Scotiabank · 2018. 7. 20. · Scotia Private Pools® and Pinnacle Portfolios Annual Report December 31, 2014 Money Market Fund Scotia Private Short Term Income Pool Bond Funds Scotia

Scotia Private Pools®and

Pinnacle PortfoliosAnnual ReportDecember 31, 2014

Money Market FundScotia Private Short Term Income Pool

Bond FundsScotia Private Income PoolScotia Private High Yield Income PoolScotia Private American Core-Plus Bond Pool

Balanced FundScotia Private Strategic Balanced Pool

Canadian Equity FundsScotia Private Canadian Value PoolScotia Private Canadian Mid Cap PoolScotia Private Canadian Growth PoolScotia Private Canadian Small Cap Pool

Foreign Equity FundsScotia Private U.S. Value PoolScotia Private U.S. Mid Cap Value PoolScotia Private U.S. Mid Cap Growth PoolScotia Private U.S. Large Cap Growth PoolScotia Private International Equity PoolScotia Private International Small to Mid Cap Value PoolScotia Private Emerging Markets PoolScotia Private Global Equity PoolScotia Private Global Real Estate Pool

Pinnacle PortfoliosPinnacle Income PortfolioPinnacle Balanced PortfolioPinnacle Growth Portfolio

Financial Statements

Money Market Fund3 • Scotia Private Short Term Income Pool

Bond Funds8 • Scotia Private Income Pool15 • Scotia Private High Yield Income Pool25 • Scotia Private American Core-Plus Bond Pool

Balanced Fund40 • Scotia Private Strategic Balanced Pool

Canadian Equity Funds49 • Scotia Private Canadian Value Pool55 • Scotia Private Canadian Mid Cap Pool61 • Scotia Private Canadian Growth Pool67 • Scotia Private Canadian Small Cap Pool

Foreign Equity Funds73 • Scotia Private U.S. Value Pool79 • Scotia Private U.S. Mid Cap Value Pool85 • Scotia Private U.S. Mid Cap Growth Pool91 • Scotia Private U.S. Large Cap Growth Pool97 • Scotia Private International Equity Pool105 • Scotia Private International Small to Mid Cap Value Pool114 • Scotia Private Emerging Markets Pool122 • Scotia Private Global Equity Pool129 • Scotia Private Global Real Estate Pool

The Pinnacle Portfolios137 • Pinnacle Income Portfolio142 • Pinnacle Balanced Portfolio148 • Pinnacle Growth Portfolio

153 Notes to the Financial Statements

165 Management’s Responsibility for Financial Reporting

166 Independent Auditors Report

1

2

Scotia Private Short Term Income Pool

STATEMENTS OF FINANCIAL POSITIONAs at

December 31,2014

December 31,2013

January 1,2013

ASSETSCurrent assetsInvestments

Non-derivative financial assets $5,714,689 $6,155,880 $8,748,759Cash 57,667 56,626 35,850Accrued investment income 178 198 287

5,772,534 6,212,704 8,784,896

LIABILITIESCurrent liabilitiesDistributions payable – 12 15

Net Assets attributable to holders ofredeemable units $5,772,534 $6,212,692 $8,784,881

NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITSPER SERIES

Pinnacle Series Units $5,682,212 $6,129,532 $8,712,213Series F Units $ 90,322 $ 83,160 $ 72,668

UNITS OUTSTANDINGPinnacle Series Units 568,221 612,953 871,221Series F Units 9,032 8,316 7,267

NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITSPER UNIT

Pinnacle Series Units $ 10.00 $ 10.00 $ 10.00Series F Units $ 10.00 $ 10.00 $ 10.00

STATEMENTS OF COMPREHENSIVE INCOMEFor the periods ended December 31,

2014 2013

INCOMENet gain (loss) on investments (note 2)

Interest for distribution purposes $ 56,613 $ 70,914

Net gain (loss) on investments 56,613 70,914

Securities lending 42 –

Total income (loss) 56,655 70,914

EXPENSESManagement fees (note 5) 547 395Administration fees (note 6) 78 –Harmonized Sales Tax/Goods and Services Tax 4,176 3,141Audit fees 175 1,564Independent Review Committee fees 16 834Custodian fees 1,365 1,452Filing fees 16,276 19,436Legal fees 85 3Unitholder reporting costs 6,639 3,690Unitholder administration and service fees 28,909 23,520

Total expenses 58,266 54,035Absorbed expenses (31,628) (22,513)

Net expenses 26,638 31,522

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $ 30,017 $ 39,392

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS FROM OPERATIONS PER SERIES

Pinnacle Series Units $ 29,388 $ 38,895Series F Units $ 629 $ 497

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS FROM OPERATIONS PER UNIT*

Pinnacle Series Units $ 0.06 $ 0.07Series F Units $ 0.06 $ 0.06

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 467,127 573,028Series F Units 10,937 7,853

* The increase (decrease) in net assets attributable to holders of redeemable units perunit is calculated by dividing the increase (decrease) in net assets attributable toholders of redeemable units from operations per series by the weighted average units perseries.

STATEMENTS OF CHANGES IN NET ASSETSATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITSFor the periods ended December 31,

2014 2013

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS – BEGINNING OF PERIOD

Pinnacle Series Units $ 6,129,532 $ 8,712,213Series F Units 83,160 72,668

6,212,692 8,784,881

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS

Pinnacle Series Units 29,388 38,895Series F Units 629 497

30,017 39,392

DISTRIBUTIONS TO UNITHOLDERS OF REDEEMABLE UNITSFrom net investment income

Pinnacle Series Units (29,388) (38,895)Series F Units (629) (497)

(30,017) (39,392)

REDEEMABLE UNIT TRANSACTIONSProceeds from issue

Pinnacle Series Units 4,201,485 8,310,094Series F Units 157,298 42,750

Reinvested distributionsPinnacle Series Units 29,391 38,805Series F Units 521 497

Payments on redemptionPinnacle Series Units (4,678,196) (10,931,580)Series F Units (150,657) (32,755)

(440,158) (2,572,189)

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS

Pinnacle Series Units (447,320) (2,582,681)Series F Units 7,162 10,492

(440,158) (2,572,189)

NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLEUNITS – END OF PERIOD


$ 5,772,534 $ 6,212,692

STATEMENTS OF CASH FLOWSFor the periods ended December 31,

2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in net assets attributable to holders of

redeemable units $ 30,017 $ 39,392Adjustments For:

Purchases of non-derivative financial assets (20,790,915) (28,535,710)Proceeds from sale of non-derivative financial assets 21,232,106 31,128,588Accrued investment income 20 89

Net cash provided by (used in) operating activities 471,228 2,632,359

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 4,358,783 8,352,844Amounts paid on redemption of redeemable units (4,828,853) (10,964,335)Distributions to unitholders of redeemable units (117) (92)

Net cash provided by (used in) financing activities (470,187) (2,611,583)Net increase (decrease) in cash 1,041 20,776Cash (Bank Indebtedness) at beginning of period 56,626 35,850

CASH (BANK INDEBTEDNESS) AT END OF PERIOD $ 57,667 $ 56,626

Interest received(1) 56,633 71,003

(1) Classified as operating items.

Portfolio Advisor: 1832 Asset Management L.P.

The accompanying notes are an integral part of these financial statements.

MO

NE

YM

AR

KE

TFU

ND

3

Scotia Private Short Term Income Pool (Continued)

SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014FaceValue ($) Issuer

AverageCost ($)

CarryingValue ($)

MONEY MARKET INSTRUMENTS – 99.0%Treasury Bills – 29.4%300,000 Government of Canada

0.00% due Jan. 08, 2015 299,922 299,945Province of Ontario

150,000 0.00% due Feb. 4, 2015 149,781 149,862800,000 0.00% due from Apr. 1, 2015 797,927 797,951

Province of Quebec150,000 0.00% due Jan. 30, 2015 149,828 149,881300,000 0.00% due Feb. 27, 2015 299,286 299,532

1,696,744 1,697,171

Promissory Notes – 24.5%670,000 Alberta Province

0.00% due Jan. 20, 2015 668,505 669,662160,000 Province of British Columbia

0.00% due Apr. 20, 2015 159,458 159,519Province of Nova Scotia

185,000 0.00% due Jan. 20, 2015 184,760 184,905400,000 0.00% due Mar. 30, 2015 398,987 398,999

1,411,710 1,413,085

Bankers’ Acceptances – 1.3%75,000 Royal Bank of Canada

0.00% due Dec. 18, 2015 74,051 74,053

Bearers’ Deposit Notes – 1.7%100,000 Manulife Bank of Canada

0.00% due Apr. 28, 2015 98,605 99,548

Commercial Paper – 5.6%125,000 Daimler Canada Finance Inc.

0.00% due Jan. 09, 2015 123,134 124,959100,000 Enbridge Inc.

0.00% due Jan. 05, 2015 99,698 99,986100,000 Wells Fargo Financial Canada Corporation

0.00% due Nov. 13, 2015 98,769 98,889

321,601 323,834

Short-Term Bonds – 36.5%100,000 407 International Inc. (Floating Rate)

3.88% due Jun. 16, 2015 101,146 101,306150,000 Bank of Montreal (Floating Rate)

1.40% due Jun. 19, 2015 150,000 150,068100,000 Bayerische Motoren Werke AG (Floating Rate)

2.64% due Aug. 10, 2015 100,739 101,765100,000 Caisse Centrale Desjardins (Floating Rate)

1.62% due Oct. 16, 2015 100,217 100,555150,000 Canadian Imperial Bank of Commerce (Floating Rate)

1.51% due Jul. 14, 2016 150,000 150,481150,000 CARDS II Trust (Floating Rate)

3.10% due Sep. 15, 2015 151,799 153,171100,000 GE Capital Canada Funding Company (Floating Rate)

4.65% due Feb. 11, 2015 100,369 102,163100,000 Golden Credit Card Trust (Floating Rate)

3.82% due May 15, 2015 100,923 101,409120,000 HSBC Bank USA NA (Floating Rate)

3.86% due May 21, 2015 121,109 121,621150,000 National Bank of Canada (Floating Rate)

1.38% due Sep. 11, 2015 150,000 150,108225,000 Ontario Hydro (Floating Rate)

0.00% due Aug. 06, 2015 223,523 223,523250,000 Quebec Hydro (Floating Rate)

0.00% due Feb. 15, 2015 249,689 249,688150,000 Royal Bank of Canada (Floating Rate)

1.36% due Sep. 18, 2015 150,000 150,073

FaceValue ($) Issuer

AverageCost ($)

CarryingValue ($)

MONEY MARKET INSTRUMENTS (cont’d)Short-Term Bonds (cont’d)150,000 Toronto-Dominion Bank, The (Floating Rate)

1.47% due Apr. 21, 2016 150,000 150,430100,000 Volkswagen AG (Floating Rate)

2.50% due Jun. 1, 2015 100,431 100,637

2,099,945 2,106,998

TOTAL INVESTMENT PORTFOLIO 5,702,656 5,714,689

OTHER ASSETS, LESS LIABILITIES – 1.0% 57,845

NET ASSETS – 100.0% 5,772,534

Instruments with a 0.00% stated interest rate are purchased at a discount to face value. Thediscount represents the implied effective interest.



MO

NE

YM

AR

KE

TFU

ND

4


FUND SPECIFIC NOTESFor the periods indicated in Note 1.

1. The Fund (note 1)i) The Fund’s investment objective is to preserve investment capital while providing interest income and maintaining liquidity by

investing primarily in highly liquid, senior investment grade money market instruments (i.e. federal and provincial treasurybills and bond) and bankers acceptance.

2. Transition to IFRS (note 12)There were no adjustments related to the measurement of the assets and liabilities at fair value on transition to IFRS and therefore,the Fund’s transition adjustments are limited to those disclosed in note 12.

3. Risks Associated with Financial Instruments (note 4)i) Interest rate risk

The table below summarizes the Fund’s exposure to interest rate risk by the remaining term to maturity of the Fund’s fixed incomeinstruments.

Interest Rate Exposure* December 31, 2014 December 31, 2013 January 1, 2013

Less than 1 year $5,714,689 $6,155,880 $8,748,759

1-3 years – – –

3-5 years – – –

5-10 years – – –

> 10 years – – –

Total $5,714,689 $6,155,880 $8,748,759

* Earlier of maturity or interest reset date. Excludes cash.

ii) Currency risk

The Fund did not have significant currency risk exposure as at December 31, 2014, December 31, 2013 and January 1, 2013.

iii) Other price risk

The Fund’s significant market risks have been discussed in the previous sections. As at December 31, 2014, December 31, 2013 andJanuary 1, 2013, the investments of this Fund were not subject to significant other price risk as the Fund did not hold any equities orcommodities.

iv) Credit risk

The table below summarizes the credit ratings of any fixed income securities and preferred securities, excluding cash and moneymarket instruments, held by the Fund.

December 31, 2014

Percentage ofTotal Money Market

Instruments (%)Percentage ofNet Assets (%)

Short-Term Rating

R1-High 21.1 20.8

R1-Middle 38.1 37.8

R1-Low 3.9 3.9

Bond Rating

A- to AAA+ 36.9 36.5

Total 100.0 99.0

MO

NE

YM

AR

KE

TFU

ND


5



v) Liquidity risk

The table below summarizes the Fund’s financial liabilities based on the remaining period to the contractual maturity date.

December 31, 2014 December 31, 2013 January 1, 2013

On DemandLess than3 months On demand

Less than3 months On demand

Less than3 months

Accounts payable and accrued liabilities $ – $ – $ – $12 $ – $15

Redeemable units 5,772,534 – 6,212,692 – 8,784,881 –

$5,772,534 $ – $6,212,692 $12 $8,784,881 $15

Redeemable units are redeemable on demand at the holder’s option. However, the Manager does not expect that the contractualmaturity disclosed in the table above will be representative of the actual cash outflows, as holders of these instruments typicallyretain them for a longer term.

vi) Concentration risk

Concentration risk arises as a result of the concentration of exposures within the same category, geographical location, asset type,industry sector or counterparty type. The table below is a summary of the Fund’s concentration risk.

Percentage of Net Assets (%)

December 31,2014

December 31,2013

January 1,2013

Treasury Bills 29.4 13.3 20.4

Promissory Notes 24.5 3.5 26.5

Bankers’ Acceptance 1.3 12.4 3.4

Bearers’ Deposit Notes 1.7 2.4 1.4

Commercial Paper 5.6 6.7 15.3

Short-Term Bonds 36.5 60.8 32.5

vii) Fair value classification (note 2)

The tables below illustrate the classification of the Fund’s financial instruments within the fair value hierarchy as at December 31,2014, December 31, 2013 and January 1, 2013.

December 31, 2014 Level 1 Level 2 Level 3 Total

Money Market Instruments $ – $5,714,689 $ – $5,714,689



January 1, 2013 Level 1 Level 2 Level 3 Total


Transfers Between LevelsDuring the periods ended December 31, 2014 and December 31, 2013, there were no transfers between Level 1 and Level 2.

4. Offsetting of Financial Assets and Liabilities (note 2)As at December 31, 2014, December 31, 2013 and January 1, 2013, the Fund did not enter into any agreement whereby the financialinstruments were eligible for offset.

5. Interest in Underlying Funds (note 2)The Fund did not hold any interests in Underlying Funds as at December 31, 2014, December 31, 2013 and January 1, 2013.

MO

NE

YM

AR

KE

TFU

ND


6



6. Comparison of Net Asset Value per Unit and Net Assets per Unit (note 2)The table below provides a comparison of the IFRS net assets per unit and Pricing NAV per unit. The primary reason for thedifference between the IFRS net assets per unit and Pricing NAV per unit is described in Note 2. There were no material differencesbetween the IFRS net assets per unit and Pricing NAV per unit as at January 1, 2013 and are hence not presented.

December 31, 2014 December 31, 2013

Pricing NAVper unit ($)

IFRS net assetsper unit ($)



Series A 10.00 10.00 10.00 10.00

Series F 10.00 10.00 10.00 10.00

MO

NE

YM

AR

KE

TFU

ND


7

Scotia Private Income Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $327,070,742 $291,921,877 $297,436,458Cash 5,143,571 304,293 105,090Accrued investment income 1,926,976 1,774,977 1,618,879Subscriptions receivable 418,112 177,761 21,602

334,559,401 294,178,908 299,182,029

LIABILITIESCurrent liabilitiesPayable for securities purchased – 2,913,854 –Redemptions payable 112,372 771,294 109,899

112,372 3,685,148 109,899



Pinnacle Series Units $299,668,608 $256,065,876 $251,509,501Series F Units $ 2,793,881 $ 4,957,890 $ 19,368,089Series I Units $ 31,984,540 $ 29,469,994 $ 28,194,540

UNITS OUTSTANDINGPinnacle Series Units 27,579,029 24,308,721 21,510,621Series F Units 250,430 458,770 1,607,255Series I Units 2,933,224 2,787,803 2,405,181


Pinnacle Series Units $ 10.87 $ 10.53 $ 11.69Series F Units $ 11.16 $ 10.81 $ 12.05Series I Units $ 10.90 $ 10.57 $ 11.72


2014 2013


Interest for distribution purposes 10,163,533 9,890,029Net realized gain (loss) on non-derivative financial assets (2,795,897) 16,931,405Net gain (loss) foreign exchange 2,868 –Change in unrealized appreciation (depreciation) of non-

derivative financial assets 12,434,854 (29,198,594)

Net gain (loss) on investments 19,805,358 (2,377,160)Securities lending 28,231 46,690Other income 2,568 514

Total income (loss) 19,836,157 (2,329,956)

EXPENSESManagement fees (note 5) 23,246 68,391Administration fees (note 6) 78,620 –Harmonized Sales Tax/Goods and Services Tax 21,299 19,393Audit fees 7,625 7,974Independent Review Committee fees 836 1,738Custodian fees 2,488 6,334Filing fees 12,146 22,456Legal fees 3,890 522Unitholder reporting costs 12,292 7,046Unitholder administration and service fees 88,788 141,805

Total expenses 251,230 275,659Absorbed expenses (2,924) –

Net expenses 248,306 275,659

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $19,587,851 $ (2,605,615)

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONSPER SERIES

Pinnacle Series Units $17,434,685 $ (2,257,852)Series F Units $ 191,850 $ (120,305)Series I Units $ 1,961,316 $ (227,458)

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONSPER UNIT*

Pinnacle Series Units $ 0.66 $ (0.10)Series F Units $ 0.64 $ (0.15)Series I Units $ 0.67 $ (0.09)

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 26,264,225 22,184,104Series F Units 300,617 819,640Series I Units 2,908,067 2,518,166


Portfolio Advisor: Beutel Goodman & Company Ltd.


BO

ND

FUN

DS

8

Scotia Private Income Pool (Continued)


2014 2013


Pinnacle Series Units $256,065,876 $251,509,501Series F Units 4,957,890 19,368,089Series I Units 29,469,994 28,194,540

290,493,760 299,072,130


Pinnacle Series Units 17,434,685 (2,257,852)Series F Units 191,850 (120,305)Series I Units 1,961,316 (227,458)

19,587,851 (2,605,615)


Pinnacle Series Units (8,850,932) (8,525,710)Series F Units (70,622) (208,881)Series I Units (993,539) (990,578)

From realized gainPinnacle Series Units – (14,965,055)Series F Units – (326,036)Series I Units – (1,714,708)

(9,915,093) (26,730,968)


Pinnacle Series Units 75,062,528 60,522,281Series F Units 141,335 1,033,788Series I Units 2,526,188 2,789,513

Reinvested distributionsPinnacle Series Units 8,810,499 23,397,457Series F Units 61,052 441,263Series I Units 993,539 2,705,286

Payments on redemptionPinnacle Series Units (48,854,048) (53,614,746)Series F Units (2,487,624) (15,230,028)Series I Units (1,972,958) (1,286,601)

34,280,511 20,758,213


Pinnacle Series Units 43,602,732 4,556,375Series F Units (2,164,009) (14,410,199)Series I Units 2,514,546 1,275,454

43,953,269 (8,578,370)


Pinnacle Series Units 299,668,608 256,065,876Series F Units 2,793,881 4,957,890Series I Units 31,984,540 29,469,994

$334,447,029 $290,493,760


2014 2013


redeemable units $ 19,587,851 $ (2,605,615)Adjustments For:

Net realized (gain) loss on sale of non-derivativefinancial assets 2,795,897 (16,931,405)

Net realized (gain) loss foreign exchange on cash (2,868) –Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets (12,434,854) 29,198,594Purchases of non-derivative financial assets (327,709,073) (638,281,791)Proceeds from sale of non-derivative financial assets 299,285,311 634,443,037Accrued investment income (151,999) (156,098)

Net cash provided by (used in) operating activities (18,629,735) 5,666,722

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 77,489,700 64,189,423Amounts paid on redemption of redeemable units (53,973,552) (69,469,980)Distributions to unitholders of redeemable units (50,003) (186,962)

Net cash provided by (used in) financing activities 23,466,145 (5,467,519)Net realized (gain) loss foreign exchange on cash 2,868 –Net increase (decrease) in cash 4,836,410 199,203Cash (Bank Indebtedness) at beginning of period 304,293 105,090

CASH (BANK INDEBTEDNESS) AT END OF PERIOD $ 5,143,571 $ 304,293

Interest received(1) 10,011,534 9,733,931




BO

ND

FUN

DS

9



AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS – 97.8%Federal Bonds – 39.2%

Canada Housing Trust No. 15,915,000 3.15% due Jun. 15, 2015 6,103,635 5,971,223

28,445,000 2.45% due Dec. 15, 2015 29,113,280 28,820,19214,395,000 2.75% due Dec. 15, 2015 14,723,334 14,624,72418,025,000 2.75% due Jun. 15, 2016 18,510,196 18,449,93510,810,000 1.85% due Dec. 15, 2016 10,951,290 10,956,88220,285,000 2.05% due Jun. 15, 2017 20,627,423 20,680,7645,340,000 1.70% due Dec. 15, 2017 5,367,928 5,397,9108,895,000 2.05% due Jun. 15, 2018 9,021,323 9,083,6745,200,000 2.35% due Dec. 15, 2018 5,322,000 5,371,250

Government of Canada6,160,000 1.50% due Aug. 1, 2015 6,200,524 6,177,9714,755,000 0.88% due Feb. 14, 2017 5,135,175 5,525,525

131,076,108 131,060,050

Provincial Bonds – 10.1%Province of Alberta

3,615,000 1.85% due Sep. 1, 2016 3,667,063 3,658,869325,000 2.55% due Dec. 15, 2022 325,450 332,529660,000 3.50% due Jun. 1, 2031 677,207 705,177

Province of British Columbia1,220,000 2.10% due May 18, 2016 1,342,229 1,445,4391,900,000 1.20% due Apr. 25, 2017 2,042,991 2,214,9061,820,000 2.25% due Mar. 1, 2019 1,854,616 1,871,1262,245,000 2.85% due Jun. 18, 2025 2,265,430 2,303,2221,125,000 5.70% due Jun. 18, 2029 1,474,830 1,501,0521,325,000 6.35% due Jun. 18, 2031 1,862,310 1,907,350

100,000 5.40% due Jun. 18, 2035 130,500 134,69835,000 4.95% due Jun. 18, 2040 42,886 45,951

Province of Manitoba1,750,000 5.20% due Dec. 3, 2015 1,888,476 1,815,1261,670,000 1.85% due Jun. 1, 2017 1,690,207 1,693,3763,830,000 3.30% due Jun. 2, 2024 3,991,098 4,067,942

590,000 4.40% due Sep. 5, 2025 667,649 682,2421,090,000 3.25% due Sep. 5, 2029 1,099,873 1,127,436

650,000 5.70% due Mar. 5, 2037 875,370 903,040435,000 4.60% due Mar. 5, 2038 497,845 531,78640,000 4.40% due Mar. 5, 2042 47,416 48,239

2,900,000 4.05% due Sep. 5, 2045 3,045,258 3,350,109700,000 4.70% due Mar. 5, 2050 865,810 912,570

1,620,000 3.15% due Sep. 5, 2052 1,428,110 1,586,562Province of New Brunswick

1 6.47% due Nov. 30, 2027 1 1Province of Saskatchewan

300,000 4.25% due Dec. 3, 2015 317,910 308,62970,000 3.20% due Jun. 3, 2024 72,752 74,393

250,000 4.75% due Jun. 1, 2040 279,744 319,006160,000 3.90% due Jun. 2, 2045 165,491 182,871

32,618,522 33,723,647

Corporate Bonds – 48.5%Alliance Pipeline LP

163,008 5.55% due Dec. 31, 2023 163,008 179,512993,032 7.22% due Dec. 31, 2025 993,033 1,198,102

AltaGas Ltd. (callable)620,000 5.16% due Jan. 13, 2044-(Jul. 13, 2043) 619,250 667,999

AltaLink LP145,000 2.98% due Nov. 28, 2022 145,457 148,978300,000 5.25% due Sep. 22, 2036 363,000 367,138

2,150,000 5.38% due Mar. 26, 2040 2,703,300 2,702,6521,085,000 4.87% due Nov. 15, 2040 1,250,080 1,281,090

500,000 4.46% due Nov. 8, 2041 555,500 556,8331,875,000 3.99% due Jun. 30, 2042 1,810,188 1,946,824

500,000 4.92% due Sep. 17, 2043 549,120 597,674


AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)Corporate Bonds (cont’d)1,865,000 4.45% due Jul. 11, 2053 1,942,356 2,078,495

Bank of Montreal770,000 3.93% due Apr. 27, 2015 806,960 776,078

1,100,000 3.10% due Mar. 10, 2016 1,129,789 1,119,768300,000 3.49% due Jun. 10, 2016 310,470 307,917

Bank of Nova Scotia, The2,385,000 2.25% due May 8, 2015 2,416,049 2,392,3871,300,000 3.61% due Feb. 22, 2016 1,343,030 1,330,0443,985,000 1.80% due May 9, 2016 3,995,749 3,995,6613,100,000 2.60% due Feb. 27, 2017 3,169,185 3,158,284

Canadian Imperial Bank of Commerce875,000 3.10% due Mar. 2, 2015 879,176 877,509

8,850,000 1.75% due Jun. 1, 2016 8,866,693 8,869,141Canadian Utilities Limited

1,185,000 3.86% due Nov. 14, 2052 1,165,191 1,183,648CIBC Capital Trust

2,325,000 2.20% due May 22, 2015 2,354,211 2,332,4511,120,000 3.40% due Jan. 14, 2016 1,154,596 1,141,261

CU Inc.380,000 4.80% due Nov. 22, 2021 415,201 438,463625,000 5.90% due Nov. 20, 2034 796,275 815,894500,000 5.03% due Nov. 20, 2036 589,300 595,489830,000 5.58% due May 26, 2038 1,003,279 1,065,758

1,312,000 4.54% due Oct. 24, 2041 1,312,000 1,480,642790,000 3.81% due Sep. 10, 2042 791,975 793,329370,000 4.72% due Mar. 9, 2043 407,650 430,160

1,800,000 4.95% due Nov. 18, 2050 2,095,100 2,179,042Cu Inc. (callable)

875,000 4.56% due Nov. 7, 2053-(May 7, 2053) 954,466 994,821Duke Energy Corporation

225,000 8.50% due Nov. 23, 2015 259,425 237,983Enbridge Gas Distribution Inc.

720,000 4.77% due Dec. 17, 2021 837,937 824,255315,000 3.15% due Aug. 22, 2024 314,115 321,097700,000 6.90% due Nov. 15, 2032 979,700 988,158930,000 6.16% due Dec. 16, 2033 1,240,508 1,224,634

Enbridge Inc.1,490,000 1.85% due Apr. 24, 2017 1,491,897 1,497,3452,235,000 4.57% due Mar. 11, 2044 2,299,451 2,203,3981,425,000 4.95% due Nov. 22, 2050 1,759,006 1,707,180

Enbridge Income Fund1,290,000 3.95% due Nov. 19, 2024 1,290,000 1,321,795

Enbridge Pipelines Inc.1,975,000 2.93% due Sep. 8, 2015 2,020,425 1,995,4561,365,000 2.93% due Nov. 30, 2022 1,384,599 1,384,427

550,000 6.35% due Nov. 17, 2023 668,785 691,6751,000,000 5.33% due Apr. 6, 2040 1,246,800 1,223,187

350,000 4.55% due Aug. 17, 2043 381,675 388,432ENMAX Corporation (callable)

455,000 3.81% due Dec. 5, 2024-(Sep. 5, 2024) 455,000 461,436EPCOR Utilities Inc.

575,000 6.75% due Mar. 22, 2016 633,075 610,018300,000 6.80% due Jun. 28, 2029 405,450 408,668

1,525,000 5.65% due Nov. 16, 2035 1,744,511 1,911,785500,000 5.75% due Nov. 24, 2039 639,050 647,745

Export Development Canada1,360,000 1.00% due May 15, 2017 1,473,927 1,580,454

FortisAlberta Inc.500,000 6.22% due Oct. 31, 2034 671,000 674,123700,000 5.40% due Apr. 21, 2036 866,560 867,120500,000 5.37% due Oct. 30, 2039 622,000 625,919900,000 4.54% due Oct. 18, 2041 986,650 1,014,442500,000 4.80% due Oct. 27, 2050 597,600 587,639



BO

ND

FUN

DS

10



AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)Corporate Bonds (cont’d)

FortisAlberta Inc. (callable)365,000 4.85% due Sep. 11, 2043-(Mar. 11, 2043) 364,599 431,962

FortisAlberta, Inc.548,000 5.85% due Apr. 15, 2038 728,237 723,327

FortisBC Energy Inc.75,000 6.95% due Sep. 21, 2029 106,275 104,493

FortisBC Inc.500,000 5.00% due Nov. 24, 2050 610,750 608,084

Greater Toronto Airports Authority1,800,000 5.00% due Jun. 1, 2015 1,906,887 1,826,819

700,000 4.70% due Feb. 15, 2016 742,414 724,858Hydro One Inc.

2,725,000 2.95% due Sep. 11, 2015 2,805,990 2,755,170785,000 4.64% due Mar. 3, 2016 820,275 813,640

2,205,000 3.20% due Jan. 13, 2022 2,318,892 2,322,1711,530,000 6.35% due Jan. 31, 2034 2,058,942 2,090,2011,000,000 4.89% due Mar. 13, 2037 1,159,350 1,175,8435,505,000 5.49% due Jul. 16, 2040 6,987,197 7,065,5542,500,000 5.00% due Oct. 19, 2046 3,068,500 3,046,004

Hydro Ottawa Holding Inc.1,600,000 4.93% due Feb. 9, 2015 1,679,800 1,604,801

Inter Pipeline Fund425,000 4.90% due Feb. 3, 2020 480,913 473,907203,000 4.97% due Feb. 2, 2021 233,044 227,086500,000 3.78% due May 30, 2022 529,500 520,966

Inter Pipeline Ltd. (callable)1,275,000 4.64% due May 30, 2044-(Nov. 30, 2043) 1,284,798 1,316,441

Lower Mattagami Energy Limited Partnership1,250,000 5.14% due May 18, 2041 1,451,915 1,521,2351,000,000 4.18% due Feb. 23, 2046 1,054,800 1,059,372

NAV Canada500,000 7.40% due Jun. 1, 2027 732,750 718,038

NOVA Gas Transmission Ltd.1,465,000 12.20% due Feb. 28, 2016 1,872,710 1,634,821

Nova Scotia Power Inc.500,000 8.40% due Oct. 23, 2015 577,750 525,322

1,050,000 6.95% due Aug. 25, 2033 1,389,575 1,481,451200,000 5.67% due Nov. 14, 2035 253,600 250,854

3,520,000 5.61% due Jun. 15, 2040 4,532,352 4,472,421570,000 4.15% due Mar. 6, 2042 558,828 592,571

Pembina Pipeline Corp.1,410,000 4.81% due Mar. 25, 2044 1,437,864 1,440,169

Royal Bank of Canada700,000 2.05% due Jan. 13, 2015 706,790 700,044

3,600,000 3.36% due Jan. 11, 2016 3,714,152 3,666,2711,000,000 3.03% due Jul. 26, 2016 1,029,100 1,021,1725,225,000 3.66% due Jan. 25, 2017 5,482,164 5,427,367

Terasen Gas Inc.100,000 6.50% due May 1, 2034 138,000 137,758500,000 5.90% due Feb. 26, 2035 657,250 651,329500,000 5.80% due May 13, 2038 655,625 655,133

Toronto Hydro Corporation2,600,000 5.54% due May 21, 2040 3,209,783 3,348,447

Toronto Hydro Corporation (callable)262,000 3.96% due Apr. 9, 2063-(Oct. 9, 2062) 252,568 265,608

TransCanada Corporation1,200,000 3.65% due Nov. 15, 2021 1,271,040 1,276,202

TransCanada PipeLines Limited380,000 11.80% due Nov. 20, 2020 614,612 564,658

1,390,000 7.90% due Apr. 15, 2027 1,859,507 1,930,8891,355,000 6.28% due May 26, 2028 1,641,545 1,696,254

950,000 4.55% due Nov. 15, 2041 1,000,938 1,012,331


AverageCost ($)

CarryingValue ($)


TransCanada PipeLines Ltd.2,675,000 8.29% due Feb. 5, 2026 3,951,908 3,852,820

500,000 7.31% due Jan. 15, 2027 693,000 674,0241,300,000 8.21% due Apr. 25, 2030 1,940,640 1,883,302

TransCanada PipeLines Ltd. (callable)175,000 3.69% due Jul. 19, 2023-(Apr. 19, 2023) 182,763 184,401

Union Gas Limited1,500,000 4.64% due Jun. 30, 2016 1,601,580 1,564,7321,000,000 4.85% due Apr. 25, 2022 1,165,500 1,146,082

250,000 8.65% due Nov. 10, 2025 365,975 369,838440,000 5.46% due Sep. 11, 2036 545,380 540,693

2,500,000 5.20% due Jul. 23, 2040 3,090,250 3,026,438Union Gas Ltd. (callable)

2,095,000 4.88% due Jun. 21, 2041-(Dec. 21, 2040) 2,480,271 2,447,987Vancouver International Airport Authority

500,000 5.02% due Nov. 13, 2015 543,100 515,276Westcoast Energy Inc.

1,715,000 3.28% due Jan. 15, 2016 1,782,641 1,741,823500,000 3.88% due Oct. 28, 2021 540,100 532,299800,000 8.85% due Jul. 21, 2025 1,109,920 1,157,275

1,715,000 7.30% due Dec. 18, 2026 2,360,119 2,305,337675,000 6.75% due Dec. 15, 2027 817,924 874,021400,000 7.15% due Mar. 20, 2031 516,120 551,962

1,475,000 4.79% due Oct. 28, 2041 1,650,089 1,636,276

161,638,644 162,287,045


OTHER ASSETS, LESS LIABILITIES – 2.2% 7,376,287

NET ASSETS – 100.0% 334,447,029



BO

ND

FUN

DS

11



1. The Fund (note 1)i) The Fund’s investment objective is to preserve investment capital while seeking to achieve increased income by investing

primarily in a portfolio of Canadian government and corporate bonds, preferred shares of Canadian corporations and loans ofsupranational organizations. The Fund’s investments may also include mortgage-backed securities, mortgage bonds, mortgages,term loans, short-term instruments and cash equivalents. Duration may vary by no more than one year from the duration of theDEX Universe Bond Index.

2. Transition to IFRS (note 12)The following reconciliation between IFRS and Canadian GAAP, as required by IFRS 1, and the related explanations of anysignificant adjustments are as follows:

(i) Reconciliation of nets assets as previously reported under Canadian GAAP as at:

Equity December 31, 2013 January 1, 2013

Net assets as reported under Canadian GAAP $290,205,849 $298,684,650

Revaluation of Investments at FVTPL 287,911 387,480

Net assets attributable to holders of redeemable units $290,493,760 $299,072,130

(ii) Reconciliation of comprehensive income as previously reported under Canadian GAAP as at:

Comprehensive Income December 31, 2013

Comprehensive income as reported under Canadian GAAP $(2,506,046)

Revaluation of Investments at FVTPL (99,569)

Increase (decrease) in net assets attributable to holders of redeemable units $(2,605,615)

The difference in the amounts reported under IFRS is mainly due to revaluation of investments at FVTPL upon transition to IFRS.




Less than 1 year $ 74,257,161 $ 50,122,588 $ 23,155,408

1-3 years 110,228,185 142,335,297 31,972,794

3-5 years 16,326,049 – 86,832,319

5-10 years 17,494,274 11,708,137 24,746,019

> 10 years 108,765,073 83,332,038 127,655,932

Total $327,070,742 $287,498,060 $294,362,472

* Earlier of maturity or interest reset date. Excludes cash, money market instruments, underlying Funds, and preferred shares where applicable.

As at December 31, 2014, had the prevailing interest rates increased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, net assets attributable to holders of redeemable units would have decreased or increased,respectively, by $4,998,858 or approximately 1.5% (December 31, 2013 – $3,625,459 or approximately 1.2%, January 1, 2013 – $5,976,351or approximately 2.0%). In practice, actual results may differ from this sensitivity analysis and the difference could be material.

ii) Currency risk

The tables below indicates the currencies to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables also

BO

ND

FUN

DS


12



illustrates the potential impact on the net assets attributable to holders of redeemable units if the Canadian dollar had strengthenedor weakened by 10% in relation to each of the other currencies, with all other variables held constant.

