Woodford Funds (Ireland) ICAV Annual Report and Financial … · 2019-05-02 · Statement of Comprehensive Income ... net assets inthe LF Woodford Equity Income Fund- Class F GBP

Woodford Funds (Ireland) ICAV Annual Report and Financial Statements

For the financial year ended 31 December 2018

MANAGEMENT AND ADMINISTRATION

MANAGER Link Fund Manager Solutions (Ireland) Limited First Floor 2 Grand Canal Square Grand Canal Harbour Dublin 2 D02 A342 Ireland

DIRECTORS OF THE ICAV G. Palmer (Chairman) (Irish)**K. O’Brien (Irish)**S. Dale (British)*V. Patel (British)** Non-executive Directors** Independent Non-executive Director

INVESTMENT MANAGER Woodford Investment Management LTD 9400 Garsington Road Oxford OX4 2HN United Kingdom (Authorised and regulated by the Financial Conduct Authority)

DEPOSITARY Northern Trust Fiduciary Services (Ireland) Limited Georges Court 54-62 Townsend StreetDublin 2D02 R156Ireland

ADMINISTRATOR & REGISTRAR Northern Trust International Fund Administration Services (Ireland) Limited Georges Court 54-62 Townsend StreetDublin 2D02 R156Ireland

MANAGEMENT AND ADMINISTRATION (continued) INDEPENDENT AUDITOR Grant Thornton Chartered Accountants and Registered Auditors 13-18 City Quay Dublin 2 D02 ED70 Ireland ICAV SECRETARY Link Fund Administrators (Ireland) Limited First Floor 2 Grand Canal Square Grand Canal Harbour Dublin 2 D02 A342 Ireland LEGAL AND TAX ADVISERS IN IRELAND Dillon Eustace 33 Sir John Rogerson’s Quay Dublin 2 D02 XK09 Ireland REGISTERED OFFICE 2 Grand Canal Square Grand Canal Harbour Dublin 2 D02 A342 Ireland Note: All capitalised terms, unless otherwise defined herein, shall have the same meaning as they have in the Prospectus for the ICAV.

Woodford Equity Income Feeder Fund 1

CONTENTS

WOODFORD FUNDS (IRELAND) ICAV

Background to the ICAV ......................................................................................................... 2

Investment Manager's Report ................................................................................................ 4

Directors’ Report .................................................................................................................... 8

Annual Depositary Report to Shareholders .......................................................................... 12

Independent Auditors’ Report to the Shareholders of Woodford Funds (Ireland) ICAV ......... 13

Schedule of Investments ..................................................................................................... 17

Schedule of Portfolio Changes (unaudited) ........................................................................... 19

Statement of Comprehensive Income .................................................................................. 20

Statement of Financial Position ........................................................................................... 21

Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares .................................................................................................................................. 23

Statement of Cashflows ....................................................................................................... 24

Notes to the Financial Statements ....................................................................................... 25

Appendix 1 – Remuneration Policy (unaudited) .................................................................. 58

Appendix 2 – Securities Financing Transactions Regulation (unaudited) ............................ 59

Appendix 3 – LF Woodford Investment Fund Audited Financial Statements for the financial year ended 31 December 2018 ........................................................................................... 60


BACKGROUND TO THE ICAV

DESCRIPTION

Woodford Funds (Ireland) ICAV (the "ICAV") is an open-ended umbrella type Irish Collective Asset-management Vehicle with limited liability and segregated liability between sub-funds, registered with and authorised by the Central Bank of Ireland (“Central Bank”) to carry on business as an ICAV pursuant to part 2 of the Irish Collective Asset-management Vehicles Act, 2015 (the “ICAV Act”) and pursuant to the provisions of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended) (the “UCITS Regulations”) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015. The ICAV is structured as an umbrella type Irish Collective Asset-management Vehicle which may consist of different funds, each comprising one or more Classes.

The ICAV was registered in Ireland on 18 July 2016 and was authorised by the Central Bank on 23 September 2016 as an umbrella fund with segregated liability between sub-funds.

As at 31 December 2018, the ICAV has one sub-fund, namely the Woodford Equity Income Feeder Fund (the “Fund”).

The ICAV has two types of share classes Accumulating and Income. For the purpose of these financial statements Accumulating will be abbreviated to “Acc” and Income to “Inc”.

INVESTMENT OBJECTIVE AND POLICY

The investment objective of the Fund is to invest at least 85% of its net assets in the LF Woodford Equity Income Fund (“Master Fund”). The Master Fund is a sub-fund of the LF Woodford Investment Fund which is an open-ended umbrella type investment company with variable capital incorporated with limited liability and registered in England and Wales under registered number IC001010 and which is authorised by the UK’s Financial Conduct Authority as a UCITS.

The investment objective of the Fund may only be amended with the approval of Shareholders of the Fund on the basis of a majority of votes cast at a general meeting duly convened. In the event of a change of investment objective of the Fund, a reasonable notification period must be provided to enable Shareholders to redeem their Shares prior to the implementation of such change.

Save as otherwise provided hereinafter, it is not intended that the Fund will make any direct investments and it is the intention that 100% of all monies received by the Fund will be invested in the Master Fund other than retaining a limited reserve of cash sufficient to cover the various fees and expenses payable by the Fund.


BACKGROUND TO THE ICAV (continued) INVESTMENT OBJECTIVE AND POLICY (continued)

As at 31 December 2018, the Fund has invested 97.38% (31 December 2017: 100.55%) of its net assets in the LF Woodford Equity Income Fund - Class F GBP Accumulating Share Class.

The Fund may invest up to 15% of net assets in aggregate in ancillary liquid assets including cash deposits, cash equivalents (i.e. cash accounts held at bank), certificates of deposits and money market instruments (being instruments normally dealt in on the money market which are liquid, and have a value which can be accurately determined at any time and including but being limited to floating rate notes and fixed or variable rate commercial paper) which may be held by the Fund, to meet expenses and pending reinvestment in accordance with the Central Bank’s requirements.

The Fund may utilise forward foreign currency exchange contracts for Share Class hedging purposes.

The global exposure of the Fund through the use of such financial derivative instruments will be measured using the “commitment approach” in accordance with the UCITS Regulations. The commitment approach is a measure which converts each financial derivative instrument position into the market value of an equivalent position in the underlying asset of that derivative. As per UCITS: Where the commitment approach is used for the calculation of global exposure, management companies shall convert each financial derivative instrument position into the market value of an equivalent position in the underlying asset of that derivative (standard commitment approach). Other than any leverage arising from the use of forward foreign currency exchange contracts the ICAV may borrow in limited circumstances including for cash management purposes, there will be no leverage in the Fund. The extent of any leverage will not exceed 100% of the Net Asset Value of the Fund.


INVESTMENT MANAGER’S REPORT

WOODFORD EQUITY INCOME FEEDER FUND

The Woodford Equity Income Feeder Fund was launched in October 2016, to provide offshore access to the LF Woodford Equity Income Fund (the ‘master fund’). The report below forms a review of the master fund during 2018.

LF Woodford Equity Income Fund: Annual Report 2018

The portfolio endured another challenging year in 2018 in performance terms, delivering a total return of -16.5%, compared to a return of -9.5% from the FTSE All Share index.

The year commenced with financial markets in a similar frame of mind to that which had prevailed in 2017, with momentum playing a dominant role in share price movements. This is a behaviour that we have seen before in the late-stages of a bull market and it inevitably poses a problem for our fundamentally-anchored investment approach.

In the UK, this momentum manifested itself in a narrow fixation on resource-related companies and other large Asian-exposed businesses, seen as beneficiaries of a reflationary global growth scenario that we simply did not believe in. Furthermore, it came despite increasing evidence of problems in many emerging market economies, most prominently, China. The fund has very little exposure to these parts of the market because of macroeconomic concerns and on valuation grounds. This lack of exposure to sectors such as Basic Materials, Oil & Gas and large financial groups such as HSBC, explains a significant proportion of the fund’s under-performance in the first half of the year.

As the year progressed, macroeconomic evidence in contradiction to the market’s reflationary biases continued to mount, to the extent that momentum started to falter. The portfolio increasingly benefited from avoiding areas of valuation excess and the stocks most vulnerable to the deteriorating global economic environment. However, one other performance factor has remained a headwind to performance.

Over the course of the last two years, we have seen a very attractive investment opportunity emerging in domestically-exposed stocks, such as housebuilders, construction, property and logistics businesses. These have been increasingly out-of-favour since the UK voted to leave the European Union in June 2016. As the negotiations with Europe have progressed, uncertainty about the path of the UK’s future relationship with Europe has increased. Within the UK stock market, a significant gap has, in turn, opened up between the performance and valuation of international-facing stocks and domestically-exposed stocks. The fund has progressively increased its exposure to the latter, selectively focusing on stocks which are pricing in an overly bleak scenario for the UK’s economic future.

The market’s persistent antipathy towards UK-exposed stocks means this part of the strategy has not yet paid off. Indeed, these stocks were the primary cause of the portfolio’s continued underperformance in the second half of 2018. The companies themselves have done very little wrong during this period – some of them have delivered excellent operational results – but this has counted for nothing given the continued negativity towards UK-exposed stocks.


INVESTMENT MANAGER’S REPORT (continued) LF Woodford Equity Income Fund: Annual Report 2018 (continued) By way of example, the largest detractor from performance was Purplebricks, whose share price declined by more than 60% over the course of the year, despite continued progress on the company’s path to disrupting the global real estate market. Our long-term investment thesis for the business remains intact and was reaffirmed by many aspects of its interim results released towards the end of the year. The business has had some challenges in 2018, most notably in Australia and in a softer-than-anticipated UK market. Nevertheless, growth continues and there are very encouraging signs from its earlier territories, the US in particular. This progress, however, is being materially and increasingly under-appreciated by the stock market.

Elsewhere, US biotechnology business, Prothena, was a significant detractor, following the announcement in April of the failure of its Pronto clinical trial, which was investigating NEOD001 in AL amyloidosis. The study identified a much bigger and more significant placebo effect than suggested by any previous trials. This was an extremely disappointing and surprising outcome and its shares fell heavily on the announcement. However, there is much more to Prothena than NEOD001. The company still has an attractive, albeit earlier-stage, pipeline of clinical assets, along with a technology platform and a world-leading specialism in misfolding proteins. Its research platform has been validated by ongoing partnerships with Roche and Celgene, and it also has its own, unpartnered assets and a very strong balance sheet. The shares remain well below the level at which they started the year and substantially below what we consider to be the long-term intrinsic value of this business. Indeed, they ended the year trading at a level below that of the value of cash on Prothena’s balance sheet.

More positively, litigation finance business Burford Capital, continued to deliver strong growth, which was rewarded with a progressively higher share price. Its financial results were consistently well ahead of all estimates, and the company continues to demonstrate an explosion in demand for its services globally, which we expect to continue. The business raised more capital during the year and, alongside a new strategic relationship with a long-term sovereign investor, it is very well funded to capitalise on the growth opportunity that lies ahead in an industry that it dominates.

Meanwhile, the portfolio also enjoyed a positive contribution from some of its earlier-stage unquoted investments. Autolus is a clinical-stage biotechnology business at the forefront of a revolution in cancer treatment. It focuses on developing and commercialising a novel class of immuno-oncology treatments known as CAR-T (Chimeric Antigen Receptor T-cells) therapies, which harness the power of a patient’s immune system to combat cancers. We first invested in the business in 2016, believing that it has a compelling technological advantage over other CAR-T businesses through its dual-targeting therapies, which engineer immune cells to recognise two cancer-specific features, meaning that there is less chance for the cancer to escape and recur. The business listed on the Nasdaq stock exchange in June 2018 at a significantly higher valuation and the shares have subsequently performed well, albeit over a short period thus far.


INVESTMENT MANAGER’S REPORT (continued) LF Woodford Equity Income Fund: Annual Report 2018 (continued) Towards the end of 2018, Autolus released promising updates regarding its lead programme, AUTO3. This latest data lends even more credibility and excitement to the investment case and, with further updates due over the course of 2019, we believe there is much more to come from this exciting young company.

Meanwhile, disruptive new energy technology business, Industrial Heat, also delivered a positive contribution to performance. Over the course of the last eighteen months, there have been developments within its portfolio of technologies that have shown increasing promise. Hence, with the company raising capital from other investors to continue the path to commercialisation, the valuation of the company was adjusted to reflect this progress.

In terms of portfolio activity, much of our purchases were aimed towards further exploiting the opportunity that has emerged in domestically-focused businesses. For example, we added materially to the holdings in housebuilders Crest Nicholson, Barratt Developments and Countryside Properties as the year progressed, alongside construction company Eurocell and property business NewRiver REIT. We also participated in the rights issue of Provident Financial, as it continues to recover from the operational problems that have beset it in recent years.

In order to take advantage of the opportunities above, we reassessed the relative attractiveness of several long-held portfolio positions. Consequently, AstraZeneca, Next, Drax and Lloyds were all sold as the year progressed. These are all still attractive businesses from a fundamental perspective, but we are keen to position the portfolio towards stocks where the gap between current share price and long-term intrinsic value appears the widest.

Turning to the investment strategy and outlook, although the UK stock market has remained preoccupied by the ebbs and flows of the Brexit debate, the UK economy has continued to produce strong data. Towards the end of 2018, we saw further positive numbers on wage growth and employment, backed up by more good news on inflation. With the lowest unemployment since the 1970s, strong growth in employment and hours worked, combined with the fastest real wage growth since the financial crisis, we enter 2019 with strong economic momentum in the UK.

Meanwhile, the rest of the world economy is gradually looking less robust. China is very visibly slowing, emerging economies continue to struggle with dollar strength and higher dollar borrowing costs, and Europe has slowed significantly. The weak oil price that was evident in the final months of 2018 is, from our perspective a reflection of this backdrop, with much weaker demand growth than the consensus had expected, as well as more robust supply growth. The US economy is still visibly strong but the waning influence of fiscal stimulus, allied to the lagged effects of much tighter monetary policy, are beginning to challenge policymakers and financial markets. Bond investors appear to be pricing in a much more challenging economic environment and the correction that appears to have started in the equity market is another warning of more troubling times ahead.


INVESTMENT MANAGER’S REPORT (continued)

LF Woodford Equity Income Fund: Annual Report 2018 (continued)

Our strategy remains focused on avoiding the considerable risks that have built up in equity markets over the last decade of QE-fuelled exuberance and capturing the opportunity that exists in the few parts of the market that have been left behind. This results in a portfolio which has a strong but selective bias towards profoundly undervalued companies that are exposed to the slings and arrows of the UK economy.

Elsewhere, the portfolio also continues to be positioned to capture an exciting long-term opportunity across a range of earlier-stage businesses exposed to the themes of healthcare innovation and disruptive technology more broadly.

Woodford Investment Management LTD January 2019


DIRECTORS’ REPORT The Directors present their Annual Report and Audited Financial Statements of the Woodford Funds (Ireland) ICAV (the “ICAV”) for the financial year ended to 31 December 2018.

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Directors’ Report and financial statements, in accordance with applicable law and regulations.

The Irish Collective Asset-management Vehicles Act, 2015 (the “ICAV Act”) requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with with International Financial Reporting Standards as adopted by the European Union (“IFRS”) and applicable law.

The financial statements are required to give a true and fair view of the assets, liabilities and financial position of the ICAV at the end of the financial year and of the profit or loss of the ICAV for the financial year. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether they have been prepared in accordance with IFRS as adopted by the

European Union; and • prepare the financial statements on the going concern basis unless it is

inappropriate to presume that the ICAV will continue in business.

The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the ICAV and enable them to ensure that the financial statements comply with the ICAV Act and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the ICAV. In this regard they have entrusted the assets of the ICAV to a depositary for safe-keeping. They have general responsibility for taking such steps as are reasonably open to them to prevent and detect fraud and other irregularities. The Directors are also responsible for preparing a Directors’ Report that complies with the requirements of the ICAV Act.

The Directors are responsible for the maintenance and integrity of the financial statements of the ICAV included on the Investment Manager's website. Legislation in Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

PRINCIPAL ACTIVITIES

Woodford Funds (Ireland) ICAV has been approved by the Central Bank of Ireland as an Irish Collective Asset-Management Vehicle established under the laws of Ireland pursuant to the ICAV Act.

The Investment Manager's Report contains a review of the factors which contributed to the performance for the financial year under review. Please see the Investment Manager's Report for further details. The Directors do not anticipate any changes in the structure or investment objective.


DIRECTORS’ REPORT (continued) PRINCIPAL RISKS AND UNCERTAINTIES

The Woodford Equity Income Feeder Fund (the “Fund”) invests substantially all of its assets in LF Woodford Equity Income Fund (the “Master Fund”). For a detailed description of the financial instruments and associated risks of an investment in the Master Fund, please refer to the audited financial statements of LF Woodford Equity Income Fund.

SIGNIFICANT EVENTS DURING THE YEAR

On 5 March 2018, a major Shareholder redeemed the full value of their holding. As stated in the Fund’s Prospectus, the Fund’s expenses are capped and Woodford Investment Management continue to cover any costs over the cap. The financial statements have been prepared on a going concern basis under the historical cost basis.

There were no other significant events during the financial year ended 31 December 2018.

SUBSEQUENT EVENTS On 28 March 2019, a letter was issued to shareholders noting that should a Hard Brexit situation arise on 12 April 2019, the Fund would compulsorily redeem all shares in the Fund at that date and pay the subsequent redemption proceeds to shareholders.

On 11 April 2019, a Brexit extension "only as long as necessary" and no longer than 31 October 2019 to allow for the ratification of the withdrawal agreement was agreed between the EU and United Kingdom. If the withdrawal agreement is ratified in this period, the Fund will consider the arrangements required to continue uninterrupted. Should a Hard Brexit situation arise in this period, the Fund would as advised compulsorily redeem all shares at that date and pay the subsequent redemption proceeds to shareholders which would, in effect terminate the Fund. However, the Directors intend to continue the ICAV for the foreseeable future and at least 12 months from the date of these financial statements.

There have been no other events after the Statement of Financial Position date, which, in the opinion of the Directors of the ICAV may have an impact on the financial statements for the financial year ended 31 December 2018. DIVIDENDS

Accumulating Share Classes

In the case of Accumulating Share Classes, all net income and net realised and unrealised gains (i.e. realised and unrealised capital gains net of all realised and unrealised losses) less accrued expenses of the Fund attributable to the relevant Class will be accumulated and reflected in the Net Asset Value per share.

Income Share Classes

The Directors intend to make a quarterly distribution to Shareholders in the Income Share Classes, comprised of a quarterly dividend calculated as at the last Business Day of March, June, September and December respectively.


DIRECTORS’ REPORT (continued)

Income Share Classes (continued)

Profits for these purposes shall consist of undistributed net income and realised and unrealised gains (less realised and unrealised losses) attributable to the Income Share Classes. In addition, in the event that there is insufficient net income and realised and unrealised gains (less realised and unrealised losses), the Fund may pay distributions out of capital. The rationale for providing for the payment of distributions out of capital is to allow the Fund the ability to provide a stable and consistent level of distribution. The effect of this is that capital will be eroded to allow higher dividends to be paid, thereby reducing the potential for future capital growth.

DIVIDENDS

The level of dividends payable will be determined by the Directors in conjunction with the Investment Manager.

DIRECTORS AND SECRETARY

The Directors and ICAV Secretary who held office during the financial year under review are disclosed under Management and Administration.

DIRECTORS’ INTERESTS IN SHARES AND CONTRACTS

None of the Directors who held office at the financial year end has or had any direct interest in the shares of the ICAV or in any transaction effected by the ICAV which is unusual in its nature or conditions or is significant to the business of the ICAV.

