055,956 – –Total Liabilities 1,178,642,088 1,178,416,595 225,493 –

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Norwegian Equities Liabilities Payable for investments purchased 14,186,737 14,186,737 – –Investment management fees 3,374,776 3,374,776 – –Performance fees 1,222,733 1,222,733 – –Payable for redemptions 5,243,977 5,243,977 – –Administration fees 409,832 409,832 – –Custodian fees 542,634 542,634 – –Audit fees 102,213 – 102,213 –Other payables and accrued expenses 287,011 29,095 257,916 –Redeemable participating shares 2,541,129,408 2,541,129,408 – –Total Liabilities 2,566,499,321 2,566,139,192 360,129 – As at 31 December 2014:

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Return Liabilities Investment management fees 26,522 26,522 – –Administration fees 273,318 273,318 – –Custodian fees 87,557 87,557 – –Audit fees 40,368 – 40,368 –Directors' fees 26,400 26,400 – –Other payables and accrued expenses 111,049 10,973 100,076 –Redeemable participating shares 607,428,236 607,428,236 – –Total Liabilities 607,993,450 607,853,006 140,444 –



64



TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Global Equities Liabilities Investment management fees 224,553 224,553 – –Payable for redemptions 75,000 75,000 – –Administration fees 303,848 303,848 – –Custodian fees 88,519 88,519 – –Audit fees 4,024 – 4,024 –Directors' fees 17,727 17,727 – –Other payables and accrued expenses 50,986 30,150 20,836 –Redeemable participating shares 628,342,612 628,342,612 – –Total Liabilities 629,107,269 629,082,409 24,860 –

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic High Return Liabilities Financial liabilities at fair value through profit or loss 1,586,359 1,586,359 – –Investment management fees 265,791 265,791 – –Performance fees 1,293,508 1,293,508 – –Administration fees 462,666 462,666 – –Custodian fees 234,860 234,860 – –Audit fees 148,676 – 148,676 –Directors' fees 64,281 64,281 – –Distributions payable 1,371,839 1,371,839 – –Other payables and accrued expenses 197,101 33,022 164,079 –Redeemable participating shares 1,230,907,443 1,230,907,443 – –Total Liabilities 1,236,532,524 1,236,219,769 312,755 –

TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Investment Grade Liabilities Financial liabilities at fair value through profit or loss 2,616,701 2,616,701 – –Investment management fees 455,614 455,614 – –Performance fees 2,368,997 2,368,997 – –Payable for redemptions 500,000 500,000 – –Administration fees 297,904 297,904 – –Custodian fees 102,971 102,971 – –Audit fees 55,753 – 55,753 –Directors' fees 21,037 21,037 – –Interest payable 365,534 365,534 – –Other payables and accrued expenses 82,126 16,043 66,083 –Redeemable participating shares 1,751,491,788 1,751,491,788 – –Total Liabilities 1,758,358,425 1,758,236,589 121,836 –



65



TotalNOK

Less than 1 month

NOK1-3 months

NOK


Arctic Norwegian Equities Liabilities Investment management fees 3,553,618 3,553,618 – –Payable for Redemptions 5,002,690 5,002,690 – –Administration fees 728,009 728,009 – –Custodian fees 212,415 212,415 – –Audit fees 92,923 – 92,923 –Directors' fees 35,611 35,611 – –Other payables and accrued expenses 185,593 39,044 146,549 –Redeemable participating shares 1,873,507,381 1,873,507,381 – –Total Liabilities 1,883,318,240 1,883,078,768 239,472 – Fair Values of Financial Assets and Financial Liabilities All of the financial assets and financial liabilities of the Company are held at market value, which equates to fair value as determined in accordance with the accounting policies. There were no valuations undertaken by the Directors at the financial year end.

Capital risk management The capital of the Funds is represented by the net assets attributable to holders of redeemable participating shares at the end of the year. The amount of net assets attributable to holders of redeemable participating shares can change significantly on a daily basis as the Funds are subject to daily subscriptions and redemptions at the discretion of the shareholders. The Funds’ objective when managing capital is to safeguard the Funds’ ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Funds.

The Directors are entitled to limit the number of Shares in a Fund repurchased on any Dealing Day to Shares representing ten per cent of the total Net Asset Value of that Fund on that Dealing Day. In this event, the limitation will apply pro rata so that all Shareholders wishing to have Shares of that Fund repurchased on that Dealing Day realise the same proportion of such Shares. Shares not repurchased, but which would otherwise have been repurchased, will be carried forward for repurchase on the next Dealing Day and will be dealt with in priority (on a rateable basis) to repurchase requests received subsequently. If requests for repurchase are so carried forward, the Administrator will inform the Shareholders affected.

11. Fair Value Hierarchy

The Company has early adopted the Amendments to FRS 102, “Fair Value Hierarchy Disclosures”, which are effective for accounting periods beginning on or after 1 January 2017. These amendments require the Company to categorise its fair value measurements into the following levels consistent with the fair value hierarchy set out in International Financial Reporting Standards as adopted for use in the European Union. These amendments did not have any impact on the Funds' financial position or performance.