December 31, 2014

CurrencyNet CurrencyExposure ($)

Percentage ofNet Assets (%)

Impact if Canadiandollar had

strengthened orweakened by 10%


US Dollar 10,766,324 3.2 1,076,632 0.3


The Fund’s significant market risks have been discussed in the previous sections. As at December 31, 2014, December 31, 2013 andJanuary 1, 2013, the investments of this Fund were not subject to significant other price risk as the Fund did not hold any equities orcommodities.

iv) Credit risk


December 31, 2014 December 31, 2013 December 31, 2012

Percentage ofTotal Bond and

DebentureInstruments (%)

Percentage ofNet assets

attributable toholders of

redeemableunits (%)





redeemableunits (%)





redeemableunits (%)

Bond Rating

A- to AAA+ 98.3 96.2 99.4 98.0 93.1 91.6

B- to BBB+ 1.7 1.6 0.6 0.5 6.9 6.8

Total 100.0 97.8 100.0 98.5 100.0 98.4

v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $112,372 $ – $3,685,148 $ – $109,899


$334,447,029 $112,372 $290,493,760 $3,685,148 $299,072,130 $109,899


BO

ND

FUN

DS


13







Federal Bonds 39.2 48.5 33.0

Provincial Bonds 10.1 4.2 11.4

Municipal Bonds – – 0.7

Corporate Bonds 48.5 46.3 48.6

Mortgage-Backed Securities – – 4.7

Money Market Instruments – 1.5 1.0




Bond and Debenture Instruments $ – $327,070,742 $ – $327,070,742



Money Market Instruments – 4,423,817 – 4,423,817

$ – $291,921,877 $ – $291,921,877




$ – $297,436,458 $ – $297,436,458










Pinnacle Series 10.87 10.87 10.53 10.53

Series F 11.16 11.16 10.81 10.81

Series I 10.90 10.90 10.57 10.57

BO

ND

FUN

DS


14

Scotia Private High Yield Income Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $897,466,049 $748,931,300 $569,946,010Unrealized gain on currency

forward contracts 3,628,088 – –Cash 13,172 7,548 98,148Accrued investment income 11,956,462 10,541,363 8,396,798Subscriptions receivable 790,973 521,624 170,326

913,854,744 760,001,835 578,611,282

LIABILITIESCurrent liabilitiesPayable for securities purchased – – 6,079,586Redemptions payable 293,508 321,214 156,211Unrealized loss on currency forward

contracts 3,059,918 – –

3,353,426 321,214 6,235,797



Pinnacle Series Units $137,196,265 $124,683,620 $120,492,992Series F Units $ 15,037,425 $ 13,233,849 $ 11,195,181Series I Units $472,739,554 $327,520,685 $214,668,154Series M Units $285,528,074 $294,242,467 $226,019,158

UNITS OUTSTANDINGPinnacle Series Units 14,556,998 13,256,227 12,896,125Series F Units 1,536,581 1,355,346 1,154,540Series I Units 49,991,293 34,719,535 22,913,212Series M Units 30,113,831 31,104,735 24,060,230


Pinnacle Series Units $ 9.42 $ 9.40 $ 9.34Series F Units $ 9.79 $ 9.76 $ 9.69Series I Units $ 9.46 $ 9.43 $ 9.37Series M Units $ 9.48 $ 9.46 $ 9.39


2014 2013


Dividends 3,542,798 3,285,646Interest for distribution purposes 47,118,452 42,830,095Net realized gain (loss) on non-derivative financial

assets 11,041,015 3,555,823Net realized gain (loss) on currency forwards 3,847,390 –Net gain (loss) foreign exchange 832,640 492,487Change in unrealized appreciation (depreciation) of

non-derivative financial assets (17,877,915) (1,784,397)Change in unrealized appreciation (depreciation) of

currency forwards 568,170 –

Net gain (loss) on investments 49,072,550 48,379,654Securities lending 270,125 83,569Other income 72 –

Total income (loss) 49,342,747 48,463,223

EXPENSESManagement fees (note 5) 984,098 916,011Administration fees (note 6) 137,986 –Harmonized Sales Tax/Goods and Services Tax 117,794 99,810Audit fees 21,685 19,726Independent Review Committee fees 2,288 784Custodian fees 9,385 10,647Filing fees 11,930 18,345Legal fees 10,640 264Unitholder reporting costs 16,045 6,947Unitholder administration and service fees 125,058 222,258Overdraft charges 1,567 625Foreign withholding taxes/tax reclaims 531,420 492,847Transaction costs 40,913 28,962

Total expenses 2,010,809 1,817,226

Net expenses 2,010,809 1,817,226

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $ 47,331,938 $46,645,997


Pinnacle Series Units $ 7,595,579 $ 8,498,232Series F Units $ 690,519 $ 753,968Series I Units $ 21,780,023 $19,551,633Series M Units $ 17,265,817 $17,842,164


Pinnacle Series Units $ 0.55 $ 0.67Series F Units $ 0.48 $ 0.61Series I Units $ 0.50 $ 0.66Series M Units $ 0.58 $ 0.62

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 13,925,659 12,750,537Series F Units 1,437,846 1,246,156Series I Units 43,498,472 29,835,654Series M Units 29,775,122 28,960,594


Portfolio Advisor: Guardian Capital LP


BO

ND

FUN

DS

15

Scotia Private High Yield Income Pool (Continued)


2014 2013

NET ASSETS ATTRIBUTABLE TO HOLDERS OFREDEEMABLE UNITS – BEGINNING OF PERIOD

Pinnacle Series Units $ 124,683,620 $120,492,992Series F Units 13,233,849 11,195,181Series I Units 327,520,685 214,668,154Series M Units 294,242,467 226,019,158

759,680,621 572,375,485

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLETO HOLDERS OF REDEEMABLE UNITS FROMOPERATIONS

Pinnacle Series Units 7,595,579 8,498,232Series F Units 690,519 753,968Series I Units 21,780,023 19,551,633Series M Units 17,265,817 17,842,164

47,331,938 46,645,997

DISTRIBUTIONS TO UNITHOLDERS OF REDEEMABLEUNITS

From net investment incomePinnacle Series Units (7,596,712) (7,593,831)Series F Units (704,970) (685,597)Series I Units (24,739,612) (18,620,259)Series M Units (15,856,516) (16,995,432)

From realized gainPinnacle Series Units (54,579) –Series F Units (6,019) –Series I Units (186,098) –Series M Units (112,861) –

(49,257,367) (43,895,119)


Pinnacle Series Units 25,188,166 20,866,530Series F Units 2,504,752 2,357,239Series I Units 154,153,323 110,674,147Series M Units 106,052,455 136,510,542

Reinvested distributionsPinnacle Series Units 7,625,650 7,559,361Series F Units 164,578 160,676Series I Units 24,925,710 18,620,259Series M Units 11,919,958 11,844,253

Payments on redemptionPinnacle Series Units (20,245,459) (25,139,664)Series F Units (845,284) (547,618)Series I Units (30,714,477) (17,373,249)Series M Units (127,983,246) (80,978,218)

152,746,126 184,554,258

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLETO HOLDERS OF REDEEMABLE UNITS

Pinnacle Series Units 12,512,645 4,190,628Series F Units 1,803,576 2,038,668Series I Units 145,218,869 112,852,531Series M Units (8,714,393) 68,223,309

150,820,697 187,305,136

NET ASSETS ATTRIBUTABLE TO HOLDERS OFREDEEMABLE UNITS – END OF PERIOD

Pinnacle Series Units 137,196,265 124,683,620Series F Units 15,037,425 13,233,849Series I Units 472,739,554 327,520,685Series M Units 285,528,074 294,242,467

$ 910,501,318 $759,680,621


2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in net assets attributable to

holders of redeemable units $ 47,331,938 $ 46,645,997Adjustments For:

Net realized (gain) loss on sale of non-derivativefinancial assets (11,041,015) (3,555,823)

Net realized (gain) loss foreign exchange on cash (832,640) (492,487)Change in unrealized (appreciation) depreciation

on sale of non-derivative financial assets 17,877,915 1,784,397Change in unrealized (appreciation) depreciation

of forward currency contracts (568,170) –Purchases of non-derivative financial assets (1,176,216,994) (997,689,836)Proceeds from sale of non-derivative financial

assets 1,020,804,432 814,367,425Transaction costs 40,913 28,962Accrued investment income (1,415,099) (2,144,565)

Net cash provided by (used in) operating activities (104,018,720) (141,055,930)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 287,629,347 270,057,159Amounts paid on redemption of redeemable units (179,816,172) (123,873,746)Distributions to unitholders of redeemable units (4,621,471) (5,710,570)

Net cash provided by (used in) financing activities 103,191,704 140,472,843Net realized (gain) loss foreign exchange on cash 832,640 492,487Net increase (decrease) in cash (827,016) (583,087)Cash (Bank Indebtedness) at beginning of period 7,548 98,148


Interest received(1) 44,861,594 41,589,363Dividends received, net of withholding taxes(1) 3,260,849 2,462,267




BO

ND

FUN

DS

16


SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014


AverageCost ($)

CarryingValue ($)


Canada Housing Trust No. 15,000,000 2.90% due Jun. 15, 2024 5,068,200 5,276,103

Government of Canada5,000,000 1.25% due Sep. 1, 2018 4,925,750 5,012,982

10,000,000 1.75% due Mar. 1, 2019 10,037,200 10,205,6278,950,000 1.50% due Jun. 1, 2023 8,179,210 8,815,8943,500,000 2.50% due Jun. 1, 2024 3,659,119 3,715,5254,000,000 4.00% due Jun. 1, 2041 4,745,960 5,307,708

36,615,439 38,333,839

Provincial Bonds – 5.0%Province of New Brunswick

13,500,000 4.50% due Feb. 4, 2015 13,892,850 13,534,792Province of Ontario

21,000,000 4.40% due Mar. 8, 2016 22,365,300 21,802,81710,000,000 3.20% due Sep. 8, 2016 10,486,300 10,335,496

46,744,450 45,673,105

Corporate Bonds – 72.9%ACCO Brands Corp.

1,400,000 6.75% due Apr. 30, 2020 1,383,755 1,707,490Ainsworth Lumber Ltd. (callable)

1,800,000 7.50% due Dec. 15, 2017-(2014) 1,806,757 2,162,005AK Steel Corporation (callable)

8,070,000 7.63% due May 15, 2020-(2015) 8,080,863 8,796,4592,000,000 8.38% due Apr. 1, 2022-(2017) 1,783,330 2,147,406

AK Steel Corporation (callable)500,000 7.63% due Oct. 1, 2021-(2017) 548,496 535,279

Alliance Grain Traders Inc.12,000,000 9.00% due Feb. 14, 2018 11,949,375 12,605,000

Allied Nevada Gold Corporation (callable)13,750,000 8.75% due Jun. 01, 2019-(2016) 13,443,760 5,645,888

Amkor Technology Inc.2,500,000 6.38% due Oct. 1, 2022 2,618,653 2,821,777

Armstrong Energy, Inc. (callable)11,875,000 11.75% due Dec. 15, 2019-(2016) 11,296,430 14,528,512

Athabasca Oil Corporation (callable)18,500,000 7.50% due Nov. 19, 2017-(2014) 18,382,500 14,880,938

Bank of Montreal10,000,000 2.24% due Dec. 11, 2017 10,060,400 10,107,928

Bank of Nova Scotia, The (callable)11,000,000 3.04% due Oct. 18, 2024-(2019) 10,837,600 11,276,455

Bank of Nova Scotia, The1,300,000 2.40% due Oct. 28, 2019 1,299,701 1,310,136

Banro Corporation (callable)7,750,000 10.00% due Mar. 1, 2017-(2014) 7,747,676 6,385,633

Baytex Energy Corporation1,000,000 5.13% due Jun. 1, 2021 1,098,378 993,675

Baytex Energy Corporation (callable)6,000,000 6.63% due Jul. 19, 2022-(2017) 6,000,000 5,471,250

Bombardier Inc.2,000,000 7.35% due Dec. 22, 2026 2,025,000 2,108,333

Bristow Group, Inc.1,850,000 6.25% due Oct. 15, 2022-(2017) 1,814,757 2,150,633

Cameco Corporation (callable)4,000,000 4.19% due Jun. 24, 2024-(Mar. 24, 2024) 3,998,400 4,124,148

Canadian Energy Services & TechnologyCorporation (callable)

4,500,000 7.38% due Apr. 17, 2020-(Apr. 17, 2017) 4,500,000 4,348,125Canadian Imperial Bank of Commerce

10,000,000 2.22% due Mar. 7, 2018 9,673,000 10,091,825Canadian International Oil Corporation*

6,796,908 11.00% due May 2, 2016 6,699,409 6,796,908


AverageCost ($)

CarryingValue ($)


Cascades, Inc.10,000,000 5.50% due Jul. 15, 2021 10,000,000 9,734,167

CCO Holdings LLC/CCO Holdings CapitalCorporation (callable)

2,350,000 5.25% due Sep. 30, 2022-(Sep. 30, 2017) 2,331,399 2,738,649Centric Health Corp. (callable)

11,500,000 8.63% due Apr. 18, 2018-(Apr. 18, 2016) 11,470,000 9,775,000CenturyLink, Inc.

4,850,000 5.80% due Mar. 15, 2022 5,122,778 5,853,911CHC Helicopter SA (callable)

4,230,000 9.25% due Oct. 15, 2020 -(2015) 4,151,799 4,798,451Citigroup Inc.

9,000,000 4.75% due Feb. 15, 2015 10,218,796 10,465,359Cng Holdings, Inc. (callable)

1,200,000 9.38% due May 15, 2020-(2016) 1,194,303 924,336Connacher Oil & Gas Limited (callable)

3,000,000 8.75% due Aug. 1, 2018-(2015) 2,282,500 1,050,000Connacher Oil and Gas Limited (callable)

6,850,000 8.50% due Aug. 1, 2019-(2015) 6,665,288 2,921,405Cott Beverage Inc. (callable)

6,350,000 6.75% due Jan. 1, 2020-(2017) 7,240,499 7,433,634Data & Audio-Visual Enterprises Holdings Inc.*(callable)

6,507,000 9.5% due Apr. 29, 2018-(2014) 6,457,333 4,515,8583,833,737 15.0% due Sep. 25, 2018-(Jul. 22, 2013) 3,578,510 –

Data & Audio-Visual Enterprises Holdings Inc.*1,558,773 15.5% due Feb. 16, 2015 1,261,435 123,143

DISH DBS Corporation2,500,000 7.75% due May 31, 2015 2,646,852 2,966,3171,000,000 4.63% due Jul. 15, 2017 1,178,476 1,211,2685,000,000 4.25% due Apr. 1, 2018 5,013,554 5,971,9162,350,000 5.00% due Mar. 15, 2023 2,381,402 2,665,806

Dollar General Corporation1,300,000 3.25% due Apr. 15, 2023 1,287,404 1,385,246

DPL Inc. (callable)9,500,000 7.25% due Oct. 15, 2021-(Jul. 15) 10,495,991 11,422,270

El Paso Corporation900,000 7.25% due Jun. 1, 2018 919,889 1,180,549

Fairfax Financial Holdings Limited13,117,000 7.38% due Apr. 15, 2018 15,750,406 17,215,8911,500,000 6.40% due May 25, 2021 1,502,020 1,689,7412,000,000 7.75% due Jul. 15, 2037 1,943,339 2,757,166

First Quantum Minerals Ltd. (callable)4,015,000 6.75% due Feb. 15, 2020-(2017) 3,695,481 4,228,4004,015,000 7.00% due Feb. 15, 2021-(2018) 3,695,481 4,158,509

Fly Leasing Ltd. (callable)7,300,000 6.75% due Dec. 15, 2020-(2016) 8,251,049 8,598,700

Ford Credit Canada Limited5,000,000 2.63% due Nov. 21, 2016 5,044,905 5,058,7328,000,000 4.88% due Feb. 8, 2017 8,592,800 8,456,819

Frontier Communications Corporation1,600,000 8.75% due Apr. 15, 2022 1,655,293 2,107,462

Goldman Sachs Group, Inc.6,500,000 3.38% due Feb. 1, 2018 6,491,420 6,705,903

Golf Town Canada Inc. (callable)12,435,000 10.50% due Jul. 24, 2018-(2015) 12,458,750 11,331,394

Great-West Lifeco Finance (Delaware) LP6,000,000 5.69% due Jun. 21, 2017 6,567,600 6,534,042

Gulfmark Offshore Inc.2,000,000 6.38% due Mar. 15, 2017 1,971,201 1,791,041

Harvest Operations Corp.1,000,000 6.88% due Oct. 1, 2017 1,134,649 1,128,293



BO

ND

FUN

DS

17




AverageCost ($)

CarryingValue ($)


Hertz Corp, The (callable)5,706,000 6.25% due Oct. 15, 2022-(2017) 6,506,798 6,723,571

HSBC Bank of Canada5,000,000 2.94% due Jan. 14, 2020 4,895,100 5,151,708

HudBay Minerals, Inc.6,000,000 9.50% due Oct. 1, 2020 6,996,818 6,771,498

Huntington Ingalls Industries Inc. (callable)1,500,000 7.13% due Mar. 15, 2021-(2016) 1,456,597 1,884,531

IAMGOLD Corporation9,900,000 6.75% due Oct. 1, 2020 9,636,373 8,530,521

Iron Mountain Canada Operations ULC(callable)

7,000,000 6.13% due Aug. 15, 2021-(2017) 7,015,000 7,110,833Isle of Capri Casions Inc. (callable)

4,000,000 8.88% due Jun. 15, 2020-(2016) 4,062,398 4,833,469Kodiak Oil & Gas Corporation (callable)

2,040,000 5.50% due Jan. 15, 2021-(2017) 2,317,565 2,385,169Kruger Products LP

4,000,000 8.00% due Aug. 9, 2018 4,000,000 4,241,667Loblaw Companies Limited

5,000,000 3.75% due Mar. 12, 2019 5,243,650 5,281,456Lone Pine Resources Canada (callable)*

5,900,000 10.38% due Feb. 15, 2017-(2015) 5,967,216 –Magnum Hunter Resources Corporation(callable)

9,000,000 9.75% due May 15, 2020-(2016) 9,068,363 8,304,294MEG Energy Corporation (callable)

6,250,000 6.38% due Jan. 30, 2023-(Jul. 30, 2017) 6,343,117 6,554,993MGM Resorts International

1,500,000 6.63% due Dec. 15, 2021 1,727,041 1,861,431Millar Western Forest Products Ltd. (Callable)

10,625,000 8.50% due Apr. 1, 2021-(2016) 8,977,545 12,792,663Morgan Stanley

9,000,000 4.90% due Feb. 23, 2017 9,545,000 9,538,868Navistar International Corporation (callable)

2,000,000 8.25% due Nov. 1, 2021 -(2014) 2,162,940 2,309,597New Gold Inc. (callable)

4,000,000 6.25% due Nov. 15, 2022-(2017) 4,450,227 4,583,962Newalta Corp. (callable)

6,650,000 5.88% due Apr. 1, 2021-(2017) 6,658,000 6,414,479Newalta Corporation (callable)

2,500,000 7.75% due Nov. 14, 2019-(2015) 2,500,000 2,562,709NGPL Pipeco LLC

5,289,000 7.12% due Dec. 15, 2017 6,191,741 6,087,414North American Energy Partners Inc. (callable)

2,847,000 9.13% due Apr. 7, 2017-(2014) 2,809,539 2,858,862NRG Energy, Inc. (callable)

7,372,000 8.25% due Sep. 1, 2020-(2015) 7,321,298 9,118,583NRG Energy, Inc.

2,500,000 7.63% due Jan. 15, 2018 2,477,168 3,192,671NRL Energy Investments Ltd. (callable)

21,500,000 8.25% due Apr. 13, 2018-(2015) 18,918,125 18,570,625Paramount Resources Ltd. (callable)

8,000,000 8.25% due Dec. 13, 2017-(2014) 8,150,000 7,785,33313,500,000 7.63% due Dec. 4, 2019-(2015) 13,538,405 12,813,750

PBF Holding Co. LLC (callable)7,000,000 8.25% due Feb. 15, 2020-(2016) 6,874,390 8,145,004

Perpetual Energy Inc. (callable)1,220,000 8.75% due Mar. 15, 2018-(2015) 1,061,400 1,172,7252,500,000 8.75% due Jul. 23, 2019-(Jul 23, 2016) 2,500,000 2,383,333

Petrobakken Energy Ltd. (callable)6,375,000 8.63% due Feb. 1, 2020-(2016) 6,475,019 5,215,707


AverageCost ($)

CarryingValue ($)


Postmedia Network Inc. (callable)7,393,536 8.25% due Aug. 16, 2017-(2015) 7,426,469 7,684,656

Precision Drilling Corporation (callable)9,000,000 6.50% due Mar. 15, 2019-(2015) 9,173,125 8,388,397

Quadra FNX Mining Ltd. (callable)1,000,000 7.75% due Jun. 15, 2019-(2015) 972,027 1,198,213

Quebecor Media (callable)2,447,000 7.38% due Jan. 15, 2021-(2016) 2,495,940 2,612,173

Quebecor Media6,750,000 6.63% due Jan. 15, 2023 6,753,938 6,997,500

Reynolds Group Issuer LLC (callable)7,000,000 5.75% due Oct. 15, 2020-(2015) 7,636,231 8,372,868

RioCan Real Estate Investment Trust4,290,000 3.72% due Dec. 13, 2021 4,277,988 4,422,590

River Cree Enterprises (callable)1,750,000 11.00% due Jan. 20, 2021-(2018) 1,749,668 1,859,375

Royal Bank of Canada (callable)5,000,000 2.99% due Dec. 6, 2024-(2019) 4,821,650 5,114,202

Savanna Energy Services Corp. (callable)5,525,000 7.00% due May 25, 2018-(2014) 5,510,135 5,230,333

Shaw Communications Inc.8,000,000 4.35% due Jan. 31, 2024 8,426,000 8,505,858

Sherritt International Corporation5,153,211 8.00% due Nov. 15, 2017 5,295,049 5,121,003

Sherritt International Corporation (callable)10,250,000 7.88% due Oct. 11, 2022-(2018) 9,966,250 9,677,708

Sherritt International Corporation (callable)4,434,329 7.50% due Sep. 24, 2020-(2019) 4,369,946 4,232,937

Smithfield Foods, Inc. (callable)2,500,000 6.63% due Aug. 15, 2022-(2017) 2,513,998 3,039,051

Sobeys Inc.4,300,000 3.52% due Aug. 8, 2018 4,443,577 4,453,883

Southern Pacific Resource Corporation(callable)

6,000,000 8.75% due Jan. 25, 2018-(2015) 5,540,250 765,000Sprint Corporation

7,000,000 7.25% due Sep. 15, 2021 8,285,040 8,103,901Superior Plus LP (callable)

7,500,000 6.50% due Dec. 9, 2021-(2017) 7,500,000 7,378,125Taseko Mines Limited (callable)

7,700,000 7.75% due Apr. 15, 2019-(2015) 7,552,894 8,042,242Tervita Corporation (callable)

7,500,000 9.75% due Nov. 1, 2019-(2015) 7,356,675 4,982,883Transcontinental Inc.

7,000,000 3.90% due May 13, 2019 7,000,000 7,103,969Trevali Mining Corporation

2,000,000 12.50% due May 30, 2019 1,960,000 1,967,378Trilogy Energy Trust (callable)

7,000,000 7.25% due Dec. 13, 2019-(2015) 7,085,000 6,673,333United Refining Company (callable)

4,074,000 10.50% due Feb. 28, 2018-(2015) 3,958,776 4,987,896United States Steel Corporation

1,900,000 7.38% due Apr. 1, 2020 2,055,861 2,327,494Verizon Communications Inc.

6,856,000 2.50% due Sep. 15, 2016 7,856,473 8,137,572Videotron Ltd. (callable)

6,500,000 5.63% due Jun. 15, 2025-(Mar. 15, 2025) 6,500,000 6,489,167Wajax Corp. (callable)

2,250,000 6.13% due Oct. 23, 2020-(2017) 2,250,000 2,271,563Wells Fargo Financial Canada Corporation

15,250,000 3.04% due Jan. 29, 2021 15,417,598 15,694,074



BO

ND

FUN

DS

18


SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014FaceValue ($)/Number ofShares Issuer

AverageCost ($)

CarryingValue ($)


Wynn Las Vegas LLC / Corporation (callable)5,500,000 4.25% due May 30, 2023-(Feb. 28, 2023) 5,766,958 6,096,179

679,465,191 663,008,130

TOTAL BOND AND DEBENTUREINSTRUMENTS 762,825,080 747,015,074

EQUITIES – 6.2%Canadian Equities – 0.1%

520,000 Canadian International Oil CorporationWarrants May 2, 2016* – –

735,926 Lone Pine Resources Canada Ltd.* – 782,804372,000 Banro Corp. Warrants Mar. 2, 2017* – 130246,400 Trevali Mining Corporation Warrants Sep. 30,

2014* – 62,80720,700 Data & Audio-Visual Enterprises Holdings Inc.

Warrants* $12.00 Sep. 25, 2018 – –48,300 Data & Audio-Visual Enterprises Holdings lnc.*

Warrants $3.91 Sep. 25, 2018 – –

– 845,741

United States – 6.1%1,241,100 SPDR Barclays Capital High Yield Bond ETF 51,547,404 55,609,691

735,926 Lone Pine Resources Inc.* – 854

51,547,404 55,610,545

TOTAL EQUITIES 51,547,404 56,456,286


AverageCost ($)

CarryingValue ($)

MONEY MARKET INSTRUMENTS – 10.3%52,959,000 Government of Canada Treasury Bills

0.86% to 0.96% due fromJan. 5, 2015 to Mar. 12, 2015 52,874,088 52,909,416

11,600,000 Province of Quebec Treasury Bills0.08% to 1.00% due fromJan. 20, 2015 to Feb. 13, 2015 11,975,633 12,087,421

1,385,000 Province of Alberta Promissory Notes0.97% due Jan. 27, 2015 1,382,687 1,384,045

1,730,000 Province of British Columbia Promissory Notes(US) 0.09% due Mar. 25, 2015 2,014,022 2,007,247

1,675,000 Canadian Wheat Board Commercial Paper(US) 0.05% due Jan. 30, 2015 1,948,668 1,943,758

5,270,000 Farm Credit Canada Commercial Paper(US) 0.04% to 0.05% due from 5,915,812 6,115,617

15,915,000 Province of Ontario Commercial Paper(US) 0.06% to 0.99% due from Jan. 5, 2015 to

Feb. 10, 2015 17,455,218 17,547,185

93,566,128 93,994,689


Currency Forward Contracts – 0.1% 568,170OTHER ASSETS, LESS LIABILITIES – 1.3% 12,467,099

NET ASSETS – 100.0% 910,501,318

* This security is not actively traded and considered illiquid.

CURRENCY FORWARD CONTRACTS

Settlement Date Currency To Be Received Contractual Amount Currency To Be Delivered Contractual AmountCanadian Value as at

December 31, 2014 ($)

Canadian ($)Appreciation/

(Depreciation)

Feb. 19, 2015 Canadian Dollar 43,508,237 U.S. Dollar 38,400,000 44,665,705 (1,157,468)Feb. 19, 2015 U.S. Dollar 38,400,000 Canadian Dollar 43,282,752 43,183,647 1,379,426Feb. 20, 2015 Canadian Dollar 70,983,441 U.S. Dollar 62,660,000 72,885,890 (1,902,450)Feb. 20, 2015 U.S. Dollar 62,660,000 Canadian Dollar 70,631,605 70,468,061 2,248,662

568,170

The currency forward contracts outstanding at December 31, 2014 are placed with a financial institution with a credit rating of A+ by Standard & Poor’s.



BO

ND

FUN

DS

19

-For equities, all common shares unless otherwise noted.



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns and to provide income as well as capital growth by investing

primarily in high yield, lower rated Canadian corporate bonds, preferred shares and short-term money market securities. TheFund’s investments will have an average duration of 7 years and an average credit rating of single B. The Fund’s investmentsmay also include up to 30% high yield, lower rated bonds of U.S. corporations.





Revaluation of Investments at FVTPL 1,740,645 1,557,934




Comprehensive income as reported under Canadian GAAP $46,463,286

Revaluation of Investments at FVTPL 182,711

Increase (decrease) in net assets attributable to holders of redeemable units $46,645,997





Less than 1 year 131,776,149 $ 36,735,208 $ 10,471,934

1-3 years 277,024,411 216,983,308 149,020,415

3-5 years 143,361,190 200,082,011 168,267,998

5-10 years 178,190,950 123,341,784 131,839,796

> 10 years 16,662,374 12,164,720 17,902,211

Total 747,015,074 $589,307,031 $477,502,354


As at December 31, 2014, had the prevailing interest rates increased or decreased by 0.25%, assuming a parallel shift in the yield curveand all other variables held constant, net assets attributable to holders of redeemable units would have decreased or increased,respectively, by $7,794,689 or approximately 0.9% (December 31, 2013 – $5,654,147 or approximately 0.7%, January 1, 2013 – $5,136,050or approximately 0.9%). In practice, actual results may differ from this sensitivity analysis and the difference could be material.

ii) Currency risk

The tables below indicates the currency to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables also

BO

ND

FUN

DS


20




December 31, 2014

Currency

NetCurrencyExposure

($)Percentage ofNet Assets (%)




US Dollar 377,956,625 41.5 37,795,663 4.2

December 31, 2013

Currency

NetCurrencyExposure



strengthened orweaked by 10%


U.S. Dollar 356,967,783 47.0 35,696,778 4.7

January 1, 2013

Currency

NetCurrencyExposure





U.S. Dollar 268,901,972 47.0 26,890,197 4.7


Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 6.2% (December 31, 2013 – 15.0%, January 1, 2013 – 5.8%) of the Fund’s net assets attributable to holders ofredeemable units were exposed to other price risk. If prices of these investments had decreased or increased by 10%, with all othervariables held constant, net assets attributable to holders of redeemable units of the Fund would have decreased or increased,respectively, by approximately $5,645,629 (December 31, 2013 – $11,393,995, January 1, 2013 – $3,273,996). In practice, actualresults will differ from this sensitivity analysis and the difference could be material.

iv) Credit risk


Percentage ofTotal Fixed IncomeInstruments (%)


A- to AAA+ 22.7 18.6

B- to BBB+ 63.2 51.9

C- to CCC+ 10.9 8.9

Unrated 3.2 2.6

Total 100.0 82.0

BO

ND

FUN

DS


21



v) Liquidity risk



On DemandLess than3 months On Demand

Less than3 months On Demand

Less than3 months

Accounts Payable and accrued liabilities $ – $ 293,508 $ – $321,214 $ – $6,235,797

Unrealized loss currency forward contracts – 3,059,918 – – – –


$910,501,318 $3,353,426 $759,680,621 $321,214 $572,375,485 $6,235,797






Bond and Debenture Instruments 82.1 77.6 83.3

Equities 6.2 15.0 5.8

Money Market Instruments 10.3 6.0 10.5

Currency Forward Contracts 0.1 – –




Equities $ 55,609,691 $ – $ 783,658 $ 56,393,349

Warrants – 62,937 – 62,937


Bond and Debenture Instruments – 735,579,165 11,435,909 747,015,074

Currency Forward Contracts – Assets – 3,628,088 – 3,628,088

55,609,691 833,264,879 12,219,567 901,094,137

Currency Forward Contracts – Liabilities – (3,059,918) – (3,059,918)

$ 55,609,691 $830,204,961 $12,219,567 $898,034,219


Equities $113,954,780 $ – $ – $113,954,780

Warrants – 11,856 – 11,856

Bond and Debenture Instruments – 577,099,280 12,207,751 589,307,031


$113,954,780 $622,768,769 $12,207,751 $748,931,300

January 1 , 2013 Level 1 Level 2 Level 3 Total

Equities $ 32,404,098 $ 40,866 $ – $ 32,444,964

Warrants – 294,997 – $ 294,997

Bond and Debenture Instruments – 477,502,354 – $477,502,354

Money Market Instruments – 59,703,695 – $ 59,703,695

$ 32,404,098 $537,541,912 $ – $569,946,010

BO

ND

FUN

DS


22




Reconciliation of Level 3 Financial InstrumentsThe following tables presents the movement in the Fund’s Level 3 financial instruments for the periods ended at December 31, 2014,December 31, 2013 and January 1, 2013.


Beginning of period $12,207,751 $ – $ –

Purchases 199,409 9,078,143 –

Sales – – –

Transfers into Level 3 5,967,216 8,719,135 –

Transfers out of Level 3 – – –

Net realized gains (losses) – – –

Net change in unrealized appreciation (depreciation)* (6,154,809) (5,589,527) –

End of period $12,219,567 $12,207,751 $ –

* Net change in unrealized appreciation (depreciation) for Level 3 financial instruments held as at December 31, 2014, December 31, 2013 and January 1, 2013, was $(6,154,809),$(2,011,017) and nil, respectively.

Level 3 Valuation TechniquesThe significant unobservable inputs and valuation techniques used to determine the fair value measurements categorized in Level 3are indicated below:

Valuation Technique Significant Unobservable Input December 31, 2014 December 31, 2013 January 1, 2013

Bond and Debenture Instruments Fair value based on transaction price Transaction price $ – $ 6,498,538 $ –

Bond and Debenture Instruments Internal Fundamental Model Probability weighting 4,639,001 5,709,213 –

Bond and Debenture Instruments Grey Market Trade Transaction price 6,796,908 – –

Equities Comparable performance based model Peer group price performance 783,658 – –

Equities Financing Financing price – – –

Equities Grey market trade Transaction price – – –

Warrant Broker quote Broker quoted price – – –

$12,219,567 $12,207,751 $ –

The significant unobservable inputs used in the valuation techniques used to estimate the fair values of level 3 investments can varyconsiderably over time to time depending on company specific factors and economic or market conditions. A 10% increase ordecrease in the results of applying these valuation techniques, with all other variables held consistent, would have resulted in anincrease or decrease, respectively, in net assets of approximately $1,221,967 (December 31, 2013 - $1,220,775, January 1, 2013 - nil).

4. Offsetting of Financial Assets and Liabilities (note 2)The following table presents offsetting of financial assets and liabilities and collateral amounts that would occur if future events,such as bankruptcy or termination of contracts were to arise. No amounts were offset in the financial statements.

December 31, 2014

Financial assets – by typeGross amount

of assetsMaster netting

offsetCollateralpledged Net Amount

Future contracts $ – $ – $ – $ –

Currency spot contracts – – – –

Currency forward contracts 3,628,088 (3,059,918) – 568,170

Swap contracts – – – –

Total $3,628,088 $(3,059,918) $ – $568,170

BO

ND

FUN

DS


23



Financial liabilities – by typeGross amountof liabilities

Master nettingoffset

Collateralpledged Net Amount

Future contracts $ – $ – $ – $ –

Currency spot contracts – – – –

Currency forward contracts 3,059,918 (3,059,918) – –


Total $3,059,918 $(3,059,918) $ – $ –








Pinnacle Series 9.42 9.42 9.40 9.40

Series F 9.79 9.79 9.76 9.76

Series I 9.46 9.46 9.43 9.43

Series M 9.48 9.48 9.46 9.46

BO

ND

FUN

DS


24

Scotia Private American Core-Plus Bond Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $679,432,581 $420,421,455 $280,896,529Unrealized gain on currency

forward contracts 526,380 27,378 669,099Cash 65,872,456 74,796,818 41,186,145Accrued investment income 3,771,538 2,445,711 1,549,717Receivable for securities sold 12,467,836 5,351,809 2,472,460Subscriptions receivable 174,510 143,092 –

762,245,301 503,186,263 326,773,950

LIABILITIESCurrent liabilitiesPayable for securities purchased 133,885,686 86,584,357 53,341,852Redemptions payable 3,524 20,383 857Unrealized loss on currency forward

contracts 10,848 904,317 357,418

133,900,058 87,509,057 53,700,127



Pinnacle Series Units $ 39,874,459 $ 32,009,024 $ 27,783,584Series F Units $ 131,023 $ 139,095 $ 112,512Series I Units $588,339,761 $383,529,087 $245,177,727

UNITS OUTSTANDINGPinnacle Series Units 4,290,006 3,610,634 3,035,648Series F Units 13,801 15,359 12,033Series I Units 61,446,382 41,999,468 26,003,440




2014 2013


Interest for distribution purposes $ 17,016,081 $ 10,812,851Net realized gain (loss) on non-derivative financial assets 36,150,880 5,763,752Net realized gain (loss) on currency forwards (42,582,294) (18,161,401)Net gain (loss) foreign exchange (9,858,731) (4,831,468)Change in unrealized appreciation (depreciation) of non-

derivative financial assets 29,755,388 975,653Change in unrealized appreciation (depreciation) of

currency forwards 1,392,471 (1,188,620)

Net gain (loss) on investments 31,873,795 (6,629,233)Securities lending 34,884 13,196Net realized (gain) loss foreign exchange on cash 9,125,392 5,228,846Other income 192 2,082

Total income (loss) 41,034,263 (1,385,109)

EXPENSESManagement fees (note 5) 1,073 1,002Administration fees (note 6) 86,649 –Harmonized Sales Tax/Goods and Services Tax 17,618 10,920Audit fees 13,213 10,130Independent Review Committee fees 1,449 1,120Custodian fees 13,484 29,170Filing fees 11,073 16,965Legal fees 6,655 4,640Unitholder reporting costs 9,749 4,460Unitholder administration and service fees 61,365 97,934Overdraft charges 6,966 2,543Foreign withholding taxes/tax reclaims 28,309 4,695


Net expenses 255,612 181,523

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $ 40,778,651 $ (1,566,632)


Pinnacle Series Units $ 2,644,697 $ (119,742)Series F Units $ 9,649 $ (1,224)Series I Units $ 38,124,305 $ (1,445,666)


Pinnacle Series Units $ 0.67 $ (0.04)Series F Units $ 0.63 $ (0.08)Series I Units $ 0.69 $ (0.04)



Portfolio Advisor: Logan Circle Partners, L.P.