TRANSACTIONS INVOLVING DIRECTORS

Mr Patel and Mr Dale shall be deemed to be interested in any contract entered into by the ICAV with the Woodford Investment Management LTD (the “Investment Manager”) by virtue of each being employees of the Investment Manager.

There are no other contracts or arrangements of any significance in relation to the business of the ICAV in which the Directors or Company Secretary had any interest as defined in the ICAV Act, at any time during the financial year.

TRANSACTIONS WITH CONNECTED PERSONS

The Central Bank UCITS Regulations require that any transaction carried out with a UCITS by a management company or depositary to the UCITS, the delegates or sub-delegates of a management company or depository, and any associated or group of such a management company, depository, delegate or sub-delegate (“connected persons”) must be carried out as if negotiated at arm’s length. Transactions must be in the best interests of the Shareholders.

The Central Bank UCITS Regulations also introduced the concept of a ‘responsible person’ and many of the positive obligations in the Central Bank UCITS Regulations are framed as the direct responsibility of the responsible person. Consequently, the failure to meet such obligations constitutes a direct breach of the Central Bank UCITS Regulations by such responsible person. For UCITS that use management companies, the management company is the responsible person. For self-managed UCITS, the UCITS itself is the responsible person.

Independent auditor’s report to the shareholders of Woodford Funds (Ireland) ICAV

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We have audited the financial statements of Woodford Funds (Ireland) ICAV (or the “ICAV”) which

comprise the Statement of financial position, the Statement of comprehensive income, the Statement of

changes in net assets attributable to holders of participating shares, the Statement of cash flows, and the

Schedule of investments for the financial year ended 31 December 2018, and the related notes to the

financial statements, including the summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is

Irish law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

In our opinion, Woodford Funds (Ireland) ICAV’s financial statements:

· give a true and fair view in accordance with IFRS as adopted by the European Union of the

assets, liabilities and financial position of the ICAV as at 31 December 2018 and of its financial

performance and cash flows for the financial year then ended; and

· have been properly prepared in accordance with the requirements of the Irish Collective Asset-

management Vehicles Act 2015 and the European Communities (Undertakings for Collective

Investment in Transferable Securities) Regulations, 2011 (as amended). � � � � � � � � � � � � � �

We conducted our audit in accordance with International Standards on Auditing (Ireland) (or “ISAs

(Ireland)”) and applicable law. Our responsibilities under those standards are further described in the

‘responsibilities of the auditor for the audit of the financial statements’ section of our report. We are

independent of the ICAV in accordance with the ethical requirements that are relevant to our audit of the

financial statements in Ireland, namely the Irish Auditing and Accounting Supervisory Authority (IAASA)

Ethical Standard concerning the integrity, objectivity and independence of the auditor, and the ethical

pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate

in the circumstances for the entity. We have fulfilled our other ethical responsibilities in accordance with

these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.


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� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �In forming our opinion, which is not modified, we draw attention to Note 19 in the financial statements,

which indicates that the Directors have issued a notice to shareholders that should a Hard Brexit occur,

the sub-fund would compulsorily redeem all shares at that date and pay subsequent redemption proceeds,

which would in effect terminate the sub-fund. These events and conditions indicate that a material

uncertainty exists that may cast significant doubt on the sub-fund’s ability to continue as a going concern.

The financial statements have been prepared on a going concern basis as, the Directors intend to

continue the ICAV for the foreseeable future and at least 12 months from the date of the financial

statements. The financial statements do not include any adjustments relating to the recoverability and

classification of recorded asset amounts and classifications of liabilities that might be necessary should the

ICAV be unable to continue in existence. � � � � � � � � � � � � � �

Other information comprises information included in the annual report, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information. Our

opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the audit, or otherwise appears to be materially

misstated. If we identify such material inconsistencies in the financial statements, we are required to

determine whether there is a material misstatement in the financial statements or a material misstatement

of the other information. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard. � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �

s explained more fully in the directors’ responsibilities statement, management is responsible for the

preparation of the financial statements which give a true and fair view in accordance with IFRS as

adopted by the European Union, and for such internal control as they determine necessary to enable the

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

error.

In preparing the financial statements, management is responsible for assessing the ICAV’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting unless management either intends to liquidate the ICAV or to cease

operations, or has no realistic alternative but to do so.


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Those charged with governance are responsible for overseeing the ICAV’s financial reporting process. � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �

The auditor’s objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report

that includes their opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of these financial statements.

As part of an audit in accordance with ISAs (Ireland), the auditor will exercise professional judgment and

maintain professional scepticism throughout the audit. The auditor will also:

· Identify and assess the risks of material misstatement of the financial statements, whether due to

fraud or error, design and perform audit procedures responsive to those risks, and obtain audit

evidence that is sufficient and appropriate to provide a basis for their opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override

of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the ICAV’s internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

· Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events

or conditions that may cast significant doubt on the ICAV’s ability to continue as a going

concern. If they conclude that a material uncertainty exists, they are required to draw attention in

the auditor’s report to the related disclosures in the financial statements or, if such disclosures are

inadequate, to modify their opinion. Their conclusions are based on the audit evidence obtained

up to the date of the auditor’s report. However, future events or conditions may cause the ICAV

to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and

events in a matter that achieves a true and fair view.

The auditor communicates with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant deficiencies

in internal control that may be identified during the audit.


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This report is made solely to the ICAV’s shareholders, as a body, in accordance with section 120 of the

Irish Collective Asset-management Vehicles Act 2015. Our audit work has been undertaken so that we

might state to the ICAV’s shareholders those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the ICAV and the ICAV’s shareholders as a body, for our audit work,

for this report, or for the opinions we have formed.

Niamh Meenan

for and on behalf of Grant Thornton

Chartered Accountants & Statutory Audit Firm

13-18 City Quay

Dublin 2

D02 ED70

Ireland

Date: 25 April 2019


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV SCHEDULE OF INVESTMENTS AS AT 31 DECEMBER 2018 Financial assets at fair value through profit or loss

Nominal Fair value % ofInvestment funds Currency holdings GBP NAV

GBP 3,312,983 2,808,084 97.38Total investment funds 2,808,084 97.38

Open forward foreign currency contracts - unrealised gain (31.12.2017: 0.00%)

Currency Currency Currency Counterparty Maturity Unrealised % ofsold bought rate date gain GBP NAVUSD 6,676 GBP 5,258 1.2696 Northern Trust 29/03/2019 51 -Total open forward foreign currency contracts - unrealised gain 51 -

Open forward foreign currency contracts - unrealised loss (31.12.2017: (0.62%))

Currency Currency Currency Counterparty Maturity Unrealised % ofsold bought rate date loss GBP NAVGBP 75 EUR 82 1.1025 Northern Trust 29/03/2019 (1) -GBP 238,911 USD 303,401 1.2696 Northern Trust 29/03/2019 (2,278) (0.08) Total open forward foreign currency contracts - unrealised loss (2,279) (0.08)

Total financial assets at fair value through profit or loss (31.12.2017: 99.93%) 2,805,856 97.30

Total value of investments 2,805,856 97.30Cash 117,027 4.06Other net assets (39,340) (1.36)

Total net assets attributable to holders of redeemable participating shares 2,883,543 100.00

LF Woodford Equity Income Fund (31.12.2017: 100.55%)*


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV SCHEDULE OF INVESTMENTS (continued) AS AT 31 DECEMBER 2018

Analysis of portfolio of LF Woodford Equity Income Fund ("Feeder Fund")** % of Total assetsTransferable securities and money market instruments admitted toan official stock exchange listing or traded on a regulated market 95.75OTC financial derivative instruments -Other assets 4.25

100.00

* Woodford Equity Income Feeder Fund invests in the Class F Sterling Accumulating Shares of the LF Woodford Equity Income Fund (“Master Fund”). ** Calculation based on the total assets of the Feeder Fund (excluding liabilities). This summary is a UCITS requirement.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV SCHEDULE OF PORTFOLIO CHANGES (unaudited) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

Sales Proceeds

Holding Description GBP

62,977,040 LF Woodford Equity Income Fund 57,965,871

Purchases Proceeds

Holding Description GBP

1,230,204 LF Woodford Equity Income Fund 1,177,677


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

Woodford Equity Income Feeder

Fund


FundYear ended Year ended

31 December 2018 31 December 2017Note GBP GBP

Investment incomeNet loss on financial assets and liabilities at fair value through profit or loss 2 b), 4 (7,082,449) (3,960,934)Total investment loss (7,082,449) (3,960,934)

ExpensesManagement rebates/(fees) 5 21,362 (440,706)Administration fees 5 (1,439) (8,686)Depositary fees 5 (2,783) (8,252)Directors' fees 5 (40,249) (42,058)Audit fees (10,094) (10,232)General expenses 6 (82,063) (67,669)Total expenses (115,266) (577,603)

Net loss before finance costs (7,197,715) (4,538,537)

Finance costsBank interest expense 2 e) (81) (537)Income equalisation - 16 Distributions 12 (492,349) (2,376,197)Total finance costs (492,430) (2,376,718)

(7,690,145) (6,915,255)

Decrease in net assets for the financial year from operations attributable to holders of redeemable participating shares

The accompanying notes form an integral part of these Financial Statements.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018


Fund


FundAs at As at

31 December 2018 31 December 2017Note GBP GBP

AssetsFinancial assets at fair value through profit or loss - Investment in the Master Fund 2, 14 2,808,084 65,580,298 - Financial derivative instruments 2 51 249 Cash and cash equivalents 8 117,027 57,783 Securities sold receivable 2 - 45,310 Management fee rebate receivable 5 7,647 - Total assets 2,932,809 65,683,640

LiabilitiesFinancial liabilities at fair value through profit or loss - Financial derivatives instruments (2,279) (403,088) - Bank overdraft - - Management fees payable 5 - (26,973)Administration fee payable 5 (55) (511)Audit fee payable (9,890) (9,729)Securities purchased payable 2 (19,406) (3,093)Other payables 7 (17,636) (20,748)

(49,266) (464,142)Net assets attributable to holders of redeemable participating shares 2,883,543 65,219,498

Total liabilities (excluding net assets attributable to holders of redeemable participating shares)



WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV STATEMENT OF FINANCIAL POSITION (continued) AS AT 31 DECEMBER 2018


Fund


FundAs at As at

31 December 2018 31 December 2017

Shares in issue (Note 10)Class A Acc EUR - Hedged 100 89,781 Class A Acc GBP - Unhedged 190,773 214,741 Class A Acc USD - Unhedged 223,183 440,426 Class A Inc GBP - Unhedged 156,707 316,675 Class C Acc EUR - Unhedged 1 151,112 Class C Acc GBP - Unhedged 460,240 1,657,546 Class C Acc USD - Unhedged 1,031,381 1,031,381 Class C Inc EUR - Unhedged 46,530 132,045 Class C Inc GBP - Unhedged 1,255,281 7,019,688 Class C Inc USD - Hedged 376,007 74,653,487 Class C Inc USD - Unhedged 62,542 804,645 Class X Acc GBP - Unhedged 82,026 58,373 Class X Inc GBP - Unhedged 9,796 9,721

NAV per share (Note 11)Class A Acc EUR - Hedged EUR 0.8327 EUR 0.9966 Class A Acc GBP - Unhedged GBP 0.8579 GBP 1.0300 Class A Acc USD - Unhedged USD 0.8803 USD 1.1183 Class A Inc GBP - Unhedged GBP 0.7781 GBP 0.9642 Class C Acc EUR - Unhedged EUR 0.8500 EUR 1.0437 Class C Acc GBP - Unhedged GBP 0.8364 GBP 1.0016 Class C Acc USD - Unhedged USD 0.8633 USD 1.0940 Class C Inc EUR - Unhedged EUR 0.7495 EUR 0.9366 Class C Inc GBP - Unhedged GBP 0.7794 GBP 0.9635 Class C Inc USD - Hedged USD 0.8021 USD 0.9777 Class C Inc USD - Unhedged USD 0.8365 USD 1.0944 Class X Acc GBP - Unhedged GBP 0.8222 GBP 0.9921 Class X Inc GBP - Unhedged GBP 0.7519 GBP 0.9366



WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018


Fund



31 December 2018 31 December 2017GBP GBP

Net assets attributable to holders of redeemable participating shares at the beginning of the year 65,219,498 70,819,956 Decrease in net assets for the year from operations attributable to holders of redeemable participating shares (7,690,145) (6,915,255)

Issue of redeemable participating shares for the year 10 1,017,660 9,274,004 Redemption of redeemable participating shares for the year 10 (55,663,470) (7,959,207)Net assets attributable to holders of redeemable participating shares at the end of the year 2,883,543 65,219,498



WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV STATEMENT OF CASHFLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018


Fund




Cash flows from operating activities

(7,690,145) (6,915,255)Net gains on financial assets and liabilities at fair value through profit or loss 7,082,449 3,960,934 Net losses on forward foreign currency contracts and currencies (1,499,040) (4,574,102)Increase in receivables (7,647) -Decrease in payables (30,380) (21,985)Purchase of financial assets (1,161,364) (9,497,548)Proceeds from sale of financial assets 58,011,181 15,659,785 Net cash inflow/(outflow) from operating activities 54,705,054 (1,388,171) Cash flow from financial activitiesProceeds from redeemable participating shares issued during the year 1,017,660 9,327,754

Payments for redeemable participating shares redeemed during the year (55,663,470) (7,959,207)Net cash (outflow)/inflow from financing activities (54,645,810) 1,368,547

Net change in cash and cash equivalents 59,244 (19,624)

Cash and cash equivalents at the beginning of the year 57,783 77,407

Cash and cash equivalents at the end of the year 117,027 57,783

Decrease in net assets for the year from operations attributable to holders of redeemable participating shares



WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 1. ORGANISATION AND STRUCTURE

Woodford Funds (Ireland) ICAV (the "ICAV") is an open-ended umbrella type Irish Collective Asset-management Vehicle with limited liability and segregated liability between funds, registered with and authorised by the Central Bank of Ireland (the “Central Bank”) to carry on business as an ICAV pursuant to part 2 of the Irish Collective Asset-management Vehicles Act, 2015 (the “ICAV Act”). The ICAV is authorised by the Central Bank and pursuant to the provisions of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended) (the “UCITS Regulations”) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015.

The ICAV was registered in Ireland on 18 July 2016 and was authorised by the Central Bank on 23 September 2016 as an umbrella fund with segregated liability between funds.

The ICAV is structured as an umbrella type vehicle which may consist of different funds, each comprising one or more Classes. As at 31 December 2018, the ICAV has one initial fund namely the Woodford Equity Income Feeder Fund (the “Fund”).

As at 31 December 2018, the Fund holds an investment of GBP 2,788,678 (31 December 2017: GBP 65,580,298) in LF Woodford Equity Income Fund which represents 97.38% of the Fund’s net assets.

The investment objective of the Fund is to invest at least 85% of its net assets in the LF Woodford Equity Income Fund (“Master Fund”). The Master Fund is a sub-fund of the LF Woodford Investment Fund which is an open-ended umbrella type investment company with variable capital incorporated with limited liability and registered in England and Wales under registered number IC001010 and which is authorised by the UK’s Financial Conduct Authority as a UCITS.

The investment objective of the Fund may only be amended with the approval of Shareholders of the Fund on the basis of a majority of votes cast at a general meeting duly convened. In the event of a change of investment objective of the Fund, a reasonable notification period must be provided to enable Shareholders to redeem their Shares prior to the implementation of such change.

Save as otherwise provided hereinafter, it is not intended that the Fund will make any direct investments and it is the intention that 100% of all monies received by the Fund will be invested in the Master Fund other than retaining a limited reserve of cash sufficient to cover the various fees and expenses payable by the Fund.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation The financial statements of the ICAV are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”) and interpretations adopted by the International Accounting Standards Board (“IASB”), and with the requirements of the ICAV Act. The Fund continues to be open to investors and the financial statements have been prepared on a going concern basis. The preparation of financial statements in conformity with IFRS requires the use of certain critical estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results ultimately may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. All references to net assets throughout this document refer to Net Assets Attributable to Holders of Redeemable Participating Shares, unless otherwise stated. The financial statements are prepared in Sterling (“GBP”) and rounded to the nearest GBP. ACCOUNTING STANDARDS Recently effective accounting standards IFRS 9, ‘Financial Instruments’ (effective January 2018): IFRS 9 ‘Financial Instruments’ became effective for annual periods beginning on or after 1 January 2018. IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.

Classification and measurement of debt assets is driven by the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. A debt instrument is measured at amortised cost if the objective of the business model is to hold the financial asset for the collection of the contractual cash flows and the contractual cash flows under the instrument solely represent payments of principal and interest (SPPI).


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ACCOUNTING STANDARDS (continued) Recently effective accounting standards (continued)

A debt instrument is measured at fair value through other comprehensive income if the

objective of the business model is to hold the financial asset both to collect contractual cash flows from SPPI and to sell. All other debt instruments must be recognised at fair value through profit or loss. An entity may however, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency. Derivative and equity instruments are measured at fair value through profit or loss unless, for equity instruments not held for trading, an irrevocable option is taken to measure at fair value through other comprehensive income. IFRS 9 also introduces a new expected credit loss (ECL) impairment model.

IFRS 9 requirements represent a significant change from the requirements in International

Accounting Standard (“IAS”) 39, Financial Instruments: Recognition and Measurement, in respect of financial assets. The standard contains two primary measurement categories for financial assets: at amortised cost and fair value.

A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of held to maturity, available for sale and loans and receivables. No amount recognised in other comprehensive income would ever be reclassified to profit or loss. However, dividends on such investments are recognised in profit or loss, rather than other comprehensive income unless they clearly represent a partial recovery of the cost of the investment. Investments in equity instruments in respect of which an entity does not elect to present fair value changes in other comprehensive income would be measured at fair value with changes in fair value recognised in profit or loss. The standard requires that derivatives embedded in contracts with a host that is a financial asset within the scope of the standard are not separated; instead the hybrid financial instrument is assessed in its entirety as to whether it should be measured at amortised cost or fair value.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ACCOUNTING STANDARDS (continued) Recently effective accounting standards (continued)

IFRS 9, ‘Financial Instruments’ (effective January 2018) (continued): IFRS 9 requires that the effects of changes in credit risk of liabilities designated as at fair value through profit or loss are presented in other comprehensive income unless such treatment would create or enlarge an accounting mismatch in profit or loss, in which case all gains or losses on that liability are presented in profit or loss. Other requirements of IFRS 9 relating to classification and measurement of financial liabilities are unchanged from IAS 39. IFRS 9 has been applied retrospectively by the Company and did not result in a change to the classification or measurement of financial instruments. The Company’s investment portfolio continues to be classified as fair value through profit or loss and other financial assets which are held for collection continue to be measured at amortised cost. There was no material impact on adoption from the application of the new impairment model. The requirements of IFRS 9 relating to derecognition are unchanged from IAS 39. There are no other standards, amendments to standards or interpretations that are effective for annual periods beginning on 1 January 2018 that have a material effect on the financial statements of the Company.

b) Investments

(i) Classification and Recognition The ICAV classifies its investments in the Master Fund as financial assets or financial liabilities designated at fair value through profit or loss at inception. The ICAV recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument. Financial assets that are classified at amortisation cost include cash, securities sold receivable and other assets. Financial liabilities that are not recognised at fair value through profit or loss include securities purchased payable and accounts payable.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ACCOUNTING STANDARDS (continued)

b) Investments (continued)

(ii) Measurement Financial instruments are measured initially at fair value as determined by their transaction price. Subsequent to initial recognition, all instruments classified at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. The fair value of the Fund’s investment in the LF Woodford Investment Fund is based on the Net Asset Value per share obtained from the Master Fund’s administrator. The Master Fund is an investment company with variable capital incorporated under the Open-Ended Investment Company (“OEIC”) Regulations and is regulated in England and Wales. LF Woodford Investment Fund is an umbrella company authorised as a UCITS Scheme for the purpose of the Collective Investment Schemes Sourcebook (“COLL”) and consists of one sub-fund. The Master Fund was authorised by an order made by the Financial Conduct Authority with effect from 7 May 2014. The operation of the Master Fund is governed by the OEIC Regulations, the Instrument of Incorporation and its Prospectus. The Fund invests primarily in the Master Fund.