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

An investment is always categorised as level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for an investment may use a number of different inputs that fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and is specific to the investment.



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11. Fair Value Hierarchy (continued)

The following tables provide an analysis of financial instruments as at 31 December 2015 that are measured at fair value in accordance with FRS 102.

Arctic Return Level 1

NOKLevel 2

NOKLevel 3

NOK

Total as at 31 December 2015

NOKFinancial Assets at Fair Value - Corporate Bonds – 1,026,096,403 – 1,026,096,403- Government Bonds – 14,739,000 – 14,739,000Total Financial Assets at Fair Value – 1,040,835,403 – 1,040,835,403 Financial Liabilities at Fair Value - Cross Currency Swaps – (1,117,906) – (1,117,906)- Forward Currency Contracts – (3,861,156) – (3,861,156)- Interest Rate Swaps – (111,006) – (111,006)Total Financial Liabilities at Fair Value – (5,090,068) – (5,090,068)

Arctic Global Equities Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Common Stock 981,743,020 – – 981,743,020- Forward Currency Contracts – 21,516 – 21,516Total Financial Assets at Fair Value 981,743,020 21,516 – 981,764,536 Financial Liabilities at Fair Value - Forward Currency Contracts – (1,999,509) – (1,999,509)Total Financial Liabilities at Fair Value – (1,999,509) – (1,999,509)

Arctic High Return Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Common Stock 2,169,869 – – 2,169,869- Corporate Bonds – 1,273,668,270 – 1,273,668,270Total Financial Assets at Fair Value 2,169,869 1,273,668,270 – 1,275,838,139 Financial Liabilities at Fair Value - Cross Currency Swaps – (1,117,906) – (1,117,906)- Forward Currency Contracts – (7,873,703) – (7,873,703)- Interest Rate Swaps – (166,509) – (166,509)Total Financial Liabilities at Fair Value – (9,158,118) – (9,158,118)

Arctic Investment Grade Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Corporate Bonds – 1,130,555,294 – 1,130,555,294- Government Bonds – 14,739,000 – 14,739,000- Forward Currency Contracts – 817,851 – 817,851Total Financial Assets at Fair Value – 1,146,112,145 – 1,146,112,145 Financial Liabilities at Fair Value - Cross Currency Swaps – (1,117,906) – (1,117,906)- Forward Currency Contracts – (5,389,376) – (5,389,376)- Interest Rate Swaps – (1,871,924) – (1,871,924)Total Financial Liabilities at Fair Value – (8,379,206) – (8,379,206)



67


Arctic Norwegian Equities Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Common Stock 2,471,092,144 – – 2,471,092,144- Private Placements – – 1,710,000 1,710,000Total Financial Assets at Fair Value 2,471,092,144 – 1,710,000 2,472,802,144 The following tables provide an analysis of financial instruments as at 31 December 2014 that are measured at fair value in accordance with FRS 102.

Arctic Return Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Corporate Bonds – 599,815,700 – 599,815,700Total Financial Assets at Fair Value – 599,815,700 – 599,815,700

Arctic Global Equities Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Common Stock 621,157,706 – – 621,157,706- Private Placements – – 495,000 495,000Total Financial Assets at Fair Value 621,157,706 – 495,000 621,652,706

Arctic High Return Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Corporate Bonds – 1,202,365,139 – 1,202,365,139- Forward Currency Contracts – 3,216,975 – 3,216,975Total Financial Assets at Fair Value – 1,205,582,114 – 1,205,582,114 Financial Liabilities at Fair Value - Forward Currency Contracts – (1,586,359) – (1,586,359)Total Financial Liabilities at Fair Value – (1,586,359) – (1,586,359)

Arctic Investment Grade Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Corporate Bonds – 1,672,470,268 – 1,672,470,268- Government Bonds – 28,444,400 – 28,444,400- Forward Currency Contracts – 7,175,934 – 7,175,934Total Financial Assets at Fair Value – 1,708,090,602 – 1,708,090,602 Financial Liabilities at Fair Value - Forward Currency Contracts – (726,170) – (726,170)- Interest Rate Swaps – (1,890,531) – (1,890,531)Total Financial Liabilities at Fair Value – (2,616,701) – (2,616,701)