BO

ND

FUN

DS

25

Scotia Private American Core-Plus Bond Pool (Continued)


2014 2013


Pinnacle Series Units $ 32,009,024 $ 27,783,584Series F Units 139,095 112,512Series I Units 383,529,087 245,177,727

415,677,206 273,073,823


Pinnacle Series Units 2,644,697 (119,742)Series F Units 9,649 (1,224)Series I Units 38,124,305 (1,445,666)

40,778,651 (1,566,632)


Pinnacle Series Units (1,002,029) (805,443)Series F Units (2,840) (2,715)Series I Units (15,512,688) (9,693,198)

(16,517,557) (10,501,356)


Pinnacle Series Units 11,612,995 9,206,933Series F Units 2,302 34,492Series I Units 185,598,444 155,095,604

Reinvested distributionsPinnacle Series Units 997,854 804,529Series F Units 2,343 2,208Series I Units 15,512,688 9,693,198

Payments on redemptionPinnacle Series Units (6,388,082) (4,860,837)Series F Units (19,526) (6,178)Series I Units (18,912,075) (15,298,578)

188,406,943 154,671,371


Pinnacle Series Units 7,865,435 4,225,440Series F Units (8,072) 26,583Series I Units 204,810,674 138,351,360

212,668,037 142,603,383



$628,345,243 $415,677,206


2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in net assets attributable to

holders of redeemable units $ 40,778,651 $ (1,566,632)Adjustments For:


Net unrealized (gain) loss foreign exchange oncash (8,663,024) (4,689,875)

Change in unrealized (appreciation) depreciationon sale of non-derivative financial assets (29,755,388) (975,653)

Change in unrealized (appreciation) depreciation offorward currency contracts (1,392,471) 1,188,620

Purchases of non-derivative financial assets (3,415,540,421) (2,028,269,089)Proceeds from sale of non-derivative financial

assets 3,262,620,865 1,925,846,724Accrued investment income (1,325,827) (895,994)



Net cash provided by (used in) financing activities 171,841,109 144,046,449Net unrealized (gain) loss foreign exchange on cash 8,663,024 4,689,875Net increase (decrease) in cash (17,587,386) 28,920,798Cash (Bank Indebtedness) at beginning of period 74,796,818 41,186,145

CASH (BANK INDEBTEDNESS) AT END OF PERIOD $ 65,872,456 $ 74,796,818

Interest received(1) 15,690,254 9,916,857




BO

ND

FUN

DS

26




AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS – 108.1%Australian Dollar – 0.2%

Morgan Stanley1,590,000 4.75% due Nov. 16, 2018 1,621,407 1,562,912

British Pound – 0.8%KFW

1,800,000 2.00% due Dec. 6, 2018 3,332,383 3,357,631United Mexican States

1,090,000 5.63% due Mar. 19, 2114 1,969,436 1,978,247

5,301,819 5,335,878

European Euro – 0.7%America Movil Sab De CV

1,400,000 3.26% due Jul. 22, 2023 1,905,514 2,292,096Bundesrepublik Deutschland

900,000 4.75% due Jul. 4, 2028 1,821,437 1,896,664Republic of Korea

75,000 4.25% due Dec. 7, 2021 113,400 127,513Vale S.A.

125,000 4.38% due Mar. 24, 2018 172,710 189,595

4,013,061 4,505,868

India Rupee – 0.6%European Bank Reconstruction &Development

70,000,000 5.00% due May 28, 2015 1,229,106 1,283,673International Finance Corporation

120,000,000 7.80% due Jun. 3, 2019 2,175,277 2,444,161

3,404,383 3,727,834

Indonesian Rupiah – 0.1%Government of Indonesia

7,200,000,000 7.00% due May 15, 2022 833,063 644,011

Malaysian Ringgit – 0.2%Government of Malaysia

4,000,000 3.65% due Oct. 31, 2019 1,363,634 1,316,260

Mexican Peso – 1.1%America Movil SAB de C.V.

22,000,000 6.00% due Jun. 9, 2019 1,856,920 1,719,905Mex Bonos Desarr

30,180,000 6.50% due Jun. 9, 2022 2,659,848 2,495,02530,500,000 7.75% due May 29, 2031 2,844,336 2,734,043

7,361,104 6,948,973

New Zealand Dollar – 1.5%Citigroup Inc.

1,350,000 6.25% due Jun. 29, 2017 1,094,145 1,253,804Goldman Sachs Group, Inc., The

3,310,000 5.20% due Dec. 17, 2019 2,967,086 3,015,841JPMorgan Chase & Co

2,300,000 4.25% due Nov. 2, 2018 1,991,202 2,025,549KFW

2,500,000 3.75% due Jun. 14, 2018 2,311,335 2,225,014

8,363,768 8,520,208

Swedish Krona – 0.2%Swedish Government

8,350,000 3.50% due Jun. 1, 2022 1,486,041 1,503,392

Thai Baht – 0.2%Government of Thailand

41,400,000 3.88% due Jun. 13, 2019 1,473,778 1,550,488


AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)United States Dollar – 102.5%

Access Group Inc. (Floating Rate)1,302,404 0.68% due Aug. 25, 2037 1,336,477 1,376,969

312,723 0.45% due Apr. 27, 2026 318,665 362,253Access Group, Inc., Series 2008-1

2,773,357 1.22% due Jul. 1, 2038 3,072,617 3,160,453Access Group, Inc., Series 2008-1(Floating Rate)

2,527,492 1.22% due Jul. 1, 2038 2,800,221 2,896,789Adjustable Rate Mortgage Trust (callable)

35,878 5.03% due Jan. 25, 2036 36,697 39,991Advanced Micro Devices Inc.

1,670,000 7.50% due Aug. 15, 2022 1,876,722 1,756,766African Development Bank

1,000,000 0.75% due Oct. 18, 2016 1,036,154 1,155,789Albemarle Corporation (callable)

1,180,000 4.15% due Dec. 1, 2024-(Sep. 1, 2024) 1,328,428 1,404,1691,000,000 5.45% due Dec. 1, 2044-(Jun. 1, 2044) 1,144,526 1,252,031

Ally Auto Receivables Trust1,465,057 0.70% due Dec. 21, 2015 1,628,385 1,701,783

555,000 1.21% due Jul. 15, 2016 643,386 645,3794,820,786 0.59% due Jan. 17, 2017 5,259,546 5,598,9761,734,872 0.63% due May 15, 2017 1,943,327 2,015,964

Ally Auto Receivables Trust 2011-1221,216 2.23% due Mar. 15, 2016 245,592 257,224

Ally Auto Receivables Trust 2012-32,735,824 0.85% due Aug. 15, 2016 3,019,149 3,178,175

Ally Master Owner Trust2,570,000 1.44% due Feb. 15, 2017 2,673,736 2,987,3203,670,000 1.21% due Jun. 15, 2017 3,965,750 4,273,4692,370,000 1.00% due Feb. 15, 2018 2,662,275 2,757,674

Altria Group, Inc.130,000 9.95% due Nov. 10, 2038 231,336 262,508807,000 10.20% due Feb. 6, 2039 1,397,768 1,642,681

Amazon.com Inc.570,000 1.20% due Nov. 29, 2017 563,623 661,258

Amazon.com Inc. (callable)1,505,000 3.80% due Dec. 5, 2024-(Sep. 5, 2024) 1,709,943 1,791,626

American Airlines 2014-1 Class B PassThrough Trust

885,000 4.38% due Oct. 1, 2022 1,005,247 1,054,354American Express Company (callable)

925,000 3.63% due Dec. 5, 2024-(Nov. 4, 2024) 1,049,791 1,085,305AmeriCredit Automobile Receivables Trust

1,187,047 0.68% due Oct. 11, 2016 1,303,096 1,378,580137,754 0.53% due Nov. 8, 2016 149,584 159,963

1,728,963 0.62% due Jun. 8, 2017 1,899,328 2,007,8735,123,382 0.67% due Jun. 8, 2017 5,634,602 5,950,626

885,112 0.57% due Jul. 10, 2017 995,155 1,027,840615,000 1.59% due Jul. 10, 2017 680,434 716,091

6,445,000 0.44% due Oct. 10, 2017 7,033,416 7,481,5482,218,663 0.61% due Oct. 10, 2017 2,444,545 2,574,458

570,000 1.07% due Mar. 8, 2018 648,052 661,687Ameriprise Financial Inc. (callable)

320,000 7.52% due Jun. 1, 2066-(2016) 315,340 397,818Anheuser-Busch InBev NV

1,557,000 5.38% due Jan. 15, 2020 1,997,400 2,048,303Anheuser-Busch InBev Worldwide Inc.

475,000 8.20% due Jan. 15, 2039 780,628 864,095Apple Inc.

650,000 2.85% due May 6, 2021 711,872 773,739



BO

ND

FUN

DS

27




AverageCost ($)

CarryingValue ($)

BOND AND DEBENTURE INSTRUMENTS (cont’d)United States Dollar (cont’d)

ArcelorMittal1,265,000 7.25% due Mar. 1, 2041 1,421,645 1,476,638

Avago Technologies Ltd.1,343,250 3.75% due May 6, 2021 1,450,145 1,556,569

Baidu, Inc.1,523,000 3.25% due Aug. 6, 2018 1,658,584 1,808,414

Banc of America Commercial Mortgage Inc.134,157 2.62% due Nov. 25, 2033 131,150 154,331

1,494,927 6.24% due Feb. 10, 2051 1,747,728 1,922,240Banc of America Commercial MortgageTrust

1,258,000 5.18% due Oct. 10, 2045 1,422,759 1,499,512234,697 5.32% due Sep. 10, 2047 244,685 273,309

1,545,000 5.62% due Apr. 10, 2049 1,878,767 1,942,573Banc of America Mortgage Securities(callable)

59,506 2.73% due Oct. 25, 2034-(May 25, 2016) 55,494 66,172242,894 2.69% due Aug. 25, 2035-(Sep. 25, 2021) 206,465 255,18483,405 6.00% due Sep. 25, 2037-(Jan. 25, 2018) 74,428 88,834

Banc of America Mortgage Securities Inc.41,431 2.62% due Dec. 25, 2034 43,445 46,097

Banc of America Mortgage Trust 2005-31,552,215 5.50% due Apr. 25, 2035 1,786,981 1,866,106

Bancolombia S.A.700,000 6.13% due Jul. 26, 2020 825,991 855,812

Bank of America Alternative Loan Trust(callable)

105,083 6.00% due Jun. 25, 2035-(Mar. 25, 2023) 96,227 118,119Bank of America Auto Trust

1,017,857 0.78% due Jun. 15, 2016 1,058,259 1,182,478Bank of America Corporation

985,000 4.75% due Aug. 1, 2015 996,407 1,169,0491,760,000 4.20% due Aug. 26, 2024 1,931,314 2,110,7231,250,000 4.25% due Oct. 22, 2026 1,402,652 1,452,037

Barclays Bank PLC1,115,000 2.75% due Nov. 8, 2019 1,262,241 1,293,876

BBVA US Senior SAU1,675,000 4.66% due Oct. 9, 2015 1,795,310 1,995,081

Bear Stearns Adjustable Rate MortgageTrust (callable)

655,002 2.96% due Jul. 25, 2034-(Feb. 25, 2016) 659,081 762,953Bear Stearns Asset Backed Securities(Floating Rate)

199,559 0.49% due Dec. 25, 2035 191,797 231,273Bear Stearns Commercial MortgageSecurities Trust

217,958 5.12% due Feb. 11, 2041 238,404 254,186Bear Stearns Companies LLC

1,350,000 5.55% due Jan. 22, 2017 1,581,837 1,693,077BellSouth

945,000 7.88% due Feb. 15, 2030 1,353,474 1,468,194Boston Scientific Corporation

1,875,000 6.00% due Jan. 15, 2020 2,403,669 2,459,118BP Capital Markets PLC

855,000 3.25% due May 6, 2022 895,226 980,179Braskem Finance Ltd.

1,335,000 6.45% due Feb. 3, 2024 1,472,286 1,568,358Brazilian Government International Bond

700,000 5.00% due Jan. 27, 2045 738,848 789,931Capital Auto Receivables Asset Trust

1,405,000 1.29% due Apr. 20, 2018 1,425,349 1,631,406


AverageCost ($)

CarryingValue ($)


CareFusion Corporation805,000 6.38% due Aug. 1, 2019 1,033,307 1,080,701

Carmax Auto Owner Trust776,370 0.60% due Oct. 16, 2017 882,131 900,922

Carolina Power & Light Co. (callable)1,155,000 4.10% due Mar. 15, 2043-(Sep. 15, 2042) 1,190,721 1,410,998

CD 2005-CD1 Commercial Mortgage Trust170,000 5.23% due Jul. 15, 2044 198,932 202,653445,000 5.23% due Jul. 15, 2044 513,837 528,175

CD 2007-CD4 Commercial Mortgage Trust1,335,000 5.37% due Dec. 11, 2049 1,559,921 1,614,472

Chesapeake Energy Corporation1,380,000 6.63% due Aug. 15, 2020 1,703,881 1,719,058

Chesapeake Energy Corporation (callable)(Floating Rate)

1,040,000 3.48% due Apr. 15, 2019-(2015) 1,136,463 1,181,783Chevron Corporation (callable)

1,350,000 3.19% due Jun. 24, 2023-(Mar. 24, 2023) 1,422,198 1,604,122Chrysler Group LLC

1,246,778 3.50% due May 24, 2017 1,346,835 1,441,977Citicorp Mortgage Securities, Inc. (callable)

247,338 5.75% due Jun. 25, 2036-(Jul. 25, 2016) 214,063 291,854Citigroup Commercial Mortgage Trust

640,000 4.96% due May 15, 2043 731,190 748,801CNOOC Finance 2013 Ltd.

920,000 3.00% due May 9, 2023 849,880 1,010,436Comcast Corporation

580,000 6.50% due Jan. 15, 2015 639,664 674,3671,325,000 6.95% due Aug. 15, 2037 2,016,958 2,166,806

COMM Mortgage Trust215,000 5.21% due Jun. 10, 2044 246,908 254,786

1,240,000 3.84% due Sep. 10, 2047 1,400,849 1,520,184405,000 3.94% due Nov. 10, 2047 468,843 488,103

Commercial Mortgage Asset Trust4,180 6.89% due Jan. 17, 2032 4,467 4,850

Commonwealth Edison Company700,000 5.80% due Mar. 15, 2018 810,486 916,426100,000 6.45% due Jan. 15, 2038 122,518 160,554

ConAgra Foods, Inc.265,000 4.95% due Aug. 15, 2020 323,014 340,115570,000 8.25% due Sep. 15, 2030 848,780 954,543

Corporacion Andina de Fomento549,000 4.38% due Jun. 15, 2022 537,018 687,206

Countrywide Alternative Loan Trust18,376 5.50% due Mar. 25, 2036 24,239 17,703

Countrywide Asset-Backed Certificates99,286 5.53% due Mar. 25, 2029 88,664 111,993

Countrywide Home Loans (callable)36,511 2.46% due Sep. 20, 2034-(Apr. 20, 2017) 35,415 25,91933,636 6.00% due Mar. 25, 2036-(Jan. 25, 2024) 35,722 37,209

Credit Suisse First Boston MortgageSecurities Corp.

290,000 5.28% due Aug. 15, 2038 315,653 337,749795,000 5.23% due Dec. 15, 2040 891,974 915,122940,000 5.23% due Dec. 15, 2040 1,068,413 1,107,677

Credit Suisse Mortgage Trust460,000 5.54% due Jan. 15, 2049 536,393 572,750

CVS Caremark Corporation540,000 3.25% due May 18, 2015 561,001 633,220

Deutsche Bank AG (callable)1,140,000 7.50% due Dec. 29, 2049-(Apr. 30, 2025) 1,288,560 1,295,363



BO

ND

FUN

DS

28




AverageCost ($)

CarryingValue ($)


DIRECTV Holdings LLC (callable)1,825,000 4.45% due Apr. 1, 2024-(Jan. 1, 2024) 2,095,548 2,231,342

Discover Card Execution Note Trust3,150,000 0.81% due Aug. 15, 2017 3,410,836 3,659,338

Discover Financial Services (callable)1,070,000 3.95% due Nov. 6, 2024-(Aug. 6, 2024) 1,214,678 1,251,885

Dish DBS Corp1,425,000 6.75% due Jun. 1, 2021 1,735,664 1,789,262

Energy Transfer Partners (callable)1,070,000 6.05% due Jun. 1, 2041-(Dec. 1, 2040) 1,220,635 1,361,366

Enterprise Products Operating LLC (callable)535,000 3.75% due Feb. 15, 2025-(Nov. 15, 2024) 594,835 623,865805,000 7.03% due Jan. 15, 2068-(2018) 885,038 1,015,195

Enterprise Products Operating LLC1,775,000 5.25% due Jan. 31, 2020 2,066,941 2,284,450

Export-Import Bank of Korea, The400,000 4.13% due Sep. 9, 2015 412,102 474,764400,000 5.00% due Apr. 11, 2022 403,409 527,601

Express Scripts Holding Company1,400,000 4.13% due Sep. 15, 2020 1,620,131 1,719,236

Fannie Mae64,213 5.50% due Sep. 25, 2017 67,287 78,158

1,466,299 2.73% due Apr. 1, 2022 1,529,645 1,737,678413,307 5.26% due Jun. 1, 2023 516,729 538,39137,537 4.50% due Aug. 25, 2023 34,974 46,481

361,534 3.65% due Sep. 1, 2023 405,178 455,567629,727 3.80% due Sep. 1, 2023 686,621 770,974

1,010,000 3.02% due Aug. 25, 2024 1,149,822 1,201,343754,980 4.50% due Sep. 25, 2024 886,968 934,220101,813 5.00% due Oct. 25, 2024 107,149 127,527248,131 3.24% due Jun. 1, 2026 269,503 301,333

7,495 7.50% due Nov. 25, 2026 10,865 9,943361,074 4.50% due Jun. 25, 2029 416,685 451,526

1,036,140 4.00% due Nov. 25, 2029 1,071,886 1,280,1101,464 7.50% due Jun. 1, 2031 2,347 1,952

1,803,940 3.50% due Jan. 1, 2032 1,976,050 2,210,9812,096 7.50% due Apr. 1, 2032 3,044 2,7933,262 5.00% due Nov. 1, 2033 4,232 4,1761,749 5.00% due Nov. 1, 2034 2,074 2,1431,992 5.00% due Nov. 1, 2034 2,377 2,431

201,640 5.50% due Sep. 25, 2035 241,374 251,6856,166 5.00% due Jan. 1, 2036 6,842 7,669

597,149 5.50% due Aug. 1, 2037 731,859 778,5771,098,533 5.50% due Feb. 1, 2038 1,383,910 1,433,490

468,889 2.50% due May 25, 2041 478,851 550,6651,056,260 4.00% due Nov. 1, 2041 1,171,469 1,312,6061,405,000 2.00% due Dec. 25, 2042 1,357,140 1,524,6228,930,000 2.50% due 2.5% due Dec. 25, 2028 10,502,951 10,557,546

15,140,000 3.0% due Dec. 25, 2043 17,400,111 17,782,6812,665,000 3.50% due Dec. 1, 2099 3,254,764 3,267,172

17,875,000 4.00% due Dec. 1, 2099 21,857,650 22,139,22817,469,000 4.50% due Dec. 1, 2099 21,747,170 22,005,4014,605,000 5.00% due Dec. 1, 2099 5,818,727 5,904,3824,255,000 5.50% due Dec. 1, 2099 5,443,445 5,523,519

Fannie Mae Grantor Trust225,126 6.99% due Feb. 19, 2030 255,241 295,858151,168 7.50% due Jun. 19, 2030 171,640 205,04220,580 5.41% due Sep. 26, 2033 23,560 26,242

226,819 7.50% due Jul. 25, 2041 275,647 312,8909,253 9.50% due Jul. 25, 2041-(Aug. 25, 2015) 14,316 13,443

320,556 7.50% due Dec. 25, 2041 351,423 430,575


AverageCost ($)

CarryingValue ($)


3,489 7.50% due Dec. 25, 2041-( Sep. 25, 2018) 5,030 4,864Fannie Mae Whole Loan (callable)

204,243 7.00% due Feb. 25, 2044-(Jul. 25, 2018) 232,690 279,934113,111 6.50% due Feb. 25, 2044-(Dec. 25, 2020) 142,635 153,18741,316 6.50% due May 25, 2044-(Oct. 25, 2022) 49,883 55,942

Fannie Mae Whole Loan811,758 7.00% due Jul. 25, 2044 974,927 1,119,083746,645 6.00% due Feb. 25, 2047 958,435 984,824

Federal Home Loan Bank11,305,289 4.00% due Aug. 1, 2044 13,362,715 14,077,131

Federal Home Loan Mortgage Corporation8,225 5.00% due Jun. 1, 2018 8,262 10,0856,386 5.00% due Sep. 1, 2033 8,699 8,006

1,318,248 2.50% due May 15, 2041 1,369,017 1,530,887782,727 3.00% due Jan. 15, 2042 827,954 927,178642,231 3.00% due Jul. 1, 2042 666,823 754,871

Federal National Mortgage Association25,730,000 3.50% due Dec. 1, 2099 30,534,255 31,133,2762,615,000 6.00% due Dec. 1, 2099 3,390,933 3,440,590

FHLMC Structured Pass Through Securities(callable)

16,700 6.50% due Sep. 25, 2043-(Aug. 25, 2020) 24,044 22,287FHLMC Structured Pass Through Securities

481,294 5.23% due May 25, 2043-(Nov. 25, 2020) 547,923 623,544Fifth Third Bancorp

1,200,000 2.88% due Oct. 1, 2021 1,304,907 1,401,926First Data Corporation

1,500,000 3.66% due Mar. 24, 2018 1,609,286 1,709,742First Horizon Mortgage Pass-Through Trust(callable)

408,515 2.63% due Dec. 25, 2034-(Oct. 25, 2017) 396,551 470,535Ford Credit Auto Lease Trust

2,861,240 0.60% due Mar. 15, 2016 3,283,997 3,323,476Ford Credit Auto Owner Trust

1,756,809 0.48% due Nov. 15, 2016 1,985,803 2,040,475793,072 1.35% due Dec. 15, 2016 869,952 922,983505,000 0.46% due Jul. 15, 2017 587,841 586,493967,591 0.55% due Jul. 15, 2017 1,087,761 1,124,317

Ford Credit Auto Owner Trust 2009-D727,791 0.84% due Aug. 15, 2016 799,057 845,510

Freddie Mac (callable)7,596 7.00% due May 15, 2024-(Feb. 15, 2014) 9,933 9,921

Freddie Mac7,720 1.50% due Mar. 15, 2015 7,875 8,967

980,000 2.00% due Aug. 25, 2016 935,887 1,163,137165,000 4.00% due Aug. 15, 2024 169,225 208,586107,401 5.00% due May 15, 2026 109,852 134,912220,000 4.50% due Nov. 15, 2029 229,963 287,481

2,545,000 4.50% due Apr. 15, 2030 3,009,601 3,170,012329,833 5.00% due May 15, 2033 347,565 405,973101,093 5.00% due Jun. 15, 2033 109,903 127,874381,000 4.50% due Dec. 15, 2033 404,720 479,109354,583 4.00% due Nov. 15, 2036 386,615 432,943398,770 3.00% due May 15, 2041 420,649 473,600577,714 2.00% due Dec. 15, 2041 586,754 659,993

Freeport-McMoRan Copper & Gold Inc.(callable)

800,000 4.55% due Nov. 14, 2024-(Aug. 14, 2024) 909,178 908,3861,335,000 5.40% due Nov. 14, 2034-(May 14, 2034) 1,511,283 1,517,681

GCCFC Commercial Mortgage Trust512,082 5.44% due Mar. 10, 2017 595,753 634,585



BO

ND

FUN

DS

29




AverageCost ($)

CarryingValue ($)


GE Commercial Mortgage Corporation830,000 5.04% due Jul. 10, 2045 917,270 984,451

Genentech, Inc.20,000 4.75% due Jul. 15, 2015 23,495 23,703

General Electric Capital Corporation515,000 5.25% due Dec. 6, 2017 583,441 662,203

General Electric Company695,000 4.50% due Mar. 11, 2044 764,188 897,919

General Mills, Inc.1,340,000 1.40% due Oct. 20, 2017 1,514,262 1,549,959

General Motors Financial Company, Inc.1,110,000 5.00% due Apr. 1, 2035 1,293,718 1,346,086

Georgia-Pacific LLC1,060,000 8.88% due May 15, 2031 1,592,632 1,930,413

Gilead Sciences, Inc.640,000 3.50% due Feb. 1, 2025 723,162 767,632705,000 4.50% due Feb. 1, 2045 795,011 880,019

Gilead Sciences, Inc. (callable)740,000 4.80% due Apr. 1, 2044-(Oct. 1, 2043) 839,780 963,481

Ginnie Mae II Pool747,459 4.00% due Apr. 20, 2040 828,641 909,565

1,937,326 4.56% due Nov. 1, 2062 2,130,148 2,459,285GlaxoSmithKline Capital Inc.

795,000 6.38% due May 15, 2038 1,111,389 1,232,674GMAC Mortgage Corporation Loan Trust(callable)

327,640 4.57% due May 25, 2035-(Nov. 25, 2021) 323,291 375,102Goldman Sachs Group, Inc., The

1,075,000 2.55% due Oct. 23, 2019 1,210,380 1,252,9861,075,000 6.35% due Feb. 15, 2034 1,463,697 1,477,7791,695,000 6.75% due Oct. 1, 2037 2,157,574 2,462,8051,060,000 4.80% due Jul. 8, 2044 1,124,449 1,310,733

Government National Mortgage Association1,792 7.50% due Feb. 15, 2032 2,613 2,433

25,431 7.00% due Dec. 15, 2034 31,108 33,90878,031 4.50% due Jun. 16, 2039 84,133 95,843

196,613 4.00% due Jan. 20, 2040 214,261 235,614181,721 3.50% due Feb. 20, 2040 199,016 211,790

2,723,565 3.50% due Feb. 20, 2040 2,991,955 3,198,232325,000 3.39% due Mar. 16, 2045 339,086 387,946600,000 3.86% due Oct. 16, 2047 580,855 729,097

1,730,000 4.37% due Sep. 16, 2051 1,904,398 2,158,0032,588,758 5.47% due Nov. 20, 2059 2,900,258 3,174,9232,559,243 5.39% due Dec. 20, 2059 2,883,475 3,142,010

337,114 5.07% due Apr. 20, 2062 393,342 423,944210,243 4.85% due May 20, 2062 244,354 264,307153,140 4.73% due Apr. 20, 2063 175,076 193,492606,092 4.68% due Aug. 20, 2064 741,862 757,709369,162 4.79% due Sep. 20, 2064 451,792 462,303176,652 4.65% due Dec. 1, 2099 195,204 226,94379,881 4.66% due Dec. 1, 2099 88,360 102,495

Government National MortgageAssociation II

253,968 3.50% due Jun. 20, 2040 265,589 317,6313,009,305 4.81% due Feb. 20, 2061 3,518,423 3,762,020

Great Plains Energy Inc. (callable)2,000,000 5.29% due Jun. 15, 2022-(Mar. 15, 2022) 2,362,965 2,647,650

GS Mortgage Securities Corp. IISeries 2005-GG4

825,000 4.78% due Jul. 10, 2039 929,572 963,078


AverageCost ($)

CarryingValue ($)


GS Mortgage Securities Trust 2014-GC26565,000 4.51% due Nov. 10, 2047 647,306 674,430

Hewlett-Packard Company870,000 3.75% due Dec. 1, 2020 1,006,076 1,043,919

Hologic Inc.970,321 3.25% due Aug. 1, 2019 1,043,179 1,119,016

Homestar Mortgage Acceptance Corporation(callable)

513,740 0.62% due Oct. 25, 2034-(Jun. 25, 2016) 487,896 581,188Honda Auto Receivables Trust

2,914 0.37% due Oct. 16, 2015 3,279 3,3841,380,000 0.97% due Apr. 16, 2018 1,557,728 1,603,700

Hospira, Inc.2,145,000 5.20% due Aug. 12, 2020 2,575,716 2,687,038

HSBC Holdings PLC (callable)880,000 6.38% due Dec. 29, 2049-(Sep. 17, 2024) 992,150 1,040,916

HSBC USA Inc.380,000 2.38% due Feb. 13, 2015 378,314 441,697

1,600,000 5.00% due Sep. 27, 2020 1,937,634 2,041,592Humana Inc. (callable)

950,000 4.95% due Oct. 1, 2044-(Apr. 1, 2044) 1,037,454 1,155,021Hyundai Auto Receivables Trust

4,526,985 0.56% due Jul. 17, 2017 5,084,505 5,258,595Hyundai Auto Receivables Trust 2011-B

45,277 1.65% due Feb. 15, 2017 50,755 52,643IndyMac INDX Mortgage Loan Trust(callable)

46,798 4.80% due Dec. 25, 2035-(Jun. 25, 2025) 55,417 44,247Intesa Sanpaolo

3,655,000 2.38% due Jan. 13, 2017 3,999,056 4,278,433JP Morgan & Co

1,265,000 5.46% due Mar. 15, 2017 1,497,166 1,533,458Jp Morgan Chase Comm Mort4.911% 071542

470,000 4.91% due Jul. 15, 2042 529,402 558,439JPMorgan Chase & Co.

1,105,000 3.88% due Sep. 10, 2024 1,196,863 1,291,524JPMorgan Chase Commercial Mortgage

545,000 4.99% due Sep. 12, 2037 604,811 643,058JPMorgan Chase Commercial MortgageSecurities Corp.

331,457 6.80% due Apr. 15, 2035 370,999 387,000232 4.70% due Jul. 15, 2042 231 271

935,000 5.79% due Jun. 15, 2049 1,067,702 1,134,95671,010 5.19% due Jan. 12, 2037 71,006 82,315

390,000 5.20% due Jul. 15, 2041 409,833 451,503410,073 5.81% due May 12, 2016 453,086 500,863495,000 5.88% due Feb. 12, 2051 613,756 634,091

JPMorgan Mortgage Trust (callable)96,667 2.54% due Sep. 25, 2035-(Jun. 25, 2018) 107,034 108,18014,699 5.24% due Jul. 25, 2035-(Sep. 25, 2020) 14,763 17,082

JPMorgan Mortgage Trust490,185 2.47% due May 25, 2034 521,064 590,953749,973 2.23% due Jul. 25, 2035 840,442 870,286150,830 2.54% due Oct. 25, 2036 131,370 153,184

Kimberly-Clark Corporation75,000 7.50% due Nov. 1, 2018 90,835 105,366

Kinder Morgan, Inc. (callable)1,255,000 4.30% due Jun. 1, 2025-(Mar. 1, 2025) 1,411,390 1,466,152

La Paz County Industrial DevelopmentAuthority

765,000 7.00% due Mar. 1, 2034 796,179 886,715



BO

ND

FUN

DS

30




AverageCost ($)

CarryingValue ($)


LB-UBS Commercial Mortgage Trust1,639,500 4.79% due Jul. 15, 2040 1,841,061 1,936,939

515,000 4.90% due Jul. 15, 2040 590,379 599,281Lehman Brothers Holdings Inc.

40,000 6.88% due May 02, 2018 40,417 4,745Life Technologies Corporation

2,490,000 6.00% due Mar. 1, 2020 3,134,576 3,300,586Lloyds Banking Group plc

1,665,000 7.50% due Jun. 27, 2024 1,925,385 1,971,084Lorillard Tobacco Company

1,412,000 6.88% due May 1, 2020 1,808,577 1,938,391MacDermic Inc.

1,989,899 4.00% due Jun. 7, 2020 2,145,854 2,268,143Master Adjustable Rate Mortgages Trust(callable)

12,562 2.45% due Dec. 25, 2033-(Jun. 25, 2014) 11,287 13,959MASTR Adjustable Rate Mortgage Trust

635,052 2.63% due Feb. 25, 2036 664,802 719,583Medtronic, Inc. (callable)

1,230,000 2.75% due Apr. 1, 2023-(Jan. 1, 2023) 1,325,032 1,404,822Merrill Lynch Mortgage Investors Trust

86,725 2.52% due Dec. 25, 2034 76,063 99,847Merrill Lynch Mortgage Investors Trust,Series 2005

920,457 0.38% due Feb. 25, 2036 944,051 1,003,532Merrill Lynch Mortgage Trust

2,729,400 5.11% due Jul. 12, 2038 3,027,228 3,225,329202,864 5.69% due Feb. 12, 2051 210,805 257,504

Merrill Lynch Mortgage Trust 20061,000,000 5.78% due Aug. 12, 2043 1,162,622 1,235,186

MetLife, Inc. (callable)1,800,000 10.75% due Aug. 1, 2039-(2034) 2,849,641 3,412,282

Morgan Stanley440,000 0.71% due Oct. 15, 2015 393,561 507,603

1,185,000 3.70% due Oct. 23, 2024 1,334,647 1,410,1461,445,000 4.35% due Sep. 8, 2026 1,590,954 1,698,760

Morgan Stanley Bank of America MerrillLynch Trust 2014-C199

1,135,000 3.10% due Dec. 15, 2047 1,337,291 1,359,451Morgan Stanley Capital I

1,850,000 5.37% due Dec. 15, 2016 2,229,546 2,269,830Morgan Stanley Capital I Trust

367,314 5.65% due Jun. 11, 2042 434,467 463,791705,000 5.20% due Aug. 13, 2042 790,614 832,107555,000 5.49% due Mar. 12, 2044 617,197 665,108

1,230,766 5.59% due Apr. 12, 2049 1,370,123 1,438,962299,291 5.67% due Apr. 15, 2049 369,422 374,129

Morgan Stanley Dean Witter Capital19,243 6.79% due Jul. 15, 2033 18,941 22,424

Mortgage Linked Amort Note2.06% 011522

1,055,588 2.06% due Jan. 15, 2022 1,185,885 1,246,549Municipal Electric Authority of Georgia

660,000 6.64% due Apr. 1, 2057 716,611 1,016,1721,500,000 7.06% due Apr. 1, 2057 1,698,121 2,054,079

NCUA Guaranteed Notes1,099,115 1.84% due Oct. 7, 2020 1,137,977 1,283,323

Next Generation Network202,896 2.40% due Dec. 8, 2020 201,492 237,356

Nissan Auto Lease Trust6,740,000 0.74% due Sep. 17, 2018 7,545,327 7,830,898


AverageCost ($)

CarryingValue ($)


Nissan Auto Receivables 2011-A OwnerTrust

1,780,260 1.94% due Sep. 15, 2017 2,019,922 2,074,612Nissan Auto Receivables 2011-B OwnerTrust

116,865 0.95% due Feb. 16, 2016 129,124 135,821Nokia Corporation

1,910,000 6.63% due May 15, 2039 2,101,088 2,467,118Nomura Asset Acceptance Corporation

9,610 4.79% due Mar. 25, 2035 12,058 11,167Nomura Holdings, Inc.