Financial instruments at fair value through profit or loss are measured initially at fair value. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments classified at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income.

(iii) Recognition and Derecognition The ICAV recognises financial assets and financial liabilities when all significant rights and access to the benefits from the assets and the exposure to the risks inherent in those benefits are transferred to the Fund. The Fund derecognises financial assets and financial liabilities when all such benefits and risks are transferred from the Fund.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES (continued)

b) Investments (continued)

(iv) Net gain/(loss) on financial assets and liabilities at fair value through profit or loss Net gain/(loss) on financial assets and liabilities at fair value through profit or loss include all realised and unrealised fair value changes and foreign exchange differences but excludes interest and dividend income. The ICAV uses the first in-first out (“FIFO”) method to determine realised gains and losses on derecognition. (v) Forward foreign currency contracts The unrealised gain or loss on open forward foreign currency contracts, if any, is calculated as the difference between the original contracted rate and the rate to close out the contract at that point in time. Realised gains or losses include net gains on contracts which have been settled or offset by other contracts. The ICAV recognises a realised gain or loss in the Statement of Comprehensive Income when the contract is closed. (vi) Transaction costs Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument. When a financial asset or liability is recognised initially, an entity shall measure it at its fair value through profit or loss plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or liability. For the financial year ended transaction costs incurred were immediately recognised in the Statement of Comprehensive Income as an expense. c) Cash and cash equivalents Cash and cash equivalents includes cash in bank and other short-term investments in an active market with original maturities of three months or less. d) Foreign exchange The functional and presentation currency of the Fund is GBP. Monetary assets and liabilities denominated in currencies other than GBP are translated into GBP at the closing rates of exchange at each financial year end. Transactions during the financial year, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction. Foreign currency gains and losses are included in realised and unrealised gain and loss on investments, in the Statement of Comprehensive Income.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 2. SIGNIFICANT ACCOUNTING POLICIES (continued)

e) Income and expenses Interest income and expense on cash is accounted for using the effective interest method. f) Distributions It is the intention of the Directors to make a quarterly distribution to Shareholders, comprised of a quarterly dividend calculated as at the last Business Day of March, June, September and December respectively on all Income Share Classes. The Directors intend to operate equalisation in relation to both Accumulating and Income Share classes. Shareholders who have purchased either Accumulating or Income Share Classes during a distribution period, being each quarter, will be entitled to benefit from two amounts: • Income which has accrued from the date of purchase, and • Capital which represents the return of the equalisation element.

g) Receivables Receivables are assets with fixed or determinable payments that are not quoted in an active market. Receivables are recognised initially at amortised cost plus transaction costs that are directly attributable to their acquisition. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment.

h) Redeemable participating shares The Fund has thirteen classes of redeemable participating shares in issue, which are redeemable at the holder’s option and do not have identical features. Such shares are classified as financial liabilities. Redeemable participating shares can be put back into the Fund at any dealing date for cash equal to a proportionate share of the Fund’s Net Asset Value attributable to the Share Class. The redeemable participating shares are carried at the redemption amount that is payable at the Statement of Financial Position date if the holder exercises the right to put the share back to the Fund. Redeemable participating shares are issued and redeemed at the holder’s option at prices based on the Fund’s Net Asset Value per share at the time of issue or redemption. The Fund’s Net Asset Value per share is calculated by dividing the net assets attributable to the holders of each class of redeemable participating shares with the total number of outstanding redeemable participating shares for each respective class.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 3. TAXATION

Under current Irish law and practice, the ICAV qualifies as an investment undertaking for the purposes of Section 739B of the Taxes Consolidation Act, 1997, as amended (“TCA”) so long as the ICAV is resident in Ireland. Accordingly, it is generally not chargeable to Irish tax on its income and gains.

Irish tax can arise on the happening of a “chargeable event” in the ICAV. A chargeable event includes any payments of distributions to Shareholders, any encashment, repurchase, redemption, cancellation or transfer of Shares and any deemed disposal of Shares A for Irish tax purposes arising as a result of holding Shares in the ICAV for a period of eight years or more. Where a chargeable event occurs, the ICAV is required to account for the Irish tax thereon.

No Irish tax will arise in respect of a chargeable event where:

• the Shareholder is neither resident nor ordinarily resident in Ireland (“Non-Irish Resident”) and it (or an intermediary acting on its behalf) has made the necessary declaration to that effect and the ICAV is not in possession of any information which would reasonably suggest that the information contained in the declaration is not, or is no longer, materially correct; or

• the Shareholder is Non-Irish Resident and has confirmed that to the ICAV and the ICAV is in possession of written notice of approval from the Revenue Commissioners to the effect that the requirement to provide the necessary declaration of non-residence has been complied with in respect of the Shareholder and the approval has not been withdrawn; or

• the Shareholder is an exempt Irish tax resident.

In the absence of a signed and completed declaration or written notice of approval from the Revenue Commissioners, as applicable, being in the possession of the ICAV at the relevant time there is a presumption that the Shareholder is resident or ordinarily resident in Ireland or is not an exempt Irish tax resident and a charge to tax arises.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 3. TAXATION (continued)

A chargeable event does not include:

• any transactions (which might otherwise be a chargeable event) in relation to Shares held in a recognised clearing system as designated by order of the Revenue Commissioners of Ireland; or

• a transfer of Shares between spouses/civil partners and any transfer of Shares between spouses/civil partners or former spouses/civil partners on the occasion of judicial separation, decree of dissolution and/or divorce, as appropriate; or

• an exchange by a Shareholder, effected by way of arm’s length bargain where no payment is made to the Shareholder, of Shares in the ICAV for other Shares in the ICAV; or

• an exchange of Shares arising on a qualifying amalgamation or reconstruction (within the meaning of Section 739H of the TCA) of the ICAV with another investment undertaking.

Capital gains, dividends and interest which the ICAV receives with respect to investments (other than securities of Irish issuers) may be subject to taxes, including withholding taxes, in the countries in which the issuers of the investments are located and such taxes may not be recoverable by the ICAV and its Shareholders.

4. NET GAINS AND LOSSES ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE

THROUGH PROFIT OR LOSS

Woodford Equity Income Feeder Fund


Year ended Year ended31 December 2018 31 December 2017

GBP GBPNet realised gain/(loss) from:- Investments gain 80,498 363,116 - Investments loss (4,871,149) (41,387)- Currencies gain 1,167,661 2,547,772 - Currencies loss (2,666,696) (7,121,874)

(6,289,686) (4,252,373)


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

4. NET GAINS AND LOSSES ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE

THROUGH PROFIT OR LOSS (continued)




GBP GBPMovement in net unrealised gain/(loss)from:- Investments gain - 878,178 - Investments loss (1,193,369) - - Currencies (6) - - Forward currency contracts gain 400,810 -- Forward currency contract loss (198) (586,739)

(792,763) 291,439




GBP GBPNet realised loss on investments (4,790,651) 321,729 Movement in net unrealised loss on investments (1,193,369) 878,178 Net currency loss (1,098,429) (5,160,841)

(7,082,449) (3,960,934)


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 5. FEES AND EXPENSES

As stated in the Fund’s Prospectus, the Fund's expenses are capped and Woodford Investment Management will cover any costs over the cap. The cap for Fund’s classes is set at the management fee for each class. The caps are calculated daily using assets after capital change. Establishment Expenses All fees and expenses relating to the establishment and organisation of the ICAV and the Fund including the fees of the ICAV’s professional advisers were borne by the Investment Manager in its capacity as promoter of the ICAV. The fees and expenses relating to the establishment of any additional Funds will be set out in the relevant Supplement for that Fund. Annual Management Fees The Fund is charged an Annual Management Fee in respect of each Class at the following percentage rate per annum of the Net Asset Value of the Fund:

Class A Acc EUR – Hedged 1.05% Class A Acc GBP – Unhedged 1.00% Class A Acc USD – Unhedged 1.00% Class A Inc GBP – Unhedged 1.00% Class C Acc EUR – Unhedged 0.75% Class C Acc GBP – Unhedged 0.75% Class C Acc USD – Unhedged 0.75% Class C Inc EUR – Unhedged 0.75% Class C Inc GBP – Unhedged 0.75% Class C Inc USD – Hedged 0.80% Class C Inc USD – Unhedged 0.75% Class X Inc GBP – Unhedged 1.50% Class X Acc GBP – Unhedged 1.50%

The Annual Management Fee is calculated and accrued daily and is payable monthly based on the daily Net Asset Value of the relevant Class within the Fund. The amount due is payable as soon as is practicable and in any event no later than the end of the following calendar month. There was a 0% management fee on the Class F Sterling Accumulation class.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 5. FEES AND EXPENSES (continued)

Investment Manager Fees The Investment Manager is entitled to receive a fee from the ICAV out of the Annual Management Fee provided that the following fees specified below have already been paid from the Annual Management Fee: • Fees of the Directors from time to time applicable to the Fund; • Fees of the Manager; • Fees of the Depositary; • Fees of the Administrator; • Fees of the Hedging Agent (in respect of performing Share Class currency hedging

services); • Fees of the ICAV Secretary from time to time applicable to the Fund; • Fees of the Auditor from time to time applicable to the Fund; and • Fees of the anti-money laundering reporting officer.

The Investment Manager is entitled to be reimbursed by the Fund for reasonable out of pocket expenses incurred by them and any VAT on fees and expenses payable to or by it. Investment Manager rebates for the year ended 31 December 2018 are GBP 36,445 (Investment Manager fees for the year ended 31 December 2017 are GBP 425,746) of which GBP 10,420 was Investment Manager’s fee rebate receivable at the year end (31 December 2017: GBP 26,788 remained payable at year end). The Investment Manager will not receive a performance fee. Management Company Fees The Manager, for its own benefit and use, is entitled to receive from the Annual Management Fee a management company fee (the “Management Company Fee”) of 0.0125% of the Net Asset Value of the Fund subject to a minimum fee of GBP 1,250 per month. The Management Company Fee accrues as of each Valuation Point and is payable monthly in arrears (plus VAT, if any). The Manager is entitled to be reimbursed by the Fund for reasonable out of pocket expenses incurred by it and any VAT on fees and expenses payable to or by it. Manager fees for the year ended 31 December 2018 are GBP 15,083 (31 December 2017: GBP 14,960) of which GBP 2,773 (31 December 2017: GBP 185) remained payable at the year end.



The Investment Manager rebates/fees and Management Company fees are combined in the Statement of Comprehensive Income under Management Fees of GBP 21,362 (31 December 2017: (GBP 440,706)). The Investment Manager and Management Company Fees receivables are combined in the Statement of Financial Position under Management fees receivable of GBP 7,647 (31 December 2017 Management Company fees payable: GBP 26,973). The ICAV’s current policy is that the fees associated with ongoing charges of the Fund will be borne by the Investment Manager out of its portion of the Annual Management Fee. The reimbursement for the year ended 31 December 2018 was GBP 151,554 (31 December 2017: GBP 151,983). Administrator Fees The Administrator is entitled to receive from the ICAV a portion of the Annual Management Fee not exceeding 0.01% of the Net Asset Value of the Fund (plus VAT, if any), accrued and calculated on each Valuation Point and payable monthly in arrears. The Administrator is entitled to receive a fee of GBP 10,000 for the preparation of the financial statements of the ICAV including the financial statements of the Fund per set of reports. Administrator fees for the year ended 31 December 2018 are GBP 1,439 (31 December 2017: GBP 8,686) of which GBP 55 (31 December 2017: GBP 511) remained payable at the year end.

Depositary Fees The Depositary is entitled to receive from the ICAV a portion of the Annual Management Fee not exceeding 0.01% of the Net Asset Value of the Fund (plus VAT, if any), accrued and calculated on each Valuation Point and payable monthly in arrears.

The Depositary is also entitled to be repaid out of the assets of the Fund for all of its reasonable disbursements incurred on behalf of the Fund, including the safe-keeping fees and expenses of any sub-custodian (which shall be at normal commercial rates) and transaction charges (which shall also be at normal commercial rates) levied by the Depositary or any sub-custodian and any applicable taxes it incurs on behalf of the Fund. Such custody fees shall accrue and be payable monthly in arrears. Depositary fees for the year ended 31 December 2018 are GBP 2,783 (31 December 2017: GBP 8,252) of which GBP 80 (31 December 2017: GBP nil) remained payable at the year end.

LF Woodford Equity Income Fund (Master) depositary fees are payable by the Authorised Corporate Director (“ACD”) out of the ACD’s periodic charge.



Directors Fees The ICAV authorises the Directors to charge a fee for their services at a rate determined by the Directors. Each Director shall receive a fee for their services up to a maximum of EUR 30,000 per annum, or such other amount as may from time to time be disclosed in the Annual Report of the ICAV. The Directors who are employees of the Investment Manager will not receive any fee. Any increase above the maximum permitted fee will be notified in advance to Shareholders. The Directors may elect not to receive a fee, as is the case with those Directors connected with the Investment Manager. Each Director may be entitled to special remuneration if called upon to perform any special or extra services to the ICAV, details of which will be set out in the financial statements of the ICAV. All Directors will be entitled to reimbursement by the ICAV of expenses properly incurred in connection with the business of the ICAV or the discharge of their duties. Directors fees for the year ended 31 December 2018 are GBP 40,249 (31 December 2017: GBP 42,058) of which GBP nil (31 December 2017: GBP nil) remained payable at the year end.

6. GENERAL EXPENSES




GBP GBPCentral Bank of Ireland regulatory levy 4,300 49 Legal fees 23,329 25,219 Corporate secretarial fees 14,074 9,756 Other professional fees 10,199 7,511 Reporting fees 20,126 20,017 Miscellaneous fees 9,674 4,974 Transaction costs 361 143

82,063 67,669


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 7. OTHER PAYABLES


Fund


FundAs at As at


Central Bank of Ireland regulatory levy - 1,353 Legal fees 3,353 9,242 Corporate secretary fees 2,180 135 Other professional fees 8,215 7,388 Reporting fees 1,663 1,589 Miscellaneous fees 2,225 1,041

17,636 20,748

8. CASH AND CASH EQUIVALENTS

At 31 December 2018, the ICAV held cash and cash equivalents of GBP 117,027 (31 December 2017: GBP 57,783) with The Northern Trust Company (TNTC). TNTC is a wholly owned subsidiary of Northern Trust Corporation. As at 31 December 2018, Northern Trust Corporation had a long term rating from Standard & Poor’s of A+.

9. EFFICIENT PORTFOLIO MANAGEMENT

The ICAV and the Master Fund may make use of financial derivative instruments for investment purposes, and/or derivative instruments, for efficient portfolio management purposes. Details of these are disclosed in the schedule of investments of the Master Fund. A detailed description of the techniques and instruments that the Master Fund may employ for efficient portfolio management purposes are set out in the Prospectus.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 10. SHARE CAPITAL

The share capital of the ICAV is divided into a specified number of shares without assigning any nominal value to them. Shares of the ICAV are divided into ordinary participating shares of no nominal value (“Shares”) and ordinary management shares of no nominal value (“Management Shares”).

Class A Acc EUR - Hedged

Class A Acc EUR - Hedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 89,781 - Subscriptions - 89,875 Redemptions (89,681) (94)At the end of the year 100 89,781

Class A Acc GBP - Unhedged

Class A Acc GBP - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 214,741 - Subscriptions - 214,741 Redemptions (23,968) - At the end of the year 190,773 214,741



10. SHARE CAPITAL (continued)

Class A Acc USD - Unhedged

Class A Acc USD - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 440,426 495,429 Subscriptions - - Redemptions (217,243) (55,003)At the end of the year 223,183 440,426

Class A Inc GBP - Unhedged

Class A Inc GBP - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 316,675 549,767 Subscriptions 156,707 72,193 Redemptions (316,675) (305,285)At the end of the year 156,707 316,675

Class C Acc EUR - Unhedged

Class C Acc EUR - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 151,112 40,000 Subscriptions - 289,230 Redemptions (151,111) (178,118)At the end of the year 1 151,112


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 10. SHARE CAPITAL (continued)

Class C Acc GBP -

UnhedgedClass C Acc GBP -

UnhedgedYear ended Year ended

Number of shares: 31 December 2018 31 December 2017At the beginning of the year 1,657,546 1,228,568 Subscriptions 340,725 1,093,844 Redemptions (1,538,031) (664,866)At the end of the year 460,240 1,657,546

Class C Acc USD - Unhedged

Class C Acc USD - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 1,031,381 - Subscriptions - 1,076,064 Redemptions - (44,683)At the end of the year 1,031,381 1,031,381

Class C Inc EUR - Unhedged

Class C Inc EUR - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 132,045 38,000 Subscriptions 46,530 94,045 Redemptions (132,045) - At the end of the year 46,530 132,045



Class C Inc GBP -

UnhedgedClass C Inc GBP -

UnhedgedYear ended Year ended

Number of shares: 31 December 2018 31 December 2017At the beginning of the year 7,019,688 2,946,601 Subscriptions 527,397 5,585,458 Redemptions (6,291,804) (1,512,371)At the end of the year 1,255,281 7,019,688

Class C Inc USD - Hedged Class C Inc USD - HedgedYear ended Year ended

Number of shares: 31 December 2018 31 December 2017At the beginning of the year 74,653,487 81,387,563 Subscriptions 9,251 367,033 Redemptions (74,286,731) (7,101,109)At the end of the year 376,007 74,653,487

Class C Inc USD - Unhedged

Class C Inc USD - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 804,645 82,442 Subscriptions - 722,203 Redemptions (742,103) - At the end of the year 62,542 804,645



Class X Acc GBP - Unhedged

Class X Acc GBP - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 58,373 - Subscriptions 23,653 58,373 Redemptions - - At the end of the year 82,026 58,373

Class X Inc GBP - Unhedged

Class X Inc GBP - Unhedged

Year ended Year endedNumber of shares: 31 December 2018 31 December 2017At the beginning of the year 9,721 - Subscriptions 75 9,721 Redemptions - - At the end of the year 9,796 9,721



11. NET ASSET VALUE PER SHARE The Net Asset Value of the Fund divided by the number of shares of the Fund in issue as at the relevant Valuation Point is equal to the Net Asset Value of a share of the Fund.