68


Arctic Norwegian Equities Level 1

NOKLevel 2

NOKLevel 3

NOK


NOKFinancial Assets at Fair Value - Common Stock 1,789,102,979 – – 1,789,102,979- Private Placements – – 7,069,430 7,069,430Total Financial Assets at Fair Value 1,789,102,979 – 7,069,430 1,796,172,409 12. Comparative Net Asset Values 31 December 2015 31 December 2014 31 December 2013Arctic Return* Net Assets attributable to holders of redeemable participating shares 1,060,844,693 607,428,236 648,342,543Outstanding shares Class A NOK 39,163 – –Class B NOK 109,612 – –Class I NOK 795,941 536,058* 587,916*Class R NOK 2,000 – –Dealing Net Asset Value per share Class A NOK 1,005.46 – –Class B NOK 1,006.23 – –Class I NOK 1,142.26 1,133.26* 1,103.04*Class R NOK 1,001.43 – – Arctic Global Equities Net Assets attributable to holders of redeemable participating shares 993,540,210 628,342,612 504,864,919Outstanding shares Class A NOK 26,560 14,179 7,421Class B NOK 66,720 61,022 57,112Class H Hedged NOK 151,090 – –Class I NOK 427,893 363,349 363,991Dealing Net Asset Value per share Class A NOK 1,487.38 1,310.93 1,087.72Class B NOK 1,581.81 1,384.19 1,138.93Class H Hedged NOK 924.27 – –Class I NOK 1,656.60 1,445.87 1,186.57 Arctic High Return Net Assets attributable to holders of redeemable participating shares 1,283,367,463 1,230,907,443 1,857,439,045Outstanding shares Class A NOK 53,209 95,587 116,235Class B NOK 452,351 615,836 1,179,652Class C NOK 175,037 173,592 –Class D NOK 574,907 192,406 219,468Dealing Net Asset Value per share Class A NOK 1,169.00 1,224.71 1,257.37Class B NOK 1,180.89 1,233.56 1,262.62Class C NOK 845.42 949.71 –Class D NOK 937.56 984.23 1,011.49 *Arctic Covered was renamed as Arctic Return in February 2015. Class B NOK was renamed as Class I NOK.



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12. Comparative Net Asset Values (continued) 31 December 2015 31 December 2014 31 December 2013Arctic Investment Grade Net Assets attributable to holders of redeemable participating shares 1,169,055,956 1,751,491,788 910,188,089Outstanding shares Class B NOK 814,691 880,501 786,529Class B SEK 27,280 28,115 9,700Class D NOK 164,988 669,628 –Dealing Net Asset Value per share Class B NOK 1,193.12 1,190.50 1,144.97Class B SEK 1,089.28 1,103.14 1,009.41Class D NOK 1,005.38 1,006.04 – 31 December 2015 31 December 2014 31 December 2013Arctic Norwegian Equities Net Assets attributable to holders of redeemable participating shares 2,541,129,408 1,873,507,381 1,176,153,279Outstanding shares Class A NOK 48,670 41,675 16,379Class B NOK 103,598 94,718 163,040Class D NOK 1,073,420 845,511 529,266Class I NOK 362,214 296,427 186,975Dealing Net Asset Value per share Class A NOK 1,600.36 1,467.33 1,308.73Class B NOK 1,733.12 1,576.92 1,395.74Class D NOK 1,532.37 1,404.71 1,251.39Class I NOK 1,763.64 1,603.64 1,417.25

13. Soft Commission Arrangements

There were no soft commissions for the financial year ended 31 December 2015 or the financial year ended 31 December 2014.

14. Related Party Transactions

Fees payable to the Investment Manager and the Directors are detailed in Note 3.

Arctic Securities AS, promoter of the Company, are also engaged to provide brokerage services. The provision of the broker services by Arctic Securities AS is on an arm’s length basis and commission fees are based on market terms. Arctic Securities AS are not deemed a preferred broker to the Company. During the financial year ended 31 December 2015 and 31 December 2014 there are no fees paid under this brokerage services arrangement. There were no other material related party transactions with the Investment Manager and the Directors to be included in the Notes to the Financial Statements.

15. Significant events

Arctic Covered changed its name and investment policy in February 2015. The new name of the Fund is Arctic Return. The main market for the Fund is the Nordic bond market. The Fund invests in bonds and money market instruments issued or guaranteed by governments in the Nordic countries or other governments within Europe, local authorities within Nordic countries or other European countries, as well as financial institutions and reputable and financially sound companies within Nordic countries and other countries in Europe. Class B NOK was renamed as Class I NOK.

On 12 February 2015, Class A NOK Shares were launched for Arctic Return.

A new prospectus was issued on 13 March 2015.



70

15. Significant events (continued)

On 30 January 2015 Bengt Arve Rem resigned from Arctic Fund Management AS (the “Investment Manager”).

On 13 May 2015, Class H Hedged NOK Shares were launched for Arctic Global Equities.

On 14 October 2015, Class R NOK Shares were launched for Arctic Return.

Effective 2 November 2015, Tom Murray resigned as a Director and Fiona Mulhall was appointed as a Director.

There were no other significant events affecting the Company during the financial year.

16. Post Balance Sheet Events

There were no significant events affecting the Company since the financial year end.

17. Approval of the Financial Statements

The financial statements were approved by the Board of Directors on 13 April 2016.


Statement of Portfolio Changes (Unaudited)

71

A statement of largest changes in the composition of the Portfolio of Investments during the reporting financial year is provided to ensure that shareholders can identify changes in the investments held by each Fund. These are defined as the aggregate purchases and sales of an investment (including maturities but excluding repurchase agreements, overnight discount notes and time deposits, which are employed chiefly as a means of seeking to ensure efficient portfolio management) exceeding 1.00 per cent of the total value of purchases and sales for the financial year. At a minimum the largest twenty purchases and sales are listed. If each Fund entered into less than twenty purchases or sales during the financial year, then all transactions are presented.