1,970,000 2.00% due Sep. 13, 2016 2,101,020 2,308,366Numericable U.S. LLC

804,231 4.50% due Apr. 23, 2020 870,394 931,641695,769 4.50% due Apr. 23, 2020 753,009 805,997

NVR Inc. (callable)1,290,000 3.95% due Sep. 15, 2022-(Jun. 15, 2022) 1,341,232 1,565,815

O’Reilly Automotive, Inc.560,000 3.80% due Sep. 1, 2022 638,050 668,673

Oracle Corporation1,170,000 2.25% due Oct. 8, 2019 1,247,345 1,366,968

PacifiCorp (callable)1,520,000 2.95% due Feb. 1, 2022-(Nov. 1, 2021) 1,657,915 1,790,943

Perrigo Company PLC (callable)395,000 3.90% due Dec. 15, 2024-(Sep. 15, 2024) 444,138 463,663

Petroleos Mexicanos1,000,000 8.63% due Feb. 1, 2022 1,344,780 1,424,6781,285,000 6.38% due Jan. 23, 2045 1,701,107 1,707,671

Pfizer Inc.1,980,000 6.20% due Mar. 15, 2019 2,547,492 2,680,066

PNC Bank, N.A.1,160,000 3.30% due Oct. 30, 2024 1,302,765 1,375,240

Regency Centers LP95,000 5.88% due Jun. 15, 2017 98,153 121,350

Renaissance Home Equity Loan Trust155,177 5.61% due May 25, 2036 142,628 146,101167,049 5.68% due Jun. 25, 2037 112,647 109,139

Republic Of Chile3,320,000 3.13% due Mar. 27, 2025 3,752,709 3,829,379

Republic of Hungary1,200,000 5.38% due Mar. 25, 2024 1,319,098 1,512,707

Residential Asset Mortgage Products, Inc.(callable)

243 7.00% due Nov. 25, 2031 344 285Rio Tinto Finance USA PLC

815,000 1.38% due Jun. 17, 2016 826,472 950,255Rockwood Specialties Group Inc. (callable)

1,510,000 4.63% due Oct. 15, 2020-(2015) 1,678,468 1,808,916Royal Bank of Scotland

1,480,000 5.13% due May 28, 2024 1,603,824 1,745,857RSB Bondco LLC

34,288 5.72% due Apr. 1, 2018 37,147 40,842Santander Drive Auto Receivables Trust

30,503 2.09% due Aug. 15, 2016 33,991 35,4342,444,891 1.83% due Mar. 15, 2017 2,812,700 2,841,5611,137,083 0.62% due Jun. 15, 2017 1,243,910 1,320,5342,764,351 0.66% due Jun. 15, 2017 3,029,242 3,210,4291,207,393 0.70% due Sep. 15, 2017 1,300,858 1,402,4743,985,775 0.70% due Oct. 16, 2017 4,443,196 4,629,2951,775,000 1.16% due Jan. 15, 2019 1,968,442 2,062,4871,050,000 1.82% due May 15, 2019 1,148,241 1,218,902



BO

ND

FUN

DS

31




AverageCost ($)

CarryingValue ($)


Santander Drive Auto ReceivablesTrust 2012-5

62,189 0.83% due Dec. 15, 2016 68,148 72,219Seagate HDD Cayman

905,000 4.75% due Jun. 1, 2023 1,027,676 1,090,196Sequoia Mortgage Trust (callable)

133,327 0.47% due Dec. 20, 2034-(Feb. 20, 2018) 124,721 149,482Sequoia Mortgage Trust (Floating Rate)

529,859 0.69% due Oct. 20, 2034 496,711 599,654SLM Student Loan Trust

1,390,101 0.42% due Mar. 15, 2023 1,338,869 1,604,841Smart Trust

1,446,501 0.97% due Mar. 14, 2017 1,418,286 1,683,412Sprint Capital Corporation

3,285,000 8.75% due Mar. 15, 2032 3,901,513 3,734,100Structured Adjustable Rate Mortgage Loan(callable)

7,920 2.59% due Dec. 25, 2034-(Sep. 25, 2016) 9,552 8,483Structured Asset Mortgage Investments Inc.

526,565 0.84% due May 19, 2035 514,089 589,711Structured Asset Securities Corporation(callable)

196,097 2.59% due Nov. 25, 2033-(Oct. 25, 2020) 190,387 220,903Sunguard Availability Service Capital Inc.

1,318,358 6.00% due Mar. 31, 2019 1,412,042 1,370,071Symantec Corporation (callable)

550,000 2.75% due Jun. 15, 2017-(May 15, 2017) 615,972 648,667Telefonos de Mexico, S.A.B. de C.V.

290,000 5.50% due Jan. 27, 2015 328,133 337,444Tennessee Gas Pipeline

490,000 8.38% due Jun. 15, 2032 656,899 769,633Teva Pharmaceutical Finance IV B.V.

1,110,000 3.65% due Nov. 10, 2021 1,295,025 1,322,680Time Warner Cable Inc.

1,225,000 5.00% due Feb. 1, 2020 1,492,354 1,571,261965,000 4.88% due Mar. 15, 2020 1,166,889 1,236,397

1,400,000 6.55% due May 1, 2037 1,884,757 2,089,439Total Capital SA

1,740,000 2.13% due Aug. 10, 2018 1,858,788 2,032,228Transocean Ltd.

505,000 6.38% due Dec. 15, 2021 601,143 544,359Twenty-First Century Fox Inc.

815,000 6.40% due Dec. 15, 2035 1,198,017 1,243,133Tyco Electronics Group SA

355,000 6.55% due Oct. 1, 2017 386,475 465,123United States Treasury Notes

4,960,000 0.50% due Nov. 30, 2016 5,652,367 5,744,2643,455,000 1.00% due Dec. 15, 2017 3,997,776 4,001,818

13,112,500 1.50% due Nov. 30, 2019 14,857,619 15,127,7652,370,000 2.00% due Oct. 31, 2021 2,689,260 2,760,1002,455,000 1.88% due Nov. 30, 2021 2,788,640 2,836,185

26,285,000 2.25% due Nov. 15, 2024 29,644,661 30,758,3619,105,000 3.13% due Aug. 15, 2044 10,511,719 11,405,553

UnitedHealth Group Incorporated (callable)990,000 3.88% due Oct. 15, 2020-(Jul. 15, 2020) 1,164,917 1,231,106

Vale Overseas Limited665,000 4.38% due Jan. 11, 2022 670,376 741,783

1,990,000 8.25% due Jan. 17, 2034 2,609,082 2,746,463Vale SA

885,000 5.63% due Sep. 11, 2042 822,391 962,285Validus Holdings Ltd.

940,000 8.88% due Jan. 26, 2040 1,372,893 1,525,561

FaceValue ($)/Number ofShares Issuer

AverageCost ($)

CarryingValue ($)


Verizon Communications Inc.5,265,000 5.15% due Sep. 15, 2023 5,968,790 6,772,4021,130,000 6.55% due Sep. 15, 2043 1,646,388 1,687,250

Verizon Communications Inc. (callable)12,050,000 1.48% due Feb. 15, 2054-(2019) 3,346,519 3,668,699

795,000 4.40% due Nov. 1, 2034-(May 1, 2034) 877,813 923,098Volkswagen Auto Loan Enhanced Trust

869,233 0.85% due Aug. 22, 2016 948,202 1,010,502Wachovia Capital Trust III (callable)

1,775,000 5.57% due Oct. 17, 2014 (Mar/29/2049) 1,835,684 1,991,823Walgreens Boots Alliance Inc. (callable)

945,000 3.80% due Nov. 18, 2024-(Aug. 18, 2024) 1,077,210 1,122,342640,000 4.80% due Nov. 18, 2044-(May 18, 2044) 731,111 791,544

WaMu Mortgage Pass-Through Certificates(Floating Rate)

419,731 2.30% due Aug. 25, 2033 485,833 483,327Washington Mutual, Inc.

197,792 2.42% due Oct. 25, 2033 186,762 234,435Watson Pharmaceuticals, Inc.

1,915,000 3.25% due Oct. 1, 2022 2,092,501 2,172,693Weather Channel TL 2L 06/20/20

1,200,000 7.00% due Jun. 26, 2020 1,299,154 1,339,218Weatherford International Ltd.

2,055,000 5.13% due Sep. 15, 2020 2,407,358 2,331,532Wells Fargo & Company

1,265,000 4.10% due Jun. 3, 2026 1,386,848 1,509,7281,085,000 4.65% due Nov. 4, 2044 1,209,116 1,314,938

Wells Fargo Mortgage Backed SecuritiesTrust (callable)

111,995 2.61% due Sep. 25, 2034-(Oct. 25, 2018) 103,314 131,37485,225 2.61% due Mar. 25, 2035-(Sep. 25, 2019) 75,298 99,36054,843 2.61% due Oct. 25, 2035-(Feb. 25, 2019) 56,164 56,147

118,880 6.00% due Jun. 25, 2036-(Sep. 25, 2018) 110,233 132,98196,915 5.02% due Mar. 25, 2036-(Sep. 25, 2015) 99,613 111,03937,282 2.61% due Jul. 25, 2036-(Nov. 25, 2020) 28,513 40,956

Wells Fargo Mortgage Backed SecuritiesTrust

17,641 6.00% due Jul. 25, 2037 17,969 19,919WF-RBS Commercial Mortgage Trust

1,580,000 3.66% due Mar. 15, 2047 1,805,889 1,921,899Williams Partners LP

927,000 7.25% due Feb. 1, 2017 1,144,725 1,195,520Willis Group Holdings Limited

360,000 4.13% due Mar. 15, 2016 375,769 430,903World Financial Network Credit Card MasterTrust

1,930,000 1.54% due Aug. 15, 2021 2,192,080 2,238,406Yum! Brands, Inc.

580,000 4.25% due Sep. 15, 2015 623,218 688,697

608,980,146 643,816,663

TOTAL BOND AND DEBENTUREINSTRUMENTS 644,202,204 679,432,487

EQUITIES – 0.0%3 NRG Energy, Inc. 69 94


Currency Forward Contracts – 0.1% 515,532OTHER ASSETS, LESS LIABILITIES – (8.2%) (51,602,870)

NET ASSETS – 100.0% 628,345,243


The accompanying notes are an integral part of these financial statements. -For equities, all common shares unless otherwise noted.

BO

ND

FUN

DS

32



CURRENCY FORWARD CONTRACTS


December 31, 2014 ($)

Canadian ($)Appreciation /(Depreciation)

Jan. 30, 2015 Canadian Dollar 572,794,397 U.S. Dollar 492,216,152 572,284,472 509,925Jan. 30, 2015 U.S. Dollar 1,378,872 Australian Dollar 1,696,649 1,604,181 (4,005)Jan. 30, 2015 U.S. Dollar 4,911,538 Mexican Peso 72,350,886 5,683,369 16,455Jan. 30, 2015 U.S. Dollar 1,193,965 Swedish Krona 9,366,058 1,392,435 (6,843)

515,532

The currency forward contracts outstanding at December 31, 2014 are placed with a financial institution with a credit rating of A- by Standard & Poor’s.



BO

ND

FUN

DS

33



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns and to provide income as well as capital growth by investing

primarily in a portfolio of U.S. government and corporate bonds and mortgage pass through securities. The Fund may invest inthe U.S. dollar denominated emerging markets, non-investment grade debt and non-U.S. investment grade sovereign andcorporate debt. As well, the Fund’s investments may also include short-term instruments, cash equivalents, U.S. denominatedasset-backed securities and mortgage-backed securities. The Fund’s investments in bonds will have an average credit rating ofat least single A.









Comprehensive income as reported under Canadian GAAP $(1,726,281)


Increase (decrease) in net assets attributable to holders of redeemable units $(1,566,632)





Less than 1 year $ 11,125,215 $ 8,223,498 $ 14,447,286

1-3 years 112,808,944 66,270,524 41,228,406

3-5 years 72,762,107 33,968,713 31,436,667

5-10 years 151,593,803 109,293,411 67,916,448

> 10 years 331,142,418 202,665,309 125,867,722

Total $679,432,487 $420,421,455 $280,896,529


As at December 31, 2014, had the prevailing interest rates increased or decreased by 0.25%, assuming a parallel shift in the yieldcurve and all other variables held constant, net assets attributable to holders of redeemable units would have decreased orincreased, respectively, by $10,151,236 or approximately 1.6% (December 31, 2013 – $6,728,192 or approximately 1.6%, January 1,2013 – $4,266,507 or approximately 1.6%). In practice, actual results may differ from this sensitivity analysis and the difference couldbe material.

ii) Currency risk

The tables below indicates the currencies to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables alsoB

ON

DFU

ND

S


34




December 31, 2014






US Dollar 145,526,842 23.2 14,552,684 2.3

New Zealand Dollar 8,520,208 1.4 852,021 0.1

British Pound 5,482,455 0.9 548,246 0.1

European Euro 4,626,438 0.7 462,644 0.1

Indian Rupee 3,727,835 0.6 372,784 0.1

Thai Baht 1,550,488 0.2 155,049 –

Mexican Peso 1,490,727 0.2 149,073 –

Malaysian Ringgit 1,316,260 0.2 131,626 –

Indonesian Rupiah 644,011 0.1 64,401 –

Swedish Krona 110,957 – 11,096 –

Hungary Forint 2 – – –

Australian Dollar (41,268) – (4,127) –

Total 172,954,955 27.5 17,295,497 2.7

December 31, 2013






U.S. Dollar 107,499,762 25.9 10,749,976 2.6

Mexican Peso 6,293,388 1.5 629,339 0.2

New Zealand Dollar 4,961,418 1.2 496,142 0.1

Russian Ruble 3,215,645 0.8 321,565 0.1

Thai Baht 2,995,727 0.7 299,573 0.1

Uraguayan Peso 2,293,380 0.6 229,338 0.1

Hungary Forint 1,860,740 0.4 186,074 –

Colombia Peso 1,717,790 0.4 171,779 –

Swedish Krona 1,502,946 0.4 150,295 –

Indonesian Rupiah 1,214,712 0.3 121,471 –

British Pound 1,056,019 0.3 105,602 –

Norwegian Krone 1,029,134 0.2 102,913 –

Philippines Peso 1,026,987 0.2 102,699 –

South African Rand 848,528 0.2 84,853 –

Polish Zloty 751,268 0.2 75,127 –

Japanese Yen 76,757 – 7,676 –

Swiss Franc 8,341 – 834 –

Turkish Lira 0 – – –

Australian Dollar (49,842) – (4,984) –

European Euro (82,010) – (8,201) –

Total 138,220,691 33.3 13,822,071 3.2

BO

ND

FUN

DS


35



January 1, 2013






U.S. Dollar 50,137,851 18.4 5,013,785 1.8

Mexican Peso 5,302,211 1.9 530,221 0.2

Hungary Forint 2,446,223 0.9 244,622 0.1

Uraguayan Peso 1,656,994 0.6 165,699 0.1

Colombia Peso 1,178,733 0.4 117,873 –

Thai Baht 1,162,416 0.4 116,242 –

New Zealand Dollar 1,161,334 0.4 116,133 –

Chile Peso 868,950 0.3 86,895 –

Philippines Peso 749,748 0.3 74,975 –

Indonesian Rupiah 631,353 0.2 63,135 –

Australian Dollar 536,582 0.2 53,658 –

Norwegian Krone 207,144 0.1 20,714 –

Peruvian New Sol 168,410 0.1 16,841 –

Polish Zloty 73,472 – 7,347 –

Swiss Franc 7,612 – 761 –

South African Rand 683 – 68 –

Turkish Lira 0 – – –

Swedish Krona (15,053) – (1,505) –

Brazilian Real (27,018) – (2,702) –

British Pound (49,393) – (4,939) –

European Euro (85,597) – (8,560) –

Japanese Yen (1,518,057) (0.6) (151,806) (0.1)

Total 64,594,597 23.6 6,459,457 2.1


The Fund’s significant market risks have been discussed in the previous sections. As at December 31, 2014, December 31, 2013 andJanuary 1, 2013, the investments of this Fund were not subject to significant other price risk as the Fund did not hold any significantequities or commodities.

iv) Credit risk







redeemableunits (%)





redeemableunits (%)





redeemableunits (%)

Bond Rating

A- to AAA+ 73.7 79.7 76.4 77.1 75.8 78.0

B- to BBB+ 25.9 28 22.8 23.2 22.6 23.3

C- to CCC+ 0.4 0.4 0.6 0.6 1.2 1.2

D- to DDD+ – – 0.1 0.1 0.1 0.1

Unrated – – 0.1 0.1 0.3 0.3

Total 100.0 108.1 100.0 101.1 100.0 102.9

BO

ND

FUN

DS


36



v) Liquidity risk



On demandLess than3 months On demand


Less than3 months

Accounts payable and accrued liabilities $ – $133,889,210 $ – $86,604,740 $ – $53,342,709

Unrealized loss on currency forward contracts – 10,848 – 904,317 – 357,418


$628,345,243 $133,900,058 $415,677,206 $87,509,057 $273,073,823 $53,700,127






Bond and Debenture Instruments

Australian Dollar 0.2 0.8 0.4

British Pound 0.8 0.3 0.7

Chile Peso – – 0.3

Columbia Peso – 0.4 0.4

European Euro 0.7 0.8 1.1

Hungarian Forint – 0.4 0.4

India Rupee 0.6 – –

Indonesian Rupiah 0.1 0.3 0.2

Japanese Yen – 0.2 0.4

Malaysian Ringgit 0.2 – –

Mexican Peso 1.1 1.5 1.4

New Zealand Dollar 1.5 1.2 0.4

Norwegian Krone – 0.6 0.4

Peruvian Nuevo Sol – – 0.1

Philippine Peso – 0.3 0.3

Polish Zloty – – 0.7

Russian Ruble – 0.8 –

South African Rand – 0.2 –

Swedish Krona 0.2 0.4 –

Thai Baht 0.2 0.7 0.4

Uraguayan Peso – 0.6 0.6

U.S. Dollar 102.5 91.6 94.7

Equities 0.0 0.0 0.0

Currency Forward Contracts 0.1 (0.2) 0.1

BO

ND

FUN

DS


37






Equities $94 $ – $ – $ 94

Bond and Debenture Instruments – 679,432,487 – 679,432,487

Currency Forward Contracts – Assets – 526,380 – 526,380

94 679,958,867 – 679,958,961

Currency Forward Contracts – Liabilities – (10,848) – (10,848)

$94 $679,948,019 $ – $679,948,113


Equities $92 $ – $ – $ 92



92 420,448,741 – 420,448,833


$92 $419,544,424 $ – $419,544,516


Equities $69 $ – $ – $ 69



69 281,565,559 – 281,565,628


$69 $281,208,141 $ – $281,208,210

Transfer Between LevelsDuring the periods ended December 31, 2014 and December 31, 2013, there were no transfers between Level 1 and Level 2.

4. Offsetting of Financial Assets and Liabilities (note 2)The following table presents offsetting of financial assets and liabilites and collateral amounts that would occur if future events, suchas bankruptcy or termination of contracts were to arise. No amounts were offset in the financial statements.

December 31, 2014




Currency forward contracts $526,380 $(6,843) $ – $519,537


Total $526,380 $(6,843) $ – $519,537




Currency forward contracts $ 10,848 $(6,843) $ – $ 4,005


Total $ 10,848 $(6,843) $ – $ 4,005

BO

ND

FUN

DS


38



December 31, 2013




Currency forward contracts $ 27,378 $ (27,378) $ – $ –


Total $ 27,378 $ (27,378) $ – $ –




Currency forward contracts $904,317 $ (27,378) $ – $876,939


Total $904,317 $ (27,378) $ – $876,939

January 1, 2013






Total $669,099 $(249,300) $ – $419,799






Total $357,418 $(249,300) $ – $108,118









Series F 9.49 9.49 9.05 9.05

Series I 9.57 9.57 9.13 9.13

BO

ND

FUN

DS


39

Scotia Private Strategic Balanced Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $42,190,689 $32,931,949 $32,369,057Unrealized gain on currency spot

contracts 1 – –Cash 277,601 615,581 582,498Accrued investment income 84,930 66,688 84,688Receivable for securities sold 4,275 33,419 –Subscriptions receivable 38,800 – 16,876

42,596,296 33,647,637 33,053,119

LIABILITIESCurrent liabilitiesPayable for securities purchased 2,140,284 – 1,514Redemptions payable 119 674 7,884Unrealized loss on currency spot

contracts – – 4

2,140,403 674 9,402



Pinnacle Series Units $40,072,429 $33,060,193 $32,715,640Series F Units $ 383,464 $ 586,770 $ 328,077

UNITS OUTSTANDINGPinnacle Series Units 2,315,056 2,022,256 2,218,038Series F Units 21,880 35,496 21,991


Pinnacle Series Units $ 17.31 $ 16.35 $ 14.75Series F Units $ 17.53 $ 16.53 $ 14.92


2014 2013


Dividends $ 531,597 $ 448,899Interest for distribution purposes 385,059 373,442Net realized gain (loss) on non-derivative financial assets 1,314,808 569,345Net gain (loss) foreign exchange (484) 1,964Change in unrealized appreciation (depreciation) of non-

derivative financial assets 672,979 2,819,786Change in unrealized appreciation (depreciation) of currency

spots 1 4

Net gain (loss) on investments 2,903,960 4,213,440Securities lending 6,079 8,580Other income 68 98


EXPENSESManagement fees (note 5) 6,736 5,344Administration fees (note 6) 43,361 –Harmonized Sales Tax/Goods and Services Tax 12,256 10,078Audit fees 898 548Independent Review Committee fees 100 934Custodian fees 9,264 24,183Filing fees 10,213 15,377Legal fees 452 42Unitholder reporting costs 5,475 4,178Unitholder administration and service fees 38,204 52,842Overdraft charges – 1Foreign withholding taxes/tax reclaims 15,420 6,731Transaction costs 17,043 9,457


Net expenses 157,148 127,160

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $2,752,959 $4,094,958

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PERSERIES

Pinnacle Series Units $2,710,045 $4,031,748Series F Units $ 42,914 $ 63,210

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLE UNITS FROM OPERATIONS PERUNIT*

Pinnacle Series Units $ 1.26 $ 1.95Series F Units $ 1.10 $ 1.83

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 2,156,191 2,065,555Series F Units 38,903 34,451


Portfolio Advisor: Gryphon Investment Counsel Inc.


BA

LAN

CE

DFU

ND

40

Scotia Private Strategic Balanced Pool (Continued)


2014 2013


Pinnacle Series Units $33,060,193 $32,715,640Series F Units 586,770 328,077

33,646,963 33,043,717



2,752,959 4,094,958


Pinnacle Series Units (765,846) (718,455)Series F Units (7,189) (7,686)

(773,035) (726,141)



Reinvested distributionsPinnacle Series Units 758,220 717,789Series F Units 5,931 6,482

Payments on redemptionPinnacle Series Units (6,833,050) (6,525,494)Series F Units (376,061) –

4,829,006 (2,765,571)


Pinnacle Series Units 7,012,236 344,553Series F Units (203,306) 258,693

6,808,930 603,246



$40,455,893 $33,646,963


2014 2013


redeemable units $ 2,752,959 $ 4,094,958Adjustments For:

Net realized (gain) loss on sale of non-derivativefinancial assets (1,314,808) (569,345)

Net realized (gain) loss foreign exchange on cash 484 (1,964)Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets (672,979) (2,819,786)Change in unrealized (appreciation) depreciation of

currency spot contracts (1) (4)Purchases of non-derivative financial assets (22,079,364) (10,118,707)Proceeds from sale of non-derivative financial assets 16,960,796 12,900,556Transaction costs 17,043 9,457Accrued investment income (18,242) 18,000

Net cash provided by (used in) operating activities (4,354,112) 3,513,165


Net cash provided by (used in) financing activities 4,016,616 (3,482,046)Net realized (gain) loss foreign exchange on cash (484) 1,964Net increase (decrease) in cash (337,496) 31,119Cash (Bank Indebtedness) at beginning of period 615,581 582,498


Interest received(1) 372,941 384,918Dividends received, net of withholding taxes(1) 510,052 448,692




BA

LAN

CE

DFU

ND

41



Number ofShares Issuer

AverageCost ($)

CarryingValue ($)

CANADIAN EQUITIES – 43.0%Energy – 6.5%

16,800 Canadian Natural Resources Ltd. 558,809 603,45622,040 Cenovus Energy Inc. 641,694 528,2992,085 EnCana Corporation 40,872 33,7147,970 Husky Energy Inc. 239,062 219,175

14,091 Lightstream Resources Ltd. 223,761 16,7685,275 MEG Engery Corporation 165,786 103,1267,005 Mullen Group Limited 172,865 149,277

24,780 Suncor Energy, Inc. 865,833 914,3825,110 Trican Well Service Ltd. 89,147 28,4638,990 Trinidad Drilling Ltd. 65,617 46,748

3,063,446 2,643,408

Materials – 4.8%1,445 Agrium Inc. 91,260 158,950

17,300 Canexus Corp. 83,703 56,39829,839 First Quantum Minerals Ltd. 609,716 492,64217,140 HudBay Minerals, Inc. 152,118 173,45731,225 Lundin Mining Corporation 229,735 178,60714,400 Potash Corporation of Saskatchewan Inc. 586,925 591,40818,720 Teck Resources Ltd., Class B 482,719 297,274

2,236,176 1,948,736

Industrials – 4.8%16,755 CAE, Inc. 176,655 252,6658,050 Canadian National Railway Company 421,728 644,1616,460 Finning International Inc. 152,318 162,986

23,370 Horizon North Logistics Inc. 172,126 61,6978,085 Newalta Corp. 166,600 142,6196,375 SNC-Lavalin Group Inc. 322,816 282,4766,775 Stantec Inc. 110,205 216,3265,710 WSP Global Inc. 198,835 199,051

1,721,283 1,961,981

Consumer Discretionary – 4.5%2,050 Dollarama Inc. 92,200 121,7708,520 Gildan Activewear Inc. 220,834 559,7645,645 Magna International Inc. 320,887 710,649

14,820 Martinrea International Inc. 169,807 153,6838,765 Quebecor Inc., Class B 114,222 279,954

917,950 1,825,820

Consumer Staples – 3.4%3,050 AGT Food and Ingredients Inc. 84,156 83,997

17,660 Alimentation Couche-Tard Inc., Class B 169,191 859,8657,415 Jean Coutu Group (PJC) Inc., The, Class A 105,897 209,9193,645 Loblaw Companies Limited 173,265 226,610

532,509 1,380,391

Financials – 15.1%11,535 Bank of Montreal 609,404 947,94615,745 Bank of Nova Scotia, The 777,272 1,044,0505,910 Canadian Imperial Bank of Commerce 419,561 590,0548,100 Home Capital Group Inc. 254,463 388,719

23,915 Manulife Financial Corporation 612,169 530,43516,905 Royal Bank of Canada 876,485 1,356,45522,515 Toronto-Dominion Bank, The 932,778 1,249,806

4,482,132 6,107,465

Information Technology – 3.9%22,550 Celestica Inc. 235,058 307,80813,485 CGI Group Inc., Class A 199,325 597,25112,610 Descartes Systems Group Inc., The 153,911 217,523


AverageCost ($)

CarryingValue ($)

CANADIAN EQUITIES (cont’d)Information Technology (cont’d)

4,940 Open Text Corporation 154,715 333,99314,880 Pure Technologies Ltd. 79,935 109,963

822,944 1,566,538

TOTAL CANADIAN EQUITIES 13,776,440 17,434,339

FOREIGN EQUITIES – 17.1%United States – 8.4%Materials – 1.2%

2,470 Cytec Industries Inc. 134,984 132,3433,210 Dow Chemical Company, The 156,786 169,8131,125 Praxair, Inc. 123,648 169,200

415,418 471,356

Industrials – 2.2%2,055 Danaher Corporation 125,031 204,4031,035 Dover Corporation 63,479 86,1441,410 Honeywell International Inc. 96,424 163,5321,850 Stanley Black & Decker Inc. 170,648 206,2222,380 Wabtec Corporation 108,786 239,989

564,368 900,290

Consumer Discretionary – 1.0%2,170 Royal Caribbean Cruises Ltd. 166,940 207,5822,585 TJX Companies, Inc., The 89,412 205,732

256,352 413,314

Health Care – 1.2%1,685 Gilead Sciences, Inc. 202,696 184,3191,560 Johnson & Johnson 118,020 189,3111,635 ResMed Inc. 59,851 106,397

380,567 480,027

Financials – 1.2%1,840 American Express Company 110,939 198,6382,055 JPMorgan Chase & Co. 97,037 149,2782,025 MetLife, Inc. 118,745 127,112

326,721 475,028

Information Technology – 1.6%2,520 Cognizant Technology Solutions Corporation 96,605 154,0026,640 Corning Incorporated 114,961 176,692

380 Mettler-Toledo International Inc. 72,650 133,5142,255 Tyco Electronics Ltd. 140,934 165,586

425,150 629,794

TOTAL UNITED STATES EQUITIES 2,368,576 3,369,809

Belgium – 0.1%622 UCB SA 48,941 54,769

Denmark – 0.1%2,165 GN Store Nord A/S 56,880 54,693

France – 1.5%1,492 Airbus Group NV 63,520 85,9801,170 Atos Origin SA 70,028 107,4241,916 BNP Paribas 121,640 130,637

730 Schneider Electric SA 44,383 61,544838 Technip SA 68,697 58,060808 Teleperformance 34,287 63,742

1,663 Total SA 105,237 99,485

507,792 606,872



BA

LAN

CE

DFU

ND

42




AverageCost ($)

CarryingValue ($)

FOREIGN EQUITIES (cont’d)Germany – 1.0%

3,546 Deutsche Lufthansa AG 70,990 68,9013,497 Fresenius SE & Co. KGaA 119,030 211,881

617 MTU Aero Engines Holding AG 32,055 62,507637 Wacker Chemie AG 80,302 81,076

302,377 424,365

Hong Kong – 0.4%13,000 AIA Group Ltd. 72,821 83,081

144,000 Global Brands Group Holding Ltd. 37,415 32,66814,400 Kingboard Chemicals Holdings Limited 40,228 28,040

150,464 143,789

Japan – 2.6%2,000 Bridgestone Corporation 55,866 80,6571,200 Canon Inc. 42,958 44,232

600 Daikin Industries, Ltd. 42,902 44,9091,200 Hamamatsu Photonics KK 32,582 66,545

10,000 Hitachi, Ltd. 73,159 84,9171,000 Honda Motor Co., Ltd. 34,769 33,7473,000 Komatsu Ltd. 62,121 77,1832,500 Nabtesco Corporation 56,102 69,6511,200 NIDEC Corporation 49,632 90,328

800 Nitto Denko Corporation 46,726 51,9194,500 ORIX Corporation 71,053 65,2831,800 Seven & I Holdings Co., Ltd. 55,392 75,3482,400 Terumo Corporation 62,101 63,432

10,000 Toray Industries Inc. 72,071 92,9443,000 Toto Ltd. 21,715 40,4941,200 Toyota Motor Corporation 77,123 86,843

856,272 1,068,432

Netherlands – 0.8%1,232 Heineken NV 89,221 101,547

10,043 ING Groep NV 111,848 150,8734,223 Koninklijke Ahold NV 76,049 87,099

277,118 339,519

Spain – 0.3%3,592 Industria de Diseno Textil SA 55,650 119,416

Sweden – 0.4%1,473 Hexagon AB 24,480 52,8698,384 Telefonaktiebolaget LM Ericsson, Class B 96,676 117,847

121,156 170,716

Switzerland – 0.9%1,217 Adecco SA 73,069 96,731

304 Dufry AG 54,495 52,28854 Galenica AG 34,508 49,628

1,510 Novartis AG 93,458 161,128

255,530 359,775

Number ofShares/FaceValue ($) Issuer

AverageCost ($)

CarryingValue ($)

FOREIGN EQUITIES (cont’d)United Kingdom – 0.6%

23,287 Barclays PLC 93,546 101,59614,946 DS Smith PLC 78,818 86,4361,645 Weir Group PLC, The 51,078 54,639

223,442 242,671

TOTAL FOREIGN EQUITIES 5,224,198 6,954,826

TOTAL EQUITIES 19,000,638 24,389,165


Government of Canada1,475,000 1.50% due Mar. 1, 2017 1,490,635 1,491,0532,125,000 1.25% due Mar. 1, 2018 2,131,333 2,132,6372,425,000 4.25% due Jun. 1, 2018 2,607,190 2,676,721

800,000 1.75% due Mar. 1, 2019 806,400 816,4502,250,000 2.75% due Jun. 1, 2022 2,378,580 2,429,7442,050,000 5.75% due Jun. 1, 2029 2,679,350 2,980,289

12,093,488 12,526,894

Corporate Bonds – 0.6%Brilliant Power Funding Corporation

54,723 5.67% due May 31, 2026 58,365 64,360Pearson International Fuel Facilities Corporation

66,244 5.09% due Mar. 9, 2032 66,135 70,917Royal Bank Scotland

86,000 6.67% due Oct. 5, 2017 82,963 95,030

207,463 230,307

TOTAL BOND AND DEBENTURE INSTRUMENTS 12,300,951 12,757,201

MONEY MARKET INSTRUMENTS – 12.5%5,050,000 Government of Canada

0.88% to 0.96% due fromJan. 5, 2015 to Apr. 23, 2015 5,040,961 5,044,323


Currency Spot Contracts – 0.0% 1OTHER ASSETS, LESS LIABILITIES – (4.2)% (1,734,797)

NET ASSETS – 100.0% 40,455,893

CURRENCY SPOT CONTRACTS


December 31, 2014 ($)


(Depreciation)

Jan. 2, 2015 Canadian Dollar 4,276 Hong Kong Dollar 28,565 4,275 1

The currency spot contracts outstanding at December 31, 2014 are placed with a financial institution with a credit rating of A+ by Standard & Poor’s.



BA

LAN

CE

DFU

ND

43



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through a combination of capital growth and income by

investing primarily in large capitalization stocks of Canadian corporations and Canadian government bonds. The weighting ofthe Fund’s portfolio will be allocated between asset classes within specified ranges: 40%-80% equities, 20%-60% fixed incomesecurities, and 0%-30% short-term money market securities and cash.
















Less than 1 year $ – $ – $ –

1-3 years 1,586,083 5,899,962 6,225,453

3-5 years 5,625,809 2,759,424 76,262

5-10 years 2,429,744 805,659 3,817,068

> 10 years 3,115,565 2,859,529 3,343,877

Total $12,757,201 $12,324,574 $13,462,660


As at December 31, 2014, had the prevailing interest rates increased or decreased by 0.25%, assuming a parallel shift in the yieldcurve and all other variables held constant, net assets attributable to holders of redeemable units would have decreased orincreased, respectively, by $252,768 or approximately 0.6% (December 31, 2013 – $161,279 or approximately 0.5%, January 1, 2013 –$196,266 or approximately 0.6%). In practice, actual results may differ from this sensitivity analysis and the difference could bematerial.

ii) Currency risk

The tables below indicates the currencies to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables also

BA

LAN

CE

DFU

ND


44




December 31, 2014






US Dollar 3,634,996 9.0 363,500 0.9

European Euro 1,546,011 3.8 154,601 0.4

Japanese Yen 1,068,704 2.6 106,870 0.3

Swiss Franc 359,775 0.9 35,978 0.1

British Pound 242,671 0.6 24,267 0.1

Swedish Krona 170,716 0.4 17,072 0.0

Hong Kong Dollar 139,513 0.3 13,951 0.0

Danish Krone 54,693 0.1 5,469 0.0

Total 7,217,079 17.7 721,708 1.8

December 31, 2013






U.S. Dollar 2,395,164 7.1 239,516 0.7

European Euro 1,600,348 4.8 160,035 0.5

Japanese Yen 791,533 2.4 79,153 0.2

Swiss Franc 248,399 0.7 24,840 0.1

Hong Kong Dollar 167,094 0.5 16,709 0.0

Swedish Krona 101,004 0.3 10,100 0.0

British Pound 99,022 0.3 9,902 0.0

Australian Dollar 17,842 0.1 1,784 0.0

Total 5,420,405 16.2 542,039 1.5

January 1, 2013






U.S. Dollar 1,761,949 5.3 176,195 0.5

European Euro 1,294,458 3.9 129,446 0.4

Japanese Yen 552,225 1.7 55,222 0.2

Swiss Franc 181,894 0.6 18,189 0.1

Hong Kong Dollar 178,632 0.5 17,863 0.1

British Pound 130,816 0.4 13,082 0.0

Swedish Krona 126,296 0.4 12,630 0.0

Australian Dollar 17,465 0.1 1,747 0.0

Total 4,243,733 12.9 424,374 1.3


Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 60.1% (December 31, 2013 – 59.9%, January 1, 2013– 55.0%) of the Fund’s net assets attributable to holders ofredeemable units were exposed to other price risk. If prices of these investments had decreased or increased by 10%, with all othervariables held constant, net assets attributable to holders of redeemable units of the Fund would have decreased or increased,

BA

LAN

CE

DFU

ND


45



respectively, by approximately $2,438,917 (December 31, 2013 – $2,014,168, January 1, 2013 – $1,808,402). In practice, actual resultswill differ from this sensitivity analysis and the difference could be material.

iv) Credit risk







redeemableunits (%)





redeemableunits (%)





redeemableunits (%)

Bond Rating

A- to AAA+ 99.3 31.4 99.3 36.4 99.4 40.6

B- to BBB+ 0.7 0.2 0.7 0.3 0.6 0.2

Total 100.0 31.6 100.0 36.7 100.0 40.8

v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $2,140,403 $ – $674 $ – $9,398

Unrealized loss on currency spot contracts – – – – – 4


$40,455,893 $2,140,403 $33,646,963 $674 $33,043,717 $9,402


BA

LAN

CE

DFU

ND


46







Canadian Equities

Energy 6.5 9.3 9.7

Materials 4.8 5.6 6.5

Industrials 4.8 3.6 3.4

Consumer Discretionary 4.5 3.8 3.3

Consumer Staples 3.4 2.0 1.5

Financials 15.1 15.2 13.5

Information Technology 3.9 3.9 2.6

Telecommunication Services – 0.5 1.6

United States Equities 8.4 7.0 5.2

Australia Equities – 0.1 0.1

Belgium Equities 0.1 0.1 –

Denmark Equities 0.1 – –

France Equities 1.5 1.3 1.3

Germany Equities 1.0 1.3 1.0

Hong Kong Equities 0.4 0.5 0.5

Italy Equities – 0.1 0.1

Japan Equities 2.6 2.4 1.7

Netherlands Equities 0.8 1.6 1.3

Spain Equities 0.3 0.3 0.3

Sweden Equities 0.4 0.3 0.4

Switzerland Equities 0.9 0.7 0.6

United Kingdom Equities 0.6 0.3 0.4

Bond and Debenture Instruments 31.6 36.7 40.8





Equities $20,804,148 $ 3,585,017 $ – $24,389,165



Currency Spot Contracts – Assets 1 – – 1

$20,804,149 $21,386,541 $ – $42,190,690


Equities $17,135,716 $ 3,022,477 $ – $20,158,193


Money Market Instruments – 449,182 – 449,182

$17,135,716 $15,796,233 $ – $32,931,949

BA

LAN

CE

DFU

ND


47


FUND SPECIFIC NOTESFor the periods indicated in Note 1.January 1, 2013 Level 1 Level 2 Level 3 Total

Equities $15,625,935 $ 2,481,782 $ – $18,107,717



15,625,935 16,743,122 – 32,369,057

Currency Spot Contracts – Liabilities (4) – – (4)

$15,625,931 $16,743,122 $ – $32,369,053










Pinnacle Series 17.31 17.31 16.35 16.35

Series F 17.53 17.53 16.53 16.53

BA

LAN

CE

DFU

ND


48

Scotia Private Canadian Value Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $129,127,626 $113,949,384 $95,278,305Cash 10,391 22,893 97,377Accrued investment income 386,618 343,081 358,751Subscriptions receivable 142,293 72,091 25,456

129,666,928 114,387,449 95,759,889

LIABILITIESCurrent liabilitiesRedemptions payable 26,560 119,519 21,638



Pinnacle Series Units $118,037,195 $102,750,821 $85,710,109Series F Units $ 571,764 $ 647,289 $ 486,971Series I Units $ 11,031,409 $ 10,869,820 $ 9,541,171

UNITS OUTSTANDINGPinnacle Series Units 5,666,390 5,009,436 4,641,593Series F Units 27,547 31,767 26,528Series I Units 517,950 518,352 505,435




2014 2013


Dividends $ 3,566,459 $ 2,987,015Interest for distribution purposes 24,183 19,494Net realized gain (loss) on non-derivative financial assets 3,940,829 2,192,971Net gain (loss) foreign exchange – (224)Change in unrealized appreciation (depreciation) of non-

derivative financial assets (2,184,314) 9,058,045

Net gain (loss) on investments 5,347,157 14,257,301Securities lending 4,489 12,698Other income 209 1,301


EXPENSESManagement fees (note 5) 6,904 5,719Administration fees (note 6) 65,787 –Harmonized Sales Tax/Goods and Services Tax 17,380 13,468Audit fees 3,004 2,559Independent Review Committee fees 331 1,068Custodian fees 2,670 3,118Filing fees 11,092 16,778Legal fees 1,531 13Unitholder reporting costs 11,134 6,320Unitholder administration and service fees 84,203 116,809Overdraft charges 142 96Foreign withholding taxes/tax reclaims 1,109 3,528Transaction costs 54,557 58,605


Net expenses 257,956 226,221



Pinnacle Series Units $ 4,526,429 $12,609,037Series F Units $ 19,791 $ 68,745Series I Units $ 547,679 $ 1,367,297


Pinnacle Series Units $ 0.88 $ 2.64Series F Units $ 0.62 $ 2.28Series I Units $ 1.09 $ 2.69

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 5,152,544 4,771,018Series F Units 31,858 30,191Series I Units 502,882 508,544


Portfolio Advisor: Scheer, Rowlett & Associates Investment Management Ltd.