Fund


Fund


FundYear ended Year ended Year ended

31 December 2018 31 December 2017 31 December 2016

Net Asset Value Class A Acc EUR - Hedged* EUR 83 EUR 89,476 -Net Asset Value Class A Acc GBP - Unhedged* GBP 163,672 GBP 221,175 -Net Asset Value Class A Acc USD - Unhedged USD 196,462 USD 492,522 USD 501,082Net Asset Value Class A Inc GBP - Unhedged GBP 121,929 GBP 305,338 GBP 544,453Net Asset Value Class C Acc EUR - Unhedged EUR 1 EUR 157,715 EUR 42,758Net Asset Value Class C Acc GBP - Unhedged GBP 384,957 GBP 1,660,202 GBP 1,219,318Net Asset Value Class C Acc USD - Unhedged* USD 890,412 USD 1,128,348 -Net Asset Value Class C Inc EUR - Unhedged EUR 34,874 EUR 123,668 EUR 37,688Net Asset Value Class C Inc GBP - Unhedged GBP 978,393 GBP 6,763,609 GBP 2,908,721Net Asset Value Class C Inc USD - Hedged USD 301,592 USD 72,991,513 USD 80,704,419Net Asset Value Class C Inc USD - Unhedged USD 52,315 USD 880,571 USD 84,158Net Asset Value Class X Acc GBP - Unhedged* GBP 67,443 GBP 57,909 -Net Asset Value Class X Inc GBP - Unhedged* GBP 7,366 GBP 9,105 - * Class A Accumulating EUR Hedged- launched on 12 January 2017. Class A Accumulating GBP Unhedged - launched on 3 February 2017. Class C Accumulating USD Unhedged - launched on 9 February 2017. Class X Income GBP Unhedged - launched on 22 March 2017. Class X Accumulating GBP Unhedged - launched on 26 October 2017.



11. NET ASSET VALUE PER SHARE (continued)

Woodford Equity

Income Feeder Fund


Fund


FundYear ended Year ended Year ended

31 December 2018 31 December 2017 31 December 2016

Net Asset Value Class A Acc EUR - Hedged* EUR 0.8327 EUR 0.9966 -Net Asset Value Class A Acc GBP - Unhedged* GBP 0.8579 GBP 1.0300 -Net Asset Value Class A Acc USD - Unhedged USD 0.8803 USD 1.1183 USD 1.0114Net Asset Value Class A Inc GBP - Unhedged GBP 0.7781 GBP 0.9642 GBP 0.9903Net Asset Value Class C Acc EUR - Unhedged EUR 0.8500 EUR 1.0437 EUR 1.0689Net Asset Value Class C Acc GBP - Unhedged GBP 0.8364 GBP 1.0016 GBP 0.9925Net Asset Value Class C Acc USD - Unhedged* USD 0.8633 USD 1.0940 -Net Asset Value Class C Inc EUR - Unhedged EUR 0.7495 EUR 0.9366 EUR 0.9918Net Asset Value Class C Inc GBP - Unhedged GBP 0.7794 GBP 0.9635 GBP 0.9871Net Asset Value Class C Inc USD - Hedged USD 0.8021 USD 0.9777 USD 0.9916Net Asset Value Class C Inc USD - Unhedged USD 0.8365 USD 1.0944 USD 1.0208Net Asset Value Class X Acc GBP - Unhedged* GBP 0.8222 GBP 0.9921 -Net Asset Value Class X Inc GBP - Unhedged* GBP 0.7519 GBP 0.9366 - * Class A Accumulating EUR Hedged- launched on 12 January 2017. Class A Accumulating GBP Unhedged - launched on 3 February 2017. Class C Accumulating USD Unhedged - launched on 9 February 2017. Class X Income GBP Unhedged - launched on 22 March 2017. Class X Accumulating GBP Unhedged - launched on 26 October 2017.



12. DISTRIBUTIONS

The following distributions were made during the year (quoted in GBP): Record date 29/12/2017* 29/03/2018 29/06/2018 26/09/2018Pay date 16/01/2018 17/04/2018 16/07/2018 16/10/2018

GBP GBP GBP GBPNet Asset Value Class A Inc GBP - Unhedged

2,134 2,349 1,910 674

Net Asset Value Class C Inc EUR - Unhedged

762 55 531 171

Net Asset Value Class C Inc GBP - Unhedged

47,271 16,116 25,783 6,847

Net Asset Value Class C Inc USD - Hedged

375,645 1,303 3,489 1,268

Net Asset Value Class C Inc USD - Unhedged

4,532 289 706 247

Net Asset Value Class X Inc GBP - Unhedged

64 47 115 41

Distributions 430,408 20,159 32,534 9,248

Total Distributions 492,349

* Distributions for December 2017 were made in the financial year 2018.



12. DISTRIBUTIONS (continued)

Record date 31/12/2016* 31/03/2017 30/06/2017 30/09/2017

Pay date 17/01/2017 19/04/2017 17/07/2017 16/10/2017

GBP GBP GBP GBPNet Asset Value Class A Inc GBP - Unhedged

3,623 4,234 7,322 4,585

Net Asset Value Class C Inc EUR - Unhedged

215 538 1,206 868

Net Asset Value Class C Inc GBP - Unhedged

20,713 40,509 71,522 54,955

Net Asset Value Class C Inc USD - Hedged

436,534 505,120 745,559 470,327

Net Asset Value Class C Inc USD - Unhedged

455 1,124 1,783 4,749

Net Asset Value Class X Inc GBP - Unhedged

- 73 111 72

Distributions 461,540 551,598 827,503 535,556

Total Distributions 2,376,197

* Distributions for December 2016 were made in the financial year 2017.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 13. RELATED PARTIES

IAS 24 ‘Related Party Disclosures’ requires the disclosure of information relating to material transactions with parties who are deemed to be related to the reporting entity.

The Fund is managed by Link Fund Manager Solutions (Ireland) Limited, the Manager. Under the terms of the investment management agreement, the Investment Manager is responsible, subject to the overall supervision and control of the Directors, for managing the assets and investments of the Fund in accordance with the investment objective and policies of the Fund. The Investment Manager is entitled to receive Investment Manager fees as set out in Note 5.

Vimal Patel and Simon Dale, both Directors of the ICAV, are employees of the Investment Manager and as such do not receive a Director’s fee.

The fees charged by all service providers are disclosed in Note 5 to the financial statements.

14. FINANCIAL INSTRUMENTS

Substantially all of the assets of the Fund are invested in the Master Fund and are, therefore, exposed to the underlying investments of that Master Fund. Substantially all of the Master Fund’s financial assets and liabilities relate to investments in UK listed companies. The specific risks arising from the Master Fund’s exposure to these instruments (and, therefore, affecting this Fund), and the Manager’s policies for managing the risks of the Fund, which have been applied throughout the year, are summarised in the relevant Supplementary Memorandum to the Prospectus. For a more detailed description of the financial instruments and associated risks of an investment in the Master Fund, please refer to the audited financial statements of the LF Woodford Equity Income Fund.

15. FINANCIAL RISK MANAGEMENT

The Fund’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The investment objective of the Fund is to invest at least 85% of its net assets in the LF Woodford Equity Income Fund (“Master Fund”). The Master Fund is a sub-fund of the LF Woodford Investment Fund which is an open-ended umbrella type investment company with variable capital incorporated with limited liability and registered in England and Wales under registered number IC001010 and which is authorised by the UK’s Financial Conduct Authority as a UCITS.



15. FINANCIAL RISK MANAGEMENT (continued)

The Fund takes exposure to certain risks to generate investment returns on its portfolio. These risks can potentially result in a reduction in the Fund’s net assets. The Investment Manager will use its best endeavours to minimise the potentially adverse effects of these risks on the Fund’s performance where it can do so while still managing the investments of the Fund in a way that is consistent with the Fund’s investment objective and policy. Please refer to the Fund’s Prospectus under the heading Risk Factors for further discussion on the ICAV’s risk management policies. The Fund’s financial instruments consist of transferable securities, OTC derivatives and cash. The nature and extent of the financial instruments outstanding at the Statement of Financial Position date and the risk management policies employed by the ICAV are discussed further below. Market risk IFRS 7 ‘Financial Instrument: Disclosures’ defines market risk as the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk reflects interest rate risk, currency risk and other price risks. The maximum risk resulting from financial instruments the Fund holds is equal to their fair value. The Fund’s holdings are susceptible to market price risk arising from uncertainties about future prices of the instruments. The Fund invests at least 85% of its net assets in the Master Fund and as such is materially exposed to the market risk of the Master Fund. The Investment Manager moderates this risk through a careful selection of securities within specified limits. In addition, the Investment Manager manages the exposure of the portfolio to the risk of adverse changes in the general level of market prices through adhering to its formal risk management process, which includes the use of systems and technology to monitor overall market and position risk on a daily basis. The Directors of the ICAV set limits and give a mandate to the Investment Manager, who manages this risk in line with the Prospectus. The Directors of the ICAV monitor the market risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Directors of the ICAV meet regularly and at each meeting reviews investment performance and overall market positions. They monitor the Investment Manager’s compliance with the ICAV’s objectives. The Fund’s market risk is affected by two components: changes in market prices and currency exchange rates. The Fund’s exposure to market risk is disclosed in the Schedule of Investments.




Market risk (continued) Sensitivity analysis If the price of the underlying investment fund held by the Fund had increased by 5% at 31 December 2018 (31 December 2017: 5%), with all other variables held constant, this would have increased the Net Assets Attributable to Holders of Redeemable Participating Shares of the Fund by GBP 139,434 (31 December 2017: GBP 3,279,015). Conversely, had it decreased by 5%, this would have decreased the Net Assets Attributable to Holders of Redeemable Participating Shares of the Fund by an equal amount with all other variables remaining constant. - Interest rate risk Interest rate risk arises from the effects of fluctuations on the prevailing levels of market interest rates on the fair value of future cash flows of financial assets and liabilities. At 31 December 2018, the Fund held cash amounting to 4.06% (31 December 2017: 0.09%) of the net assets. The Fund's cash and cash equivalents expose them to interest rate risk. The Fund's other financial assets are non-interest bearing. The Fund’s financial liabilities are non-interest bearing. The Fund's financial liabilities are non-interest bearing which mature within one year, other than the Net Assets Attributable to Holders of Redeemable Participating Shares which do not have a maturity. Sensitivity analysis As at 31 December 2018, if interest rates had lowered by 1% (31 December 2017: 1%) with all other variables remaining constant, the decrease in Net Assets Attributable to Holders of Redeemable Participating Shares for the year would amount to approximately GBP 1,170 (31 December 2017: GBP 578). If interest rates had risen by 1%, the Fund would have experienced an equal and opposite effect. - Currency risk Currency risk is defined in IFRS 7 as the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Fund is exposed to currency risk as the assets and liabilities of the Fund may be denominated in a currency other than the functional currency of the Fund, which is GBP. Currency risk arises as the value of future transactions, recognised monetary assets and monetary liabilities denominated in other currencies fluctuate due to changes in foreign exchange rates. At 31 December 2018, the majority of monetary and non-monetary assets of the Fund are denominated in GBP, the functional currency. Therefore, the currency risk of the Fund as at 31 December 2018 was negligible.




- Other price risk Other price risk is the risk that the value of the Fund’s financial instruments will fluctuate as a result of changes in market prices caused by factors other than interest rate or foreign currency movement. Price risk arises primarily from uncertainty about the future prices of financial instruments that the Fund holds. This Fund is exposed to derivative price risk. Liquidity risk IFRS 7 defines liquidity risk as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Fund and the Master Fund are exposed to daily cash redemptions of shares. The Fund invests the majority of its assets in the Master Fund which is considered to be liquid, as it can be readily disposed of in the event that cash needs to be raised to meet redemptions or to pay expenses. There are a number of circumstances when Link Financial Managers (Ireland) Limited (the “Manager”) may, with the approval of the Depositary, temporarily suspend the right of Shareholders to require the realisation of shares of any Class and/or may delay the payment of any monies in respect of any such realisation. In accordance with the Fund’s policy, the Manager monitors the Fund’s liquidity on a daily basis and reviews any significant exposures at its periodic meetings. At 31 December 2018 the Fund’s financial liabilities, as disclosed on the Statement of Financial Position, were all due within three months.

Credit risk Credit risk is defined in IFRS 7 as the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Fund will be exposed to credit risk on parties with whom they trade, which will include counterparties, and may also bear the risk of settlement default. The carrying amounts of financial assets best represent the maximum credit risk exposure at the Statement of Financial Position date. The Fund is indirectly exposed to credit risk due to the investment in the Master Fund. All transactions entered into by the Master Fund in listed securities 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. Northern Trust Fiduciary Services (Ireland) Limited (“NTFSIL”) is the appointed Depositary of the Fund, responsible for the safe-keeping of assets. NTFSIL has appointed The Northern Trust Company (“TNTC”) as its global sub-custodian. Both NTFSIL and TNTC are wholly owned subsidiaries of Northern Trust Corporation (“NTC”).


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 15. FINANCIAL RISK MANAGEMENT (continued)

Credit risk (continued) As at year end date 31 December 2018, NTC had a long term credit rating from Standard & Poor’s of (A+). TNTC (as global sub-custodian of NTFSIL) does not appoint external sub-custodians within the U.S., the U.K., Ireland and Canada. However, in all other markets, TNTC appoints local external sub-custodians. NTFSIL, in the discharge of its depositary duties, verifies the Fund’s ownership of Other Assets, Art 22(5) of UCITS V Directive 2014/91/EU , by assessing whether the Fund holds the ownership based on information or documents provided by the Fund or where available, on external evidence. TNTC, in the discharge of its delegated depositary duties, holds in custody (i) all financial instruments that may be registered in a financial instruments account opened on the books of TNTC and (ii) all financial instruments that can be physically delivered to TNTC. TNTC ensures all financial instruments (held in a financial instruments account on the books of TNTC) are held in segregated accounts in the name of the Fund, clearly identifiable as belonging to the Fund, and distinct and separately from the proprietary assets of TNTC, NTFSIL and NTC. In addition TNTC, as banker, holds cash of the Fund on deposit. Such cash is held on the Statement of Financial Position of TNTC. In the event of insolvency of TNTC, in accordance with standard banking practice, the Fund will rank as an unsecured creditor of TNTC in respect of any cash deposits. Insolvency of NTFSIL and or one of its agents or affiliates may cause the Fund’s rights with respect to its assets to be delayed. The Responsible Party manages risk by monitoring the credit quality and financial position of the Depositary and such risk is further managed by the Depositary monitoring the credit quality and financial positions of sub-custodian appointments. The Master Fund only buys and sells investments through brokers which have been approved as an acceptable counterparty. In addition, limits are set as to the maximum exposure to any individual broker that may exist at any time; these limits are reviewed regularly. • Fair value – there is no material difference between the value of the financial assets

and liabilities, as shown in the balance sheet of the Master Fund, and their fair value.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 15. FINANCIAL RISK MANAGEMENT (continued)

Credit risk (continued) • Derivatives and other financial instruments – transactions in derivatives and forward

currency contracts may be used for the purpose of hedging and meeting the investment objective of the Master Fund. In pursuing the Master Fund’s objectives, the Investment Manager may make use of a variety of instruments in accordance with the rules.

Credit risk arising from receivables relating to unsettled trades is considered small due to the short settlement period involved. The maximum exposure related to unsettled trades equals the amounts shown on the Statement of Financial Position. There were no past due or impaired assets as of 31 December 2018.

16. FAIR VALUE HIERARCHY IFRS 13 ‘Fair Value Measurement’ requires the ICAV to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value of financial assets and liabilities traded in active markets are based on quoted market prices at the close of trading on the reporting date. The ICAV has adopted IFRS 13 and uses last traded market prices as its valuation inputs for listed securities. If market quotations are not available or are unrepresentative, estimation methods may be used to calculate fair value. The fair value hierarchy has the following levels: • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: 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 3: Certain inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV NOTES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS (continued) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 16. FAIR VALUE HIERARCHY (continued)

The determination of what constitutes “observable” requires significant judgement by the ICAV. The ICAV considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Level 1 Level 2 Level 3 Total31 December 2018 GBP GBP GBP GBP

Investment funds:AssetsWoodford Equity Income Feeder Fund - 2,808,084 - 2,808,084

Open forward foreign currency contracts - 51 - 51 - 2,808,135 - 2,808,135

Liabilities

Open forward foreign currency contracts - (2,279) - (2,279) - (2,279) - (2,279)

The following tables analyse the fair value hierarchy within the Fund’s financial assets and liabilities measured at fair value at 31 December 2018 and 31 December 2017.

Level 1 Level 2 Level 3 Total31 December 2017 GBP GBP GBP GBP

Investment funds:AssetsWoodford Equity Income Feeder Fund - 65,580,298 - 65,580,298

Open forward foreign currency contracts - 249 - 249 - 65,580,547 - 65,580,547

Liabilities

Open forward foreign currency contracts - (403,088) - (403,088) - (403,088) - (403,088)



17. EXCHANGE RATES

The following table shows the exchange rates (against GBP) used to convert assets and liabilities denominated in foreign currencies into GBP at the year end.

Exchange Rate to GBP

Exchange Rate to GBP

31 December 2018 31 December 2017

Euro 1.1141 1.1265United States dollar 1.2736 1.3528

18. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

On 5 March 2018, a major Shareholder redeemed the full value of their holding. As stated in the Fund’s Prospectus, the Fund’s expenses are capped and Woodford Investment Management continue to cover any costs over the cap. The financial statements have been prepared on a going concern basis under the historical cost basis. There were no other significant events during the financial year ended 31 December 2018.

19. SUBSEQUENT EVENTS

On 28 March 2019, a letter was issued to shareholders noting that should a Hard Brexit situation arise on 12 April 2019, the Fund would compulsorily redeem all shares in the Fund at that date and pay the subsequent redemption proceeds to shareholders. On 11 April 2019, a Brexit extension "only as long as necessary" and no longer than 31 October 2019 to allow for the ratification of the withdrawal agreement was agreed between the EU and United Kingdom. If the withdrawal agreement is ratified in this period, the Fund will consider the arrangements required to continue uninterrupted. Should a Hard Brexit situation arise in this period, the Fund would as advised compulsorily redeem all shares at that date and pay the subsequent redemption proceeds to shareholders which would, in effect terminate the Fund. However; the Directors intend to continue the ICAV for 12 months from the date of these financial statements. There have been no other events after the Statement of Financial Position date, which, in the opinion of the Directors of the ICAV may have an impact on the financial statements for the financial year ended 31 December 2018.

20. COMPARATIVE YEAR

The comparatives shown are for the year ended 31 December 2017.



21. APPROVAL OF FINANCIAL STATEMENTS

These financial statements were authorised for issue by the Board of Directors on 25 April 2019.


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV APPENDIX 1 (unaudited) REMUNERATION POLICY The ICAV has a remuneration policy in place to ensure compliance with UCITS V and all relevant regulations.

The Manager has designed and implements a remuneration policy which is consistent with and promotes sound and effective risk management by having a business model which by its nature does not promote excessive risk taking that is inconsistent with the risk profile of the ICAV and its Funds.

The Manager’s remuneration policy is consistent with the business strategy, objectives, values and interests of the ICAV and the Shareholders of the ICAV and includes measures to avoid conflicts of interest.

The Manager’s remuneration policy applies to those categories of staff, including senior management, risk takers, control functions and any employee receiving total remuneration that falls into the remuneration bracket of senior management and risk takers, whose professional activities have a material impact on the risk profile of the ICAV and its Funds.

In line with the provisions of the UCITS Directive and ESMA Guidelines on Sound Remuneration Policies under the UCITS Directive and AIFMD (2016/ESMA/GUIDELINES) (the “ESMA Remuneration Guidelines”) each of which may be amended from time to time, the ICAV applies its remuneration policy and practices in a way and to the extent that is proportionate to its size, its internal organisation and the nature, scope and complexity of its activities.

Where the Manager delegates investment management functions in respect of any Fund of the ICAV, it will ensure that:

a. the entities to which investment management activities have been delegated are subject to regulatory requirements on remuneration that are equally as effective as those applicable under the ESMA Remuneration Guidelines; or

b. appropriate contractual arrangements are put in place to ensure that there is no circumvention of the remuneration rules set out in the ESMA Remuneration Guideline.