Arctic Return LARGEST PURCHASES COST NOKDNB Boligkreditt AS, 1.93%, 22/11/2019 40,175,630 Nordea Eiendomskreditt AS, 1.30%, 17/06/2021 29,961,000 Gjensidige Bank Boligkreditt AS, 2.15%, 21/09/2018 25,159,926 DNB Boligkreditt AS, 1.35%, 11/11/2021 24,864,600 Nordea Eiendomskreditt AS, 1.30%, 17/06/2021 24,849,300 Schibsted ASA, 2.18%, 06/05/2021 22,306,500 Nortura SA, 2.77%, 25/01/2019 20,693,000Grieg Seafood ASA, 8.32%, 21/12/2015 20,440,500 DNB Bank ASA, 2.76%, 19/06/2023 20,220,000 SpareBank 1 Boligkreditt AS, 1.63%, 17/06/2020 20,215,516 Nordea Eiendomskreditt AS, 2.17%, 19/06/2019 20,190,242 Aker ASA, 4.65%, 06/06/2018 20,188,750 Sandnes Sparebank, 3.18%, 24/06/2023 20,188,000 Stadshypotek AB, 2.10%, 16/05/2019 20,117,549 Helgeland Boligkreditt AS, 1.69%, 16/06/2020 20,056,774 Brage Finans AS, 1.91%, 18/09/2017 20,050,000 SpareBank 1 SMN, 2.74%, 16/03/2016 20,039,759 Sparebanken Sor, 2.73%, 09/05/2016 20,037,271 Bustadkreditt Sogn og Fjordane AS, 1.96%, 18/04/2018 20,012,663 Nordea Eiendomskreditt AS, 1.67%, 17/06/2020 20,004,156 Hoenefoss Sparebank, 1.99%, 26/02/2020 20,000,000 Statkraft AS, 1.72%, 08/07/2020 20,000,000 Citycon Treasury BV, 2.71%, 01/03/2021 20,000,000 Skandiabanken AB, 1.76%, 04/10/2018 19,982,826 Sparebanken Soer Boligkreditt AS, 1.37%, 16/06/2021 19,907,000 Eika Boligkreditt AS, 1.40%, 10/02/2022 19,904,000 Stolt-Nielsen Ltd, 5.95%, 22/06/2016 19,481,500 Teekay LNG Partners LP, 6.34%, 03/05/2017 18,768,400


Statement of Portfolio Changes (Unaudited) (Continued)

72

Arctic Return (Continued) LARGEST SALES PROCEEDS NOKDNB Boligkreditt AS, 2.21%, 22/11/2019 80,844,370Gjensidige Bank Boligkreditt AS, 2.15%, 21/09/2018 50,642,824Nordea Eiendomskreditt AS, 2.17%, 19/06/2019 40,715,758Bustadkreditt Sogn og Fjordane AS, 1.96%, 18/04/2018 40,238,537Helgeland Boligkreditt AS, 1.89%, 16/06/2020 40,181,826Nordea Eiendomskreditt AS, 1.87%, 17/06/2020 40,176,844SpareBank 1 Boligkreditt AS, 2.00%, 10/09/2019 34,339,405SpareBank 1 Telemark, 2.83%, 09/09/2016 30,717,601SpareBank 1 Boligkreditt AS, 1.63%, 17/06/2020 30,396,584Sparebanken More, 2.43%, 05/12/2016 30,199,500RorosBanken, 2.56%, 05/02/2016 30,115,229Fana Sparebank Boligkreditt AS, 2.04%, 11/02/2020 30,096,136Swedbank Hypotek AB, 1.90%, 19/03/2021 30,087,000Fana Sparebank Boligkreditt AS, 1.90%, 15/05/2018 30,072,316Skandiabanken AB, 1.76%, 04/10/2018 30,040,974Nordea Eiendomskreditt AS, 1.30%, 17/06/2021 29,900,300Sparebank 1 Hallingdal Valdres, 2.32%, 26/10/2016 25,314,467Sparebanken Ost Boligkreditt AS, 1.98%, 18/10/2016 25,124,808Marker Sparebank, 2.07%, 27/02/2017 22,037,850Haugesund Sparebank, 3.16%, 11/06/2016 20,600,407Sparebanken Soer Boligkreditt AS, 2.22%, 20/06/2018 20,346,765LeasePlan Corp NV, 3.45%, 07/09/2015 20,290,300More Boligkreditt AS, 2.27%, 06/09/2018 20,251,284Stadshypotek AB, 2.10%, 16/05/2019 20,201,251Eika Boligkreditt AS, 2.17%, 08/06/2018 20,167,962SpareBank 1 Boligkreditt AS, 1.91%, 16/08/2018 20,138,411SpareBank 1 SMN, 2.74%, 16/03/2016 20,106,641Sparebanken Soer Boligkreditt AS, 1.93%, 14/09/2018 20,099,213Sparebanken Sor, 2.73%, 09/05/2016 20,094,929More Boligkreditt AS, 1.85%, 10/05/2019 20,090,000Eiendomskreditt, 2.02%, 15/09/2017 20,087,000Jernbanepersonalets Sparebank, 2.15%, 10/10/2016 20,055,000Grieg Seafood ASA, 8.32%, 21/12/2015 20,013,000SpareBank 1 Naeringskreditt AS, 1.85%, 17/06/2020 20,002,000Aker ASA, 6.39%, 23/11/2015 15,300,000Gjensidige Bank Boligkreditt AS, 2.01%, 06/05/2019 15,121,500Eika Boligkreditt AS, 1.83%, 16/12/2020 15,119,415LeasePlan Corp NV, 2.26%, 07/02/2017 15,045,750SSB Boligkreditt AS, 2.21%, 20/09/2018 14,991,383Arion Banki HF, 6.42%, 04/03/2016 14,367,500