CA

NA

DIA

NE

QU

ITY

FUN

DS

49

Scotia Private Canadian Value Pool (Continued)


2014 2013


Pinnacle Series Units $102,750,821 $ 85,710,109Series F Units 647,289 486,971Series I Units 10,869,820 9,541,171

114,267,930 95,738,251


Pinnacle Series Units 4,526,429 12,609,037Series F Units 19,791 68,745Series I Units 547,679 1,367,297

5,093,899 14,045,079


Pinnacle Series Units (2,944,788) (2,515,766)Series F Units (6,743) (9,921)Series I Units (287,669) (278,325)

(3,239,200) (2,804,012)


Pinnacle Series Units 28,896,256 21,521,640Series F Units 66,479 189,257Series I Units 917,900 590,609

Reinvested distributionsPinnacle Series Units 2,935,750 2,511,322Series F Units 5,777 9,322Series I Units 287,669 278,325

Payments on redemptionPinnacle Series Units (18,127,273) (17,085,521)Series F Units (160,829) (97,085)Series I Units (1,303,990) (629,257)

13,517,739 7,288,612


Pinnacle Series Units 15,286,374 17,040,712Series F Units (75,525) 160,318Series I Units 161,589 1,328,649

15,372,438 18,529,679



$129,640,368 $114,267,930


2014 2013



Net realized (gain) loss on sale of non-derivative financialassets (3,940,829) (2,192,971)

Net realized (gain) loss foreign exchange on cash – 224Change in unrealized (appreciation) depreciation on sale

of non-derivative financial assets 2,184,314 (9,058,045)Purchases of non-derivative financial assets (71,410,043) (55,308,695)Proceeds from sale of non-derivative financial assets 57,933,759 47,830,026Transaction costs 54,557 58,605Accrued investment income (43,537) 15,670



Net cash provided by (used in) financing activities 10,115,378 4,535,847Net realized (gain) loss foreign exchange on cash – (224)Net increase (decrease) in cash (12,502) (74,260)Cash (Bank Indebtedness) at beginning of period 22,893 97,377


Interest received(1) 24,184 19,504Dividends received, net of withholding taxes(1) 3,521,813 2,999,147




CA

NA

DIA

NE

QU

ITY

FUN

DS

50


SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014Number ofShares Issuer

AverageCost ($)

CarryingValue ($)

EQUITIES – 95.6%Energy – 18.6%

30,600 Cameco Corporation 585,557 582,930188,700 Canadian Natural Resources Ltd. 5,085,263 6,778,10436,100 Canyon Services Group Inc 539,532 324,539

179,900 Cenovus Energy Inc. 5,022,335 4,312,20362,200 MEG Engery Corporation 2,087,068 1,216,010

182,200 Precision Drilling Corporation 1,733,069 1,286,332247,464 Suncor Energy, Inc. 6,690,951 9,131,42236,770 Trican Well Service Ltd. 489,940 204,80946,800 Trinidad Drilling Ltd. 330,472 243,360

22,564,187 24,079,709

Materials – 12.6%40,200 Agrium Inc. 3,186,617 4,422,000

194,800 Barrick Gold Corporation 7,176,986 2,438,896500,600 Capstone Mining Corp. 1,237,438 1,016,218

9,000 Domtar Corporation 356,909 420,120195,500 Lundin Mining Corporation 971,668 1,118,26086,300 Major Drilling Group International Inc. 691,629 492,77357,300 Potash Corporation of Saskatchewan Inc. 2,222,105 2,353,311

577,400 Sherritt International Corporation 2,066,129 1,732,200148,800 Teck Resources Ltd., Class B 4,958,201 2,362,944

22,867,682 16,356,722

Industrials – 5.9%95,200 Canadian National Railway Company 3,203,320 7,617,904

Consumer Discretionary – 6.6%1,500 Canadian Tire Corporation, Limited, Class A 85,708 184,110

35,600 Gildan Activewear Inc. 1,154,871 2,338,92036,200 Magna International Inc. 2,226,048 4,557,21850,600 RONA inc. 616,499 700,81015,700 Thomson Reuters Corporation 558,255 735,859

4,641,381 8,516,917

Consumer Staples – 1.7%111,500 Maple Leaf Foods Inc. 1,337,018 2,170,905

Financials – 42.8%183,500 Bank of Nova Scotia, The 8,002,045 12,167,88494,400 Canadian Imperial Bank of Commerce 6,345,177 9,424,89638,400 Element Financial Corp. 513,774 542,976

196,980 Manulife Financial Corporation 4,060,912 4,369,01655,000 National Bank of Canada 2,165,611 2,719,200

151,600 Royal Bank of Canada 7,541,977 12,164,38483,400 Sun Life Financial Inc. 2,944,880 3,496,128

191,900 Toronto-Dominion Bank, The 5,833,347 10,652,369

37,407,723 55,536,853

Information Technology – 0.3%24,700 Celestica Inc. 215,066 337,155

Telecommunication Services – 5.5%13,300 BCE Inc. 464,336 708,62470,800 Rogers Communications, Inc., Class B 2,500,917 3,198,03677,200 TELUS Corporation 1,770,369 3,233,908

4,735,622 7,140,568

Utilities – 0.6%31,400 Capital Power Corporation 709,161 816,400

Exchange-traded Funds – 1.0%60,900 iShares S&P/TSX 60 Index Fund 1,318,510 1,307,523

TOTAL EQUITIES 98,999,670 123,880,656


AverageCost ($)

CarryingValue ($)


0.00% to 0.93% due from Jan. 5, 2015 toMar. 26, 2015 5,245,571 5,246,970



NET ASSETS – 100.0% 129,640,368



CA

NA

DIA

NE

QU

ITY

FUN

DS

51



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through capital growth by investing primarily in securities of

Canadian corporations. The Fund’s investments may also include up to 15% cash and cash equivalents.













3. Risks Associated with Financial Instruments (note 4)i) Interest Rate Risk

As at December 31, 2014, December 31, 2013 and January 1, 2013, the Fund had no significant exposure to interest rate risk as itsassets and liabilities were substantially non-interest bearing or were invested in short term fixed income instruments with term tomaturity of less than 90 days, for the applicable periods.

ii) Currency Risk




iv) Credit Rate Risk

The Fund had no significant exposure to debt instruments or preferred securities as at December 31, 2014, December 31, 2013 andJanuary 1, 2013. In addition, all investment transactions are executed by brokers with an approved credit rating. As such, the risk ofdefault on transactions with counterparties and brokers is considered minimal. In instances where the credit rating were to fallbelow the approved rating, the Manager would take appropriate action.

CA

NA

DIA

NE

QU

ITY

FUN

DS


52



v) Liquidity risk




Less than3 months

Ondemand

Less than3 months

Accounts payable and accrued liabilities $ – $26,560 $ – $119,519 $ – $21,638


$129,640,368 $26,560 $114,267,930 $119,519 $95,738,251 $21,638






Energy 18.6 22.7 21.6

Materials 12.6 14.9 21.3






Telecommunication Services 5.5 6.3 7.5

Utilities 0.6 0.5 –

Exchange-traded Funds 1.0 – –





Equities $123,880,656 $ – $ – $123,880,656


$123,880,656 $5,246,970 $ – $129,127,626


Equities $112,101,389 $ – $ – $112,101,389


$112,101,389 $1,847,995 $ – $113,949,384


Equities $ 94,978,406 $ – $ – $ 94,978,406


$ 94,978,406 $ 299,899 $ – $ 95,278,305

CA

NA

DIA

NE

QU

ITY

FUN

DS


53



Transfer Between LevelsDuring the periods ended December 31, 2014 and December 31, 2013, there were no transfers between Level 1 and Level 2.









Pinnacle Series 20.83 20.83 20.51 20.51

Series F 20.76 20.76 20.38 20.38

Series I 21.30 21.30 20.97 20.97

CA

NA

DIA

NE

QU

ITY

FUN

DS


54

Scotia Private Canadian Mid Cap Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $56,919,676 $52,918,495 $40,646,248Cash 88,034 62,765 42,419Accrued investment income 115,912 78,439 62,799Receivable for securities sold 62,355 – –Subscriptions receivable 100,263 37,567 13,190

57,286,240 53,097,266 40,764,656

LIABILITIESCurrent liabilitiesPayable for securities purchased 145,497 292,945 –Redemptions payable 10,847 67,820 4,897

156,344 360,765 4,897








2014 2013


Dividends $ 990,767 $ 868,740Interest for distribution purposes 33,959 16,219Capital gains distributions received (3,902) 9,194Net realized gain (loss) on non-derivative financial assets 9,548,544 5,784,080Net gain (loss) foreign exchange (6) –Change in unrealized appreciation (depreciation) of non-


Net gain (loss) on investments 5,931,875 15,243,006Securities lending 12,290 11,841Other income 65 300


EXPENSESManagement fees (note 5) 2,206 1,198Administration fees (note 6) 45,175 –Harmonized Sales Tax/Goods and Services Tax 12,392 8,940Audit fees 1,346 895Independent Review Committee fees 147 934Custodian fees 5,516 5,265Filing fees 11,097 16,768Legal fees 689 1,230Unitholder reporting costs 9,664 5,907Unitholder administration and service fees 54,331 71,706Overdraft charges 301 902Foreign withholding taxes/tax reclaims 3,132 352Transaction costs 119,538 93,696


Net expenses 263,465 205,604



Pinnacle Series Units $ 5,026,318 $13,368,055Series F Units $ 16,779 $ 39,298Series I Units $ 637,668 $ 1,642,190





Portfolio Advisor: Connor, Clark & Lunn Investment Management Ltd.


CA

NA

DIA

NE

QU

ITY

FUN

DS

55

Scotia Private Canadian Mid Cap Pool (Continued)


2014 2013


Pinnacle Series Units $ 46,937,672 $36,120,917Series F Units 178,925 67,818Series I Units 5,619,904 4,571,024

52,736,501 40,759,759



5,680,765 15,049,543


Pinnacle Series Units (796,883) (619,015)Series F Units (864) (1,423)Series I Units (105,797) (83,342)

From realized gain – –Pinnacle Series Units (6,515,310) –Series F Units (24,700) –Series I Units (779,427) –

(8,222,981) (703,780)



Reinvested distributionsPinnacle Series Units 7,279,491 617,660Series F Units 18,898 1,177Series I Units 885,224 83,342

Payments on redemptionPinnacle Series Units (10,423,257) (9,508,516)Series F Units (54,331) (20,549)Series I Units (749,690) (796,208)

6,935,611 (2,369,021)



4,393,395 11,976,742



$ 57,129,896 $52,736,501


2014 2013




Net realized (gain) loss foreign exchange on cash 6 –Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets 4,637,487 (8,564,773)Purchases of non-derivative financial assets (56,443,859) (43,757,623)Proceeds from sale of non-derivative financial assets 57,024,394 46,033,478Transaction costs 119,538 93,696Accrued investment income (37,473) (15,640)

Net cash provided by (used in) operating activities 1,432,314 3,054,601


Net cash provided by (used in) financing activities (1,407,039) (3,034,255)Net realized (gain) loss foreign exchange on cash (6) –Net increase (decrease) in cash 25,275 20,346Cash (Bank Indebtedness) at beginning of period 62,765 42,419






CA

NA

DIA

NE

QU

ITY

FUN

DS

56




AverageCost ($)

CarryingValue ($)


42,841 Cardinal Energy Ltd. 611,768 578,78218,800 Crescent Point Energy Corp. 786,482 505,90832,400 Gibson Energy Inc. 845,095 880,95692,041 Kelt Exploration Ltd. 977,411 644,28710,400 Keyera Corp. 825,771 843,12856,800 Painted Pony Petroleum Ltd 634,760 525,40083,800 Parex Resources Inc. 892,936 635,2048,000 Peyto Exploration & Development Corporation 202,003 267,760

16,300 PrairieSky Royalty Ltd. 513,804 498,78077,700 Precision Drilling Corporation 712,656 548,562

139,060 Raging River Exploration Inc. 529,114 1,020,70089,400 RMP Energy Inc. 509,532 409,45261,100 Secure Energy Services Inc. 1,170,937 1,036,86720,300 ShawCor Ltd. 1,062,636 860,72036,400 TORC Oil & Gas Ltd. 404,196 280,280

100,400 Western Energy Services Corp. 917,852 603,404

11,596,953 10,140,190

Materials – 11.3%47,445 Alamos Gold Inc. 689,513 393,7943,700 CCL Industries Inc., Class B 150,999 465,719

69,100 Eldorado Gold Corporation 571,740 489,22822,400 Franco-Nevada Corporation 1,289,924 1,281,50430,600 HudBay Minerals, Inc. 346,294 309,67268,500 Interfor Corporation 861,354 1,503,57431,300 Intertape Polymer Group Inc. 404,467 582,493

109,718 Lundin Mining Corporation 537,613 627,5879,432 Methanex Corporation 596,763 503,386

60,200 Yamana Gold Inc. 295,559 282,338

5,744,226 6,439,295

Industrials – 9.0%63,400 ATS Automation Tooling Systems Inc. 568,787 982,70071,000 CAE, Inc. 979,043 1,070,68019,000 Lumenpulse Inc. 357,272 311,60026,300 Progressive Waste Solutions Ltd. 622,287 918,65914,104 Russel Metals Inc. 394,747 365,29417,400 WestJet Airlines Ltd. 534,115 580,46426,800 WSP Global Inc. 952,575 934,248

4,408,826 5,163,645

Consumer Discretionary – 12.6%8,600 Aimia Inc 123,959 125,6467,900 AutoCanada Inc. 267,825 351,550

13,875 BRP Inc. 390,677 335,9147,500 Cineplex, Inc. 308,406 336,225

10,600 Cogeco Cable Inc. 605,396 759,38430,500 Dollarama Inc. 1,062,705 1,811,6997,900 Gildan Activewear Inc. 237,742 519,030

31,400 Harwoods Distribution Inc. 240,699 361,72815,800 IMAX Corporation 360,609 566,58822,661 Linamar Corporation 560,991 1,607,79831,612 SunOpta Inc. 327,359 434,981

4,486,368 7,210,543

Consumer Staples – 9.6%72,418 Alimentation Couche-Tard Inc., Class B 1,301,547 3,526,03213,200 Empire Company Limited, Class A 1,044,418 1,156,58441,570 Maple Leaf Foods Inc. 799,564 809,368

3,145,529 5,491,984


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Health Care – 1.6%

10,400 Concordia Healthcare Corporation 455,901 486,2005,200 Endo International PLC 425,116 439,088

881,017 925,288

Financials – 23.4%9,400 Allied Properties Real Estate Investment Trust 352,624 351,936

22,100 Artis Real Estate Investment Trust 338,908 313,3787,600 Boardwalk Real Estate Investment Trust 446,100 467,704

33,917 Brookfield Property Partners LP 679,475 897,10526,300 Callidus Capital Corporation 563,710 460,25015,200 Calloway Real Estate Investment Trust 403,199 414,96020,800 CI Financial Corporation 691,092 671,63211,200 Davis + Henderson Income Corporation 248,146 410,70484,887 Element Financial Corp. 635,591 1,200,30218,900 FirstService Corporation 825,650 1,120,39220,700 Gluskin Sheff + Associates Inc. 365,526 573,18337,000 Great-West Lifeco Inc. 1,215,141 1,242,83016,700 IGM Financial, Inc. 779,413 773,37713,900 Industrial Alliance Insurance and Financial

Services Inc. 524,592 617,57717,400 Intact Financial Corporation 1,130,350 1,458,99023,640 Milestone Apartments Real Estate Investment

Trust 269,349 288,88134,600 Power Financial Corporation 1,059,980 1,251,82813,800 RioCan Real Estate Investment Trust 363,954 364,73453,700 Tricon Capital Group Inc 318,073 468,264

11,210,873 13,348,027

Information Technology – 8.1%11,900 CGI Group Inc., Class A 470,959 527,0513,100 Constellation Software Inc. 613,448 1,070,864

28,500 Descartes Systems Group Inc., The 415,789 491,6258,300 MacDonald, Dettwiler and Associates Ltd. 593,183 788,085

20,560 Open Text Corporation 734,588 1,390,06298,770 Sandvine Corporation 264,795 322,978

3,092,762 4,590,665

Utilities – 3.1%14,400 Brookfield Infrastructure Partners LP 380,566 700,56026,800 Capital Power Corporation 614,030 696,80013,064 Pattern Energy Group Inc. 381,219 366,315

1,375,815 1,763,675

TOTAL EQUITIES 45,942,369 55,073,312


0.89% to 0.91% due fromFeb. 26, 2015 to Apr. 9, 2015 1,845,735 1,846,364



NET ASSETS – 100.0% 57,129,896



CA

NA

DIA

NE

QU

ITY

FUN

DS

57



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through capital growth by investing primarily in stocks of small

and medium capitalization Canadian corporations.















ii) Currency risk



Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 96.4% (December 31, 2013 – 98.9%, January 1, 2013 – 99.2%) of the Fund’s net assets attributable to holders ofredeemable units were exposed to other price risk. If prices of these investments had decreased or increased by 10%, with all othervariables held constant, net assets attributable to holders of redeemable units of the Fund would have decreased or increased,respectively, by approximately $5,507,331 (December 31, 2013 – $5,194,238, January 1, 2013 – $4,030,467). In practice, actual resultswill differ from this sensitivity analysis and the difference could be material.

iv) Credit risk


CA

NA

DIA

NE

QU

ITY

FUN

DS


58



v) Liquidity risk





Less than3 months



$57,129,896 $156,344 $52,736,501 $360,765 $40,759,759 $4,897






Canadian Equities

Energy 17.7 20.2 21.4

Materials 11.3 9.8 16.6




Health Care 1.6 – –



Telecommunication Services – – 3.2

Utilities 3.1 2.0 3.7





Equities $55,073,312 $ – $ – $55,073,312


$55,073,312 $1,846,364 $ – $56,919,676


Equities $51,877,142 $ – $ – $51,877,142

Warrants – 292,945 – 292,945


$51,877,142 $1,041,353 $ – $52,918,495


Equities $40,446,729 $ – $ – $40,446,729


$40,446,729 $ 199,519 $ – $40,646,248

CA

NA

DIA

NE

QU

ITY

FUN

DS


59












Pinnacle Series 19.80 19.80 20.92 20.92

Series F 19.66 19.66 20.70 20.70

Series I 20.18 20.18 21.27 21.27

CA

NA

DIA

NE

QU

ITY

FUN

DS


60

Scotia Private Canadian Growth Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $331,274,656 $258,408,870 $170,394,122Cash 70,558 121,379 76,114Accrued investment income 227,549 231,406 306,742Subscriptions receivable 134,991 80,352 43,434

331,707,754 258,842,007 170,820,412

LIABILITIESCurrent liabilitiesPayable for securities purchased 485,309 – –Redemptions payable 41,159 120,208 24,230

526,468 120,208 24,230



Pinnacle Series Units $122,999,468 $105,923,774 $ 89,119,816Series F Units $ 1,112,085 $ 1,065,853 $ 565,484Series I Units $207,069,733 $151,732,172 $ 81,110,882





2014 2013


Dividends $ 5,742,427 $ 4,812,541Interest for distribution purposes 77,196 57,268Net realized gain (loss) on non-derivative financial assets 12,262,841 (3,593,845)Net gain (loss) foreign exchange 3,838 2,159Change in unrealized appreciation (depreciation) of non-

derivative financial assets 14,959,215 42,707,738

Net gain (loss) on investments 33,045,517 43,985,861Securities lending 24,808 36,551

Other income 195 411


EXPENSESManagement fees (note 5) 11,901 6,955Administration fees (note 6) 94,144 –Harmonized Sales Tax/Goods and Services Tax 22,459 15,830

Audit fees 7,051 5,855Independent Review Committee fees 773 1,215Custodian fees 8,622 16,042Filing fees 11,084 16,764Legal fees 3,541 3,548Unitholder reporting costs 12,235 6,501Unitholder administration and service fees 93,366 133,234Overdraft charges – 21Transaction costs 183,837 123,021


Net expenses 447,319 327,209



Pinnacle Series Units $13,241,313 $19,509,424Series F Units $ 117,785 $ 137,556Series I Units $19,264,103 $24,048,634





Portfolio Advisor: Manulife Asset Management


CA

NA

DIA

NE

QU

ITY

FUN

DS

61

Scotia Private Canadian Growth Pool (Continued)


2014 2013


Pinnacle Series Units $105,923,774 $ 89,119,816Series F Units 1,065,853 565,484Series I Units 151,732,172 81,110,882

258,721,799 170,796,182



32,623,201 43,695,614


From net investment incomePinnacle Series Units (1,947,409) (1,801,325)Series F Units (5,115) (11,395)Series I Units (3,505,501) (2,725,597)

(5,458,025) (4,538,317)



Reinvested distributionsPinnacle Series Units 1,941,651 1,798,407Series F Units 4,562 10,229Series I Units 3,505,501 2,725,597


45,294,311 48,768,320



72,459,487 87,925,617


Pinnacle Series Units 122,999,468 105,923,774Series F Units 1,112,085 1,065,853Series I Units 207,069,733 151,732,172

331,181,286 258,721,799


2014 2013

CASH FLOWS FROM OPERATING ACTIVITIESIncrease (decrease) in net assets attributable to holders

of redeemable units $ 32,623,201 $ 43,695,614Adjustments For:

Net realized (gain) loss on sale of non-derivativefinancial assets (12,262,841) 3,593,845

Net realized (gain) loss foreign exchange on cash (3,838) (2,159)Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets (14,959,215) (42,707,738)Purchases of non-derivative financial assets (699,366,015) (848,760,205)Proceeds from sale of non-derivative financial assets 654,023,758 799,736,330Transaction costs 183,837 123,021Accrued investment income 3,857 75,336



Net cash provided by (used in) financing activities 39,702,597 44,289,063Net realized (gain) loss foreign exchange on cash 3,838 2,159Net increase (decrease) in cash (54,659) 43,106Cash (Bank Indebtedness) at beginning of period 121,379 76,114






CA

NA

DIA

NE

QU

ITY

FUN

DS

62




AverageCost ($)

CarryingValue ($)


311,310 Canadian Natural Resources Ltd. 12,405,711 11,182,255274,870 EnCana Corporation 6,754,388 4,444,64893,650 Imperial Oil Ltd. 4,306,631 4,687,183

131,810 Peyto Exploration & Development Corporation 4,501,337 4,411,681162,910 PrairieSky Royalty Ltd. 5,910,727 4,985,046130,400 Seven Generations Energy Ltd. 2,530,267 2,280,69644,300 ShawCor Ltd. 1,975,196 1,878,320

403,660 Suncor Energy, Inc. 15,107,878 14,895,054

53,492,135 48,764,883

Materials – 6.9%36,300 Agrium Inc. 3,443,041 3,993,000

364,440 First Quantum Minerals Ltd. 7,844,264 6,016,90482,490 Franco-Nevada Corporation 3,943,106 4,719,253

701,990 Lundin Mining Corporation 4,008,447 4,015,38374,910 Methanex Corporation 3,776,986 3,997,947

23,015,844 22,742,487

Industrials – 12.1%199,690 Canadian National Railway Company 8,509,846 15,979,19446,110 Canadian Pacific Railway Limited 9,095,880 10,317,113

133,020 SNC-Lavalin Group Inc. 6,145,562 5,894,116238,930 WestJet Airlines Ltd. 5,223,236 7,970,705

28,974,524 40,161,128

Consumer Discretionary – 13.6%269,080 Aimia Inc 4,409,240 3,931,25944,820 AutoCanada Inc. 3,134,895 1,994,490

101,200 BRP Inc. 2,806,145 2,450,052109,870 Dollarama Inc. 2,849,867 6,526,278148,590 Gildan Activewear Inc. 7,715,271 9,762,363108,310 IMAX Corporation 3,014,452 3,883,99792,920 Magna International Inc. 5,376,217 11,697,699

108,630 Restaurant Brands International Inc. 4,670,439 4,942,665

33,976,526 45,188,803

Consumer Staples – 7.3%234,000 Alimentation Couche-Tard Inc., Class B 3,710,399 11,393,460130,690 Loblaw Companies Limited 6,631,547 8,124,997129,640 Saputo Inc. 3,199,515 4,527,029

13,541,461 24,045,486

Health Care – 7.0%120,960 Catamaron Corporation 6,176,375 7,272,11596,320 Valeant Pharmaceuticals International, Inc. 7,081,869 16,020,906

13,258,244 23,293,021

Financials – 30.2%223,140 Bank of Nova Scotia, The 11,998,105 14,796,413156,180 Brookfield Asset Management Inc., Class A 5,820,722 9,092,800185,070 CI Financial Corporation 5,743,531 5,975,910436,030 Element Financial Corp. 5,458,998 6,165,464116,030 Home Capital Group Inc. 3,357,253 5,568,280112,390 Intact Financial Corporation 6,480,244 9,423,902184,470 Royal Bank of Canada 12,680,837 14,801,873224,130 Sun Life Financial Inc. 7,490,200 9,395,530444,660 Toronto-Dominion Bank, The 18,287,309 24,683,073

77,317,199 99,903,245


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Information Technology – 5.7%

190,380 CGI Group Inc., Class A 4,952,637 8,431,93021,890 Constellation Software Inc. 2,888,173 7,561,682

176,760 Descartes Systems Group Inc., The 2,660,716 3,049,110

10,501,526 19,042,722

TOTAL EQUITIES 254,077,459 323,141,775


0.95% to 1.00% due fromJan. 8, 2015 to Jul. 30, 2015 7,070,949 7,082,911

1,050,000 Banner Trust Commercial Paper1.04% due Jan. 2, 2015 1,049,940 1,049,970

8,120,889 8,132,881


OTHER ASSETS, LESS LIABILITIES – 0.0% (93,370)

NET ASSETS – 100.0% 331,181,286



CA

NA

DIA

NE

QU

ITY

FUN

DS

63



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through capital growth by investing primarily in stocks of large

and medium capitalization Canadian corporations. The Fund’s investments may also include up to 15% cash and cashequivalents.

2. Transition to IFRS (note 12)

The following reconciliation between IFRS and Canadian GAAP, as required by IFRS 1, and the related explanations of anysignificant adjustments are as follows:














ii) Currency risk

The tables below indicates the currencies to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables alsoillustrates the potential impact on the net assets attributable to holders of redeemable units if the Canadian dollar had strengthenedor weakened by 10% in relation to each of the other currencies, with all other variables held constant.

December 31, 2014






US Dollar 48,575 0.0 4,858 0.0

December 31, 2013






U.S. Dollar 44,468 0.0 4,447 0.0

CA

NA

DIA

NE

QU

ITY

FUN

DS


64



January 1, 2013






U.S. Dollar 41,589 0.0 4,159 0.0


Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 97.6% (December 31, 2013 – 97.7%, January 1, 2013– 97.9%) of the Fund’s net assets attributable to holders ofredeemable units were exposed to other price risk. If prices of these investments had decreased or increased by 10%, with all othervariables held constant, net assets attributable to holders of redeemable units of the Fund would have decreased or increased,respectively, by approximately $32,314,178 (December 31, 2013 – $25,238,002, January 1, 2013 – $16,673,224). In practice, actualresults will differ from this sensitivity analysis and the difference could be material.

iv) Credit risk


v) Liquidity risk





Less than3 months



$331,181,286 $526,468 $258,721,799 $120,208 $170,796,182 $24,230




Percentage of Net Assets (%)December 31, 2014 December 31, 2013 January 1, 2013

Energy 14.7 19.0 22.9





Health Care 7.0 5.6 4.0



Money Market Instruments 2.5 2.2 1.9 CA

NA

DIA

NE

QU

ITY

FUN

DS


65






Equities $323,141,775 $ – $ – $323,141,775


$323,141,775 $8,132,881 $ – $331,274,656


Equities $252,733,347 $ – $ – $252,733,347


$252,733,347 5,675,523 $ – $258,408,870


Equities $167,084,296 $ – $ – $167,084,296


$167,084,296 3,309,826 $ – $170,394,122










Pinnacle Series 15.09 15.09 13.66 13.66

Series F 15.22 15.22 13.76 13.76

Series I 15.32 15.32 13.86 13.86

CA

NA

DIA

NE

QU

ITY

FUN

DS


66

Scotia Private Canadian Small Cap Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $513,548,058 $383,326,330 $233,873,987Cash 23,877,360 11,183,951 112,956Accrued investment income 1,255,729 938,485 638,988Receivable for securities sold – 792,176 310,161Subscriptions receivable 123,282 66,808 34,170

538,804,429 396,307,750 234,970,262

LIABILITIESCurrent liabilitiesPayable for securities purchased 222,432 235,868 2,422,860Redemptions payable 16,117 48,125 9,755

238,549 283,993 2,432,615

Net Assets attributable to holdersof redeemable units $538,565,880 $396,023,757 $232,537,647

NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLEUNITS PER SERIES

Pinnacle Series Units $ 66,574,081 $ 61,592,518 $ 46,711,853Series F Units $ 1,875,278 $ 879,131 $ 428,022Series I Units $470,116,521 $333,552,108 $185,397,772


NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLEUNITS PER UNIT



2014 2013


Dividends $ 10,530,056 $ 6,875,833Interest for distribution purposes 151,881 113,154Capital gains distributions received – 7,242Net realized gain (loss) on non-derivative financial assets 54,232,521 44,882,559Net gain (loss) foreign exchange – (4,322)Change in unrealized appreciation (depreciation) of non-


Net gain (loss) on investments 39,333,465 118,662,977Securities lending 64,036 74,908


EXPENSESManagement fees (note 5) 14,142 5,635Administration fees (note 6) 100,404 –Harmonized Sales Tax/Goods and Services Tax 23,307 14,861Audit fees 11,224 8,871Independent Review Committee fees 1,224 1,117Custodian fees 9,554 12,675Filing fees 11,077 18,302Legal fees 5,605 4,414Unitholder reporting costs 12,872 6,616Unitholder administration and service fees 97,716 144,330Overdraft charges – 22Transaction costs 543,466 823,818

Total expenses 830,591 1,040,661Absorbed expenses (1,693) (2,494)

Net expenses 828,898 1,038,167



Pinnacle Series Units $ 5,828,278 $ 19,685,517Series F Units $ 44,544 $ 208,094Series I Units $ 32,695,781 $ 97,806,107





Portfolio Advisor: Van Berkom and Associates Inc.


CA

NA

DIA

NE

QU

ITY

FUN

DS

67

Scotia Private Canadian Small Cap Pool (Continued)


2014 2013



396,023,757 232,537,647



38,568,603 117,699,718


Pinnacle Series Units (1,135,514) (928,913)Series F Units (19,835) (8,544)Series I Units (8,977,097) (5,584,826)

From realized gainPinnacle Series Units (6,364,867) (4,807,818)Series F Units (180,389) (68,565)Series I Units (45,061,434) (25,763,565)

(61,739,136) (37,162,231)


Pinnacle Series Units 10,764,075 9,463,877Series F Units 1,294,331 322,969Series I Units 135,264,384 69,426,783



165,712,656 82,948,623



142,542,123 163,486,110



$538,565,880 $396,023,757


2014 2013




Net realized (gain) loss foreign exchange on cash – 4,322Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets 25,580,993 (66,788,511)Purchases of non-derivative financial assets (210,630,646) (261,941,597)Proceeds from sale of non-derivative financial assets 109,295,720 220,667,499Transaction costs 543,466 823,818Accrued investment income (317,244) (299,497)



Net cash provided by (used in) financing activities 103,885,038 45,792,124Net realized (gain) loss foreign exchange on cash – (4,322)Net increase (decrease) in cash 12,693,409 11,075,317Cash (Bank Indebtedness) at beginning of period 11,183,951 112,956






CA

NA

DIA

NE

QU

ITY

FUN

DS

68



AverageCost ($)

CarryingValue ($)

EQUITIES – 95.4%Canadian Equities – 95.4%Energy – 13.4%

986,700 Calfrac Well Services Ltd. 16,264,737 9,876,867720,291 Canadian Energy Services & Technology

Corporation 1,799,373 4,573,848594,200 Canyon Services Group Inc 7,381,872 5,341,858468,900 Enerflex Ltd. 7,301,888 7,685,271895,750 Kelt Exploration Ltd. 7,897,962 6,270,250605,300 Mullen Group Limited 16,583,888 12,898,943

1,041,300 NuVista Energy Ltd. 8,249,955 7,716,033230,700 Peyto Exploration & Development Corporation 6,906,755 7,721,529

1,311,400 Savanna Energy Services Corp. 10,278,433 4,432,532920,648 ZCL Composites Inc. 5,492,292 5,579,127

88,157,155 72,096,258

Materials – 17.5%805,300 Canam Group Inc., Class A 8,766,838 9,124,049260,000 CCL Industries Inc., Class B 20,952,631 32,726,199301,900 Interfor Corporation 4,782,165 6,626,705

1,191,100 Major Drilling Group International Inc. 8,753,970 6,801,181603,632 Stella-Jones Inc. 8,497,789 19,762,912568,471 Winpak Ltd. 9,234,069 19,038,094

60,987,462 94,079,140

Industrials – 20.9%1,010,200 ATS Automation Tooling Systems Inc. 12,333,178 15,658,100

400,350 Cervus Equipment Corp. 8,717,832 8,243,207555,256 DirectCash Payments Inc. 10,145,249 10,799,729

1,128,400 Exco Technologies Ltd. 9,966,473 13,303,8362,535,010 Horizon North Logistics Inc. 16,133,566 6,692,426

259,284 Richelieu Hardware Ltd. 7,937,349 14,779,188476,416 Stantec Inc. 8,174,908 15,211,963492,500 Toromont Industries Ltd. 11,859,913 14,041,175390,500 WSP Global Inc. 11,181,351 13,612,830

96,449,819 112,342,454

Consumer Discretionary – 7.0%702,100 Bauer Performance Sports Ltd. 9,278,565 14,842,394500,390 Leon’s Furniture Ltd. 7,370,984 8,956,981831,600 Martinrea International Inc. 9,882,922 8,623,692157,640 MTY Food Group Inc. 2,667,197 5,314,044

29,199,668 37,737,111

Consumer Staples – 8.0%681,900 Alimentation Couche-Tard Inc., Class B 19,178,545 33,201,711439,022 High Liner Foods Inc. 7,238,488 9,948,239

26,417,033 43,149,950

Health Care – 1.1%532,000 Knight Therapeutics Inc. 2,839,787 3,681,44089,600 New Look Eyewear Inc. 1,735,956 2,063,936

4,575,743 5,745,376

Financials – 10.5%348,773 Canadian Western Bank 9,274,518 11,422,316214,914 Equitable Group Inc. 7,752,096 14,113,402329,004 Equity Financial Holdings, Inc. 3,330,810 3,405,191469,263 FirstService Corporation 16,422,572 27,817,910

36,779,996 56,758,819

Information Technology – 15.4%1,698,700 5N Plus Inc. 6,181,571 4,195,7891,266,200 Absolute Software Corporation 8,846,748 10,281,5442,748,887 COM DEV International Ltd. 10,778,585 10,968,059

655,491 Descartes Systems Group Inc., The 5,216,915 11,307,220613,117 Enghouse Systems Limited 17,157,971 25,438,224217,000 MacDonald, Dettwiler and Associates Ltd. 17,567,968 20,604,150

65,749,758 82,794,986


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Canadian Equities (cont’d)Telecommunication Services – 1.6%

1,459,400 Canadian Satellite Radio Holdings Inc. 10,907,444 8,843,964



NET ASSETS – 100.0% 538,565,880



CA

NA

DIA

NE

QU

ITY

FUN

DS

69




and medium capitalization Canadian corporations. The Fund’s investments may also include up to 15% cash and cashequivalents.