Details of the Manager’s most recent remuneration policy, including, but not limited to, a description of how remuneration and benefits are calculated and the identity of persons responsible for awarding the remuneration and benefits, is available at the below email address and a paper copy of such remuneration policy is available to investors free of charge.

https://www.linkassetservices.com/what-we-do/fundssolutions/irish-management-company

https://www.linkassetservices.com/what-we-do/fundssolutions/irish-management-company


WOODFORD EQUITY INCOME FEEDER FUND A Sub-Fund of Woodford Funds (Ireland) ICAV

APPENDIX 1 (unaudited) (continued)

REMUNERATION POLICY (continued)

TOTAL REMUNERATION TO BE PAID TO THE STAFF OF THE MANAGEMENT COMPANY/AIFM DURING THE YEAR TO DECEMBER 2018/2017

2018 2017

€ €

Fixed remuneration 1,038,236 836,525

Variable remuneration 132,532 -

Total Remuneration paid 1,170,768 836,525

Number of beneficiaries 27 23

Attributable to the Woodford fund

Fixed remuneration 23,686 18,218

Variable remuneration 3,024 -

Total Remuneration paid 26,710 18,218

Remuneration of employees whose actions have a material impact on the risk profile of the UCITS managed by the Management Company

- -

APPENDIX 2 (unaudited)

SECURITIES FINANCING TRANSACTIONS REGULATION

The Securities Financing Transactions Regulation, as published by the European Securities and Markets Authority, aims to improve the transparency of the securities financing markets. Disclosures regarding exposure to Securities Financing Transactions (SFTs) will be required on all reports and accounts published after 13 January 2017. During the financial year ended 31 December 2018, the ICAV did not enter into any SFTs.

Part of Link Group

LF Woodford Investment FundLF Woodford Equity Income FundANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2018

LF Woodford Investment Fund | Annual Report 2018

AUTHORISED CORPORATE DIRECTOR (‘ACD’)LINK FUND SOLUTIONS LIMITEDHead Office:6th Floor65 Gresham Street London EC2V 7NQTelephone: 0870 607 2555 Fax: 0870 607 2550Email: [email protected](Authorised and regulated by the Financial Conduct Authority)

DIRECTORS OF THE ACDC. AddenbrookeN. BoylingB. HammondP. Hugh-SmithK.J. MidlA.J. Stuart

INVESTMENT MANAGERWOODFORD INVESTMENT MANAGEMENT LIMITED9400 Garsington RoadOxford OX4 2HN(Authorised and regulated bythe Financial Conduct Authority)

DEPOSITARYNORTHERN TRUST GLOBAL SERVICES SE UK BRANCH 50 Bank StreetCanary WharfLondon E14 5NT(Authorised by the Prudential RegulationAuthority and regulated by the FinancialConduct Authority and the Prudential Regulation Authority)

REGISTRAR AND ADMINISTRATORNORTHERN TRUST GLOBAL SERVICES SEUK BRANCH 50 Bank StreetCanary WharfLondon E14 5NTTelephone Number: 0333 300 0381Fax Number: 0207 643 3776Email: [email protected](Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority)

INDEPENDENT AUDITORGRANT THORNTON UK LLP30 Finsbury SquareLondon EC2A 1AG


CONTENTS

Page 1

LF WOODFORD INVESTMENT FUND

ACD’s Report 2

Authorised Status 2

Remuneration Policy 2

Securities Financing Transactions 4

Director’s Statement 5

Statement of ACD’s Responsibilities in Relation to the Financial Statements 6

Statement of the Depositary’s Responsibilities In Respect of the Scheme and Report of the Depositary to the Shareholders of the

LF Woodford Investment Fund (‘The Company’) 7

Independent Auditor’s Report to the Shareholders of LF Woodford Investment Fund 8

LF WOODFORD EQUITY INCOME FUND

ACD’s Report 11

Investment Objective and Policy 11

Investment Manager’s Report 12

Fund Information 15

Portfolio Statement 26

Summary of Material Portfolio Changes 36

FINANCIAL STATEMENTS

Statement of Total Return 37

Statement of Change in Net Assets Attributable to Shareholders 37

Balance Sheet 38

Notes to the Financial Statements 39

Distribution Tables 54

General Information 63


Page 2

ACD’S REPORTfor the year ended 31 December 2018

Authorised StatusThe LF Woodford Investment Fund (‘the Company’) is an investment company with variable capital incorporated in England and Wales with registered number 1C001010 and authorised by the Financial Conduct Authority with effect from 7 May 2014. The Company has an unlimited duration. The head office of the Company is at 6th Floor, 65 Gresham Street, London EC2V 7NQ. This is also the address for service on the Company of notices or other documents required or authorised to be served on it.

The Company and its sub-fund is a UCITS scheme and the base currency of the Company and its sub-fund is pounds sterling.

Shareholders are not liable for the debts of the Company. Shareholders are not liable to make any further payment to the Company after they have paid the price on purchase of the shares.

Remuneration PolicyLink Fund Solutions Limited (‘LFSL’) is committed to ensuring that its remuneration policies and practices are consistent with, and promote, sound and effective risk management. LFSL’s remuneration policy is designed to ensure that excessive risk taking is not encouraged by or within LFSL including in respect of the risk profile of the funds it operates, to manage the potential for conflicts of interest in relation to remuneration (having regard, inter alia, to its formal conflicts of interest policy) and to enable LFSL to achieve and maintain a sound capital base.

LFSL acts as the operator of both UCITS funds and AIFs.

LFSL delegates portfolio management for the funds to various investment management firms. The portfolio managers’ fees and expense for providing investment management services are paid by the ACD out of its own remuneration under the ACD agreement. The investment management firms make information on remuneration publicly available in accordance with the disclosure requirements of Pillar 3 of the Capital Requirements Directive. This disclosure is in respect of LFSL activities (including activities performed by its sister company Link Fund Administrators Limited (‘LFAL’) or by employees of that entity), and excludes activities undertaken by third party investment management firms. LFSL staff do not perform duties in respect of particular funds, nor are they remunerated by reference to the performance of any individual fund. Accordingly, the information below is for LFSL as a whole. No attempt has been made to attribute remuneration to the Company itself.

Information on LFSL’s remuneration arrangements is collated annually, as part of its statutory financial statements preparation processes. However, following the acquisition by Link Administration Holdings Limited on 3 November 2017, LFSL changed its accounting reference date to 30 June to align with that of its new parent, and its most recent accounting period was therefore for the six months to 30 June 2018. To provide investors with transparency and comparability, this report includes remuneration disclosures for both this shortened accounting period and the previous one, for the calendar year ended 31 December 2017. As at 30 June 2018, LFSL operated 96 UCITS and 59 AIFs (31.12.17: 95 UCITS and 59 AIFs), whose respective assets under management (‘AuM’) were £39,632 million and £17,801 million (31.12.17: £41,425 million and £16,780 million). This Company was valued at £6,166 million as at 30 June 2018 and represented 10.74% of LFSL’s total AuM and 15.56% of its UCITS AuM (31.12.17: this Company was valued at £8,257 million and represented 14.19% of LFSL's total AuM and 19.93% of its UCITS AuM).


ACD’S REPORT continuedfor the year ended 31 December 2018

Page 3

The disclosure below represents that required under COLL 4.5.7R (7) for funds subject to UCITS obligations.

2018 Number of beneficiaries

Fixed £’000

Variable £’000

Total £’000

Total amount of remuneration paid by LFSL for the financial period from 1 January 2018 to 30 June 2018 149 3,249 924 4,173

Total amount of remuneration paid to members of staff whose activities have a material impact on the risk profile of the funds for the financial period from 1 January 2018 to 30 June 2018:

Senior management (including all Board members) 6 356 348 704Staff engaged in control functions 4 182 59 241Risk takers and other identified staff 15 561 205 766Any employees receiving total remuneration that takes

them into the same remuneration bracket as senior management and risk takers - - - -

2017 Number of beneficiaries

Fixed £’000

Variable £’000

Total £’000

Total amount of remuneration paid by LFSL for the financial year to 31 December 2017 188 5,497 633 6,130

Total amount of remuneration paid to members of staff whose activities have a material impact on the risk profile of the funds for the financial year to 31 December 2017:

Senior management (including all Board members) 6 551 132 683Staff engaged in control functions 4 310 - 310Risk takers and other identified staff 15 995 19 1,014Any employees receiving total remuneration that takes

them into the same remuneration bracket as senior management and risk takers - - - -

LFSL’s remuneration arrangement include fixed salaries, contributory pension arrangements and certain other benefits, and the potential for discretionary bonuses. The amount available for payment of discretionary bonuses is dependent on satisfactory performance by the Company as a whole, rather than the performance of any individual fund. Subject to satisfactory Company performance, bonuses may then be paid to staff to reflect their contribution to the Company’s success. The precise metrics used will vary by function, but consideration is given to both qualitative and quantitative measures.

None of LFSL’s staff receives remuneration based on the performance of any individual fund.

Further details can be found at www.linkfundsolutions.co.uk/assets/media/LFI_Explanation_of_Compliance_with_Remuneration Code.pdf.


ACD’S REPORT continuedfor the year ended 31 December 2018

Page 4

Securities Financing TransactionsThe Company has the ability to utilise Securities Financing Transactions (being transactions such as lending or borrowing of securities, repurchase or reverse repurchase transactions, buy-sell back or sell-buy back transactions, or margin lending transactions). No such transactions have been undertaken in the period covered by this report.

LINK FUND SOLUTIONS LIMITEDACD of LF Woodford Investment Fund30 April 2019

Page 5

DIRECTOR’S STATEMENT


This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority.

N. BOYLING

LINK FUND SOLUTIONS LIMITEDACD of LF Woodford Equity Income Fund30 April 2019

Page 6

STATEMENT OF ACD’S RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS


The Collective Investment Schemes sourcebook published by the Financial Conduct Authority (‘the COLL Rules’) requires the ACD to prepare financial statements for each annual accounting year which give a true and fair view of the financial position of the Company, comprising its sub-fund, and of the net revenue and net capital gains/losses on the property of the Company’s sub-fund for the year.

In preparing the financial statements the ACD is responsible for:

• selecting suitable accounting policies and then applying them consistently;

• making judgements and estimates that are reasonable and prudent;

• following UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland;

• complying with the disclosure requirements of the Statement of Recommended Practice for UK Authorised Funds issued by the Investment Association in May 2014;

• keeping proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the above requirements;

• assessing the Company and its sub-funds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern;

• using the going concern basis of accounting unless they either intend to liquidate the Company or its sub-fund or to cease operations, or have no realistic alternative but to do so;

• such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and

• taking reasonable steps for the prevention and detection of fraud and irregularities.

The ACD is responsible for the management of the Company in accordance with its Instrument of Incorporation, the Prospectus and the COLL Rules.

Page 7

STATEMENT OF THE DEPOSITARY’S RESPONSIBILITIES IN RESPECT OF THE SCHEME AND REPORT OF THE DEPOSITARY TO THE SHAREHOLDERS OF THE LF WOODFORD INVESTMENT FUND (‘THE COMPANY’)


The Depositary must ensure that the Company is managed in accordance with the Financial Conduct Authority’s Collective Investment Schemes Sourcebook, the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228), as amended, the Financial Services and Markets Act 2000, as amended, (together ‘the Regulations’), the Company’s Instrument of Incorporation and Prospectus (together ‘the Scheme documents’) as detailed below.

The Depositary must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Company and its investors.

The Depositary is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the Company in accordance with the Regulations.

The Depositary must ensure that:

• the Company’s cash flows are properly monitored and that cash of the Company is booked into the cash accounts in accordance with the Regulations;

• the sale, issue, repurchase, redemption and cancellation of shares are carried out in accordance with the Regulations;

• the value of shares of the Company are calculated in accordance with the Regulations;

• any consideration relating to transactions in the Company’s assets is remitted to the Company within the usual time limits;

• the Company’s income is applied in accordance with the Regulations; and

• the instructions of the Authorised Fund Manager (‘the AFM’), which is the UCITS Management Company, are carried out (unless they conflict with the Regulations).

The Depositary also has a duty to take reasonable care to ensure that Company is managed in accordance with the Regulations and Scheme documents in relation to the investment and borrowing powers applicable to the Company.

Having carried out such procedures as we consider necessary to discharge our responsibilities as depositary of the Company, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Company, acting through the AFM:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and the application of the Company’s income in accordance with the Regulations and the Scheme documents of the Company; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company.

NORTHERN TRUST GLOBAL SERVICES SE UK BRANCHUK Trustee and Depositary Services30 April 2019

Page 8

INDEPENDENT AUDITOR’S REPORT TO THESHAREHOLDERS OFLF WOODFORD INVESTMENT FUND


OpinionWe have audited the financial statements of LF Woodford Investment Fund (‘the Company’) for the year ended 31 December 2018. These financial statements comprise the financial statements of the following sub-fund of the Company:

• LF Woodford Equity Income Fund (‘the Fund’)

The financial statements of the Fund comprise the statement of total return, the statement of change in net assets attributable to shareholders, the balance sheet, notes to the financial statements and the distribution tables.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice) and the Statement of Recommended Practice 'Financial Statements of UK Authorised Funds' issued by the Investment Association in May 2014.

In our opinion the financial statements:

• give a true and fair view of the financial position of the Company and the Fund as at 31 December 2018 and of the net revenue and net capital losses on the scheme property of the Company and the Fund for the year then ended, and

• have been properly prepared in accordance with the Statement of Recommended Practice 'Financial Statements of UK Authorised Funds' issued by the Investment Association in May 2014, the Collective Investment Schemes sourcebook, and the Company's Instrument of Incorporation.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concernWe have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the Authorised Corporate Director’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the Authorised Corporate Director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company or the Fund’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other informationThe Authorised Corporate Director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

INDEPENDENT AUDITOR’S REPORT TO THESHAREHOLDERS OFLF WOODFORD INVESTMENT FUND continued

Page 9


In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Collective Investment Schemes sourcebookIn our opinion:

• we have been given all the information and explanations, which, to the best of our knowledge and belief, are necessary for the purposes of our audit, and

• the information given in the Authorised Corporate Director’s Report (which comprises the information on the inside cover, the Authorised Status, the Investment Objective and Policy, the Investment Manager’s Report, the Synthetic Risk and Reward Indicator, the Portfolio Statement and the Summary of Material Portfolio Changes) is consistent with the financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Collective Investment Schemes sourcebook requires us to report to you if in our opinion:

• proper accounting records for the Company or the Fund have not been kept, or

• the financial statements are not in agreement with those accounting records.

Responsibilities of the Authorised Corporate DirectorAs explained more fully in the Statement of the ACD’s Responsibilities on page 6, the Authorised Corporate Director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Authorised Corporate Director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Authorised Corporate Director is responsible for assessing the Company’s and the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Authorised Corporate Director either intends to terminate the Fund, wind up the Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

INDEPENDENT AUDITOR’S REPORT TO THESHAREHOLDERS OFLF WOODFORD INVESTMENT FUND continued

Page 10


Use of our reportThis report is made solely to the Company’s shareholders, as a body, in accordance with regulation 67(2) of the Open-Ended Investment Companies Regulations 2001, and with Rule 4.5.12 of the Collective Investment Schemes sourcebook. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders as a body, for our audit work, for this report, or for the opinions we have formed.

GRANT THORNTON UK LLP Statutory Auditor, Chartered AccountantsLondon, United Kingdom 30 April 2019


Page 11

LF WOODFORD EQUITY INCOME FUNDACD’S REPORTfor the year ended 31 December 2018

Investment Objective and PolicyThe aim of the LF Woodford Equity Income Fund (‘the Fund’) is to provide a reasonable level of income together with capital growth. This will be achieved by investing primarily in UK listed companies. The Fund may also invest in unlisted companies and overseas entities. The Fund may also invest in other transferable securities, money market instruments, warrants, collective investment schemes and deposits.

The Investment Manager may also make use of derivatives for investment purposes (gaining both long and short exposure to the underlying assets) and for efficient portfolio management. It is not anticipated that such use of derivatives will have a significant adverse effect on the risk profile of this Fund.

LINK FUND SOLUTIONS LIMITEDACD of LF Woodford Investment Fund30 April 2019


Page 12

LF WOODFORD EQUITY INCOME FUNDINVESTMENT MANAGER’S REPORTfor the year ended 31 December 2018

The portfolio endured another challenging year in 2018 in performance terms, delivering a total return of -16.7% compared to a return of -9.5%¹ from the FTSE All Share Index.

The year commenced with financial markets in a similar frame of mind to that which had prevailed in 2017, with momentum playing a dominant role in share price movements. This is a behaviour that we have seen before in the late-stages of a bull market and it inevitably poses a problem for our fundamentally-anchored investment approach.

In the UK, this momentum manifested itself in a narrow fixation on resource-related companies and other large Asian-exposed businesses, seen as beneficiaries of a reflationary global growth scenario that we simply did not believe in. Furthermore, it came despite increasing evidence of problems in many emerging market economies, most prominently, China. The Fund has very little exposure to these parts of the market because of macroeconomic concerns and on valuation grounds. This lack of exposure to sectors such as Basic Materials, Oil & Gas and large financial groups such as HSBC, explains a significant proportion of the Fund’s under-performance in the first half of the year.

As the year progressed, macroeconomic evidence in contradiction to the market’s reflationary biases continued to mount, to the extent that momentum started to falter. The portfolio increasingly benefited from avoiding areas of valuation excess and the stocks most vulnerable to the deteriorating global economic environment. However, one other performance factor has remained a headwind to performance.

Over the course of the last two years, we have seen a very attractive investment opportunity emerging in domestically-exposed stocks, such as housebuilders, construction, property and logistics businesses. These have been increasingly out-of-favour since the UK voted to leave the European Union in June 2016. As the negotiations with Europe have progressed, uncertainty about the path of the UK’s future relationship with Europe has increased. Within the UK stock market, a significant gap has, in turn, opened up between the performance and valuation of international-facing stocks and domestically-exposed stocks. The Fund has progressively increased its exposure to the latter, selectively focusing on stocks which are pricing in an overly bleak scenario for the UK’s economic future.

The market’s persistent antipathy towards UK-exposed stocks means this part of the strategy has not yet paid off. Indeed, these stocks were the primary cause of the portfolio’s continued underperformance in the second half of 2018. The companies themselves have done very little wrong during this period – some of them have delivered excellent operational results – but this has counted for nothing given the continued negativity towards UK-exposed stocks.

By way of example, we point to the current valuation of the housebuilder, Taylor Wimpey, which released a strong set of full year financial results in February. It has reiterated its commitment to a £600m dividend return this year, which compares to a market cap of £5.8bn (source: Bloomberg as at 31 March 2019). That’s a yield of more than 10%, which means the share price could double from here and still look cheap. The same or similar applies to the share prices of many housebuilders and other companies that derive the majority of their revenues in the UK economy and that are held in the portfolio.

1 Source: FE Analytics. The Investment Manager uses the FTSE All Share Index shown above for comparison only. No benchmark is required to be disclosed per the Prospectus.


Page 13

LF WOODFORD EQUITY INCOME FUNDINVESTMENT MANAGER’S REPORT continuedfor the year ended 31 December 2018

Elsewhere, US biotechnology business, Prothena, was a significant detractor, following the announcement in April of the failure of its Pronto clinical trial, which was investigating NEOD001 in AL amyloidosis. The study identified a much bigger and more significant placebo effect than suggested by any previous trials. This was an extremely disappointing and surprising outcome and its shares fell heavily on the announcement. However, there is much more to Prothena than NEOD001. The company still has an attractive, albeit earlier-stage, pipeline of clinical assets, along with a technology platform and a world-leading specialism in misfolding proteins. Its research platform has been validated by ongoing partnerships with Roche and Celgene, and it also has its own, unpartnered assets and a very strong balance sheet. The shares remain well below the level at which they started the year and substantially below what we consider to be the long-term intrinsic value of this business. Indeed, they ended the year trading at a level below that of the value of cash on Prothena’s balance sheet.