73

Arctic Global Equities LARGEST PURCHASES COST NOKInvestor AB - Class B 23,546,833Merck & Co Inc 23,151,689Walt Disney Co 23,117,340Bayer AG 21,611,609ABB Ltd 20,735,600US Bancorp 19,203,795Volkswagen AG Preferred 17,871,817Google Inc 16,549,322SKF AB 16,421,912Jardine Matheson Holdings Ltd 15,494,766Golar LNG Ltd 15,007,277Telefonica SA 14,783,708Amgen Inc 14,746,498Juniper Networks Inc 14,039,150MetLife Inc 13,952,844Elekta AB 13,431,176EOG Resources Inc 13,330,626Volvo AB 13,286,495Ryanair Holdings Plc 12,687,032Travelers Cos Inc 12,166,301Lululemon Athletica Inc 11,877,036LyondellBasell Industries NV 11,008,030DNB ASA 10,987,262CaixaBank SA 10,694,683Alibaba Group Holding Ltd 10,378,340Beiersdorf AG 10,340,540Lennar Corp 10,273,449Exxon Mobil Corp 10,158,457Citrix Systems Inc 10,064,864Expedia Inc 10,056,7503M Co 9,957,421Arista Networks Inc 9,537,421Cognizant Technology Solutions Corp 9,515,072Intel Corp 9,450,825Cie Generale des Etablissements Michelin 9,276,793EMC Corp 9,188,588ACS Actividades de Construccion y Servicios SA 9,166,158Mellanox Technologies Ltd 9,156,596Facebook Inc 9,147,993Kroger Co 9,094,431Palo Alto Networks Inc 9,005,215Jungheinrich AG Preferred 8,937,131Corticeira Amorim SGPS SA 8,654,216Deutsche Post AG 8,532,190Palo Alto Networks Inc 8,384,870Sanofi 7,949,126



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Arctic Global Equities (Continued) LARGEST SALES PROCEEDS NOKSKF AB 30,502,507L Brands Inc 23,351,126JPMorgan Chase & Co 19,316,526Merck KGaA 18,749,408American Express Co 17,768,294Palo Alto Networks Inc 17,529,153Juniper Networks Inc 17,398,543Investor AB 15,702,100Renault SA 15,263,962LyondellBasell Industries NV 15,154,170Volvo AB 14,697,683Telefonica SA 14,615,924Hugo Boss AG 14,572,428NH Hotel Group SA 14,296,446Lennar Corp 13,009,847Google Inc 12,936,806Citigroup Inc 12,711,393Arista Networks Inc 12,070,763Dow Chemical Co 11,738,375Micron Technology Inc 11,149,342CaixaBank SA 10,434,939EMC Corp 10,034,546Lululemon Athletica Inc 10,017,945Volkswagen AG Preferred 9,585,894Bolsas y Mercados Espanoles SA 9,353,617Golar LNG Ltd 9,315,365Intel Corp 8,951,332Alibaba Group Holding Ltd 7,875,205LyondellBasell Industries NV 7,810,286Sacyr SA 7,613,611General Electric Co 7,524,744Johnson & Johnson 7,504,744Carlsberg A/S 7,013,591Apple Inc 6,931,218Banco BPI SA 6,755,604Investor AB - Class A 6,214,267Cheung Kong Property Holdings Ltd 5,594,245Microsoft Corp 5,551,859Qualcomm Inc 5,364,272ACS Actividades de Construccion y Servicios SA 5,245,534