Revaluation of Investments at FVTPL 1,412,016 1,372,116










ii) Currency risk




iv) Credit risk


CA

NA

DIA

NE

QU

ITY

FUN

DS


70



v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $238,549 $ – $283,993 $ – $2,432,615


$538,565,880 $238,549 $396,023,757 $283,993 $232,537,647 $2,432,615






Energy 13.4 16.1 17.0

Materials 17.5 13.6 9.3




Health Care 1.1 – 5.3



Telecommunication Services 1.6 2.8 –

Money Market Instruments – – 3.1




Equities $513,548,058 $ – $ – $513,548,058


Equities $383,326,330 $ – $ – $383,326,330


Equities $226,294,285 $ – $ – $226,294,285

Warrants – 321,027 – 321,027


$226,294,285 $7,579,702 $ – $233,873,987


CA

NA

DIA

NE

QU

ITY

FUN

DS


71











Pinnacle Series 31.50 31.51 32.48 32.48

Series F 32.27 32.27 33.34 33.34

Series I 32.59 32.60 33.60 33.60

CA

NA

DIA

NE

QU

ITY

FUN

DS


72

Scotia Private U.S. Value Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $273,518,113 $421,169,644 $247,647,944Cash 13,453,411 16,534,636 11,842,076Accrued investment income 176,325 594,770 369,605Receivable for securities sold 2,021,035 – –Subscriptions receivable 167,302 92,053 299,527

289,336,186 438,391,103 260,159,152

LIABILITIESCurrent liabilitiesRedemptions payable 62,026 50,207 9,277Unrealized loss on currency spot

contracts – – 107

62,026 50,207 9,384








2014 2013


Dividends $ 9,339,312 $ 8,068,923Interest for distribution purposes 2,789 1,674Net realized gain (loss) on non-derivative financial assets 59,330,495 21,657,740Net gain (loss) foreign exchange 413,894 205,045Change in unrealized appreciation (depreciation) of

non-derivative financial assets (42,827,548) 86,393,073Change in unrealized appreciation (depreciation) of

currency spots – 107

Net gain (loss) on investments 26,258,942 116,326,562Securities lending 65,629 67,989Net realized (gain) loss foreign exchange on cash 793,790 759,471


EXPENSESManagement fees (note 5) 7,061 3,042Administration fees (note 6) 78,373 –Harmonized Sales Tax/Goods and Services Tax 20,431 15,909Audit fees 6,863 10,106Independent Review Committee fees 779 1,125Custodian fees 5,477 7,019Filing fees 11,074 16,753Legal fees 3,666 4,652Unitholder reporting costs 12,220 6,740Unitholder administration and service fees 92,072 158,833Overdraft charges 172 –Foreign withholding taxes/tax reclaims 758,998 1,140,191Transaction costs 294,011 286,496

Total expenses 1,291,197 1,650,866Absorbed expenses (1,879) (2,017)

Net expenses 1,289,318 1,648,849



Pinnacle Series Units $ 7,196,327 $ 18,542,321Series F Units $ 63,987 $ 99,599Series I Units $ 18,568,729 $ 96,863,253





Portfolio Advisor: Herndon Capital Management, LLC


FOR

EIG

NE

QU

ITY

FUN

DS

73

Scotia Private U.S. Value Pool (Continued)


2014 2013



438,340,896 260,149,768



25,829,043 115,505,173


From net investment incomePinnacle Series Units (2,329,688) (956,350)Series F Units (6,476) (5,321)Series I Units (6,772,246) (5,887,744)

From realized gain – –Pinnacle Series Units (4,804,052) (881,769)Series F Units (28,654) (7,061)Series I Units (13,181,716) (4,818,273)

(27,122,832) (12,556,518)





(147,772,947) 75,242,473


Pinnacle Series Units 9,616,242 21,639,384Series F Units (170,881) 475,225Series I Units (158,512,097) 156,076,519

(149,066,736) 178,191,128



$ 289,274,160 $438,340,896


2014 2013




Net unrealized (gain) loss foreign exchange on cash (985,961) (773,219)Change in unrealized (appreciation) depreciation on

sale of non-derivative financial assets 42,827,548 (86,393,073)Change in unrealized (appreciation) depreciation of

currency spot contracts — (107)Purchases of non-derivative financial assets (233,413,458) (306,044,799)Proceeds from sale of non-derivative financial assets 395,252,890 240,287,416Transaction costs 294,011 286,496Accrued investment income 418,445 (225,165)

Net cash provided by (used in) operating activities 170,892,023 (59,015,018)


Net cash provided by (used in) financing activities (174,959,209) 62,934,359Net unrealized (gain) loss foreign exchange on cash 985,961 773,219Net increase (decrease) in cash (4,067,186) 3,919,341Cash (Bank Indebtedness) at beginning of period 16,534,636 11,842,076






FOR

EIG

NE

QU

ITY

FUN

DS

74



AverageCost ($)

CarryingValue ($)

EQUITIES – 94.6%Energy – 20.7%87,093 Apache Corporation 7,511,755 6,334,128

189,969 Atwood Oceanics, Inc. 8,582,586 6,254,405104,629 ConocoPhillips 8,101,236 8,385,377146,271 Continental Resource, Inc. 7,131,129 6,511,49552,022 Exxon Mobil Corporation 4,642,658 5,580,42778,910 Marathon Petroleum Corporation 4,935,516 8,263,70975,927 Oasis Petroleum Inc. 3,148,991 1,457,390

130,256 Oil States International, Inc. 8,152,837 7,395,58478,326 SM Energy Company 7,202,878 3,506,809

105,214 Valero Energy Corporation 5,639,458 6,043,975

65,049,044 59,733,299

Materials – 7.0%19,289 CF Industries Holdings, Inc. 3,514,723 6,100,75983,224 LyondellBasell Industries NV, Class A 6,995,395 7,667,58014,028 NewMarket Corporation 4,064,885 6,569,245

14,575,003 20,337,584

Industrials – 11.1%54,360 Caterpillar Inc. 6,049,052 5,772,24114,028 Copa Holdings SA, Class A 2,226,841 1,687,52843,839 Lockheed Martin Corporation 4,682,346 9,798,27359,036 Rockwell Collins, Inc. 4,777,607 5,787,81647,346 United Parcel Service, Inc., Class B 4,349,371 6,108,22240,916 Verisk Analytics, Inc. 2,711,832 3,041,279

24,797,049 32,195,359

Consumer Discretionary – 7.5%63,712 Ross Stores, Inc. 5,105,232 6,969,355

120,996 TJX Companies, Inc., The 4,861,760 9,629,69261,374 Yum! Brands, Inc. 4,141,163 5,188,692

14,108,155 21,787,739

Consumer Staples – 8.0%145,546 Altria Group, Inc. 4,699,431 8,321,98145,235 Campbell Soup Company 2,065,557 2,310,83391,770 Colgate-Palmolive Company 5,970,552 7,367,05353,191 Philip Morris International Inc. 4,163,548 5,027,744

16,899,088 23,027,611

Health Care – 4.7%48,321 Gilead Sciences, Inc. 4,599,954 5,285,758

127,425 Mylan Inc. 4,947,330 8,335,787

9,547,284 13,621,545

Financials – 21.6%107,552 Aflac, Inc. 5,749,785 7,624,871164,250 Apartment Investment & Management Company 4,825,460 7,081,220130,933 CBOE Holdings Inc. 4,939,222 9,636,499108,721 Discover Financial Services 4,652,019 8,262,897118,658 Eaton Vance Corp. 4,095,979 5,636,15265,466 McGraw-Hill Companies, Inc., The 3,852,899 6,757,80557,867 Moody’s Corporation 5,518,559 6,434,069

153,144 Nationstar Mortgage Holdings Inc. 5,552,433 5,010,014102,875 Waddell & Reed Financial, Inc. 4,774,183 5,947,815

43,960,539 62,391,342

Information Technology – 12.1%85,924 Apple Inc. 5,858,303 11,006,488

144,377 Microsoft Corporation 4,685,548 7,782,65275,403 Western Digital Corporation 4,090,276 9,686,796

313,888 Western Union Company 5,624,351 6,524,004

20,258,478 34,999,940


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Telecommunication Services – 1.0%

52,607 Verizon Communications Inc. 2,724,808 2,855,015

Utilities – 0.9%160,743 AES Corporation, The 2,521,241 2,568,679



NET ASSETS – 100.0% 289,274,160



FOR

EIG

NE

QU

ITY

FUN

DS

75



1. The Fund (note 1)

i) The Fund’s investment objective is to achieve long-term returns through capital growth by investing primarily in stocks of largecapitalization U.S. corporations. The Fund’s investments may also include up to 15% cash and cash equivalents and some largecapitalization non-U.S. securities.










Revaluation of Investments at FVTPL 696





ii) Currency risk


December 31, 2014






US Dollar 286,871,524 99.2 28,687,152 10.0

December 31, 2013






U.S. Dollar 437,604,280 99.8 43,760,428 10.0

FOR

EIG

NE

QU

ITY

FUN

DS


76



January 1, 2013






U.S. Dollar 259,390,021 99.7 25,939,002 10.0



iv) Credit Risk


v) Liquidity risk





Less than3 months


Payable for currency forward contracts – – – – – 107


$289,274,160 $62,026 $438,340,896 $50,207 $260,149,768 $9,384






Energy 20.7 23.0 22.6








Utilities 0.9 1.0 –

Telecommunication Services 1.0 – –

FOR

EIG

NE

QU

ITY

FUN

DS


77






Equities $273,518,113 $ – $ – $273,518,113


Equities $421,169,644 $ – $ – $421,169,644


Equities $247,647,944 $ – $ – $247,647,944


$247,647,837 $ – $ – $247,647,837










Pinnacle Series 15.28 15.28 15.20 15.20

Series F 15.39 15.39 15.19 15.19

Series I 15.68 15.68 15.59 15.59

FOR

EIG

NE

QU

ITY

FUN

DS


78

Scotia Private U.S. Mid Cap Value Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $28,213,299 $24,967,060 $17,812,375Cash 1,626,443 1,355,224 768,968Accrued investment income 33,309 15,144 10,904Subscriptions receivable 61,669 37,165 10,251

29,934,720 26,374,593 18,602,498

LIABILITIESCurrent liabilitiesPayable for securities purchased – 445,139 86,172Redemptions payable 32,303 11,379 18,095

32,303 456,518 104,267



Pinnacle Series Units $12,234,412 $10,556,154 $ 7,848,434Series F Units $ 216,440 $ 127,477 $ 59,053Series I Units $ 119,986 $ 137,659 $ 120,359Series M Units $17,331,579 $15,096,785 $10,470,385

UNITS OUTSTANDINGPinnacle Series Units 915,292 818,376 861,149Series F Units 16,309 9,964 6,515Series I Units 8,657 10,607 13,129Series M Units 1,300,385 1,175,086 1,152,768




2014 2013


Dividends $ 595,302 $ 318,744Interest for distribution purposes 1,242 1,539Net realized gain (loss) on non-derivative financial assets 5,929,994 3,428,546Net gain (loss) foreign exchange (6,882) (25,290)Change in unrealized appreciation (depreciation) of non-


Net gain (loss) on investments 3,827,758 7,893,874Securities lending 260 82Net realized (gain) loss foreign exchange on cash 79,666 66,725


EXPENSESManagement fees (note 5) 88,083 69,676Administration fees (note 6) 24,992 –Harmonized Sales Tax/Goods and Services Tax 15,472 11,269Audit fees 636 152Independent Review Committee fees 69 842Custodian fees 6,828 4,807Filing fees 13,054 20,016Legal fees 325 590Unitholder reporting costs 5,568 3,216Unitholder administration and service fees 21,970 29,602Overdraft charges 1 –Foreign withholding taxes/tax reclaims 39,144 42,172Transaction costs 74,639 30,379


Net expenses 286,133 208,857



Pinnacle Series Units $ 1,466,822 $3,264,221Series F Units $ 26,867 $ 31,740Series I Units $ 6,359 $ 44,799Series M Units $ 2,121,503 $4,411,064



WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 792,550 841,074Series F Units 15,464 8,442Series I Units 9,862 11,364Series M Units 1,153,563 1,144,237


Portfolio Advisor: Hahn Capital Management, LLC


FOR

EIG

NE

QU

ITY

FUN

DS

79

Scotia Private U.S. Mid Cap Value Pool (Continued)


2014 2013


Pinnacle Series Units $10,556,154 $ 7,848,434Series F Units 127,477 59,053Series I Units 137,659 120,359Series M Units 15,096,785 10,470,385

25,918,075 18,498,231


Pinnacle Series Units 1,466,822 3,264,221Series F Units 26,867 31,740Series I Units 6,359 44,799Series M Units 2,121,503 4,411,064

3,621,551 7,751,824


Pinnacle Series Units (168,689) (71,857)Series F Units (1,690) (442)Series I Units (534) (980)Series M Units (208,413) (84,691)

From realized gainPinnacle Series Units (942,156) –Series F Units (16,811) –Series I Units (4,268) –Series M Units (1,333,974) –

(2,676,535) (157,970)



Reinvested distributionsPinnacle Series Units 1,108,356 71,662Series F Units 18,091 442Series I Units 4,802 980Series M Units 1,535,119 82,146

Payments on redemptionPinnacle Series Units (1,913,513) (3,109,810)Series F Units (55,245) (1,114)Series I Units (142,201) (29,003)Series M Units (5,358,837) (3,486,663)

3,039,326 (174,010)


Pinnacle Series Units 1,678,258 2,707,720Series F Units 88,963 68,424Series I Units (17,673) 17,300Series M Units 2,234,794 4,626,400

3,984,342 7,419,844



$29,902,417 $25,918,075


2014 2013



Net realized (gain) loss on sale of non-derivative financialassets (5,929,994) (3,428,546)

Net unrealized (gain) loss foreign exchange on cash (77,312) (67,887)Change in unrealized (appreciation) depreciation on sale

of non-derivative financial assets 2,691,898 (4,170,335)Purchases of non-derivative financial assets (34,250,211) (17,723,908)Proceeds from sale of non-derivative financial assets 33,722,290 18,496,692Transaction costs 74,639 30,379Accrued investment income (18,165) (4,240)

Net cash provided by (used in) operating activities (165,304) 883,979


Net cash provided by (used in) financing activities 359,211 (365,610)Net unrealized (gain) loss foreign exchange on cash 77,312 67,887Net increase (decrease) in cash 193,907 518,369Cash (Bank Indebtedness) at beginning of period 1,355,224 768,968






FOR

EIG

NE

QU

ITY

FUN

DS

80



AverageCost ($)

CarryingValue ($)

EQUITIES – 94.4%United States – 94.4%Energy – 6.7%

15,663 Kinder Morgan Inc/Delaware 490,543 769,0634,291 Pioneer Natural Resources Company 912,402 741,227

36,357 Weatherford International Ltd. 799,584 483,100

2,202,529 1,993,390

Materials – 4.8%7,124 Albemarle Corporation 526,107 496,911

13,162 Reliance Steel & Aluminum Co. 1,025,461 935,866

1,551,568 1,432,777

Industrials – 22.9%4,843 Chart Industries, Inc. 373,501 192,298

41,440 Convanta Holding Corporation 881,104 1,058,48323,455 Hexcel Corporation 1,066,522 1,129,3358,789 IDEX Corporation 720,785 793,937

14,958 Jacobs Engineering Group, Inc. 941,575 775,32731,458 Quanta Services, Inc. 1,198,369 1,036,4313,616 Roper Industries, Inc. 550,755 655,974

12,082 Wabtec Corporation 995,772 1,218,295

6,728,383 6,860,080

Consumer Discretionary – 17.7%11,530 Carter’s Inc. 934,470 1,167,9866,879 Mohawk Industries, Inc. 1,029,247 1,239,9688,884 Nordstrom, Inc. 606,248 818,4994,871 PVH Corporation 606,963 724,517

12,282 Ross Stores, Inc. 928,597 1,343,509

4,105,525 5,294,479

Consumer Staples – 4.7%18,885 Kroger Co., The 986,828 1,407,225

Health Care – 4.4%19,226 CareFusion Corporation 691,360 1,323,977

Financials – 27.1%14,836 CB Richard Ellis Group, Inc. 472,651 589,68716,392 CIT Group, Inc. 783,601 909,57813,524 Euronet Worldwide, Inc. 694,426 861,63112,859 First Republic Bank 719,536 777,77817,391 HCC Insurance Holdings, Inc. 891,247 1,080,45446,410 Host Hotels & Resorts Inc. 1,091,802 1,281,0298,264 PartnerRe Ltd. 961,628 1,093,731

17,434 SEI Investments Company 638,475 810,09311,937 Waddell & Reed Financial, Inc. 858,380 690,149

7,111,746 8,094,130

Information Technology – 6.1%17,043 Agilent Technologies, Inc. 950,661 809,72525,427 Keysight Technologies Inc. 884,109 997,516

1,834,770 1,807,241



NET ASSETS – 100.0% 29,902,417



FOR

EIG

NE

QU

ITY

FUN

DS

81




and medium capitalization companies located in the U.S. The Fund’s investments may also include up to 15% cash and cashequivalents and some non-U.S. securities.















ii) Currency risk

The tables below indicate the currencies to which the Fund had significant exposure, net of the impact of foreign currency forwardcontracts and foreign currency spot contracts, if any, based on the monetary and non-monetary assets of the Fund. The tables alsoillustrate the potential impact on the net assets attributable to holders of redeemable units if the Canadian dollar had strengthenedor weakened by 10% in relation to each of the other currencies, with all other variables held constant.

December 31, 2014






US Dollar 29,772,704 99.6 2,977,270 10.0

December 31, 2013






U.S. Dollar 26,160,414 100.9 2,616,041 10.1

FOR

EIG

NE

QU

ITY

FUN

DS


82



January 1, 2013






U.S. Dollar 18,510,744 100.1 1,851,074 10.0



iv) Credit risk


v) Liquidity risk





Less than3 months



$29,902,417 $32,303 $25,918,075 $456,518 $18,498,231 $104,267






United States Equities

Energy 6.7 8.3 7.4








Utilities – 7.5 8.9 FOR

EIG

NE

QU

ITY

FUN

DS


83






Equities $28,213,299 $ – $ – $28,213,299


Equities $24,967,060 $ – $ – $24,967,060


Equities $17,812,375 $ – $ – $17,812,375










Pinnacle Series 13.37 13.37 12.90 12.90

Series F 13.27 13.27 12.79 12.79

Series I 13.86 13.86 12.98 12.98

Series M 13.33 13.33 12.85 12.85

FOR

EIG

NE

QU

ITY

FUN

DS


84

Scotia Private U.S. Mid Cap Growth Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $167,760,628 $104,441,280 $58,447,621Cash 6,087,938 3,733,190 3,370,717Accrued investment income 23,976 19,011 3,200Receivable for securities sold 226,431 355,890 –Subscriptions receivable 85,326 69,747 29,658

174,184,299 108,619,118 61,851,196

LIABILITIESCurrent liabilitiesPayable for securities purchased 243,600 1,617,462 –Redemptions payable 19,217 16,060 24,162

262,817 1,633,522 24,162



Pinnacle Series Units $ 14,814,476 $ 10,720,021 $ 7,397,334Series F Units $ 142,998 $ 88,281 $ 45,216Series I Units $141,774,132 $ 82,428,637 $43,280,594Series M Units $ 17,189,876 $ 13,748,657 $11,103,890

UNITS OUTSTANDINGPinnacle Series Units 558,534 477,061 449,479Series F Units 5,594 4,056 2,825Series I Units 5,291,209 3,634,890 2,607,812Series M Units 650,459 613,846 677,042




2014 2013


Dividends $ 1,060,080 $ 600,550Interest for distribution purposes 1,670 2,820Net realized gain (loss) on non-derivative financial assets 14,858,462 14,889,912Net gain (loss) foreign exchange (83,344) 17,466Change in unrealized appreciation (depreciation) of non-


Net gain (loss) on investments 26,517,249 25,981,039Securities lending 10,799 16,617Net realized (gain) loss foreign exchange on cash 384,561 136,368Other income – 600


EXPENSESManagement fees (note 5) 82,423 69,239Administration fees (note 6) 45,890 –Harmonized Sales Tax/Goods and Services Tax 20,275 15,795Audit fees 3,301 2,012Independent Review Committee fees 361 940Custodian fees 11,681 7,635Filing fees 11,975 18,230Legal fees 1,628 1,719Unitholder reporting costs 7,098 3,447Unitholder administration and service fees 55,867 75,748Overdraft charges 21 –Foreign withholding taxes/tax reclaims 159,168 87,041Transaction costs 113,547 101,175


Net expenses 487,037 346,201



Pinnacle Series Units $ 2,131,703 $ 2,767,832Series F Units $ 21,300 $ 19,629Series I Units $21,678,322 $19,106,368Series M Units $ 2,594,247 $ 3,894,594



WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 503,583 453,113Series F Units 5,108 3,478Series I Units 4,736,001 3,069,713Series M Units 626,502 641,412


Portfolio Advisor: William Blair & Company L.L.C.


FOR

EIG

NE

QU

ITY

FUN

DS

85

Scotia Private U.S. Mid Cap Growth Pool (Continued)


2014 2013


Pinnacle Series Units $ 10,720,021 $ 7,397,334Series F Units 88,281 45,216Series I Units 82,428,637 43,280,594Series M Units 13,748,657 11,103,890

106,985,596 61,827,034



26,425,572 25,788,423


Pinnacle Series Units (12,238) (16,601)Series I Units (687,737) (467,688)Series M Units – (678)

(699,975) (484,967)



Reinvested distributionsPinnacle Series Units 12,237 16,601Series I Units 687,737 467,688Series M Units – 659

Payments on redemptionPinnacle Series Units (2,258,522) (1,964,895)Series F Units (3,031) (1,136)Series I Units (7,129,024) (1,457,752)Series M Units (4,512,524) (4,545,093)

41,210,289 19,855,106



66,935,886 45,158,562



$173,921,482 $106,985,596


2014 2013





sale of non-derivative financial assets (10,680,381) (10,470,291)Purchases of non-derivative financial assets (153,983,009) (132,805,383)Proceeds from sale of non-derivative financial assets 114,844,554 113,332,324Transaction costs 113,547 101,175Accrued investment income (4,965) (15,811)


CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 54,397,837 27,298,945Amounts paid on redemption of redeemable units (13,899,944) (7,976,978)Distributions to unitholders of redeemable units (1) (19)

Net cash provided by (used in) financing activities 40,497,892 19,321,948Net unrealized (gain) loss foreign exchange on cash 412,942 144,657Net increase (decrease) in cash 1,941,806 217,816Cash (Bank Indebtedness) at beginning of period 3,733,190 3,370,717






FOR

EIG

NE

QU

ITY

FUN

DS

86



AverageCost ($)

CarryingValue ($)


13,970 Concho Resources Inc. 2,018,979 1,617,16128,350 FMC Technologies, Inc. 1,665,035 1,541,0408,020 Pioneer Natural Resources Company 1,320,794 1,385,374

21,460 Range Resources Corporation 1,755,385 1,331,13314,800 Whiting Petroleum Corporation 955,639 566,787

7,715,832 6,441,495

Materials – 1.1%15,969 International Flavors & Fragrances Inc. 1,741,790 1,878,030

Industrials – 16.3%56,005 Ametek Inc. 2,689,051 3,420,61448,830 Equifax Inc. 3,413,596 4,583,51544,800 Old Dominion Freight Line Inc. 2,854,394 4,036,52317,500 Rockwell Collins, Inc. 1,709,796 1,715,67836,080 Stericycle, Inc. 4,314,928 5,488,41617,560 The Middleby Corporation 1,742,643 2,019,49215,070 Towers Watson & Company, Class A 1,755,406 1,979,1957,520 TransDigm Group Inc. 1,275,066 1,712,966

46,150 Verisk Analytics, Inc. 3,263,052 3,430,321

23,017,932 28,386,720

Consumer Discretionary – 24.1%55,111 BorgWarner, Inc. 3,663,504 3,513,11057,469 Dollar General Corp. 3,598,722 4,714,16554,200 Fortune Brands Home & Security Inc. 2,530,646 2,847,434

116,347 Genpact Limited 2,187,969 2,555,93421,990 Limited Brands, Inc. 1,777,141 2,207,80423,650 Manpower Inc. 2,055,769 1,870,97737,210 Marriott International Inc., Class A 2,672,801 3,369,49820,090 Michael Kors Holdings Limited 1,728,794 1,750,91023,240 O’Reilly Automotive, Inc. 3,057,874 5,194,95021,160 Polaris Industries Inc 3,498,766 3,713,86629,590 Ross Stores, Inc. 2,740,166 3,236,80345,090 Six Flags Entertainment Corporation 2,000,731 2,257,90152,267 Williams-Sonoma, Inc 3,607,957 4,590,422

35,120,840 41,823,774

Consumer Staples – 9.4%30,970 Church & Dwight Co., Inc. 2,244,456 2,832,47719,285 Green Mountain Coffee Roasters 1,960,205 2,963,02435,810 Mead Johnson Nutrition Company 3,154,820 4,177,55626,130 Monster Beverage Corporation 2,988,873 3,285,58178,884 Sprouts Farmers Market Inc. 2,626,155 3,110,686

12,974,509 16,369,324

Health Care – 14.8%34,980 Align Technology Inc. 2,028,155 2,269,62037,064 BioMarin Pharmaceutical Inc. 2,743,564 3,890,279

114,013 HMS Holdings Corporation 2,904,855 2,797,07013,002 Idexx Laboratories Inc. 1,465,706 2,237,21317,560 Mallinckrodt PLC 1,710,383 2,017,04617,640 Medivation Inc. 1,570,176 2,039,13242,860 MEDNAX, Inc. 2,772,501 3,289,23327,790 Sirona Dental Systems, Inc. 2,182,851 2,817,70016,242 Techne Corporation 1,617,565 1,741,62852,660 Zoetis Inc. 2,026,695 2,628,417

21,022,451 25,727,338

Financials – 8.1%23,260 Affiliated Managers Group, Inc. 4,691,842 5,726,46457,984 LPL Financial Holdings Inc. 2,654,350 2,997,78036,960 Portfolio Recovery Associates, Inc. 2,335,586 2,484,73119,537 Signature Bank 2,089,445 2,855,844

11,771,223 14,064,819


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Information Technology – 16.5%

47,625 Akamai Technologies, Inc. 2,459,409 3,479,71512,464 CoStar Group Inc. 1,930,010 2,656,10344,734 Gartner Inc., Class A 3,259,829 4,371,64954,470 Guidewire Software Inc. 2,492,064 3,200,43622,750 IPG Photonics Corporation 1,625,725 1,977,9855,140 Mettler-Toledo International Inc. 1,742,398 1,805,949

55,918 NeuStar Inc. 2,252,789 1,804,01674,190 Pandora Media Inc. 1,992,538 1,535,11436,920 Red Hat, Inc. 2,099,428 2,962,340

126,384 Vantiv, Inc. 4,288,929 4,974,986

24,143,119 28,768,293

Telecommunication Services – 2.5%33,460 SBA Communications Corp., Class A 3,417,551 4,300,835



NET ASSETS – 100.0% 173,921,482



FOR

EIG

NE

QU

ITY

FUN

DS

87




and medium capitalization companies traded on U.S. stock exchanges. The Fund’s investments may also include up to 15% cashand cash equivalents.















ii) Currency risk


December 31, 2014






US Dollar 173,782,664 99.9 17,378,266 10.0

December 31, 2013






U.S. Dollar 108,053,851 101.0 10,805,385 10.1

FOR

EIG

NE

QU

ITY

FUN

DS


88



January 1, 2013






U.S. Dollar 61,548,163 99.5 6,154,816 10.0



iv) Credit risk


v) Liquidity risk




Less than3 months

Ondemand

Less than3 months



$173,921,482 $262,817 $106,985,596 $1,633,522 $61,827,034 $24,162






United States

Energy 3.7 4.2 8.8





Health Care 14.8 10.8 16.3



Telecommunication Services 2.5 4.2 – FOR

EIG

NE

QU

ITY

FUN

DS


89






Equities $167,760,628 $ – $ – $167,760,628


Equities $104,441,280 $ – $ – $104,441,280


Equities $ 58,447,621 $ – $ – $ 58,447,621










Pinnacle Series 26.52 26.52 22.47 22.47

Series F 25.56 25.56 21.77 21.77

Series I 26.79 26.79 22.68 22.68

Series M 26.43 26.43 22.40 22.40

FOR

EIG

NE

QU

ITY

FUN

DS


90

Scotia Private U.S. Large Cap Growth Pool


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $68,653,135 $53,219,185 $37,941,991Cash 1,592,787 1,059,255 392,017Accrued investment income 24,278 38,605 29,202Receivable for securities sold – – 11,768Subscriptions receivable 151,790 45,080 3,359

70,421,990 54,362,125 38,378,337

LIABILITIESCurrent liabilitiesPayable for securities purchased – – 228,418Redemptions payable 13,401 65,930 6,561

13,401 65,930 234,979








2014 2013


Dividends $ 927,976 $ 702,025Interest for distribution purposes 1,507 727Net realized gain (loss) on non-derivative financial assets 12,610,621 5,711,248Net gain (loss) foreign exchange 40,196 (11,383)Change in unrealized appreciation (depreciation) of

non-derivative financial assets 1,595,896 8,839,884

Net gain (loss) on investments 15,176,196 15,242,501Securities lending 335 2,133Net realized (gain) loss foreign exchange on cash 198,312 68,237


EXPENSESManagement fees (note 5) 4,389 2,020Administration fees (note 6) 58,766 –Harmonized Sales Tax/Goods and Services Tax 15,389 10,708Audit fees 1,375 920Independent Review Committee fees 153 912Custodian fees 9,819 13,374Filing fees 11,231 16,983Legal fees 703 1,110Unitholder reporting costs 10,086 5,791Unitholder administration and service fees 61,254 80,381Overdraft charges – 339Foreign withholding taxes/tax reclaims 95,621 94,909Transaction costs 26,525 22,024


Net expenses 292,849 247,175



Pinnacle Series Units $13,804,503 $13,754,000Series F Units $ 112,134 $ 67,333Series I Units $ 1,165,357 $ 1,244,363





Portfolio Advisor: Polen Capital Management, LLC


FOR

EIG

NE

QU

ITY

FUN

DS

91

Scotia Private U.S. Large Cap Growth Pool (Continued)


2014 2013



54,296,195 38,143,358



15,081,994 15,065,696


Pinnacle Series Units (647,567) (463,467)Series F Units (1,088) (1,710)Series I Units (59,706) (45,715)

(708,361) (510,892)



Reinvested distributionsPinnacle Series Units 645,419 462,731Series F Units 991 1,485Series I Units 59,706 45,715


1,738,761 1,598,033



16,112,394 16,152,837



$ 70,408,589 $54,296,195


2014 2013





sale of non-derivative financial assets (1,595,896) (8,839,884)Purchases of non-derivative financial assets (60,170,803) (40,214,382)Proceeds from sale of non-derivative financial assets 58,916,844 39,249,646Transaction costs 26,525 22,024Accrued investment income 14,327 (9,403)

Net cash provided by (used in) operating activities (540,278) (509,295)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 12,284,074 9,685,197Amounts paid on redemption of redeemable units (11,410,667) (8,579,447)Distributions to unitholders of redeemable units (2,245) (961)

Net cash provided by (used in) financing activities 871,162 1,104,789Net unrealized (gain) loss foreign exchange on cash 202,648 71,744Net increase (decrease) in cash 330,884 595,494Cash (Bank Indebtedness) at beginning of period 1,059,255 392,017


Interest received(1) 1,441 705Dividends received, net of withholding taxes(1) 846,748 597,735




FOR

EIG

NE

QU

ITY

FUN

DS

92



AverageCost ($)

CarryingValue ($)

EQUITIES – 97.5%United States – 93.9%Industrials – 5.6%33,620 Fastenal Company 1,685,374 1,855,5967,162 W.W. Grainger, Inc. 1,938,589 2,118,512

3,623,963 3,974,108

Consumer Discretionary – 25.2%39,826 NIKE, Inc., Class B 3,323,394 4,442,23810,498 O’Reilly Automotive, Inc. 1,726,434 2,346,6692,840 priceline.com Incorporated 3,749,210 3,759,399

36,464 Starbucks Corporation 2,813,205 3,472,05746,597 TJX Companies, Inc., The 3,113,325 3,708,509

14,725,568 17,728,872

Health Care – 19.3%82,628 Abbott Laboratories 3,380,777 4,316,94614,236 Allergan, Inc. 1,657,582 3,515,13720,259 Celgene Corporation 2,670,094 2,629,8856,542 Regeneron Pharmaceuticals, Inc. 2,287,637 3,114,605

9,996,090 13,576,573

Information Technology – 43.8%30,897 Accenture PLC, Class A 2,681,766 3,202,28724,263 Apple Inc. 1,196,449 3,107,98427,204 Automatic Data Processing, Inc. 2,322,887 2,632,00414,678 FactSet Research Systems Inc. 1,706,484 2,397,50325,608 Gartner Inc., Class A 1,910,639 2,502,5534,025 Google Inc. Class A 3,778,064 2,478,7125,975 Google Inc. Class C 1,275,344 3,650,041

14,057 MasterCard, Inc., Class A 744,832 1,405,94582,702 Oracle Corporation 3,131,381 4,316,01416,872 Visa Inc. 3,861,738 5,133,850

22,609,584 30,826,893

Foreign Equities – 3.6%Switzerland – 3.6%30,082 Nestle SA 2,572,793 2,546,689



NET ASSETS – 100.0% 70,408,589



FOR

EIG

NE

QU

ITY

FUN

DS

93



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through capital growth by investing primarily in large

capitalization stocks of U.S. corporations. The Fund’s investments may also include up to 15% cash and cash equivalents andsome non-U.S. securities.















ii) Currency risk


December 31, 2014






US Dollar 70,076,699 99.5 7,007,670 10.0

December 31, 2013






U.S. Dollar 54,200,397 99.8 5,420,040 10.0

FOR

EIG

NE

QU

ITY

FUN

DS


94



January 1, 2013






U.S. Dollar 38,244,527 100.3 3,824,453 10.0



iv) Credit risk


v) Liquidity risk





Less than3 months



$70,408,589 $13,401 $54,296,195 $65,930 $38,143,358 $234,979


FOR

EIG

NE

QU

ITY

FUN

DS


95







Canadian Equities – – 0.9

United States Equities

Energy – 5.2 4.6

Materials – 3.8 3.1



Consumer Staples – 10.7 13.9

Health Care 19.3 12.6 12.0

Financials – 4.8 4.2


Telecommunication Services – – 3.3

Utilities – – 0.3

Index Unit – 0.2 0.6

Foreign Equities 3.6 – –




Equities $68,653,135 $ – $ – $68,653,135


Equities $53,219,185 $ – $ – $53,219,185


Equities $37,941,991 $ – $ – $37,941,991










Pinnacle Series 14.33 14.33 11.34 11.33

Series F 14.22 14.22 11.26 11.26

Series I 14.40 14.40 11.39 11.39

FOR

EIG

NE

QU

ITY

FUN

DS


96

Scotia Private International Equity Pool


December 31,2014

December 31,2013

January 1,2013



contracts 5,173 – 242Cash 30,399,832 44,657,517 23,780,282Accrued investment income 244,513 230,717 297,943Receivable for securities sold 126,680 1,442,418 1,498,736Subscriptions receivable 212,664 143,590 304,614

604,864,066 773,869,590 449,638,158

LIABILITIESCurrent liabilitiesPayable for securities purchased 4,098,314 1,177,821 1,196,779Redemptions payable 17,924 118,592 17,235Unrealized loss on currency spot

contracts – 11,440 10,378

4,116,238 1,307,853 1,224,392

Net Assets attributable to holdersof redeemable units $600,747,828 $772,561,737 $448,413,766

NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLEUNITS PER SERIES



NET ASSETS ATTRIBUTABLE TOHOLDERS OF REDEEMABLEUNITS PER UNIT



2014 2013


Dividends $ 13,379,778 $ 11,939,736Interest for distribution purposes 370,406 573,787Net realized gain (loss) on non-derivative financial

assets 101,574,535 23,823,477Net gain (loss) foreign exchange 748,745 (267,460)Change in unrealized appreciation (depreciation) of


currency spots 16,613 (1,304)

Net gain (loss) on investments 11,023,683 141,928,433Securities lending 77,778 167,818Net realized (gain) loss foreign exchange on cash (1,338,696) 137,660Other income – 1,044


EXPENSESManagement fees (note 5) 8,154 5,785Administration fees (note 6) 129,554 –Harmonized Sales Tax/Goods and Services Tax 32,481 24,163Audit fees 13,144 17,727Independent Review Committee fees 1,474 1,270Custodian fees 65,093 72,751Filing fees 11,055 16,775Legal fees 6,823 7,554Unitholder reporting costs 13,343 6,962Unitholder administration and service fees 108,777 207,923Foreign withholding taxes/tax reclaims 1,972,567 1,227,274Transaction costs 883,871 473,584


Net expenses 3,244,403 2,059,809

Increase (decrease) in Net Assets attributable to holdersof redeemable units from operations $ 6,518,362 $140,175,146

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLETO HOLDERS OF REDEEMABLE UNITS FROMOPERATIONS PER SERIES

Pinnacle Series Units $ 1,196,057 $ 11,792,187Series F Units $ 4,883 $ 128,869Series I Units $ 5,317,422 $128,254,090

INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLETO HOLDERS OF REDEEMABLE UNITS FROMOPERATIONS PER UNIT*




Portfolio Advisor: Thornburg Investment Management, Inc.