More positively, litigation finance business Burford Capital, continued to deliver strong growth, which was rewarded with a progressively higher share price. Its financial results were consistently well ahead of all estimates, and the company continues to demonstrate an explosion in demand for its services globally, which we expect to continue. The business raised more capital during the year and, alongside a new strategic relationship with a long-term sovereign investor, it is very well funded to capitalise on the growth opportunity that lies ahead in an industry that it dominates.

Meanwhile, the portfolio also enjoyed a positive contribution from some of its earlier-stage unquoted investments. Autolus is a clinical-stage biotechnology business at the forefront of a revolution in cancer treatment. It focuses on developing and commercialising a novel class of immuno-oncology treatments known as CAR-T (Chimeric Antigen Receptor T-cells) therapies, which harness the power of a patient’s immune system to combat cancers. We first invested in the business in 2016, believing that it has a compelling technological advantage over other CAR-T businesses through its dual-targeting therapies, which engineer immune cells to recognise two cancer-specific features, meaning that there is less chance for the cancer to escape and recur. The business listed on the Nasdaq stock exchange in June 2018 at a significantly higher valuation and the shares have subsequently performed well, albeit over a short period thus far. Towards the end of 2018, Autolus released promising updates regarding its lead programme, AUTO3. This latest data lends even more credibility and excitement to the investment case and, with further updates due over the course of 2019, we believe there is much more to come from this exciting young company.

Meanwhile, disruptive new energy technology business, Industrial Heat, also delivered a positive contribution to performance. Over the course of the last eighteen months, there have been developments within its portfolio of technologies that have shown increasing promise. Hence, with the company raising capital from other investors to continue the path to commercialisation, the valuation of the company was adjusted to reflect this progress.

In terms of portfolio activity, much of our purchases were aimed towards further exploiting the opportunity that has emerged in domestically-focused businesses. For example, we added materially to the holdings in housebuilders Crest Nicholson, Barratt Developments and Countryside Properties as the year progressed, alongside construction company Eurocell and property business NewRiver REIT. We also participated in the rights issue of Provident Financial, as it continues to recover from the operational problems that have beset it in recent years.

In order to take advantage of the opportunities above, we reassessed the relative attractiveness of several long-held portfolio positions. Consequently, AstraZeneca, Next, Drax and Lloyds Banking were all sold as the year progressed. These are all still attractive businesses from a fundamental perspective, but we are keen to position the portfolio towards stocks where the gap between current share price and long-term intrinsic value appears the widest.


Page 14

LF WOODFORD EQUITY INCOME FUNDINVESTMENT MANAGER’S REPORT continuedfor the year ended 31 December 2018

Turning to the investment strategy and outlook, although the UK stock market has remained preoccupied by the ebbs and flows of the Brexit debate, the UK economy has continued to produce strong data. Towards the end of 2018, we saw further positive numbers on wage growth and employment, backed up by more good news on inflation. With the lowest unemployment since the 1970s, strong growth in employment and hours worked, combined with the fastest real wage growth since the financial crisis, we enter 2019 with strong economic momentum in the UK.

Meanwhile, the rest of the world economy is gradually looking less robust. China is very visibly slowing, emerging economies continue to struggle with dollar strength and higher dollar borrowing costs, and Europe has slowed significantly. The weak oil price that was evident in the final months of 2018 is, from our perspective a reflection of this backdrop, with much weaker demand growth than the consensus had expected, as well as more robust supply growth. The US economy is still visibly strong but the waning influence of fiscal stimulus, allied to the lagged effects of much tighter monetary policy, are beginning to challenge policymakers and financial markets. Bond investors appear to be pricing in a much more challenging economic environment and the correction that appears to have started in the equity market is another warning of more troubling times ahead.

Our strategy remains focused on avoiding the considerable risks that have built up in equity markets over the last decade of QE-fuelled exuberance and capturing the opportunity that exists in the few parts of the market that have been left behind. This results in a portfolio which has a strong but selective bias towards profoundly undervalued companies that are exposed to the slings and arrows of the UK economy.

Elsewhere, the portfolio also continues to be positioned to capture an exciting long-term opportunity across a range of earlier-stage businesses exposed to the themes of healthcare innovation and disruptive technology more broadly.

WOODFORD INVESTMENT MANAGEMENT LTDInvestment Manager18 January 2019


Page 15

LF WOODFORD EQUITY INCOME FUNDFUND INFORMATIONfor the year ended 31 December 2018

RISK AND REWARD PROFILE

Lower Risk

Typically Higher Rewards

TypicallyLower Rewards

Higher Risk

4

This indicator shows how much a fund may have risen and fallen in the past, and therefore how much a fund’s returns may have varied. It is a measure of a fund’s volatility. The higher a fund’s past volatility the higher the number on the scale and the greater the risk that investors in that fund may have made losses as well as gains. The lowest number on the scale does not mean that a fund is risk free.

This Fund has been classed as 5 because its volatility has been measured as above average.

This indicator is based on historical data and may not be a reliable indication of the future risk profile of this Fund.

The risk and reward profile shown is not guaranteed to remain the same and may shift over time.

Currency Risk: As the Fund invests in overseas securities movements in exchange rates may, when not hedged, cause the value of your investment to increase or decrease.

Counterparty Risk: As the Fund may enter into derivative agreements there is a risk that other parties may fail to meet their obligations. This may lead to delays in receiving amounts due to the fund, receiving less than is due or receiving nothing.

Use of Derivatives: The Fund invests in derivatives. Where derivatives are used for hedging, the risk of loss to the Fund may be increased where the value of the derivative and the value of the security or position which it is hedging are insufficiently correlated.

Smaller and Unlisted Companies: The Fund invests in listed smaller companies and private companies not available to be bought or sold on the stock market. Both are often more difficult to buy or sell, sometimes significantly harder, when compared to larger more established companies. Unlisted companies and some smaller companies can also be more difficult to value due to less available information on them and can involve a significant amount of estimation. As a result, smaller and unlisted companies may cause large short term swings (both up and down) in the value of the Fund.

For full details of the Fund’s risks, please see the Prospectus which may be obtained upon application and can be found on the ACD’s website, www.linkfundsolutions.co.uk, by following the link ‘Fund Information’.


LF WOODFORD EQUITY INCOME FUNDFUND INFORMATION continuedfor the year ended 31 December 2018

Page 16

COMPARATIVE TABLES

A Sterling Accumulation shares

CHANGE IN NET ASSETS PER SHARE 31 December 2018

pence per share

31 December 2017 pence per share


Opening net asset value per share 128.01 126.40 122.76Return before operating charges* (19.34) 2.92 4.86Operating charges (1.19) (1.31) (1.22)Return after operating charges (20.53) 1.61 3.64Distributions (4.48) (4.37) (4.21)Retained distributions on accumulation shares 4.48 4.37 4.21Closing net asset value per share 107.48 128.01 126.40* after direct transaction costs of:1 – 0.13 0.18

PERFORMANCE

Return after charges (16.04)% 1.27% 2.97%

OTHER INFORMATION

Closing net asset value (£'000) 29,667 58,161 76,729Closing number of shares 27,601,544 45,435,894 60,703,178Operating charges 1.00% 1.00% 1.00%Direct transaction costs1 –% 0.10% 0.14%

PRICES

Highest share price 128.58 139.02 132.56Lowest share price 105.03 123.73 110.82

1 Direct transaction costs are stated after deducting the proportion of the amounts collected from dilution adjustments that relate to direct transaction costs. A negative transaction costs figure might arise where there is a timing difference between inflows and the settlement of the resultant purchases.



Page 17

COMPARATIVE TABLES continued

A Sterling Income shares


pence per share



Opening net asset value per share 114.03 116.41 117.05Return before operating charges* (16.99) 2.79 4.48Operating charges (1.05) (1.19) (1.15)Return after operating charges (18.04) 1.60 3.33Distributions on income shares (3.94) (3.98) (3.97)Closing net asset value per share 92.05 114.03 116.41* after direct transaction costs of:1 – 0.12 0.17

PERFORMANCE


OTHER INFORMATION


PRICES





Page 18


C Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 1,207,228 2,133,934 2,252,771Closing number of shares 1,111,066,148 1,653,251,857 1,771,895,634Operating charges 0.75% 0.75% 0.75%Direct transaction costs1 –% 0.10% 0.14%

PRICES





Page 19


C Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 526,044 1,244,835 1,647,647Closing number of shares 564,826,559 1,081,785,070 1,406,102,020Operating charges 0.75% 0.75% 0.75%Direct transaction costs1 –% 0.10% 0.14%

PRICES





Page 20


Z Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 2,015,331 3,210,940 3,595,718Closing number of shares 1,845,897,189 2,478,116,625 2,820,152,154Operating charges 0.65% 0.65% 0.65%Direct transaction costs1 –% 0.10% 0.14%

PRICES





Page 21


Z Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 857,962 1,417,843 1,743,027Closing number of shares 917,196,155 1,227,995,028 1,484,003,136Operating charges 0.65% 0.65% 0.65%Direct transaction costs1 –% 0.10% 0.14%

PRICES





Page 22


X Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 23


X Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 24


F Sterling Accumulation shares1


pence per share


14 October 2016 to 31 December 2016

pence per share

2

Opening net asset value per share 100.71 98.46 100.00Return before operating charges* (15.37) 2.25 (1.54)Operating charges – – –Return after operating charges (15.37) 2.25 (1.54)Distributions (3.54) (3.47) (0.67)Retained distributions on accumulation shares 3.54 3.47 0.67Closing net asset value per share 85.34 100.71 98.46* after direct transaction costs of:3 – 0.10 0.14

PERFORMANCE

Return after charges (15.26)% 2.29% (1.54)%

OTHER INFORMATION


PRICES


1 This class is only available for investment by the Woodford Feeder Fund (Ireland) and the Group Self Invested Pension Plan of the Investment Manager.

2 Class F Sterling Accumulation shares launched on 14 October 2016.3 Direct transaction costs are stated after deducting the proportion of the amounts collected from dilution adjustments that relate to direct transaction costs. A negative transaction costs figure might arise where there is a timing difference between inflows and the settlement of the resultant purchases.


Page 25


Fund Performance to 31 December 20181 year 3 years Since launch1

LF Woodford Equity Income Fund (16.69)% (13.78)% 6.74%

1 Launch date 2 June 2014

The performance of the Fund is based on the published price per A Sterling Accumulation Share which includes reinvested income.

The performance of the Fund disclosed in the above table may differ from the ‘Return after charges’ disclosed in the Comparative Tables due to the above performance being calculated on the latest published price prior to the period end, rather than the period end return after operating charges.

Details of the distributions per share for the year are shown in the Distribution Tables on pages 54 to 62.

RISK WARNINGAn investment in an open-ended investment company should be regarded as a medium to long term investment. Investors should be aware that the price of shares and the income from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not necessarily a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable.


Page 26

LF WOODFORD EQUITY INCOME FUNDPORTFOLIO STATEMENTas at 31 December 2018

Holding Portfolio of investmentsValue £'000

31 December 2018

%

SpacingOnly UNITED KINGDOM 72.79% (80.42%)

SpacingOnly BASIC MATERIALS 0.04% (0.03%)

SpacingOnly Chemicals 0.04% (0.03%)51,696,852 Itaconix1 2,068 0.04

SpacingOnly INDUSTRIALS 7.26% (10.46%)

SpacingOnly Construction & Materials 1.46% (1.57%)17,042,249 Eurocell 35,789 0.76

8,007,000 Kier 32,588 0.70

68,377 1.46

SpacingOnly Industrial Engineering 0.41% (0.93%)47,613 Metalysis Preference2 1,630 0.03

144,000 Nexeon2 7,268 0.1523,786 Nexeon Limited2 1,201 0.03

48,960,201 Xeros1 9,302 0.20

19,401 0.41

SpacingOnly Industrial Transportation 1.62% (1.33%)75,567,224 Eddie Stobart Logistics1 75,567 1.62

SpacingOnly Support Services 3.77% (6.63%)45,362,431 BCA Marketplace 99,798 2.13

9,389,698 PayPoint 75,399 1.6114,296,030 Utilitywise3 1,145 0.03

176,342 3.77


LF WOODFORD EQUITY INCOME FUNDPORTFOLIO STATEMENT continuedas at 31 December 2018

Page 27


31 December 2018

%

SpacingOnly CONSUMER GOODS 20.73% (15.87%)

SpacingOnly Household Goods & Home Construction 13.63% (8.08%)64,927,047 Barratt Developments 300,223 6.4236,941,223 Countryside Properties 112,006 2.3918,727,730 Crest Nicholson 61,464 1.3127,826,094 Eve Sleep1 2,782 0.0680,851,991 Taylor Wimpey 110,161 2.3625,105,000 Watkin Jones1 50,838 1.09

637,474 13.63

SpacingOnly Tobacco 7.10% (7.00%)13,972,936 Imperial Brands 332,137 7.10

SpacingOnly Fixed Line Telecommunications 0.00% (0.79%)

SpacingOnly HEALTH CARE 17.86% (20.14%)

SpacingOnly Health Care Equipment & Services 4.27% (3.58%)2,097,902 Cell Medica 'B' Preference2 7,112 0.152,156,310 Oxford Nanopore Technologies2 111,589 2.389,635,768 Oxford Pharmascience2 96 –

12,416,667 Oxford Science Innovation2 14,900 0.326,666,667 Propelair Common Stock2 250 0.01

22,173,913 Proton Partners International2,4 44,348 0.9513,918,497 Sensyne Health1 21,574 0.4611,750,000 Sphere Medical Holdings2 40 –

199,909 4.27



Page 28


31 December 2018

%

SpacingOnly HEALTH CARE 17.86% (20.14%) (continued)

SpacingOnly Pharmaceuticals & Biotechnology 13.59% (16.56%)13,091,131 4D Pharma1 13,418 0.29

40,934 AMO Pharmaceuticals Preference2 16,735 0.3622,317,779 Arix Bioscience 36,824 0.79

6,312,380 Autolus Therapeutics ADR 157,711 3.3764,469,131 Benchmark Holdings1 36,103 0.77

236,827 BenevolentAi2,4 193,995 4.1562,125,647 Circassia Pharmaceuticals 29,820 0.6436,918,214 e-therapeutics1 2,289 0.0517,870,773 Horizon Discovery1 30,112 0.6415,635,064 hVIVO1 4,221 0.09

24,737 Immunocore2 4,193 0.09239,003 Immunocore 'A' Preference2 40,511 0.87

3,454,231 Kymab Series 'B' Preference2 11,498 0.251,162,655 Kymab Series 'C' Preference2 3,916 0.08

16,853,667 Mereo Biopharma1 29,662 0.6312,085,111 Midatech Pharma1 665 0.0115,634,240 NetScientific1 782 0.02

683,995 NovaBiotics2 1,915 0.046,141,257 ReNeuron1 2,948 0.063,424,047 Silence Therapeutics1 1,739 0.04

20,341,293 Synairgen1 2,543 0.05234,212,642 Tissue Regenix1 14,053 0.30

635,653 13.59

SpacingOnly CONSUMER SERVICES 1.45% (5.03%)

SpacingOnly Support Services 0.65% (1.01%)40,665,825 AA 30,499 0.65

SpacingOnly General Retailers 0.48% (2.41%)13,075,000 Card Factory 22,594 0.48

SpacingOnly Media 0.32% (0.32%)21,640,000 Time Out1 14,932 0.32



Page 29


31 December 2018

%

SpacingOnly CONSUMER SERVICES 1.45% (5.03%) (continued)

SpacingOnly Travel & Leisure 0.00% (0.89%)

SpacingOnly Fixed Line Telecommunications 0.00% (0.40%)

SpacingOnly UTILITIES 0.00% (1.16%)

SpacingOnly Electricity 0.00% (1.16%)

SpacingOnly FINANCIALS 25.40% (27.61%)

SpacingOnly Banks 0.00% (3.44%)

SpacingOnly Life Insurance 0.00% (4.93%)

SpacingOnly Real Estate Investment & Services 4.55% (4.89%)60,427,800 Purplebricks1 89,433 1.9161,169,497 Raven Property 29,423 0.6381,929,824 Raven Property Preference 94,219 2.01

213,075 4.55

SpacingOnly Real Estate Investment Trusts 2.70% (2.20%)59,935,217 NewRiver REIT 126,463 2.70

SpacingOnly Financial Services 14.84% (10.58%)12,750,000 Accelerated Digital Ventures 'A'2,4 12,750 0.27

600 Accelerated Digital Ventures 'B'2,4 – –47,736,637 Allied Minds 31,840 0.6839,720,597 Atom Bank2 45,679 0.98

9,575,000 Cambridge Innovation Capital2 8,158 0.18139,355,264 IP Group 150,782 3.2260,090,350 Mercia Technologies1 17,426 0.3748,841,383 Non-Standard Finance 32,235 0.6939,596,664 Provident Financial 227,681 4.8760,770,731 Redde1 102,946 2.20

332,197 Retail Money Market2 14,268 0.3165,957,500 VPC Speciality Lending Investments 50,260 1.07

694,025 14.84



Page 30


31 December 2018

%

SpacingOnly FINANCIALS 25.40% (27.61%) (continued)

SpacingOnly Equity Investment Instruments 3.31% (1.57%)7,009,634 Honeycomb Investment Trust 77,807 1.679,582,963 P2P Global Investments 76,855 1.64

154,662 3.31

SpacingOnly TECHNOLOGY 0.05% (0.12%)

SpacingOnly Software & Computer Services 0.05% (0.12%)113,205,556 Brave Bison1 2,377 0.05

8,131,847 Drayson Technologies2 – –

2,377 0.05

SpacingOnly CHANNEL ISLANDS 13.82% (8.50%)


SpacingOnly Construction & Materials 0.00% (0.78%)

SpacingOnly Industrial Engineering 2.46% (0.00%)609,933 Industrial Heat Series 'A1' Preference5,6 32,512 0.69

5,170,422 Industrial Heat Series 'A2' Preference5,6 73,742 1.5893,384 Industrial Heat Series 'A3' Preference5,6 1,656 0.04

476,794 Industrial Heat Series 'A4' Preference5,6 6,903 0.15640,710 Industrial Heat Series 'B1' Preference2 – –

114,813 2.46

SpacingOnly Industrial Transportation 1.99% (2.19%)65,254,416 Stobart 93,184 1.99



Page 31


31 December 2018

%


SpacingOnly Health Care Equipment & Services 0.00% (0.49%)


SpacingOnly Real Estate Investment & Services 1.83% (1.23%)5,000,000 Sabina Estates2 4,753 0.10

3,000 Sabina Estates Preference 15 26,906 0.581,000 Sabina Estates Preference 25 8,968 0.191,000 Sabina Estates Preference 35 8,968 0.191,000 Sabina Estates Preference 45 8,969 0.193,000 Sabina Estates Preference 55 26,906 0.58

85,470 1.83

SpacingOnly Financial Services 6.79% (3.45%)16,458,640 Burford Capital1 272,555 5.83

2,300,973 OMBU2 – –168,773 OMBU Preference 15 15,033 0.3274,807 OMBU Preference 25 6,519 0.1434,910 OMBU Preference 45 2,919 0.06