75

Arctic High Return LARGEST PURCHASES COST NOKSolstad Offshore ASA, 5.60%, 25/02/2016 48,778,250 Seadrill Ltd, 6.50%, 05/10/2015 39,845,899 Petroleum Geo-Services ASA, 7.38%, 15/12/2018 33,034,051 Hoegh LNG Holdings Ltd, 5.45%, 05/06/2020 26,422,250 Det Norske Oljeselskap ASA, 10.25%, 27/05/2022 26,206,968 Norwegian Air Shuttle ASA, 4.88%, 03/07/2017 25,353,000 Bonheur ASA, 5.62%, 10/02/2017 23,163,750 Infratek Group AS, 6.15%, 20/05/2019 21,495,500 Det Norske Oljeselskap ASA, 7.63%, 02/07/2020 21,086,250 VV Holding AS, 6.37%, 10/07/2019 20,603,500 Teekay Offshore Partners LP, 6.87%, 27/01/2017 19,805,000 Salar Bidco AS, 5.99%, 28/03/2019 19,650,000 Stendorren Fastigheter AB, 5.00%, 18/02/2018 19,609,007 Navigator Holdings Ltd, 9.00%, 18/12/2017 19,208,648 West Atlantic AB, 6.50%, 21/12/2019 18,573,823 Islandsbanki HF, 3.10%, 13/02/2019 18,194,625 Color Group AS, 6.45%, 25/08/2016 16,315,000 Fred Olsen Energy ASA, 5.40%, 12/05/2016 15,642,500 Stolt-Nielsen Ltd, 5.95%, 22/06/2016 15,583,750 Teekay Corp, 6.01%, 09/10/2015 15,027,500 Islandsbanki HF, 3.77%, 16/10/2018 15,000,000 Teekay LNG Partners LP, 6.34%, 03/05/2017 14,616,000 Akelius Residential Property AB, 0.00%, 27/03/2019 14,000,748 Grieg Seafood ASA, 8.32%, 21/12/2015 13,239,000 Aker ASA, 4.66%, 29/05/2020 13,160,000 Forchem Oy, 4.90%, 02/07/2020 13,121,688 Arion Banki HF, 4.08%, 07/07/2020 13,000,000 WA Wallvision AB, 9.00%, 05/12/2017 12,205,090 Golar LNG Partners LP, 4.78%, 22/05/2020 11,992,960 Farstad Shipping ASA, 4.56%, 29/05/2018 11,842,500 Aker ASA, 5.10%, 16/03/2017 11,027,500 Norlandia Care Group AS, 6.12%, 10/04/2018 10,982,250 Color Group AS, 6.31%, 18/09/2019 10,762,500 Golar LNG Partners LP, 6.31%, 12/10/2017 10,400,000 Austevoll Seafood ASA, 5.46%, 07/02/2017 10,265,000 Hoegh LNG Holdings Ltd, 7.13%, 03/10/2017 10,262,500 GasLog Ltd, 6.73%, 27/06/2018 10,160,000 Color Group AS, 6.25%, 16/11/2015 10,110,000 Color Group AS, 6.03%, 02/06/2020 10,000,000 Tryg Forsikring A/S, 3.91%, 13/11/2045 10,000,000 Consilium AB, 0.00%, 25/03/2020 9,501,611 Stolt-Nielsen Ltd, 4.41%, 18/03/2021 9,400,000 Marginalen Bank Bank AB, 7.50%, 09/10/2024 9,339,748 B2Holding AS, 7.50%, 08/12/2020 9,188,131



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Arctic High Return (Continued) LARGEST SALES PROCEEDS NOKSeadrill Ltd, 6.50%, 05/10/2015 42,573,453 EWOS Holding AS, 6.51%, 01/11/2020 32,462,534 Salar Bidco AS, 5.99%, 28/03/2019 28,146,150 Kistefos AS, 10.98%, 03/07/2015 21,000,000 Hoegh LNG Holdings Ltd, 7.13%, 03/10/2017 20,948,000 Veritas Petroleum Services BV, 7.00%, 01/04/2019 20,451,230 Teekay Corp, 6.01%, 09/10/2015 18,010,000 Kahrs Holding AB, 7.29%, 20/12/2017 17,940,132 DOF Subsea AS, 7.01%, 29/04/2016 17,438,750 AX IV EG Holding III ApS, 6.50%, 02/12/2020 17,297,411 Norwegian Air Shuttle ASA, 4.88%, 03/07/2017 16,676,250 Fjord Line AS, 10.25%, 05/02/2018 16,587,500 Akelius Residential Property AB, 2.40%, 27/03/2019 14,390,408 Color Group AS, 6.45%, 25/08/2016 14,292,500 Grieg Seafood ASA, 8.32%, 21/12/2015 13,086,400 Solstad Offshore ASA, 5.00%, 24/06/2019 13,057,500 West Atlantic AB, 8.00%, 08/05/2018 13,035,750 Det Norske Oljeselskap ASA, 10.25%, 27/05/2022 12,648,119 Songa Offshore, 8.40%, 17/05/2018 11,672,500 AINMT Scandinavia Holdings AS, 9.75%, 19/03/2019 11,222,746World Wide Supply AS, 7.75%, 26/05/2017 10,854,955 Teekay LNG Partners LP, 6.34%, 03/05/2017 10,414,000 Farstad Shipping ASA, 4.56%, 29/05/2018 10,312,500 Austevoll Seafood ASA, 5.46%, 07/02/2017 10,293,000 Color Group AS, 6.25%, 16/11/2015 10,150,000 Solstad Offshore ASA, 5.60%, 25/02/2016 9,943,500 Braathens Aviation AB, 5.78%, 15/06/2015 9,834,296 Norwegian Energy Co ASA, 6.50%, 06/03/2018 9,732,914 TiZir Ltd, 9.00%, 28/09/2017 9,726,961 Islandsbanki HF, 3.10%, 13/02/2019 9,722,028 Axis Offshore Pte Ltd, 7.52%, 18/05/2018 9,495,134 Consilium AB, 0.00%, 25/03/2020 9,450,505 Hoist Kredit AB, 4.02%, 18/12/2016 9,396,337 Fred Olsen Energy ASA, 5.40%, 12/05/2016 8,772,000 Akelius Residential Property AB, 2.06%, 09/03/2018 8,388,693 BassDrill Alpha Ltd, 7.50%, 05/07/2018 8,345,055 Arion Banki HF, 6.42%, 04/03/2016 8,210,000 Danske Bank A/S, 4.01%, 06/12/2023 8,119,500 Color Group AS, 5.56%, 18/12/2017 8,113,750 European Directories BondCo SCA, 6.99%, 09/12/2018 7,547,017