FOR

EIG

NE

QU

ITY

FUN

DS

97

Scotia Private International Equity Pool (Continued)


2014 2013



772,561,737 448,413,766



6,518,362 140,175,146


From net investment incomePinnacle Series Units (1,008,528) (745,180)Series F Units (3,468) (5,087)Series I Units (9,011,303) (10,500,258)

(10,023,299) (11,250,525)



Reinvested distributionsPinnacle Series Units 1,005,890 744,276Series F Units 3,208 4,881Series I Units 9,011,303 10,500,258


(168,308,972) 195,223,350


Pinnacle Series Units 9,713,534 10,879,075Series F Units (31,805) 347,711Series I Units (181,495,638) 312,921,185

(171,813,909) 324,147,971



$ 600,747,828 $772,561,737


2014 2013






currency spot contracts (16,613) 1,304Purchases of non-derivative financial assets (539,927,377) (377,345,848)Proceeds from sale of non-derivative financial assets 693,308,022 202,954,291Transaction costs 883,871 473,584Accrued investment income (13,796) 67,226









FOR

EIG

NE

QU

ITY

FUN

DS

98



AverageCost ($)

CarryingValue ($)

EQUITIES – 95.5%Brazil – 1.6%

334,088 Itau Unibanco Holding SA ADR 5,054,908 5,044,081720,656 Kroton Educacional SA 5,604,579 4,820,197

10,659,487 9,864,278

Denmark – 2.4%300,720 Novo Nordisk A/S, Class B 9,710,028 14,765,538

France – 11.1%202,049 Accor SA 10,844,683 10,503,950

3,359 Hermes International 1,355,575 1,389,69068,873 LVMH Moet Hennessy Louis Vuitton SA 11,315,223 12,636,66664,138 Pernod Ricard SA 8,190,181 8,251,15683,291 Publicis Groupe 5,523,973 6,921,65255,914 Renault SA 4,966,635 4,740,792

163,101 Safran SA 11,680,140 11,647,573183,644 Total SA 13,320,813 10,986,041

67,197,223 67,077,520

Germany – 1.3%86,801 Fresenius Medical Care AG & Co. KGaA 5,889,599 7,537,400

Hong Kong – 8.7%3,102,934 AIA Group Ltd. 15,342,460 19,830,3051,072,925 China Mobile Limited 12,600,659 14,628,637

861,656 Galaxy Entertainment Group Limited 6,008,245 5,566,899298,621 Hong Kong Exchanges & Clearing Limited 5,549,721 7,624,321270,421 Tencent Holdings Limited 4,385,009 4,503,252

43,886,094 52,153,414

India – 2.7%1,205,775 ICICI Bank Limited ADR 14,194,844 16,161,891

Italy – 1.1%2,006,502 Intesa Sanpaolo SpA 5,430,899 6,734,763

Japan – 10.3%377,846 Kubota Corporation 5,738,948 6,367,428121,623 Nippon Telegraph and Telephone Corporation 8,652,216 7,262,964272,033 Olympus Corporation 10,736,236 11,123,777362,508 Sony Corporation 8,846,498 8,564,764170,881 Tokyo Electron Limited 12,476,892 15,048,944184,890 Toyota Motor Corporation 9,244,566 13,380,386

55,695,356 61,748,263

Netherlands – 6.9%73,463 Altice S.A. 5,044,483 6,726,18461,938 ASML Holding NV 5,126,073 7,699,339

1,230,223 ING Groep NV 17,495,682 18,481,258250,566 Koninklijke Philips Electronics NV 8,468,815 8,441,205

36,135,053 41,347,986

South Korea – 0.5%65,343 Korea Electric Power Corporation 3,089,772 2,934,874

Spain – 3.6%205,434 Amadeus IT Holding SA, Class A 7,767,313 9,471,697

1,142,710 Banco Bilbao Vizcaya Argentaria, SA 14,459,533 12,478,255

22,226,846 21,949,952

Sweden – 2.3%151,370 Hennes & Mauritz AB, Class B 5,719,727 7,287,642258,609 Svenska Cellulosa AB SCA, Class B 7,461,123 6,481,971

13,180,850 13,769,613

Switzerland – 11.0%166,213 Holcim Ltd. 14,606,221 13,694,432168,026 Julius Baer Group Ltd. 6,797,577 8,896,799103,115 Nestle SA 7,715,118 8,769,883140,459 Novartis AG 10,871,206 14,987,966


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Switzerland (cont’d)

19,554 Roche Holdings AG 5,179,389 6,149,341666,652 UBS Group AG 14,414,975 13,296,162

59,584,486 65,794,583

United Kingdom – 23.3%1,050,411 Aviva PLC 9,834,309 9,133,959

381,985 BG Group PLC 6,081,581 5,900,4141,881,369 BT Group PLC 13,085,070 13,552,812

223,548 Burberry Group PLC 4,963,934 6,573,371741,175 Compass Group PLC 12,448,787 14,660,031653,095 Experian PLC 12,482,347 12,784,00593,516 Indivior PLC 202,441 252,700

3,362,690 ITV PLC 12,652,216 12,999,9952,338,637 Kingfisher PLC 11,679,258 14,301,302

284,856 Liberty Global PLC 9,577,189 15,970,0517,998,137 Lloyds Banking Group PLC 10,994,313 10,960,347

93,516 Reckitt Benkiser Group PLC 6,797,595 8,754,667113,844 Rio Tinto PLC 6,961,946 6,086,766132,910 SABMiller PLC 5,842,113 7,982,179

123,603,099 139,912,599

United States – 8.7%68,692 Actavis Inc. 17,062,785 20,539,04420,565 Baidu, Inc. 2,963,325 5,440,644

304,331 Nielsen Holdings N.V. 14,725,888 15,790,460104,445 Schlumberger Limited 9,387,882 10,352,382

44,139,880 52,122,530


Currency Spot Contracts – 0.0% 5,173OTHER ASSETS, LESS LIABILITIES – 4.5% 26,867,451

NET ASSETS – 100.0% 600,747,828



FOR

EIG

NE

QU

ITY

FUN

DS

99


SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014CURRENCY SPOT CONTRACTS


December 31, 2014 ($)


(Depreciation)

Jan. 2, 2015 British Pound 2,149,041 Canadian Dollar 3,882,672 3,882,673 4,320Jan. 5, 2015 British Pound 116,836 Canadian Dollar 211,081 211,081 241Jan. 5, 2015 Canadian Dollar 127,292 European Euro 90,229 126,680 612

5,173


Portfolio Adviser: Thornburg Investment Management, Inc.


FOR

EIG

NE

QU

ITY

FUN

DS

100




capitalization stocks of companies in Europe, Australia and the Far East. The Fund may invest up to 15% of its assets in cashand cash equivalents and up to 10% of its assets in securities of issuers in emerging markets.















ii) Currency risk


December 31, 2014






European Euro 144,520,938 24.1 14,452,094 2.4

British Pound 128,036,302 21.3 12,803,630 2.1

US Dollar 89,298,553 14.9 8,929,855 1.5

Swiss Franc 65,794,583 11.0 6,579,458 1.1

Japanese Yen 61,748,263 10.3 6,174,826 1.0

Hong Kong Dollar 52,153,418 8.7 5,215,342 0.9

Danish Krone 14,765,538 2.5 1,476,554 0.2

Swedish Krona 13,769,613 2.3 1,376,961 0.2

Brazilian Real 4,820,197 0.8 482,020 0.1

South Korean Won 2,934,874 0.5 293,487 0.0

Total 577,842,279 96.4 57,784,227 9.5

FOR

EIG

NE

QU

ITY

FUN

DS


101



December 31, 2013






European Euro 189,307,427 24.5 18,930,743 2.5

Japanese Yen 140,547,934 18.2 14,054,793 1.8

British Pound 134,817,455 17.5 13,481,745 1.7

U.S. Dollar 74,339,183 9.6 7,433,918 1.0

Swiss Franc 69,034,550 8.9 6,903,455 0.9

Hong Kong Dollar 60,003,880 7.8 6,000,388 0.8

Swedish Krona 28,955,895 3.7 2,895,589 0.4

Danish Krone 19,748,629 2.6 1,974,863 0.3

Korean Won 5,924,234 0.8 592,423 0.1

Brazilian Real 3,074,733 0.4 307,473 0.0

Mexican Peso 2,628,222 0.3 262,822 0.0

Total 728,382,142 94.3 72,838,212 9.5

January 1, 2013






European Euro 111,154,535 24.8 11,115,453 2.5

British Pound 92,911,608 20.7 9,291,161 2.1

U.S. Dollar 55,973,833 12.5 5,597,383 1.2

Hong Kong Dollar 43,605,325 9.7 4,360,533 1.0

Japanese Yen 41,904,224 9.3 4,190,422 0.9

Swiss Franc 34,444,303 7.7 3,444,430 0.8

Swedish Krona 17,192,511 3.8 1,719,251 0.4

Danish Krone 11,924,476 2.7 1,192,448 0.3

Brazilian Real 5,576,716 1.2 557,672 0.1

Korean Won 4,578,963 1.0 457,896 0.1

Mexican Peso 4,361,096 1.0 436,110 0.1

Total 423,627,590 94.4 42,362,759 9.5



iv) Credit risk


FOR

EIG

NE

QU

ITY

FUN

DS


102



v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $4,116,238 $ – $1,296,413 $ – $1,214,014Unrealized loss on currency spot contracts – – – 11,440 – 10,378Redeemable units 600,747,828 – 772,561,737 – 448,413,766 –

$600,747,828 $4,116,238 $772,561,737 $1,307,853 $448,413,766 $1,224,392






Argentina – 0.4 –

Belgium – 1.5 –

Brazil 1.6 0.9 3.0

China – 0.8 1.4

Denmark 2.4 2.6 2.7

Finland – 1.0 –

France 11.1 8.4 9.0

Germany 1.3 7.2 15.1

Hong Kong 8.7 7.0 8.3

India 2.7 – –

Italy 1.1 1.9 –

Israel – – 1.5

Japan 10.3 18.0 9.3

Mexico – 0.3 1.0

Netherlands 6.9 3.8 1.1

South Korea 0.5 0.8 1.0

Spain 3.6 2.1 –

Sweden 2.3 3.8 4.1

Switzerland 11.0 8.9 7.7

Taiwan – 0.7 –

United Kingdom 23.3 17.4 21.2

United States 8.7 6.7 8.1

Currency Spot Contracts 0.0 0.0 0.0

FOR

EIG

NE

QU

ITY

FUN

DS


103






Equities $89,298,548 $484,576,656 $ – $573,875,204

Currency Spot Contracts – Assets 5,173 – – 5,173

$89,303,721 $484,576,656 $ – $573,880,377


Equities $77,065,460 $650,329,888 $ – $727,395,348

Currency Spot Contracts – Liabilities (11,440) – – (11,440)

$77,054,020 $650,329,888 $ – $727,383,908

Juanuary 1, 2013 Level 1 Level 2 Level 3 Total

Equities $65,425,358 $358,330,983 $ – $423,756,341

Currency Spot Contracts – Assets 242.00 – – 242.00

$65,425,600 $358,330,983 $ – $423,756,583


$65,415,222 $358,330,983 $ – $423,746,205










Pinnacle Series 11.65 11.65 11.64 11.64

Series F 11.74 11.74 11.71 11.71

Series I 11.98 11.98 11.97 11.97

FOR

EIG

NE

QU

ITY

FUN

DS


104

Scotia Private International Small to Mid Cap Value Pool


December 31,2014

December 31,2013

January 1,2013



contracts – 148 –Cash 457,571 301,105 158,755Accrued investment income 19,139 25,485 27,365Subscriptions receivable 38,152 164,318 1,733

37,463,185 33,716,482 27,536,079

LIABILITIESCurrent liabilitiesRedemptions payable 11,696 17,862 4,942








2014 2013


Dividends $ 832,109 $ 751,011Interest for distribution purposes 1,872 2,751Capital gains distributions received (437) 2,425Net realized gain (loss) on non-derivative financial assets 4,265,295 5,117,930Net gain (loss) foreign exchange (11,509) 6,585Change in unrealized appreciation (depreciation) of


currency spots (148) 148

Net gain (loss) on investments 3,471,895 11,082,764Securities lending 3,433 3,685Net realized (gain) loss foreign exchange on cash (10,016) (18,094)


EXPENSESManagement fees (note 5) 7,021 1,705Administration fees (note 6) 60,158 –Harmonized Sales Tax/Goods and Services Tax 16,821 14,723Audit fees 843 433Independent Review Committee fees 92 890Custodian fees 36,188 66,736Filing fees 11,098 16,738Legal fees 432 11Unitholder reporting costs 10,027 5,789Unitholder administration and service fees 53,250 69,250Overdraft charges 866 1,363Foreign withholding taxes/tax reclaims 92,069 75,863Transaction costs 46,033 45,127


Net expenses 325,911 274,620



Pinnacle Series Units $ 2,886,370 $ 9,923,041Series F Units $ 27,596 $ 60,641Series I Units $ 225,435 $ 810,053





Portfolio Advisor: Munder Capital Management


FOR

EIG

NE

QU

ITY

FUN

DS

105

Scotia Private International Small to Mid Cap Value Pool (Continued)


2014 2013


Pinnacle Series Units $31,163,533 $25,170,538Series F Units 237,245 117,455Series I Units 2,297,842 2,243,144

33,698,620 27,531,137



3,139,401 10,793,735


Pinnacle Series Units (491,146) (489,825)Series F Units (9,036) (2,900)Series I Units (44,665) (45,856)

(544,847) (538,581)



Reinvested distributionsPinnacle Series Units 489,265 488,982Series F Units 8,804 2,697Series I Units 44,665 45,856


1,158,315 (4,087,671)



3,752,869 6,167,483



$37,451,489 $33,698,620


2014 2013




Net unrealized (gain) loss foreign exchange on cash (6,564) 3,011Change in unrealized (appreciation) depreciation on


currency spot contracts 148 (148)Purchases of non-derivative financial assets (25,628,736) (21,669,457)Proceeds from sale of non-derivative financial assets 24,509,814 26,066,974Transaction costs 46,033 45,127Accrued investment income 6,346 1,880

Net cash provided by (used in) operating activities (583,566) 4,921,278


Net cash provided by (used in) financing activities 733,468 (4,775,917)Net unrealized (gain) loss foreign exchange on cash 6,564 (3,011)Net increase (decrease) in cash 149,902 145,361Cash (Bank Indebtedness) at beginning of period 301,105 158,755






FOR

EIG

NE

QU

ITY

FUN

DS

106



AverageCost ($)

CarryingValue ($)

EQUITIES – 98.7%CANADIAN EQUITIES – 8.3%Energy – 2.2%

36,823 Bankers Petroleum Ltd. 125,376 120,04311,155 Birchcliff Energy Ltd. 113,373 87,23216,209 Cardinal Energy Ltd. 290,544 218,9847,210 Enerflex Ltd. 126,401 118,172

25,671 Gran Tierra Energy, Inc. 147,275 114,49320,493 Raging River Exploration Inc. 132,491 150,419

935,460 809,343

Materials – 1.6%4,856 Canfor Corporation 77,456 143,932

30,866 Nevsun Resources Ltd. 126,511 138,28085,725 OceanGold Corporation 187,731 173,1654,323 Stella-Jones Inc. 129,408 141,535

521,106 596,912

Industrials – 1.8%20,275 Air Canada 176,082 240,6647,164 Stantec Inc. 146,989 228,7456,320 TransForce, Inc. 157,409 187,009

480,480 656,418

Consumer Discretionary – 0.8%1,975 Cogeco Cable Inc. 120,283 141,489

25,570 Entertainment One Ltd 161,749 148,333

282,032 289,822

Health Care – 0.3%2,524 Concordia Healthcare Corporation 105,914 117,997

Financials – 1.2%5,002 Canadian Apartment Properties Real Estate

Investment Trust 87,772 125,7005,876 Gluskin Sheff + Associates Inc. 137,596 162,7063,531 Home Capital Group Inc. 76,167 169,453

301,535 457,859

Utilities – 0.4%5,181 Capital Power Corporation 111,950 134,706

TOTAL CANADIAN EQUITIES 2,738,477 3,063,057

FOREIGN EQUITIES – 90.4%Australia – 4.8%

20,779 Aristocrat Leisure Ltd. 115,216 128,6538,745 Bank of Queensland Limited 106,024 100,362

169,976 Beach Energy Limited 227,836 168,89850,222 CSR Ltd. 178,964 183,81539,518 Echo Entertainment Group Ltd. 130,540 140,56732,619 G8 Education Limited 145,511 128,10452,941 Independence Group NL 242,422 220,35931,206 Investa Office Fund 89,501 107,04422,643 IOOF Holdings Limited 197,661 189,64921,216 M2 Telecommunications Group Ltd. 162,838 162,52625,078 Primary Health Care Ltd. 85,369 111,33236,790 RCR Tomlinson Limited 81,520 76,48076,797 STW Communications Group Ltd. 110,830 70,179

1,874,232 1,787,968

Belgium – 1.0%2,360 Kinepolis 39,565 110,8562,547 Melexis NV 127,547 133,1215,014 Mobistar SA 125,117 137,735

292,229 381,712


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Denmark – 0.9%

1,965 Pandora AS 36,925 184,9604,277 Topdanmark AS 75,611 161,432

112,536 346,392

Finland – 0.4%26,019 Sponda OYJ 134,570 132,221

France – 7.6%2,252 Alten SA 129,072 111,7332,659 Atos Origin SA 218,904 244,1377,772 Euronext NV 230,444 290,4511,909 Fonciere des Regions 153,265 204,960

16,698 Havas SA 148,775 158,1751,903 Imerys SA 137,051 162,8262,711 Ingenico SA 106,407 330,4974,054 Korian-Medica 108,468 171,8425,308 Mercialys 128,608 137,3762,630 Nexity SA 121,920 115,4414,157 Saft Groupe S.A. 167,663 145,9834,788 Teleperformance 205,736 377,7182,616 Valeo SA 187,923 378,064

2,044,236 2,829,203

Germany – 6.1%8,704 Alstria Office Real Estate Investment Trust AG 97,934 125,6312,182 Deutsche Euroshop AG 83,213 110,8654,828 Duerr AG 117,473 496,5665,882 Freenet AG 80,502 195,6452,000 Hannover Rueckversicherung AG 95,221 210,489

957 Krones AG 87,150 108,4891,082 MTU Aero Engines Holding AG 108,162 109,614

15,555 SAF-Holland SA 195,027 242,3567,200 Stroeer Media AG 160,546 248,7386,328 TUI AG 81,897 121,6953,242 United Internet AG 163,406 170,5816,158 VTG AG 133,828 158,618

1,404,359 2,299,287

Hong Kong – 2.8%26,000 Dah Sing Financial Group 131,747 175,09333,000 Great Eagle Holdings Limited 104,463 124,24082,000 Man Wah Holdings Limited 148,219 156,731

208,000 PAX Global Technology Ltd. 146,120 247,862254,811 Shun Tak Holdings Ltd. 149,674 136,386142,000 Sound Global Ltd. 182,521 190,741

862,744 1,031,053

Italy – 3.5%31,058 Amplifon SpA 214,425 213,36132,613 Anima Holding S.p.A. 205,540 190,5997,912 Brembo SpA 105,016 307,654

23,390 Credito Emiliano SpA 141,446 204,5247,135 Gtech Spa 144,041 185,207

12,009 Recordati SpA 106,585 216,628

917,053 1,317,973

Japan – 18.1%13,900 CKD Corporation 163,785 152,53444,000 Clarion Co., Ltd. 77,132 158,66737,000 DAIHEN Corporation 174,217 216,43012,000 Doutor Nichires Holdings Co., Ltd. 224,748 199,38523,097 Ebara Corp 127,131 108,89913,000 Fuji Oil Co., Ltd. 224,765 193,32242,000 Fujikura Ltd. 205,918 198,989



FOR

EIG

NE

QU

ITY

FUN

DS

107



AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)Japan (cont’d)

24,100 Haseko Corporation 206,009 224,9149,000 Hitachi Kokusai Electric Inc. 118,365 146,8723,000 JAFCO Co., Ltd. 161,723 119,127

21,000 Japan Aviation Electronics Industry, Limited. 213,526 534,4113,700 K’s Holdings Corporation 111,693 113,033

13,000 Kagoshima Bank, Ltd., The 109,984 94,81314,500 Kyowa Exeo Corporation 163,516 179,77426,000 Makino Milling Machine Co., Ltd. 232,760 224,1369,900 Matsui Securities Co. Ltd. 101,487 99,8483,600 Message Co., Ltd. 145,083 114,6475,300 Nihon Kohden Corporation 159,931 302,731

29 Nippon Accommodations Fund Inc. 119,370 132,7965,300 NS Solutions Corporation 136,885 165,0702,300 PIGEON CORPORATION 59,167 155,7492,000 Relo Holdings Inc. 77,967 164,790

12,000 San-In Godo Bank, Ltd., The 108,265 104,83124,000 SANKYU INC. 116,628 113,57734,200 Sanwa Shutter Corporation 174,448 276,56619,000 Seino Transportation Co. Ltd. 185,387 221,80119,000 Shiga Bank, Ltd., The 130,667 117,6554,300 Sohgo Security Services Company Ltd. 84,194 119,971

13,900 Sumitomo Forestry Co., Ltd. 121,859 158,06440,000 Sumitomo Osaka Cement Company Ltd. 132,978 132,58410,800 Sun Frontier Fudousan Co., Ltd. 162,001 114,98348,500 Takara Leben Co., Ltd. 170,966 243,0929,200 Tokai Rika Co., Ltd. 163,827 224,2797,300 Tokyo Ohka Kogyo Co., Ltd. 166,522 259,2255,800 Tokyo Seimitsu Co., Ltd. 104,020 135,5354,900 TS Tech Co Ltd. 144,748 133,186

29,000 Tsubakimoto Chain Co. 202,330 268,1532,500 Yaoko Co., Ltd. 173,906 166,814

5,657,908 6,791,253

Netherlands – 1.8%5,749 Aalberts Industries NV 154,381 197,0713,656 ASM International NV 130,901 178,611

31,017 PostNL NV 160,421 133,8934,487 TKH Group NV 160,983 165,080

606,686 674,655

New Zealand – 0.4%28,783 Fisher & Paykel Healthcare Corporation Ltd. 116,373 162,535

Norway – 1.8%14,580 Borregaard ASA 107,176 125,44483,369 BW Offshore Ltd. 115,238 96,9835,174 Leroy Seafood Group ASA 165,776 219,402

24,806 SpareBank 1 SMN 200,271 223,712

588,461 665,541

Portugal – 0.3%37,235 Redes Energeticas Nacionais SA 140,889 125,704

Singapore – 1.3%99,000 CWT Ltd. 145,730 138,59131,000 M1 Ltd/Singapore 84,256 97,984

121,000 Mapletree Industrial Trust 141,922 157,058158,000 Starhill Global REIT 112,512 110,640

484,420 504,273

South Korea – 3.6%2,029 BGF Retail Co., Ltd. 144,052 163,5983,182 Boryung Pharmaceutical Co., Ltd. 146,100 135,0744,296 Hansae Co., Ltd. 121,530 180,700

978 Hanssem Co. Ltd. 66,884 117,719


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)South Korea (cont’d)

2,940 KIWOOM Securities Co., Ltd. 151,741 142,5455,030 Seah Besteel Corp. 151,574 148,3024,142 SKC Co., Ltd. 148,652 116,1666,722 SL Corp. 155,322 123,7409,349 Sungwoo Hitech Co., Ltd. 163,747 114,9866,576 Tovis Co., Ltd. 124,109 113,465

1,373,711 1,356,295

Spain – 1.3%26,689 Bankinter, S.A. 156,093 246,9142,486 Red Electrica Corp SA 136,847 253,215

292,940 500,129

Sweden – 3.7%1,608 Axfood AB 106,771 111,1145,269 Bilia AB 140,263 184,7958,985 Boliden AB 165,906 166,152

17,692 Fastighets AB Balder, Series B 106,165 288,3352,861 Indutrade AB 128,442 131,9634,710 Loomis AB, Class B 145,614 158,461

13,627 Nobia AB 127,534 141,4985,697 Trelleborg AB 86,730 111,3645,098 Wihlborgs Fastigheter AB 75,847 107,998

1,083,272 1,401,680

Switzerland – 7.7%2,844 Actelion Ltd. 142,214 379,6333,171 Aryzta AG 185,460 282,7016,126 Clariant, AG 119,940 119,357

234 Flughafen Zuerich AG 164,253 182,002275 Georg Fischer AG 159,979 200,756119 Givaudan SA 152,734 246,881202 Helvetia Holding AG 72,658 111,157

2,106 Julius Baer Group Ltd. 111,433 111,51017,651 Logitech International SA 146,484 277,0141,975 Lonza Group AG 211,926 258,249

12,827 OC Oerlikon Corporation AG 110,412 186,256741 Straumann Holding AG 161,488 215,995

1,119 Swiss Life Holding AG 121,806 306,816

1,860,787 2,878,327

United Kingdom – 20.6%15,531 Ashtead Group PLC 67,717 318,63762,095 Barratt Developments PLC 144,646 524,73734,805 Beazley PLC 126,272 178,9427,071 Berendsen PLC 57,198 139,910

10,550 Bodycote PLC 76,475 122,84321,719 Britvic PLC 198,006 262,64117,365 Cineworld Group PLC 117,573 129,6287,900 Close Brothers Group PLC 174,621 211,4275,950 Dialog Semiconductor plc 155,805 244,049

21,475 Direct Line Insurance Group PLC 121,268 112,40232,295 Dixons Carphone PLC 209,129 269,93526,307 DS Smith PLC 92,910 152,1393,387 Go-Ahead Group PLC 120,410 150,519

20,438 Greggs PLC 223,701 269,23579,351 Hansteen Holdings PLC 136,586 154,4367,406 Hikma Pharmaceuticals PLC 122,259 263,563

54,907 Howden Joinery Group PLC 58,323 396,20416,417 Inchcape PLC 100,276 213,22717,351 Interserve PLC 190,437 173,16514,274 Investec PLC 132,795 138,37639,994 ITV PLC 51,491 154,615



FOR

EIG

NE

QU

ITY

FUN

DS

108



AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)FOREIGN EQUITIES (cont’d)United Kingdom (cont’d)

18,948 Keller Group PLC 261,261 298,35676,548 Man Group PLC 172,798 219,79618,502 Mondi PLC 177,177 346,17229,809 Pace PLC 116,450 185,58938,598 Paragon Group Companies PLC 94,301 289,08286,698 Petra Diamonds Ltd. 265,239 302,31414,513 Playtech PLC 188,997 180,6473,963 Provident Financial PLC 151,281 175,0433,854 Renishaw PLC 121,494 135,612

24,121 Senior PLC 63,548 131,0053,589 Travis Perkins PLC 110,659 119,9096,608 TUI AG 100,502 123,225

18,338 Unite Group PLC 98,756 154,19331,022 United Drug PLC 152,371 214,63516,606 William Hill PLC 107,824 108,3715,839 WS Atkins plc 139,753 143,196

5,000,309 7,707,775

United States – 2.7%5,615 AerCap Holdings NV 112,067 252,9584,055 Canadian Solar Inc. 159,120 113,8348,845 iShares MSCI EAFE Index Fund 629,914 624,498

901,101 991,290



NET ASSETS – 100.0% 37,451,489

Portfolio Adviser: Munder Capital Management


FOR

EIG

NE

QU

ITY

FUN

DS

109



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long term returns through capital growth by investing in stocks of small and

medium capitalization corporations in Europe, Australia and the Far East.















ii) Currency risk


December 31, 2014






European Euro 8,511,007 22.7 851,101 2.3

British Pound 7,650,321 20.4 765,032 2.0

Japanese Yen 6,823,728 18.2 682,373 1.8

Swiss Franc 2,881,844 7.7 288,184 0.8

Australian Dollar 1,796,411 4.8 179,641 0.5

Swedish Krona 1,401,680 3.7 140,168 0.4

South Korean Won 1,356,296 3.6 135,630 0.4

Hong Kong Dollar 1,043,325 2.8 104,333 0.3

US Dollar 1,013,647 2.7 101,365 0.3

Norwegian Krone 668,284 1.8 66,828 0.2

Singapore Dollar 508,372 1.4 50,837 0.1

Danish Krone 346,392 0.9 34,639 0.1

New Zealand Dollar 164,046 0.4 16,405 0.0

Total 34,165,353 91.1 3,416,536 9.2

FOR

EIG

NE

QU

ITY

FUN

DS


110



December 31, 2013






European Euro 7,773,192 23.1 777,319 2.3

British Pound 7,095,478 21.1 709,548 2.1

Japanese Yen 6,134,328 18.2 613,433 1.8

Swiss Franc 2,770,510 8.2 277,051 0.8

Korean Won 1,595,052 4.7 159,505 0.5


Swedish Krona 781,964 2.3 78,196 0.2

Hong Kong Dollar 666,863 2.0 66,686 0.2

U.S. Dollar 627,244 1.9 62,724 0.2

Danish Krone 567,427 1.7 56,743 0.2

Norwegian Krone 486,539 1.4 48,654 0.1

Singapore Dollar 416,451 1.2 41,645 0.1

New Zealand Dollar 116,858 0.3 11,686 0.0

Total 30,591,885 90.7 3,059,188 9.0

January 1, 2013






European Euro 6,504,764 23.6 650476 2.4

British Pound 5,520,156 20.1 552016 2.0

Japanese Yen 4,631,126 16.8 463113 1.7

Australian Dollar 2,336,972 8.5 233697 0.8

Swiss Franc 2,227,534 8.1 222753 0.8

Korean Won 1,210,480 4.4 121048 0.4

Danish Krone 525,714 1.9 52571 0.2

Norwegian Krone 485,107 1.8 48511 0.2

Singapore Dollar 422,596 1.5 42260 0.2

Swedish Krona 413,899 1.5 41390 0.2

Hong Kong Dollar 317,349 1.2 31735 0.1

U.S. Dollar 247,892 0.9 24789 0.1

New Zealand Dollar 32 0.0 3 0.0

Total 24,843,621 90.3 2,484,362 9.1


Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 98.7% (December 31, 2013 – 98.6%, January 1, 2013 – 99.3%) of the Fund’s net assets attributable to holders ofredeemable units were exposed to other price risk. If prices of these investments had decreased or increased by 10%, with all othervariables held constant, net assets attributable to holders of redeemable units of the Fund would have decreased or increased,respectively, by approximately $3,694,832 (December 31, 2013 – $3,321,531, January 1, 2013 – $2,734,143 ). In practice, actual resultswill differ from this sensitivity analysis and the difference could be material.

iv) Credit Rate Risk


FOR

EIG

NE

QU

ITY

FUN

DS


111



v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $11,696 $ – $17,862 $ – $4,942Payable for currency spot contracts – – – – – –Redeemable units 37,451,489 – $33,698,620 – $27,531,137 –

$37,451,489 $11,696 $33,698,620 $17,862 $27,531,137 $4,942






Australia 4.8 4.3 8.1Austria – 0.8 1.9Belgium 1.0 0.5 0.8Bermuda – – 0.4Cayman Island – – 0.4Canada 8.3 7.8 9.6Denmark 0.9 1.7 1.9Finland 0.4 1.7 1.9France 7.6 6.3 6.3Germany 6.1 7.0 6.8Hong Kong 2.8 2.0 1.2Israel – – 0.2Italy 3.5 3.6 3.3Japan 18.1 17.9 16.4Netherlands 1.8 1.6 1.6New Zealand 0.4 0.4 –Norway 1.8 1.4 1.4Portugal 0.3 – –Singapore 1.3 1.2 1.5South Korea 3.6 5.0 4.8Spain 1.3 2.0 1.4Sweden 3.7 2.3 1.5Switzerland 7.7 8.2 7.0United Kingdom 20.6 21.4 20.5United States 2.7 1.5 0.4Currency Spot Contracts – 0.0 –




Equities $3,906,012 $33,042,311 $ – $36,948,323


Equities $3,269,480 $29,955,946 $ – $33,225,426


$3,269,628 $29,955,946 $ – $33,225,574

FOR

EIG

NE

QU

ITY

FUN

DS


112




Equities $2,814,527 $24,533,699 $ – $27,348,226







IFRSnet assetsper unit ($)



Pinnacle Series 22.39 22.39 20.79 20.79

Series F 22.46 22.46 20.91 20.91

Series I 22.69 22.69 21.06 21.06

FOR

EIG

NE

QU

ITY

FUN

DS


113

Scotia Private Emerging Markets Pool


December 31,2014

December 31,2013

January 1,2013



contracts 73 – 1,235Cash 6,045,269 12,151,192 5,209,842Accrued investment income 277,091 174,586 102,511Receivable for securities sold 32,929 – 331,556Subscriptions receivable 96,457 188,235 18,812

174,990,870 217,741,099 133,347,168

LIABILITIESCurrent liabilitiesPayable for securities purchased 2,413,079 – 235,601Redemptions payable 22,084 38,835 7,146Unrealized loss on currency spot

contracts 2,495 – 917

2,437,658 38,835 243,664



Pinnacle Series Units $ 33,606,228 $ 26,472,471 $ 22,168,661Series I Units $125,313,384 $171,564,468 $ 95,036,876Series M Units $ 13,633,600 $ 19,665,325 $ 15,897,967

UNITS OUTSTANDINGPinnacle Series Units 3,479,000 2,922,260 2,481,754Series I Units 12,805,973 18,695,803 10,505,631Series M Units 1,411,761 2,173,362 1,779,549


Pinnacle Series Units $ 9.66 $ 9.06 $ 8.93Series I Units $ 9.79 $ 9.18 $ 9.05Series M Units $ 9.66 $ 9.05 $ 8.93


2014 2013


Dividends $ 4,590,781 $ 3,356,560Interest for distribution purposes 122,143 344,661Net realized gain (loss) on non-derivative financial assets 7,308,957 (5,612,082)Net gain (loss) foreign exchange 319,937 (65,916)Change in unrealized appreciation (depreciation) of

non-derivative financial assets 2,938,278 10,301,622Change in unrealized appreciation (depreciation) of

currency spots (2,422) (318)

Net gain (loss) on investments 15,277,674 8,324,527Securities lending 57,838 14,409Net realized (gain) loss foreign exchange on cash (1,040,158) (105,159)


EXPENSESManagement fees (note 5) 102,880 110,269Administration fees (note 6) 61,770 –Harmonized Sales Tax/Goods and Services Tax 25,632 20,925Audit fees 3,981 4,694Independent Review Committee fees 442 954Custodian fees 72,546 75,099Filing fees 11,937 17,887Legal fees 2,067 2,698Unitholder reporting costs 13,992 8,990Unitholder administration and service fees 31,010 54,237Overdraft charges 2,568 –Foreign withholding taxes/tax reclaims 594,877 423,669Transaction costs 703,298 293,209

Total expenses 1,627,000 1,012,631Absorbed expenses – (1,960)

Net expenses 1,627,000 1,010,671

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $12,668,354 $ 7,223,106


Pinnacle Series Units $ 2,622,874 $ 861,508Series I Units $ 8,908,826 $ 6,283,553Series M Units $ 1,136,654 $ 78,045


Pinnacle Series Units $ 0.81 $ 0.31Series I Units $ 0.71 $ 0.43Series M Units $ 0.73 $ 0.04

WEIGHTED AVERAGE NUMBER OF UNITSPinnacle Series Units 3,222,200 2,736,228Series I Units 12,626,651 14,539,769Series M Units 1,562,594 1,786,726


Portfolio Advisor: Lee Munder Capital Group


FOR

EIG

NE

QU

ITY

FUN

DS

114

Scotia Private Emerging Markets Pool (Continued)


2014 2013


Pinnacle Series Units $ 26,472,471 $ 22,168,661Series I Units 171,564,468 95,036,876Series M Units 19,665,325 15,897,967

217,702,264 133,103,504


Pinnacle Series Units 2,622,874 861,508Series I Units 8,908,826 6,283,553Series M Units 1,136,654 78,045