103,571 OMBU Preference 85 10,357 0.22103,571 OMBU Preference 95 10,357 0.22

317,740 6.79

SpacingOnly Equity Investment Instruments 0.71% (0.36%)16,564,788 Crystal Amber1 33,130 0.71

SpacingOnly Non-equity Investment Instruments 0.04% (0.00%)1,597,275 Safe Harbour1 2,076 0.04



Page 32


31 December 2018

%

SpacingOnly IRELAND 3.67% (5.02%)


SpacingOnly Health Care Equipment & Services 1.40% (0.01%)1,026,410 Brandon Point Enterprises 'A' Preference2 15 –

447,115 Brandon Point Enterprises Series 22 6 –28,089,888 Marlin J1 Limited2 65,451 1.40

65,472 1.40

SpacingOnly Pharmaceuticals & Biotechnology 1.44% (4.25%)1,801,713 Carrick2 3,429 0.077,948,790 Prothena 64,061 1.37

67,490 1.44


SpacingOnly Financial Services 0.83% (0.76%)8,957,652 Malin 38,722 0.83

SpacingOnly CONTINENTAL EUROPE 2.41% (1.96%)

SpacingOnly ISLE OF MAN 0.00% (0.22%)


SpacingOnly Electronic & Electrical Equipment 0.00% (0.22%)

SpacingOnly LUXEMBOURG 0.75% (0.22%)


SpacingOnly Chemicals 0.50% (0.05%)985,360 Mafic Convertible Preference Shares 'B'2 4,569 0.10

4,052,800 Mafic S.A.2 18,797 0.40

23,366 0.50


SpacingOnly General Industrials 0.25% (0.17%)20,001,629 RM2 international1 11,601 0.25



Page 33


31 December 2018

%

SpacingOnly NORWAY 0.97% (1.25%)


SpacingOnly Industrial Goods & Services 0.97% (1.25%)108,420,610 Idex Corporation 29,543 0.63234,225,378 Thin Film Electronics 15,745 0.34

45,288 0.97

SpacingOnly SWITZERLAND 0.69% (0.27%)


SpacingOnly Health Care Equipment & Services 0.69% (0.27%)21,949,832 CeQur S.A. Series 'C' Preference2 32,413 0.69

SpacingOnly NORTH AMERICA 7.86% (4.34%)

SpacingOnly BERMUDA 1.33% (0.75%)


SpacingOnly Financial Services 1.33% (0.75%)35,845,833 Oakley Capital Investments1 62,372 1.33

SpacingOnly BRITISH VIRGIN ISLANDS 0.02% (0.00%)


SpacingOnly Chemicals 0.02% (0.00%)67,436,226 HaloSource1 641 0.0176,157,453 HaloSource Reg S1 190 0.01

831 0.02

SpacingOnly UNITED STATES 6.51% (3.59%)


SpacingOnly Chemicals 0.00% (0.23%)



Page 34


31 December 2018

%


SpacingOnly Health Care Equipment & Services 0.61% (0.49%)7,323,079 Evofem Biosciences 23,975 0.521,702,127 Evofem Biosciences Warrants 25/04/20252 13 –1,475,000 Evofem Biosciences Warrants 31/12/20492 23 –3,664,922 Viamet Pharmaceuticals2 4,291 0.09

28,302 0.61

SpacingOnly Pharmaceuticals & Biotechnology 5.72% (2.55%)1,150,000 Nightstar Therapeutics ADR 10,367 0.22

18,316,679 Northwest Biotherapeutics 2,948 0.06984,000 NuCana ADR 11,128 0.24

10,731,089 Theravance Biopharma 214,992 4.6028,889,393 Verseon1 28,312 0.60

267,747 5.72

SpacingOnly TECHNOLOGY 0.18% (0.32%)

SpacingOnly Technology 0.18% (0.32%)40,998 Origin2 117 –10,000 Origin Convertible Preference 'A'2 384 0.01

8 Origin Warrants2 – –2,348,561 Spin Transfer Technology2 7,800 0.17

8,301 0.18

Forward FX Currency Contracts7 -0.27% (0.00%)$1,032,175,000 Sold USD for £796,062,000

for settlement on 31/01/2019 (11,148) (0.24)€156,831,000 Sold EUR for £139,211,000

for settlement on 31/01/2019 (1,584) (0.03)£122,764,000 Sold GBP for $155,325,000

for settlement on 31/01/2019 (1,292) (0.03)CHF35,559,000 Sold CHF for £27,590,000

for settlement on 31/01/2019 (751) (0.02)£35,852,000 Sold GBP for kr391,810,000

for settlement on 31/01/2019 (504) (0.01)£29,413,000 Sold GBP for €32,906,000

for settlement on 31/01/2019 128 –



Page 35


31 December 2018

%

SpacingOnly Forward FX Currency Contracts7 -0.27% (0.00%) (continued)£58,481,000 Sold GBP for $75,838,000

for settlement on 31/01/2019 828 0.02kr845,485,000 Sold NOK for £78,273,000

for settlement on 31/01/2019 1,995 0.04

(12,328) (0.27)

Portfolio of investments8 4,691,545 100.28

Net other liabilities (13,227) (0.28)

Net assets 4,678,318 100.00

Comparative figures shown in brackets relate to 31 December 2017.

The investments have been valued in accordance with note 1F and are ordinary shares listed on a regulated market unless stated otherwise.

1 AIM quoted security2 Unquoted security3 Delisted security4 Recently issued security under COLL5.2.8R (3)(e) with an undertaking that application will be made to be

admitted to an eligible market and such admission secured within a year of issue5 Quoted on The International Stock Exchange (TISE)6 Dealing is currently suspended in the shares on TISE7 Held with Northern Trust Company8 Includes investment liabilities

Definition: ADR - American Depositary Receipt


Page 36

LF WOODFORD EQUITY INCOME FUNDSUMMARY OF MATERIAL PORTFOLIO CHANGESfor the year ended 31 December 2018

Total purchases for the year £'000 (Note 16) 1,526,841

Major PurchasesCost

£'000

Barratt Developments 202,402Imperial Brands 108,344Provident Financial 102,507British American Tobacco 84,625Taylor Wimpey 78,583Kier 68,848Autolus Therapeutics 61,560Crest Nicholson 57,850Theravance Biopharma 55,099ITV 54,487

Total sales for the year £'000 (Note 16) 3,764,592

Major SalesProceeds

£'000

AstraZeneca 523,083Legal & General Group 396,426Lloyds Banking 315,323Imperial Brands 215,242Next 170,188BTG 157,435Babcock International 151,166Burford Capital 143,253Alkermes 131,692Drax 112,791

The summary of material portfolio changes represents the 10 largest purchases and sales during the year.


Page 37

LF WOODFORD EQUITY INCOME FUNDFINANCIAL STATEMENTSSTATEMENT OF TOTAL RETURNfor the year ended 31 December 2018

Notes £'000

31 December 2018 £'000 £'000

31 December 2017 £'000

IncomeNet capital losses 3 (1,260,683) (98,807)Revenue 4 236,019 323,098

Expenses 5 (43,413) (65,717)

Interest payable and similar charges 7 (657) (463)

Net revenue before taxation 191,949 256,918Taxation 6 – (1,307)

Net revenue after taxation 191,949 255,611

Total return before distributions (1,068,734) 156,804Distributions 8 (230,155) (317,217)

Change in net assets attributable to shareholders from investment activities (1,298,889) (160,413)

STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERSfor the year ended 31 December 2018

£'000

31 December 2018 £'000 £'000

31 December 2017 £'000

Opening net assets attributable to shareholders 8,208,903 9,483,379

Amounts receivable on issue of shares 612,709 1,812,755

Amounts payable on redemption of shares (3,005,231) (3,133,057)(2,392,522) (1,320,302)

Dilution adjustment1 7,811 3,289

Change in net assets attributable to shareholders from investment activities (1,298,889) (160,413)

Retained distribution on accumulation shares 153,015 202,950

Closing net assets attributable to shareholders 4,678,318 8,208,903

1 See note 1E


Page 38

LF WOODFORD EQUITY INCOME FUNDFINANCIAL STATEMENTS continued

BALANCE SHEETas at 31 December 2018

Notes

31 December 2018 £'000

31 December 2017 £'000

ASSETSFixed assetsInvestments 4,706,824 8,228,599

Current assetsDebtors 9 14,570 30,997Cash and bank balances 10 58,750 42,309

Total assets 4,780,144 8,301,905

LIABILITIESInvestment liabilities (15,279) –

Creditors

Bank overdrafts 10 (52,752) (39,826)Distributions payable 11 (19,651) (18,217)Other creditors 11 (14,144) (34,959)

Total liabilities (101,826) (93,002)

Net assets attributable to shareholders 4,678,318 8,208,903


Page 39


NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2018

1. Accounting PoliciesThe principal accounting policies, which have been applied in both the current and prior year, are set out below:

(A) BASIS OF ACCOUNTING

The financial statements have been prepared on a going concern basis under the historical cost basis, as modified by the revaluation of investments and in accordance with FRS102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and the Statement of Recommended Practice (‘SORP’) for UK Authorised Funds issued by the Investment Association (IA) in May 2014, as amended.

(B) RECOGNITION OF REVENUE

Revenue from quoted equities and non-equity shares is recognised net of attributable tax credits when the security is quoted ex-dividend. Revenue from all equity investments is recognised when the dividend is declared.

Overseas revenue received after the deduction of withholding tax is shown gross of taxation, with the taxation consequences shown within the taxation charge.

Special dividends are reviewed on a case by case basis in determining whether the dividend is to be treated as revenue or capital. Amounts recognised as revenue will form part of the distributable revenue. Amounts recognised as capital are deducted from the cost of the investment. The tax accounting treatment follows the treatment of the principal amount.

All other revenue is recognised on an accruals basis.

(C) TREATMENT OF EXPENSES

All expenses are transferred to capital for distribution purposes in line with the Fund’s investment objective. This will increase the amount of revenue available for distribution; however, will erode capital and may constrain capital growth.

(D) ALLOCATION OF REVENUE AND EXPENSES TO MULTIPLE SHARE CLASSES

Any revenue or expense not directly attributable to a particular share class will normally be allocated pro-rata to the net assets of the relevant share classes unless a different allocation method is more appropriate.

All share classes are ranked pari passu and have no particular rights or terms attached, including rights on winding up.

(E) DILUTION ADJUSTMENT

The actual cost of purchasing or selling assets and investments in a fund may vary due to dealing charges, taxes, and any spread between buying and selling prices of the underlying investments of a fund. These costs could have an adverse effect on the value of the Fund, known as ‘dilution’. In order to mitigate the effect of dilution the ACD may at its discretion adjust the sale and purchase price of shares to take into account the possible effects of dilution to arrive at the price of shares. This practice is known as making a ‘dilution adjustment’. The power to make a dilution adjustment may only be exercised for the purpose of reducing dilution in a fund. If the price of the Shares does contain a dilution adjustment, such dilution adjustment will be paid into the Fund and will become part of the property of the Fund thus mitigating the effects of dilution that would otherwise constrain the future growth of the Fund.

The ACD reserves the right to make a dilution adjustment every Dealing Day. The dilution adjustment is calculated using the estimated dealing costs of the Fund’s underlying investments and taking into consideration any dealing spreads, commission and transfer taxes.


Page 40


NOTES TO THE FINANCIAL STATEMENTS continued for the year ended 31 December 2018

(F) BASIS OF VALUATION OF INVESTMENTS

All investments are valued at their fair value as at close of business (London time) on 31 December 2018, being the last business day of the financial year.

Quoted investments are valued at fair value which generally is the bid price, unless there is no active market in which case those investments are, for valuation purposes, treated as if they were unquoted investments and valued using the process described below.

Open forward currency contracts are valued based on the difference between the contract value and the market value adjusted by the prevailing spot rate and swap curve.

Unquoted investments in combination are a significant asset of the Fund. Such investments are held at fair value which requires significant estimation in concluding on their fair value. Whilst there is a robust and consistent valuation process undertaken by the ACD, it is recognised that in stating these assets at fair value there is a significant element of estimation uncertainty. Central to this uncertainty is the assumption that such assets will continue to progress in line with their stated business plan and will be held for the longer term until exit, generally where either the company is sold to an interested party or lists on an appropriate exchange. However, failure of any individual unquoted investment to progress in accordance with their business plan could result in material change to the fair valuation of that company.

On a monthly basis, unquoted holdings will be assessed by the ACD’s Fair Value Pricing Committee, as part of the fair value pricing process and where a material event occurs that significantly impacts the existing valuation the circumstances of that event will be documented (including an independent valuation assessment completed by IHSMarkit from publicly available information and that supplied by the investee companies), along with any valuation adjustment. In circumstances where matters are brought to the ACD’s attention as part of intra monthly assessments, the impact on the unquoted holding’s valuation is assessed and documented. Any intra month changes will be considered and adjustment if required will be made by the ACD.

In determining the fair value of the unquoted investments the ACD has done so in accordance with the following principles, which are consistent with the International Private Equity and Venture Capital Valuation (‘IPEVC’) guidelines issued in December 2015:

1. held at the price of a recent investment for an appropriate period where there is considered to have been no material change in fair value; or

2. where the basis in (1) is no longer considered appropriate, then the following factors will be considered in determining the fair value:

a. where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used, unless the rights attributable to the shares impact the overall capital structure and rights of existing investors; or

1. Accounting Policies (continued)


Page 41



b. in the absence of (a) and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to an earnings multiple basis or, if appropriate, other valuation models such as: (i) Probability-Weighted Expected Return Method (PWERM), which considers on a probability weighted basis the future outcomes for the investment; (ii) Option Priced Modelling (OPM) is used to value early stage companies where outcomes are uncertain; and (iii) Adjusted recent transaction prices (which consider the company’s performance against key milestones and the complexity of the capital structure) are also used. These valuation methods may lead to a company being valued on a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified when compared to the market sector (which the investment would reside were it listed) including, inter alia, a lack of marketability).

3. if the investment is in a fund then the valuation will be based on the net asset value of the fund (which invariably comprise of early stage unquoted investments), or on an adjusted basis to recognise the potential for a premium or discount to be applied to the share price.

At the end of 2018, 11.71% (31 December 2017: 4.16%) of the NAV is unquoted investments which are valued in accordance with (1), 0.48% (31 December 2017: 1.20%) in accordance with (2a), 6.52% (31 December 2017: 3.62%) in accordance with (2b) and 1.01% (31 December 2017: 0.43%) in accordance with (3).

Where values cannot be readily determined, the securities are valued at the ACD’s best assessment of their fair value.

(G) TAXATION

Provision is made for taxation at current rates on the excess of taxable revenue over allowable expenses.

Deferred tax is provided on all timing differences that have originated but not reversed by the balance sheet date, other than those differences that are regarded as permanent. Any liability to deferred tax is provided at the average rate of tax expected to apply. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax asset can be offset.

(H) FOREIGN EXCHANGE

The base and functional currency of the Fund is pounds sterling. Transactions in foreign currencies are translated at the rate of exchange ruling on the date of the transaction. Where applicable, assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the year end, 31 December 2018, being the last business day of the financial year.

(I) DERIVATIVE INSTRUMENTS

Financial derivative instruments may be used by the Fund for investment purposes and efficient portfolio management, for example to hedge investment exposure or to adjust exposure in a cost effective manner. Derivative instruments held within the Fund will be accounted for and taxed in accordance with the SORP. Derivative transactions will be treated as either revenue or capital depending on the motives and circumstances on acquisition.

1. Accounting Policies (continued)(F) BASIS OF VALUATION OF INVESTMENTS (continued)


Page 42



(J) DIRECT TRANSACTION COSTS

Direct transaction costs may consist of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties. Direct transaction costs do not include any difference between the quoted bid and offer prices or internal administrative or holding costs. The average portfolio dealing spread is the difference between the bid and offer prices of investments at the balance sheet date, including the effect of foreign exchange expressed as a percentage of the value determined by reference to the offer price.

(K) SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

The area where the ACD considers the judgements and key estimation of uncertainty to be most significant involve assumptions or estimates applied in respect of the valuation of the unquoted investments which are believed to be reasonable at the date of the financial statements as disclosed in note 1f. In future, actual experience could differ from those estimates.

2. Distribution PoliciesThe policy is to distribute all available revenue, after deduction of those expenses which are chargeable in calculating the distribution. In order to conduct a controlled dividend flow, interim distributions will be at the ACD’s discretion, up to a maximum of the distributable revenue for the year. All remaining revenue is distributed in accordance with the COLL.

All expenses are transferred to capital for distribution purposes in line with the Fund’s investment objective. This will increase the amount of revenue available for distribution; however, will erode capital and may constrain capital growth.

In calculating the amount of distribution, tax relief on expenses charged to capital is applied and transferred between the revenue and capital property of the Fund. In calculating how much tax relief should be allocated, revenue expenses are matched first against taxable income arising in revenue, and tax deductible capital expenses are matched first against taxable income arising in capital.

The ordinary element of stock dividends is treated as revenue and forms part of the distribution. In the case of an enhanced stock dividend, the value of the enhancement is treated as capital and does not form part of the distribution.

Distributions which have remained unclaimed by shareholders for over six years are credited to the capital property of the Fund.

3. Net Capital LossesThe net capital losses during the year comprise:

31 December 2018 £'000

31 December 2017 £'000

Non-derivative securities (1,208,297) (173,720)Forward currency contracts (50,551) 85,526Transaction charges (91) (3)

Currency losses (1,744) (10,610)

Net capital losses (1,260,683) (98,807)

1. Accounting Policies (continued)


Page 43



4. Revenue31 December 2018

£'00031 December 2017

£'000

Bank interest 5 8

Franked property income distributions – 158Non-taxable dividends 178,564 265,046Overseas dividends 28,637 32,154Unfranked revenue 14,378 10,674Franked stock dividends 2,126 –Unfranked property income distributions 12,309 15,058

Total revenue 236,019 323,098

5. Expenses31 December 2018

£'00031 December 2017

£'000Payable to the ACD or associates of the ACD:ACD's periodic charge 43,327 65,611

Other expenses:Administration fees 85 –Legal fees 1 106

86 106

Total expenses 43,413 65,717

Expenses due to the Depositary, Custodian, Administrator, Auditor and the Financial Conduct Authority are payable by the ACD out of the ACD’s periodic charge. Fee payable to the auditor for the audit of the Company’s financial statements for the year ended 31 December 2018 is £72,000 (£60,000 + VAT) (31 December 2017: £26,400 (£22,000 + VAT)).


Page 44



6. Taxation

31 December 2018

£'00031 December 2017

£'000(A) ANALYSIS OF CHARGE FOR THE YEAR:

Overseas withholding tax – 1,307

Total taxation – 1,307

(B) FACTORS AFFECTING TAXATION CHARGE FOR THE YEAR:Net revenue before tax 191,949 256,918

The tax assessed for the period is lower than the special rate of the corporationtax in the UK for an open-ended investment company (20%). The differences are explained below:

Net revenue multiplied by the specialrate of corporation tax of 20% (2017: 20%) 38,390 51,384

Effects of:Unutilised Excess Management Expenses 3,422 8,193Non-taxable dividends (35,713) (53,041)Non-taxable overseas dividends (6,930) (6,328)Overseas withholding tax – 1,307Taxation due to timing differences 831 (208)

Total tax charge (note 6A) – 1,307

(C) DEFERRED TAX

There was no deferred tax change in the current or prior year.

The Fund has not recognised a potential deferred tax asset of £30,291,000 (31 December 2017: £26,869,000) arising as a result of having unutilised management expenses and £43,000 (31 December 2017: £43,000) arising as a result of unutilised non trade loan relationships. These are not expected to be utilised in the foreseeable future unless the nature of the Fund’s revenue or capital gains changes.