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Arctic Investment Grade LARGEST PURCHASES COST NOKCitycon Treasury BV, 2.71%, 01/03/2021 30,000,000 Nortura SA, 3.11%, 25/01/2019 25,836,000 Arla Foods Finance A/S, 1.27%, 04/06/2018 25,313,716 OBOS BBL, 2.47%, 21/11/2016 20,270,000 Skandiabanken Boligkreditt AS, 1.60%, 04/10/2018 20,045,638 Bustadkreditt Sogn og Fjordane AS, 1.53%, 16/06/2021 20,000,000 Gjensidige Bank Boligkreditt AS, 1.44%, 12/05/2021 19,953,200 Agder Energi AS, 1.84%, 29/03/2022 19,947,200 Brage Finans AS, 1.97%, 20/04/2018 19,007,600 City of Oslo Norway, 2.30%, 14/03/2024 17,987,400 Skanska Financial Services AB, 1.54%, 12/03/2018 16,065,871 Statkraft AS, 1.72%, 08/07/2020 16,000,000 Trondheim Kommune, 1.59%, 19/06/2020 15,015,000 Sparebanken Sor, 2.75%, 25/08/2025 15,000,000 Larvikbanken Brunlanes Sparebank, 1.96%, 21/12/2017 15,000,000 Statkraft AS, 2.03%, 15/12/2021 15,000,000 Sampo Oyj, 1.25%, 29/05/2018 14,903,109 Nordea Eiendomskreditt AS, 1.30%, 17/06/2021 14,884,500 Pohjola Bank Oyj, 1.21%, 25/08/2025 14,531,406 Akelius Residential Property AB, 2.40%, 27/03/2019 14,390,408 Ikano Bank AB, 0.67%, 16/06/2020 14,070,425 Volvo Treasury AB, 0.72%, 15/04/2019 13,795,940 Ikano Bank AB, 1.62%, 29/01/2016 12,786,963 Sandnes Sparebank, 3.18%, 24/06/2023 10,094,000 Kredittforeningen for Sparebanker, 1.77%, 09/12/2019 10,016,000 BN Bank ASA, 3.15%, 11/03/2025 10,000,000 YA Bank AS, 2.51%, 04/05/2017 10,000,000 Bank Norwegian AS, 1.76%, 16/02/2018 10,000,000 LeasePlan Corp NV, 1.98%, 07/08/2018 10,000,000 Sparebanken Sor, 2.75%, 30/01/2025 10,000,000 Islandsbanki HF, 3.77%, 16/10/2018 10,000,000 Sparebanken Soer Boligkreditt AS, 1.53%, 24/06/2020 9,985,000 SpareBank 1 Nord Norge, 1.77%, 22/06/2020 9,924,000 Islandsbanki HF, 3.10%, 13/02/2019 9,722,028 NCC Treasury AB, 1.64%, 30/08/2018 9,138,158 ICA Gruppen AB, 1.68%, 25/06/2018 8,898,902 Kommunal Landspensjonskasse Gjensidig Forsikringsselskap, 4.25%, 10/06/2045 8,655,075 Arendal og Omegn Sparekasse, 3.03%, 04/02/2016 8,049,520 SpareBank 1 Ringerike Hadeland, 2.57%, 19/11/2015 7,019,390 Sparbanken Oresund AB, 2.79%, 27/11/2023 6,478,794



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Arctic Investment Grade (Continued) LARGEST SALES PROCEEDS NOKArla Foods Finance A/S, 1.27%, 04/06/2018 40,460,634 Sampo Oyj, 1.25%, 29/05/2018 32,374,718 Sektor Gruppen AS, 4.12%, 14/12/2016 31,945,500 Santander Consumer Bank AS, 2.41%, 18/11/2016 30,145,500 BWG Homes ASA, 6.09%, 12/03/2015 30,000,000 Volvo Treasury AB, 0.72%, 15/04/2019 28,793,170 Vardar AS, 3.13%, 14/12/2017 28,030,000 Ikano Bank AB, 1.62%, 29/01/2016 26,904,459 Skanska Financial Services AB, 1.54%, 12/03/2018 26,455,273 Nortura SA, 2.91%, 25/01/2019 25,262,500 Credit Suisse AG, 0.29%, 12/12/2017 24,561,687 ICA Gruppen AB, 1.68%, 25/06/2018 24,098,511 Nord-Trondelag Elektrisitetsverk FKF, 2.15%, 13/11/2019 22,505,500 SpareBank 1 SR-Bank ASA, 4.95%, 02/12/2021 20,458,000 Brage Finans AS, 2.46%, 20/05/2016 20,117,020 DNB Boligkreditt AS, 1.71%, 22/11/2019 19,966,000 Tele2 AB, 2.24%, 18/02/2020 19,870,661 BN Bank ASA, 2.30%, 24/01/2019 19,763,500 NCC Treasury AB, 1.64%, 30/08/2018 19,481,598 City of Oslo Norway, 2.30%, 14/03/2024 17,814,600 Schibsted ASA, 2.46%, 06/05/2021 17,246,500 Norwegian Property ASA, 2.77%, 05/04/2019 15,300,000 SpareBank 1 Boligkreditt AS, 1.69%, 10/09/2019 15,285,450 Ikano Bank AB, 0.61%, 14/11/2018 15,066,784 Grong Sparebank, 1.89%, 18/12/2017 15,018,000 Norwegian Property ASA, 2.45%, 07/10/2019 15,006,000 Larvikbanken Brunlanes Sparebank, 1.96%, 21/12/2017 15,004,500 Yara International ASA, 1.76%, 18/12/2019 14,739,500 Sporveien Oslo AS, 1.79%, 05/11/2019 14,730,000 Bustadkreditt Sogn og Fjordane AS, 1.53%, 16/06/2021 14,699,000 Vardar AS, 3.55%, 11/12/2019 14,695,000 Akelius Residential Property AB, 2.40%, 27/03/2019 14,642,842 Obos-banken AS, 1.78%, 26/08/2019 14,596,500 SpareBank 1 Nord Norge, 3.92%, 19/12/2022 14,180,000 Sparbanken Oresund AB, 2.79%, 27/11/2023 13,614,367 Bien Sparebank AS, 3.29%, 26/09/2016 13,255,710 Orkdal Sparebank, 2.11%, 07/05/2018 12,864,800 Citycon Treasury BV, 2.71%, 01/03/2021 11,800,000



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Arctic Norwegian Equities LARGEST PURCHASES COST NOKStatoil ASA 265,046,170 Yara International ASA 200,258,828 DNB ASA 125,216,040 Telenor ASA 94,980,611 Atea ASA 73,079,671 Hoegh LNG Holdings Ltd 68,588,463 Gjensidige Forsikring ASA 65,886,998 Orkla ASA 61,781,546 Norwegian Air Shuttle ASA 57,970,976 Norsk Hydro ASA 55,535,188 Marine Harvest ASA 53,425,089 Protector Forsikring ASA 51,034,319 Opera Software ASA 43,810,603 XXL ASA 40,112,803 NEL ASA 37,045,924 Europris ASA 32,321,063 Nickel Mountain Group 32,147,818 Nordic Semiconductor ASA 31,710,311 Veidekke ASA 31,561,600 Schibsted ASA Class A 30,582,923 NRC Group ASA 28,529,856 Royal Caribbean Cruises Ltd 28,291,026 Borregaard ASA 26,135,848 DHT Holdings Inc 24,987,850 SpareBank 1 SMN 24,170,535 SpareBank 1 Nord Norge 22,896,594 Salmar ASA 22,894,246 Targovax AS 22,039,123 Petroleum Geo-Services ASA 21,589,086 Nordic Nanovector ASA 20,800,000



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Arctic Norwegian Equities (Continued) LARGEST SALES PROCEEDS NOKStatoil ASA 203,821,319 Norsk Hydro ASA 122,309,366 Yara International ASA 91,916,775 DNB ASA 67,593,223 Telenor ASA 56,412,525 Royal Caribbean Cruises Ltd 52,876,802 SpareBank 1 Nord Norge 52,751,714 Entra ASA 52,062,694 Marine Harvest ASA 49,051,287 Vizrt Ltd 48,274,270 Gjensidige Forsikring ASA 44,807,555 SpareBank 1 SMN 42,661,410 Nordic Nanovector ASA 39,538,469 DNO ASA 39,531,537 XXL ASA 34,704,376 Schibsted ASA Class B 26,742,035 Atea ASA 26,408,984 BW LPG Ltd 25,297,202 Petroleum Geo-Services ASA 22,830,658 DHT Holdings Inc 22,379,860 Orkla ASA 20,947,664 Stolt-Nielsen Ltd 20,181,429 Norwegian Air Shuttle ASA 19,390,834 Lundin Petroleum AB 18,169,148 Det Norske Oljeselskap ASA 18,053,547 Protector Forsikring ASA 18,031,730 Weifa ASA 16,874,070

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