Page 45



7. Interest Payable and Similar Charges31 December 2018

£'00031 December 2017

£'000

Interest payable and similar charges 657 463

8. DistributionsThe distributions take account of revenue received on the creation of shares and revenue deducted on the redemption of shares and comprise:

31 December 2018 £'000

31 December 2017 £'000

First interim 38,369 74,838Second interim 88,726 111,987Third interim 28,314 69,200Final 65,080 55,188

220,489 311,213Add: Revenue deducted on redemption of shares 12,005 13,376Deduct: Revenue received on shares created (2,339) (7,372)

Net distribution for the year 230,155 317,217

Details of the distributions per share are set out in the table on pages 54 to 62.

Reconciliation between net revenue and distribution: Net revenue after taxation 191,949 255,611Add: Expenses charged to capital 43,413 65,717Add: Distribution brought forward 3 4Tax relief on capital expenses (5,207) (4,112)Less: Distribution carried forward (3) (3)Net distribution for the year 230,155 317,217


Page 46



9. Debtors31 December 2018

£'00031 December 2017

£'000

Amount receivable for issue of shares 3,110 13,696Sales awaiting settlement – 10

Accrued revenue:Non-taxable dividends 6,895 7,397Taxable dividends 1,393 5,279Unfranked property income distributions 2,589 2,860

10,877 15,536

Taxation recoverable:CIS income tax recoverable – 228Overseas withholding tax 583 1,424Property income distributions tax – 103

583 1,755

Total debtors 14,570 30,997

10. Cash and Bank Balances

31 December 2018 £'000

31 December 2017 £'000

Cash and bank balances 58,750 42,309

Bank overdraft (52,752) (39,826)


Page 47



11. Creditors31 December 2018

£'00031 December 2017

£'000

Distribution payable 19,651 18,217

Other creditors:Amount payable for redemption of shares 10,701 29,282

Purchases awaiting settlement 503 580

Accrued expenses:Amounts payable to the ACD, associates of

the ACD and agents of either of them:Annual Management Charge 2,818 4,902

Other expenses 122 195Total other creditors 14,144 34,959

12. Related Party TransactionsACD’s periodic charge payable to Link Fund Solutions Limited (‘the ACD’) is disclosed in note 5 and amounts due at the year end are disclosed in note 11.

The aggregate monies received by the ACD through the issue of shares and paid on cancellation of shares are disclosed in the Statement of Change in Net Assets Attributable to Shareholders on page 37 and amounts receivable and payable due at the year end are disclosed in notes 9 and 11, respectively.

A shareholder may be able to exercise significant influence over the financial and operating policies of the Fund and as such is deemed to be a related party. At the balance sheet date, the following shareholder held in excess of 20% of the shares in issue of the Fund:

Hargreaves Lansdown Asset Management Limited 30.51% (31 December 2017: 27.87%)

13. Contingent Assets/Liabilities and CommitmentsThe Fund had no contingent assets, outstanding unrecorded commitments or liabilities as at 31 December 2018 (31 December 2017: nil).


Page 48



14. Shares in Issue

1.1A Sterling Accumulation

Shares1.2A Sterling

Income Shares

3.1C Sterling Accumulation

Shares3.2C Sterling

Income Shares

7.1Z Sterling Accumulation

Shares

Annual Management Charge 1.00% 1.00% 0.75% 0.75% 0.65%Opening shares in issue 45,435,894 26,123,435 1,653,251,857 1,081,785,070 2,478,116,625Issues 1,305,724 609,642 184,279,399 95,691,307 169,936,845Redemptions (19,240,972) (14,015,872) (724,343,116) (585,329,797) (802,283,373)Conversions 100,898 (27,619) (2,121,992) (27,320,021) 127,092

Closing shares in issue 27,601,544 12,689,586 1,111,066,148 564,826,559 1,845,897,189

7.2Z Sterling Income Shares

8.1X Sterling Accumulation

Shares8.2X Sterling

Income Shares

9.1F Sterling Accumulation

Shares

Annual Management Charge 0.65% 1.50% 1.50% 0.00%Opening shares in issue 1,227,995,028 31,306,520 5,087,641 67,790,864Issues 76,376,813 1,625,222 14,426 1,658,603Redemptions (416,576,701) (12,045,927) (1,588,329) (63,278,206)Conversions 29,401,015 – – –

Closing shares in issue 917,196,155 20,885,815 3,513,738 6,171,261

15. Risk Management PoliciesIn pursuing the investment objective, a number of financial instruments are held which may comprise securities and other investments, cash balances, and debtors and creditors that arise directly from operations. Derivatives, such as futures or forward currency contracts, may be utilised for efficient portfolio management (including hedging) purposes and investment purposes.

The main risks from the Fund’s holding of financial instruments, together with the ACD’s policy for managing these risks, are set out below:

The ACD has in place a Risk Management Policy and Procedures Document (‘RMPPD’) that sets out the risks that may impact a fund and how the ACD seeks, where appropriate, to manage, monitor and mitigate those risks, and in particular those risks associated with the use of derivatives. The RMPPD sets out both the framework and the risk mitigations operated by the ACD in managing the identified risks of the Fund. The ACD requires that the appointed Investment Manager to the Fund has in place its own governance structure, policies and procedures that are commensurate with its regulatory obligations and the risks posed by the fund managed.

(A) CREDIT RISK

Credit risk is the risk that a counterparty may be unable or unwilling to make a payment or fulfil contractual obligations. This may be in terms of an actual default or by deterioration in a counterparty’s credit quality. Refer to the Portfolio Statement for exposure to counterparties obtained through the use of derivatives.


Page 49



Certain transactions in securities that the Fund enters into expose it to the risk that the counterparty will not deliver the investment for a purchase, or cash for a sale after the Fund has fulfilled its obligations. As part of its due diligence process, the ACD undertakes a review of the controls operated over counterparties by the Investment Manager, including initial and ongoing due diligence and business volumes placed with each counterparty. In cases which are dependent on the counterparty settling at the transaction’s maturity date, the ACD has policies in place which set out the minimum credit quality expected of a market counterparty or deposit taken at the outset of the transaction.

There were forward currency contracts held at the balance sheet date. Exposure to a counterparty is calculated using the positive mark-to-market value of the Over The Counter derivative instruments. Details of individual contracts are disclosed separately in the Portfolio Statement and the total position by counterparty at the balance sheet date was as follows:

Counterparty

Forward Contracts

31 December 2018 £'000

Forward Contracts

31 December 2017 £'000

Northern Trust Company 2,951 –

2,951 –

(B) INTEREST RATE RISK

Interest rate risk is the risk that the value of the Fund’s investments will fluctuate as a result of interest rate changes. The value of fixed interest securities may be affected by changes in interest rates, either globally or locally. Changes in the rate of return in one asset class may influence the valuation basis of other classes. The amount of revenue receivable from floating rate investments and bank balances or payable on bank overdrafts will be affected by fluctuations in interest rates.

As the Fund seeks to obtain its return from investing mainly in equities and has no significant exposure to interest rate risk, no interest rate risk table or sensitivity analysis has been presented.

(C) FOREIGN CURRENCY RISK

Foreign currency risk is the risk that the sterling value of investments will fluctuate as a result of exchange rate movements. Assets denominated in currencies other than sterling will provide direct exposure to currency risk as a consequence of the movement in foreign exchange rates when calculating the sterling equivalent value. Forward currency contracts are employed by the Investment Manager, where deemed appropriate, to mitigate the foreign exchange risk.

At the year end date, a portion of the net assets of the Fund were denominated in currencies other than sterling with the effect that the balance sheet and total return can be affected by exchange rate movements.

15. Risk Management Policies (continued)(A) CREDIT RISK (continued)


Page 50



Foreign currency exposure as at 31 December 2018:

Currency

Forward Contracts

£'000

Non Monetary

exposures £'000

Monetary exposures

£'000Total

£'000

Euro (111,253) 124,192 – 12,939Norwegian Krone (40,930) 45,289 – 4,359Sterling 794,627 3,764,940 (13,227) 4,546,340Swiss Franc (28,342) 32,413 – 4,071US Dollar (626,430) 737,039 – 110,609

(12,328) 4,703,873 (13,227) 4,678,318

Foreign currency exposure as at 31 December 2017:

Currency

Forward Contracts

£'000

Non Monetary

exposures £'000

Monetary exposures

£'000Total

£'000

Euro – 102,168 – 102,168Norwegian Krone – 102,416 – 102,416Sterling – 7,298,751 (19,696) 7,279,055Swiss Franc – 22,483 – 22,483US Dollar – 702,781 – 702,781

– 8,228,599 (19,696) 8,208,903

A 5% change in the pounds sterling exchange rate against all other currencies, assuming all other factors remained the same, would have an impact of £6,599,000 (31 December 2017: £46,492,000) on the net assets of the Fund.

(D) LIQUIDITY RISK

The main liability of the Fund is the cancellation of any shares that investors want to sell. Investments may have to be sold to fund such cancellations should insufficient cash be held at the bank to meet this obligation.

15. Risk Management Policies (continued)(C) FOREIGN CURRENCY RISK (continued)


Page 51



To maintain an appropriate liquidity risk profile for the Fund, the Investment Manager ensures that a substantial portion of the Fund’s assets consist of readily realisable securities and cash. The ACD monitors this position on a daily basis to ensure that the liquidity profile of the Fund is aligned to shareholder activity. The ACD also considers the impact of market shocks on the ability of the Fund to meet shareholder redemptions in periods of constrained liquidity.

All financial liabilities are payable in one year or less, or on demand.

(E) MARKET PRICE RISK

Market price risk is the risk that the value of the Fund’s financial instruments will fluctuate as a result of changes in market prices caused by factors other than interest rate or foreign currency movement. Market price risk arises primarily from uncertainty about the future prices of financial instruments that the Fund holds.

Market price risk represents the potential loss the Fund may suffer through holding market positions in the face of price movements. The Fund’s investment portfolio is exposed to price fluctuations, which are monitored by the ACD in pursuance of the investment objective and policy. The risk is generally regarded as consisting of two elements - stock specific risk and market risk. Adhering to investment guidelines and avoiding excessive exposure to one particular issuer can limit stock specific risk. Subject to compliance with the investment objective, spreading exposure across a broad range of global stocks can mitigate market risk.

A 5% increase in the value of the Fund’s portfolio, excluding forward currency contracts, would have the effect of increasing the return and assets by £235,194,000 (31 December 2017: £411,430,000). A 5% decrease would have an equal and opposite effect.

(F) FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

There is no material difference between the value of the financial assets and liabilities, as shown in the balance sheet, and their fair value.

(G) DERIVATIVE RISK

Over the past year, the Fund has used no other derivative instruments other than forward currency contracts (31 December 2017: same).

(H) LEVERAGE

Currently, the Fund uses only forward currency contracts as outlined in the foreign currency risk section (31 December 2017: same).

15. Risk Management Policies (continued)(D) LIQUIDITY RISK (continued)


Page 52



16. Portfolio Transaction Costs

31 December 2018

Purchase/ Sales before

transaction costs £'000

Commissions £'000

Taxes £'000

Gross purchases/

net sales £'000

Ordinary shares 1,521,385 661 4,795 1,526,841Purchases total 1,521,385 661 4,795 1,526,841Transaction cost % of purchases total 0.04% 0.32%Transaction cost % of average NAV 0.01% 0.08%

Ordinary shares 3,767,112 (2,516) (4) 3,764,592

Sales total 3,767,112 (2,516) (4) 3,764,592Transaction cost % of sales total 0.07% –Transaction cost % of average NAV 0.04% –

31 December 2017

Purchase/ Sales before

transaction costs £'000

Commissions £'000

Taxes £'000

Gross purchases/

net sales £'000

Ordinary shares 2,783,333 1,326 9,593 2,794,252Purchases total 2,783,333 1,326 9,593 2,794,252Transaction cost % of purchases total 0.05% 0.34%Transaction cost % of average NAV 0.01% 0.10%

Ordinary shares 3,891,879 (1,833) (10) 3,890,036

Sales total 3,891,879 (1,833) (10) 3,890,036Transaction cost % of sales total 0.05% –Transaction cost % of average NAV 0.02% –

Average portfolio dealing spread at 31 December 2018 is 1.09% (31 December 2017: 0.65%).


Page 53



17. Fair Value HierarchyInvestments are categorised into the following levels based on their fair value measurement:Level 1: The unadjusted quoted price in an active market for an identical instrument that the entity can access at the measurement date.Level 2: Valuation techniques using observable inputs other than quoted prices within Level 1 (i.e., developed using market data).Level 3: Valuation techniques using unobservable inputs (i.e., for which market data is unavailable).

31 December 2018Level 1

£'000Level 2

£'000Level 3

£'000Total

£'000ASSETSOrdinary shares 2,839,242 939,802 924,793 4,703,837Warrants – – 36 36Forward currency contracts – 2,951 – 2,951

2,839,242 942,753 924,829 4,706,824

LIABILITIESForward currency contracts – (15,279) – (15,279)

31 December 2017Level 1

£'000Level 2

£'000Level 3

£'000Total

£'000ASSETSOrdinary shares 5,833,091 1,571,500 824,008 8,228,599

18. Post Balance Sheet EventsSubsequent to the year end, on 6 March 2019, the Fund acquired 81,639,238 ordinary shares in Woodford Patient Capital Trust at a price of 96.67 pence per share, for a total value of £78,920,651. Payment for 75,432,424 of the ordinary shares was made by way of exchange of a portfolio of unquoted assets (Atom Bank; Carrick; Cell Medica; Ratesetter; and Spin Memory) and 6,206,814 ordinary shares for cash. This transaction is the start of a strategy to switch the Fund’s unquoted exposure from individual unquoted holdings to shares in Woodford Patient Capital Trust.

On 13 February 2019, Utilitywise was delisted from AIM. On the 26 February 2019, Proton Partners listed on the NEX exchange. In addition, on 21 March 2019, Benevolent AI listed on TISE.


Page 54


DISTRIBUTION TABLESfor the year ended 31 December 2018 - in pence per share

EQUALISATION Equalisation applies only to shares purchased during the distribution period (Group 2 shares). It represents the accrued revenue included in the purchase price of the shares. After averaging it is returned with the distribution as a capital repayment. It is not liable to income tax but must be deducted from the cost of the shares for Capital Gains Tax purposes.

First Interim Second interim Third Interim Final

From To

01 Jan 2018 31 Mar 2018

01 Apr 2018 30 Jun 2018

01 Jul 2018 30 Sep 2018

01 Oct 2018 31 Dec 2018

A STERLING ACCUMULATION SHARES

Net Revenue EqualisationAllocated

31 May 2018Allocated

31 May 2017

First interimGroup 1 0.6715 – 0.6715 0.9999Group 2 0.3073 0.3642 0.6715 0.9999


31 Aug 2018Allocated

31 Aug 2017

Second interimGroup 1 1.7153 – 1.7153 1.5110Group 2 0.6313 1.0840 1.7153 1.5110


30 Nov 2018Allocated

30 Nov 2017

Third InterimGroup 1 0.6047 – 0.6047 1.0022Group 2 0.4335 0.1712 0.6047 1.0022


28 Feb 2019Allocated

28 Feb 2018

FinalGroup 1 1.4897 – 1.4897 0.8587Group 2 0.7014 0.7883 1.4897 0.8587



DISTRIBUTION TABLES continuedfor the year ended 31 December 2018 - in pence per share

Page 55

A STERLING INCOME SHARES

Net Revenue EqualisationPaid

31 May 2018Paid

31 May 2017



31 Aug 2018Paid

31 Aug 2017



30 Nov 2018Paid

30 Nov 2017



28 Feb 2019Paid

28 Feb 2018





Page 56

C STERLING ACCUMULATION SHARES



31 May 2017




31 Aug 2017




30 Nov 2017




28 Feb 2018





Page 57

C STERLING INCOME SHARES


31 May 2018Paid

31 May 2017



31 Aug 2018Paid

31 Aug 2017



30 Nov 2018Paid

30 Nov 2017



28 Feb 2019Paid

28 Feb 2018





Page 58

Z STERLING ACCUMULATION SHARES



31 May 2017




31 Aug 2017




30 Nov 2017




28 Feb 2018





Page 59

Z STERLING INCOME SHARES


31 May 2018Paid

31 May 2017



31 Aug 2018Paid

31 Aug 2017



30 Nov 2018Paid

30 Nov 2017



28 Feb 2019Paid

28 Feb 2018





Page 60

X STERLING ACCUMULATION SHARES



31 May 2017




31 Aug 2017




30 Nov 2017




28 Feb 2018





Page 61

X STERLING INCOME SHARES


31 May 2018Paid

31 May 2017



31 Aug 2018Paid

31 Aug 2017



30 Nov 2018Paid

30 Nov 2017



28 Feb 2019Paid

28 Feb 2018





Page 62

F STERLING ACCUMULATION SHARES



31 May 2017




31 Aug 2017




30 Nov 2017




28 Feb 2018



Page 63

GENERAL INFORMATION

SHARE CAPITAL The minimum share capital of the Company is £1 and the maximum is £100,000,000,000.

STRUCTURE OF LF WOODFORD INVESTMENT FUNDThe Company is structured as an umbrella Company, in that different sub-funds may be established from time to time by the ACD with the approval of the Financial Conduct Authority and the agreement of the Depositary. On the introduction of any new sub-fund or class, a revised Prospectus will be prepared setting out the relevant details on each sub-fund or class.

The assets of each sub-fund will be treated as separate from those of every other sub-fund and will be invested in accordance with the investment objective and investment policy applicable to that sub-fund. The only sub-fund currently available is:

LF Woodford Equity Income Fund

In future, there may be other sub-funds of the Company.

VALUATION POINTThe valuation point of the Fund is 12.00 noon (London time) on each business day. Valuations may be made at other times with the Depositary’s approval.

BUYING AND SELLING SHARESThe ACD will accept orders to buy or sell shares on normal business days between 9.00am and 5.00pm (London time) and transactions will be effected at prices determined by the following valuation. Instructions to buy or sell shares may be either in writing to: PO Box 3733, Royal Wootton Bassett, Swindon SN4 4BG or by telephone on 0333 300 0381.

PRICESThe prices of all shares are published on the website of the ACD: linkfundsolutions.co.uk. The prices of shares may can also be obtained by calling 0333 300 0381 during the ACD’s normal business hours.

OTHER INFORMATIONThe Instrument of Incorporation, Prospectus, Key Investor Information Document and the most recent interim and annual reports may be inspected at the office of the ACD which is also the Head Office. Copies of these may be obtained upon application and, excepting the Instrument of Incorporation, can be found on the ACD’s website, www.linkfundsolutions.co.uk, by following the link ‘Fund Information’.

Shareholders who have any complaints about the operation of the Fund should contact the Administrator in writing. In the event that a shareholder finds the response unsatisfactory, they may make their complaint direct to the Financial Ombudsman Service at Exchange Tower, London E14 9SR.

DATA PROTECTION ACTShareholders’ names will be added to a mailing list which may be used by the ACD, its associates or third parties to inform investors of other products by sending details of such products. Shareholders who do not want to receive such details should write to the ACD requesting their removal from any such mailing list.

Part of Link Group

www 65 Gresham Street London EC2V 7NQ

T 0870 607 2555

F 0870 607 2550

www.linkfundsolutions.co.uk

Documents

Woodford Funds (Ireland) ICAV Annual Report and Financial … · 2019-05-02 · Statement of Comprehensive Income ... net assets inthe LF Woodford Equity Income Fund- Class F GBP