12,668,354 7,223,106


Pinnacle Series Units (728,462) (324,698)Series I Units (2,941,029) (2,327,171)Series M Units (202,133) (141,716)

(3,871,624) (2,793,585)


Pinnacle Series Units 7,981,473 8,252,710Series I Units 45,190,031 73,023,740Series M Units 7,446,193 11,074,977

Reinvested distributionsPinnacle Series Units 727,106 324,243Series I Units 2,941,029 2,327,171Series M Units 195,263 126,097

Payments on redemptionPinnacle Series Units (3,469,234) (4,809,953)Series I Units (100,349,941) (2,779,701)Series M Units (14,607,702) (7,370,045)

(53,945,782) 80,169,239


Pinnacle Series Units 7,133,757 4,303,810Series I Units (46,251,084) 76,527,592Series M Units (6,031,725) 3,767,358

(45,149,052) 84,598,760


Pinnacle Series Units 33,606,228 26,472,471Series I Units 125,313,384 171,564,468Series M Units 13,633,600 19,665,325

$ 172,553,212 $217,702,264


2014 2013



Net realized (gain) loss on sale of non-derivativefinancial assets (7,308,957) 5,612,082


sale of non-derivative financial assets (2,938,278) (10,301,622)Change in unrealized (appreciation) depreciation of

currency spot contracts 2,422 318Purchases of non-derivative financial assets (335,531,561) (136,429,127)Proceeds from sale of non-derivative financial assets 384,143,683 63,377,539Transaction costs 703,298 293,209Accrued investment income (102,505) (72,075)









FOR

EIG

NE

QU

ITY

FUN

DS

115



AverageCost ($)

CarryingValue ($)

EQUITIES – 97.6%Foreign Equities – 97.6%United States – 7.8%Exchange-traded Funds – 2.6%

11,293 iPath MSCI India Index ETN 673,059 912,797104,571 iShares MSCI India ETF 2,946,203 3,651,551

3,619,262 4,564,348

Index Units – 4.0%151,648 iShares MSCI Emerging Market Index 6,897,074 6,914,529

Consumer Staples – 0.5%19,389 Companhia Brasileira de Distribuicao Grupo Pao

de Acucar ADR 891,087 828,707

Information Technology – 0.7%96,035 Wipro Limited 1,343,776 1,263,266

TOTAL UNITED STATES EQUITIES 12,751,199 13,570,850

Brazil – 8.6%150,200 Banco Bradesco SA, Preference 2,426,283 2,331,187129,900 Banco do Brasil SA 1,394,330 1,333,996151,100 Braskem S.A. 1,359,327 1,135,41635,700 Companhia Energetica de Sao Paulo, Preference,

Series B 407,063 417,85474,100 Cyrela Brazil Realty SA 503,101 354,40362,300 Empresa Bras De Aeronautica SA 647,542 666,35673,900 Hypermarcas SA 571,724 537,091

173,600 Itau Unibanco Holding SA, Preference 2,658,544 2,620,194367,700 JBS SA 1,483,117 1,797,48385,700 Porto Seguro SA 1,338,037 1,128,477

312,900 Suzano Papel E Celulose Sa 1,322,674 1,536,203117,558 Vale SA ADR, Preference 1,583,201 990,450

15,694,943 14,849,110

China – 7.0%2,448,000 Agricultural Bank of China Limited 1,229,894 1,426,9105,447,000 Bank of China Ltd., Class H 2,645,552 3,539,5071,149,000 China Railway Construction Corporation, Class H 1,155,119 1,693,9782,442,000 Chongqing Rural Commercial Bank Co., Ltd. 1,218,921 1,759,7974,352,392 Industrial and Commercial Bank of China Ltd.,

Class H 3,018,946 3,669,531

9,268,432 12,089,723

Hong Kong – 13.9%1,642,000 Angang Steel Company Limited, Class H 1,152,680 1,614,2541,919,000 China CITIC Bank Corporation Limited 1,331,190 1,779,5391,955,494 China Construction Bank Corporation, Class H 1,586,452 1,847,143

189,500 China Mobile Limited 2,707,238 2,583,7102,642,000 China Power International Development Limited 1,045,399 1,547,3992,222,000 China Railway Group Ltd. 1,377,434 2,113,9471,678,000 China Resources Cement Holding Limited 1,225,073 1,256,034

702,000 Citic Pacific Ltd. 1,426,224 1,382,7722,613,000 Evergrande Real Estate Group Limited 1,178,379 1,222,8879,378,000 GOME Electrical Appliances Holding Limited 1,826,919 1,589,9621,148,829 Huaneng Power International Inc., Class H 1,277,180 1,800,231

493,500 Shimao Property Holdings Limited 1,217,714 1,273,549147,400 Tencent Holdings Limited 2,632,684 2,454,615

1,162,000 Tianjin Developement Holdings Ltd. 1,179,723 992,751378,000 Zhejiang Expressway Co. Ltd. Class H 528,833 509,880

21,693,122 23,968,673

India – 3.4%149,271 ICICI Bank Limited ADR 1,243,132 2,000,78959,024 Reliance Industries Ltd. GDR 1,860,998 1,925,10439,313 Tata Motors Limited 1,149,343 1,929,608

4,253,473 5,855,501


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Foreign Equities (cont’d)Indonesia – 3.1%

1,892,600 INRdofood Sukses Makmur Tbk PT 1,161,750 1,197,41111,836,200 PT Adaro Energy Tbk 1,184,695 1,149,9943,477,400 PT Bank Negara Indonesia (Persero) Tbk 1,253,157 1,970,5105,721,300 PT Perusahaan Perkebunan London Sumatra

Indonesia Tbk 1,223,653 1,003,641

4,823,255 5,321,556

Malaysia – 3.3%797,100 DiGi.Com Berhad 1,403,664 1,626,888216,000 Hong Leong Bank Berhad 1,082,924 1,003,332301,100 IJM Corporation Berhad 587,733 656,675556,300 Telekom Malaysia Berhad 1,355,513 1,266,331

2,209,600 YTL Corporation Berhad 1,205,682 1,163,365

5,635,516 5,716,591

Mexico – 4.7%2,447,100 America Movil SAB de CV 2,680,970 3,165,461

177,200 Arca Continental SAB de CV 1,419,507 1,299,414526,200 Compartamos SAB de CV 1,261,234 1,228,353195,200 Grupo Aeroportuario del Pacifico SAB de CV 1,204,695 1,424,954290,800 Grupo Comercial Chedraui, S.A. de C.V. 1,150,764 981,855

7,717,170 8,100,037

Philippines – 1.6%446,240 BDO Unibank, Inc. 983,001 1,265,207300,520 Universal Robina Corporation 1,073,384 1,517,230

2,056,385 2,782,437

Poland – 0.8%21,581 PKP Cargo SA 585,666 588,67156,109 Polski Koncern Naftowy Orlen SA 833,424 893,665

1,419,090 1,482,336

Russia – 2.3%336,105 Gazprom 3,182,676 1,766,92172,673 Mining and Metallurgical Company Norilsk Nickel 1,406,749 1,193,08422,590 OAO LUKOIL, Sponsored ADR 1,496,879 1,005,369

6,086,304 3,965,374

South Africa – 7.5%115,430 Barloworld Limited 1,174,333 1,104,052296,400 Gold Fields Limited 1,419,961 1,556,57881,693 Liberty Holdings Ltd. 1,032,695 1,005,725

191,276 Mediclinic International Ltd. 1,475,719 1,918,286118,790 MTN Group Limited 2,327,753 2,615,439456,490 Netcare Ltd. 1,188,248 1,731,071303,488 Sappi Ltd. 1,396,563 1,284,07145,917 Tiger Brands Ltd. 1,345,371 1,687,297

11,360,643 12,902,519

South Korea – 12.2%21,930 Dongbu Insurance Co., Ltd. 1,432,058 1,277,4315,042 E-Mart Co Ltd. 1,336,150 1,083,339

20,728 Hankook Tire Co. Ltd. 1,331,073 1,150,12135,553 Hanwha Corppration 1,326,607 1,168,42611,984 Hyundai Hysco Co., Ltd. 939,382 921,91111,229 Hyundai Motor Company 2,264,688 1,988,18795,209 Industrial Bank of Korea 1,229,635 1,414,06542,040 LG Display Co., Ltd. 1,149,493 1,484,65517,879 LG Electronics Inc. 1,432,810 1,114,42815,892 LS Corp. 1,332,177 911,1025,319 Mando Corporation 1,058,965 1,025,301

39,268 Nexen Tire Corporation 648,909 527,6722,801 Samsung Electronics Co., Ltd. 3,159,497 3,926,706

32,718 Shinhan Financial Group Co., Ltd. 1,383,315 1,531,019



FOR

EIG

NE

QU

ITY

FUN

DS

116



AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Foreign Equities (cont’d)South Korea (cont’d)

5,420 SK Corportaion 1,002,332 936,77837,631 SL Corp. 905,658 692,717

21,932,749 21,153,858

Taiwan – 12.4%1,203,000 Advanced Semiconductor Engineering Inc. 1,260,744 1,657,1212,733,000 Au Optronics Corp. 975,719 1,605,301

201,000 Catcher Technology Co. Ltd. 1,542,404 1,792,572425,000 Cheng Uei Precision Industry Co., Ltd. 1,006,320 766,665415,000 Chicony Electronics Co., Ltd. 1,466,084 1,335,714

1,903,000 China Airlines Ltd. 870,497 1,007,604454,000 Fubon Financial Holding Co Ltd 832,814 836,613862,360 Hon Hai Precision Industry Co., Ltd. 2,364,776 2,755,416

1,091,000 King Yuan Electronics Co., Ltd. 1,137,696 1,013,768561,000 Pou Chen Corporation 835,151 783,719312,000 Ruentex Development Co., Ltd. 607,849 574,778

2,493,000 Taishin Financial Holding Co., Ltd. 1,376,236 1,184,942576,818 Taiwan Semiconductor Manufacturing

Company Ltd. 1,882,847 2,949,297857,820 Uni-President Enterprises Corp. 1,533,062 1,566,608

2,822,000 United Microelectronics Corporation 1,298,796 1,513,394

18,990,995 21,343,512

Thailand – 3.8%7,943,500 Hemaraj Land and Developement Public Co. 1,020,844 1,232,354

203,000 Kasikornbank Public Company Limited 1,513,904 1,637,429213,300 PTT Exploration and Production Public Company

Limited 1,149,638 839,890


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Foreign Equities (cont’d)Thailand (cont’d)

8,742,100 Quality Houses Public Company Limited 815,316 1,123,178260,700 Siam Commercial Bank Public Company

Limited 1,678,914 1,672,023

6,178,616 6,504,874

Turkey – 3.9%747,140 Eregli Demir ve Celik Fabrikalari TAS (Erdemir) 1,019,117 1,654,644994,561 Kardemir Karabuk Demir Celik San. ve Tic 827,291 1,007,377311,730 Turk Hava Yollari Anonim Ortakligi 1,221,483 1,483,787202,211 Turkcell IletisimHizmetleri AS ADR 1,158,524 1,432,345459,043 Turkiye Vakiflar Bankasi T.A.O. 1,148,204 1,111,672

5,374,619 6,689,825

United Kingdom – 1.3%168,136 Commercial International Bank Egypt SAE 993,270 1,286,64133,611 Tatneft OAO 1,350,439 955,634

2,343,709 2,242,275


Currency Spot Contracts – 0.0% (2,422)OTHER ASSETS, LESS LIABILITIES – 2.4% 4,016,583

NET ASSETS – 100.0% 172,553,212



December 31, 2014 ($)


(Depreciation)

Jan. 2, 2015 Canadian Dollar 377 Polish Zloty 1,149 376 1Jan. 5, 2015 Canadian Dollar 32,625 Polish Zloty 99,329 32,552 72Jan. 5, 2015 U.S. Dollar 2,079,350 Canadian Dollar 2,415,581 2,415,575 (2,495)

(2,422)




FOR

EIG

NE

QU

ITY

FUN

DS

117



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long term returns through capital growth by investing primarily in equity and

equity-related securities of companies located in emerging markets and emerging industries of any market.















ii) Currency risk


December 31, 2014






Hong Kong Dollar 36,058,448 20.9 3,605,845 2.1

US Dollar 31,098,155 18.0 3,109,816 1.8

Taiwan Dollar 21,673,371 12.6 2,167,337 1.3

South Korean Won 21,153,857 12.3 2,115,386 1.2

Brazilian Real 13,858,659 8.0 1,385,866 0.8

South African Rand 12,902,519 7.5 1,290,252 0.7

Mexican Peso 8,100,039 4.7 810,004 0.5

Turkish Lira 6,689,825 3.9 668,983 0.4

Thai Baht 6,504,875 3.8 650,488 0.4

Malaysian Ringgit 5,716,590 3.3 571,659 0.3

Indonesian Rupiah 5,321,556 3.1 532,156 0.3

Philippines Peso 2,782,437 1.6 278,244 0.2

Polish Zloty 1,449,510 0.8 144,951 0.1

Total 173,309,841 100.5 17,330,987 10.1

FOR

EIG

NE

QU

ITY

FUN

DS


118



December 31, 2013






U.S. Dollar 72,531,023 33.3 7,253,102 3.3

Korean Won 33,672,324 15.5 3,367,232 1.5

Hong Kong Dollar 24,549,093 11.3 2,454,909 1.1


Taiwan Dollar 18,983,797 8.7 1,898,380 0.9

Brazilian Real 9,001,374 4.1 900,137 0.4


Thai Baht 5,780,295 2.7 578,030 0.3

Turkish Lira 3,887,397 1.8 388,740 0.2


Mexican Peso 3,478,311 1.6 347,831 0.2

European Euro 3,051,888 1.4 305,189 0.1

Philippines Peso 196,484 0.1 19,648 –

Polish Zloty 5 – 1 –

Total 206,091,423 94.6 20,609,142 9.4

January 1, 2013






U.S. Dollar 40,683,189 30.6 4,068,319 3.1

Korean Won 22,496,561 16.9 2,249,656 1.7

Hong Kong Dollar 15,429,576 11.6 1,542,958 1.2


Taiwan Dollar 8,722,337 6.6 872,234 0.7

Brazilian Real 6,746,165 5.1 674,616 0.5

Mexican Peso 4,046,114 3.0 404,611 0.3

Thai Baht 3,830,941 2.9 383,094 0.3


Turkish Lira 3,669,993 2.8 366,999 0.3


European Euro 1,440,346 1.1 144,035 0.1

Israel Shekel 1,241,016 0.9 124,102 0.1

Polish Zloty 1,088,839 0.8 108,884 0.1

Czech Koruna 935,219 0.7 93,522 0.1

Total 128,012,788 96.3 12,801,280 9.8



FOR

EIG

NE

QU

ITY

FUN

DS


119



iv) Credit risk


v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $2,435,163 $ – $38,835 $ – $242,747

Unrealized loss on currency spot contracts – 2,495 – – – 917


$172,553,212 $2,437,658 $217,702,264 $38,835 $133,103,504 $243,664






Canada – 1.7 0.4


Brazil 8.6 10.7 11.0

Cayman Islands – – 0.6

China 7.0 4.1 4.4

Columbia – 0.9 0.7

Czech Republic – – 0.7

Hong Kong 13.9 8.6 7.6

India 3.4 5.4 2.7

Indonesia 3.1 3.1 2.8

Israel – – 0.9

Malaysia 3.3 1.7 1.2

Mexico 4.7 1.6 4.3

Netherlands – – 1.0

Philippines 1.6 0.1 1.0

Poland 0.8 – 0.8

Portugal – 1.4 1.2

Russia 2.3 5.3 7.9

South Africa 7.5 5.6 6.5

South Korea 12.2 16.0 17.3

Taiwan 12.4 8.3 6.0

Thailand 3.8 2.7 2.9

Turkey 3.9 1.8 2.8


Currency Spot Contract – – 0.0

FOR

EIG

NE

QU

ITY

FUN

DS


120






Equities $29,364,024 $139,175,027 $ – $168,539,051


29,364,097 139,175,027 – 168,539,124


$29,361,602 $139,175,027 $ – $168,536,629


Equities $65,704,767 $139,319,523 $ – $205,024,290

Warrants – 202,796 – 202,796

$65,704,767 $139,522,319 $ – $205,227,086


Equities $42,088,669 $ 85,594,543 $ – $127,683,212


42,089,904 85,594,543 – 127,684,447


$42,088,987 $ 85,594,543 $ – $127,683,530




6. Comparison of Net Assets Value per Unit and Net Assets per Unit (note 2)The table below provides a comparison of the IFRS net assets per unit and Pricing NAV per unit. The primary reason for thedifference between the IFRS net assets per unit and Pricing NAV per unit is described in Note 2. There were no material differencesbetween the IFRS net assets per unit and Pricing NAV per unit as at January 1, 2013 and are hence not presented.







Series I 9.78 9.79 9.18 9.18

Series M 9.66 9.66 9.05 9.05

FOR

EIG

NE

QU

ITY

FUN

DS


121

Scotia Private Global Equity Pool


December 31,2014

December 31,2013

January 1,2013



contracts – 18,337 –Cash 17,746,811 17,293,021 10,504,412Accrued investment income 127,667 174,515 44,277Receivable for securities sold – 1,880,677 –Subscriptions receivable 68,280 75,786 444,489

460,188,629 519,796,492 341,193,509

LIABILITIESCurrent liabilitiesPayable for securities purchased 403,891 1,094,680 3,451,650Redemptions payable 52,129 32,321 9,574Unrealized loss on currency spot

contracts 418 3,263 15,024

456,438 1,130,264 3,476,248








2014 2013


Dividends $ 5,483,063 $ 6,788,521Interest for distribution purposes 126,443 73,512Net realized gain (loss) on non-derivative financial assets 87,156,594 7,900,842Net gain (loss) foreign exchange 607,513 62,839Change in unrealized appreciation (depreciation) of

non-derivative financial assets (28,714,053) 102,419,563Change in unrealized appreciation (depreciation) of currency

spots (15,492) 30,098

Net gain (loss) on investments 64,644,068 117,275,375Securities lending 18,186 7,829Net realized (gain) loss foreign exchange on cash (396,834) (183,653)


EXPENSESManagement fees (note 5) 6,483 3,986Administration fees (note 6) 108,984 –Harmonized Sales Tax/Goods and Services Tax 25,201 17,838Audit fees 9,581 12,487Independent Review Committee fees 1,073 1,076Custodian fees 25,444 44,871Filing fees 11,067 16,761Legal fees 4,927 5,524Unitholder reporting costs 12,414 6,807Unitholder administration and service fees 95,538 170,759Overdraft charges 63 –Foreign withholding taxes/tax reclaims 813,193 832,441Transaction costs 153,646 84,509


Net expenses 1,265,676 1,195,075



Pinnacle Series Units $ 6,687,454 $ 9,879,559Series F Units $ 93,880 $ 102,328Series I Units $ 56,218,410 $105,922,589





Portfolio Advisor: Harding Loevner LP


FOR

EIG

NE

QU

ITY

FUN

DS

122

Scotia Private Global Equity Pool (Continued)


2014 2013



518,666,228 337,717,261



62,999,744 115,904,476


Pinnacle Series Units (386,099) (367,230)Series F Units (2,394) (454)Series I Units (4,283,592) (5,459,887)

(4,672,085) (5,827,571)



Reinvested distributionsPinnacle Series Units 384,864 366,574Series F Units 2,252 419Series I Units 4,248,780 5,459,887


(117,261,696) 70,872,062


Pinnacle Series Units 7,982,469 7,416,471Series F Units 479,430 93,464Series I Units (67,395,936) 173,439,032

(58,934,037) 180,948,967



$ 459,732,191 $518,666,228


2014 2013






currency spot contracts 15,492 (30,098)Purchases of non-derivative financial assets (165,917,179) (113,144,128)Proceeds from sale of non-derivative financial assets 283,504,247 48,988,552Transaction costs 153,646 84,509Accrued investment income 46,848 (130,238)


CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 111,941,200 116,053,716Amounts paid on redemption of redeemable units (233,811,478) (50,617,084)Distributions to unitholders of redeemable units (36,189) (691)

Net cash provided by (used in) financing activities (121,906,467) 65,435,941Net unrealized (gain) loss foreign exchange on cash 78,923 3,605Net increase (decrease) in cash 374,867 6,785,004Cash (Bank Indebtedness) at beginning of period 17,293,021 10,504,412






FOR

EIG

NE

QU

ITY

FUN

DS

123



AverageCost ($)

CarryingValue ($)

EQUITIES – 96.2%Australia – 0.8%

53,100 Cochlear Limited 3,409,984 3,892,043

France – 5.4%43,840 Air Liquide SA 4,660,622 6,276,299

123,456 Dassault Systemes SA 5,904,686 8,717,47937,500 Essilor International SA 4,165,289 4,843,39125,100 L’Oreal SA 3,340,647 4,889,327

18,071,244 24,726,496

Germany – 2.1%21,010 Linde AG 4,375,748 4,546,83364,400 SAP AG ADR 4,829,086 5,205,361

9,204,834 9,752,194

Hong Kong – 3.0%1,613,300 AIA Group Ltd. 6,984,959 10,310,318

599,200 Sands China Ltd. 4,564,448 3,382,454

11,549,407 13,692,772

India – 1.3%103,400 HDFC Bank Ltd-ADR 3,604,604 6,092,164

Indonesia – 1.0%3,786,700 PT Bank Central Asia Tbk 3,221,293 4,623,796

Japan – 9.1%115,400 ABC-Mart, Inc. 4,569,002 6,489,43036,300 FANUC Corp. 5,433,590 6,952,442

167,207 Kakaku.com Inc. 2,682,249 2,789,75314,543 Keyence Corporation 4,175,187 7,475,530

221,600 M3, Inc. 1,873,680 4,276,46174,700 Monotaro Co., Ltd. 1,983,303 1,739,150

199,418 Stanley Electric Co., Ltd. 5,051,839 5,002,253244,700 Unicharm Corporation 4,045,882 6,833,736

29,814,732 41,558,755

Spain – 1.6%52,800 Grifolis SA 2,354,886 2,438,699

146,300 Industria de Diseno Textil SA 3,201,695 4,863,755

5,556,581 7,302,454

Sweden – 1.7%655,205 Elekta AB, Class B 8,975,613 7,761,185

Switzerland – 7.3%37,470 Lonza Group AG 2,711,485 4,899,545

142,500 Nestle SA 8,905,060 12,063,79821,000 Roche Holdings AG 6,705,365 6,604,07933,800 Sonova Holdings AG 3,764,229 5,748,9578,430 Swatch Group AG, Class B 3,785,010 4,343,161

25,871,149 33,659,540

Turkey – 1.1%1,118,530 Turkiye Garanti Bankasi ADR 5,289,438 5,153,260


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)United Kingdom – 2.8%

71,551 Aggreko PLC 1,986,046 1,934,533235,500 Standard Chartered PLC 5,654,148 4,098,544286,400 WPP Group PLC 4,049,019 6,895,180

11,689,213 12,928,257

United States – 59.0%33,500 3M Co. 3,539,741 6,389,376

102,500 Abbott Laboratories 3,405,245 5,355,170110,125 DaVita, Inc. 7,716,281 9,679,54956,700 American Express Company 3,894,872 6,121,06083,200 Citrix Systems, Inc. 5,367,118 6,160,102

111,200 MasterCard, Inc., Class A 8,396,582 11,121,93690,600 AbbVie Inc. 5,347,456 6,880,427

125,800 ARM Holdings PLC, ADR 4,170,261 6,763,00995,400 BorgWarner, Inc. 3,965,152 6,081,37654,600 Bunge Limited 3,763,543 5,757,807

105,800 Colgate-Palmolive Company 5,341,512 8,493,345189,000 eBay Inc. 7,460,400 12,309,01777,865 Emerson Electric Co. 4,200,228 5,576,69569,100 Exxon Mobil Corporation 6,241,281 7,412,39248,300 F5 Networks, Inc. 4,834,781 7,312,823

144,100 First Republic Bank 5,947,707 8,715,90117,660 Google Inc. Class A 12,524,603 10,875,54362,700 Grifols, S.A. 2,407,782 2,473,21929,325 IMS Health Holdings Inc. 881,374 872,569

112,900 Informatica Corporation 4,287,345 4,996,45164,100 IPG Photonics Corporation 4,503,023 5,573,137

143,200 JPMorgan Chase & Co. 6,739,515 10,402,233116,600 Lazard Ltd. 4,072,049 6,769,755202,480 Microsoft Corporation 6,889,840 10,914,69974,260 Monsanto Company 7,208,450 10,292,296

133,400 NIKE, Inc., Class B 8,230,201 14,879,58920,200 Polo Ralph Lauren Corporation 3,226,805 4,341,34728,920 Praxair, Inc. 2,980,630 4,349,57946,500 Procter & Gamble Company, The 3,297,483 4,916,84864,580 Roper Industries, Inc. 8,988,086 11,715,383

115,100 Schlumberger Limited 9,056,089 11,408,48469,600 SVB Financial Group 5,554,233 9,375,040

140,600 Trimble Navigation Ltd. 3,973,507 4,330,42167,200 Verisk Analytics, Inc. 5,019,725 4,994,96338,700 Waters Corporation 4,416,228 5,060,372

195,400 Wells Fargo & Company 6,925,891 12,431,042

194,775,019 271,102,955


Currency Spot Contracts – (0.0)% (418)OTHER ASSETS, LESS LIABILITIES – 3.8% 17,486,738

NET ASSETS – 100.0% 459,732,191



December 31, 2014 ($)


(Depreciation)

Jan. 2, 2015 U.S. Dollar 62,954 Canadian Dollar 73,077 73,077 (19)Jan. 5, 2015 U.S. Dollar 285,079 Canadian Dollar 331,233 331,232 (399)

(418)




FOR

EIG

NE

QU

ITY

FUN

DS

124




capitalization stocks of companies in North America, Europe, Australia and the Far East. The Fund may invest up to 10% of itsassets in securities of issuers in emerging markets and up to 15% of its assets in cash and cash equivalents.















ii) Currency risk


December 31, 2014






US Dollar 301,090,805 65.5 30,109,081 6.5

Japanese Yen 41,558,755 9.0 4,155,876 0.9

European Euro 36,578,734 8.0 3,657,873 0.8

Swiss Franc 21,595,742 4.7 2,159,574 0.5

Hong Kong Dollar 13,692,772 3.0 1,369,277 0.3

British Pound 12,928,257 2.8 1,292,826 0.3

Swedish Krona 7,761,185 1.7 776,119 0.2



Total 443,722,089 96.5 44,372,210 9.7 FOR

EIG

NE

QU

ITY

FUN

DS


125



December 31, 2013






U.S. Dollar 343,462,303 66.2 34,346,230 6.6

Japanese Yen 38,398,299 7.4 3,839,830 0.7

European Euro 35,352,430 6.8 3,535,243 0.7

British Pound 30,069,825 5.8 3,006,982 0.6

Swiss Franc 26,258,079 5.1 2,625,808 0.5

Hong Kong Dollar 11,890,129 2.3 1,189,013 0.2

South African Rand 5,242,408 1.0 524,241 0.1



Swedish Krona 1,170,553 0.2 117,055 –

Total 499,133,343 96.2 49,913,334 9.6

January 1, 2013






U.S. Dollar 214,998,594 63.7 21,499,859 6.4

Japanese Yen 33,438,929 9.9 3,343,893 1.0

European Euro 21,782,756 6.4 2,178,276 0.6

British Pound 18,301,231 5.4 1,830,123 0.5

Swiss Franc 16,323,084 4.8 1,632,308 0.5

Hong Kong Dollar 11,464,357 3.4 1,146,436 0.3


South African Rand 4,539,906 1.3 453,991 0.1

Swedish Krona 4,094,946 1.2 409,495 0.1


Total 333,666,918 98.7 33,366,692 9.8



iv) Credit risk


FOR

EIG

NE

QU

ITY

FUN

DS


126



v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $456,020 $ – $1,127,001 $ – $3,461,224

Unrealized loss on currency spot contracts – 418 – 3,263 – 15,024


$459,732,191 $456,438 $518,666,228 $1,130,264 $337,717,261 $3,476,248






Australia 0.8 0.8 1.7

France 5.4 5.0 4.4

Germany 2.1 – –

Hong Kong 3.0 2.3 3.4

India 1.3 1.5 2.2

Indonesia 1.0 0.7 0.9

Japan 9.1 7.8 9.8

Mexico – 1.8 2.2

Netherlands – 0.4 1.2

Russia – 0.5 0.7

South Africa – 1.0 1.2

Spain 1.6 1.3 1.5

Sweden 1.7 0.2 1.2


Turkey 1.1 0.7 1.3



Currency Spot Contracts (0.0) 0.0 –




Equities $299,617,538 $142,628,333 $ – $442,245,871

Currency Spot Contracts – Liabilities (418) (418)

$299,617,120 $142,628,333 $ – $442,245,453

FOR

EIG

NE

QU

ITY

FUN

DS


127




Equities $343,379,167 $156,974,989 $ – $500,354,156


343,397,504 156,974,989 – 500,372,493


$343,394,241 $156,974,989 $ – $500,369,230


Equities $210,538,815 $119,661,516 $ – $330,200,331


$210,523,791 $119,661,516 $ – $330,185,307




6. Comparison of Net Assets Value per Unit and Net Assets per Unit (note 2)The table below provides a comparison of the IFRS net assets per unit and Pricing NAV per unit. The primary reason for thedifference between the IFRS net assets per unit and Pricing NAV per unit is described in Note 2. There were no material differencesbetween the IFRS net assets per unit and Pricing NAV per unit as at January 1, 2013 and are hence not presented.






Pinnacle Series 19.85 19.85 17.26 17.26

Series F 19.78 19.78 17.26 17.26

Series I 20.17 20.17 17.53 17.53

FOR

EIG

NE

QU

ITY

FUN

DS


128

Scotia Private Global Real Estate Pool


December 31,2014

December 31,2013

January 1,2013



contracts 42 857 1,696Cash 5,181,558 9,461,775 3,952,943Accrued investment income 999,957 1,149,915 724,217Receivable for securities sold 140,005 93,365 1,195,241Subscriptions receivable 212,684 174,099 109,397

273,538,592 319,009,704 223,936,115

LIABILITIESCurrent liabilitiesPayable for securities purchased 129,714 4,572,929 660,454Redemptions payable 92,291 89,510 31,182Unrealized loss on currency spot

contracts – 6,794 5,629

222,005 4,669,233 697,265



Pinnacle Series Units $143,567,068 $112,443,887 $101,993,993Series F Units $ 1,676,634 $ 438,545 $ 188,962Series I Units $128,072,885 $201,458,039 $121,055,895





2014 2013


Dividends $10,114,858 $ 7,898,470Interest for distribution purposes 134,693 246,472Capital gains distributions received 53,393 26,880Net realized gain (loss) on non-derivative financial assets 28,174,868 10,500,934Net gain (loss) foreign exchange 99,337 (44,660)Change in unrealized appreciation (depreciation) of

non-derivative financial assets 19,231,632 9,918,734Change in unrealized appreciation (depreciation) of

currency spots 5,979 (2,004)

Net gain (loss) on investments 57,814,760 28,544,826Securities lending 16,321 19,971Net realized (gain) loss foreign exchange on cash (175,459) (17,416)Other income – 82


EXPENSESManagement fees (note 5) 11,907 3,389Administration fees (note 6) 66,834 –Harmonized Sales Tax/Goods and Services Tax 19,318 13,004Audit fees 5,927 7,434Independent Review Committee fees 657 1,181Custodian fees 34,145 22,479Filing fees 11,080 16,780Legal fees 3,060 4,343Unitholder reporting costs 11,340 6,421Unitholder administration and service fees 67,626 113,599Overdraft charges 12 –Foreign withholding taxes/tax reclaims 1,124,587 884,761Transaction costs 231,764 257,798


Net expenses 1,586,239 1,328,980



Pinnacle Series Units $27,323,475 $11,313,836Series F Units $ 226,801 $ 22,969Series I Units $28,519,107 $15,881,678





Portfolio Advisor: CBRE Clarion Securities


FOR

EIG

NE

QU

ITY

FUN

DS

129

Scotia Private Global Real Estate Pool (Continued)


2014 2013



314,340,471 223,238,850



56,069,383 27,218,483


Pinnacle Series Units (4,835,976) (2,269,667)Series F Units (45,202) (5,547)Series I Units (4,431,381) (4,195,802)

(9,312,559) (6,471,016)





(87,780,708) 70,354,154


Pinnacle Series Units 31,123,181 10,449,894Series F Units 1,238,089 249,583Series I Units (73,385,154) 80,402,144

(41,023,884) 91,101,621



$ 273,316,587 $314,340,471


2014 2013





sale of non-derivative financial assets (19,231,632) (9,918,734)Change in unrealized (appreciation) depreciation of

currency spot contracts (5,979) 2,004Purchases of non-derivative financial assets (107,012,677) (151,419,367)Proceeds from sale of non-derivative financial assets 190,822,904 86,418,517Transaction costs 231,764 257,798Accrued investment income 149,958 (425,698)









FOR

EIG

NE

QU

ITY

FUN

DS

130



AverageCost ($)

CarryingValue ($)

EQUITIES – 97.7%Australia – 5.6%

824,000 Federation Centres NPV on Stapled Security 1,850,647 2,227,181606,630 Goodman Group 2,520,965 3,247,775374,468 Investa Office Fund 1,086,585 1,284,516

1,980,803 Mirvac Group 3,117,608 3,322,262398,127 Scentre Group 2,035,159 1,314,756703,236 Stockland 2,716,834 2,728,254128,449 Westfield Corporation 892,989 1,090,648

14,220,787 15,215,392

Canadian Equities – 0.7%21,300 Boardwalk Real Estate Investment Trust 1,184,989 1,310,80217,030 Canadian Real Estate Investment Trust 631,042 779,804

1,816,031 2,090,606

France – 2.0%17,064 ICADE 1,550,195 1,585,37158,955 Klepierre 2,396,668 2,946,36236,610 Mercialys 854,914 947,498

4,801,777 5,479,231

Germany – 1.8%29,700 Deutsche Wohnen AG-Br 822,545 818,77645,695 LEG Immobilien AG 2,994,208 3,977,510

3,816,753 4,796,286

Hong Kong – 7.1%396,668 China Overseas Land & Investment Limited 1,319,912 1,358,659283,600 Hang Lung Properties Limited 1,017,583 917,297403,800 Hongkong Land Holdings Limited 2,751,663 3,154,061383,600 Link Real Estate Investment Trust, The 2,127,229 2,779,126

1,411,000 New World Development Company Limited 1,894,525 1,873,144403,100 Sun Hung Kai Properties Limited 5,883,505 7,074,39518,841 Sun Hung Kai Properties Limited Warrants

Apr. 22, 2016 55,269629,900 Swire Properties Limited 1,948,871 2,157,523

16,943,288 19,369,474

Japan – 13.1%856 GLP J-REIT 954,873 1,100,806793 Japan Hotel REIT Investment Corporation 508,317 589,225448 Japan Real Estate Investment Corporation 2,180,549 2,502,098

1,364 Japan Retail Fund Investment Corporation 2,645,531 3,338,120232 Kenedix Realty Investment Corporation 901,403 1,511,441

319,223 Mitsubishi Estate Company Ltd. 7,369,603 7,840,510308,600 Mitsui Fudosan Co., Ltd. 7,633,188 9,632,100

572 Nippon Prologis REIT Inc. 1,143,219 1,439,08579,000 NTT Urban Development Corporation 989,978 919,676

729 Orix JREIT Inc. 1,004,999 1,184,28193,400 Sumitomo Realty & Development Co., Ltd. 3,625,885 3,692,37949,000 Tokyo Tatemono Co. Ltd. 303,210 414,124

940 United Urban Investment Corporation 1,235,249 1,713,468

30,496,004 35,877,313

Luxembourg – 0.8%82,238 GAGFAH SA 1,489,047 2,134,933

Netherlands – 2.5%13,269 Corio NV 618,764 751,34420,122 Eurocommercial Properties NV 809,627 990,373

221,740 Nieuwe Steen Investments NV 1,257,398 1,145,71213,738 Unibail-Rodamco SE 3,263,539 4,074,003

5,949,328 6,961,432

Singapore – 3.4%1,354,700 Capitacommercial Trust 1,343,889 2,080,8731,001,600 Capitaland Limited 2,841,811 2,887,775


AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)Singapore (cont’d)

1,302,200 Global Logistic Properties Limited 2,686,411 2,826,064858,800 Suntec Real Estate Investment Trust 1,243,767 1,473,084

8,115,878 9,267,796

Sweden – 0.4%72,023 Hufvudstaden AB, Class A 967,075 1,085,068

Switzerland – 0.5%12,996 PSP Swiss Property AG 1,188,482 1,298,344

United Kingdom – 7.1%314,932 British Land Company PLC 3,469,240 4,390,41448,300 Derwent London PLC 1,385,229 2,617,972

207,580 Great Portland Estates PLC 1,514,616 2,753,073263,667 Hammerson PLC 2,093,007 2,859,822261,525 Land Securities Group PLC 3,742,477 5,430,648189,823 Safestore Holdings PLC 523,448 796,25361,147 Unite Group PLC 468,762 514,149

13,196,779 19,362,331

United States – 52.7%248,700 American Realty Capital Properties Inc. 3,280,153 2,611,97133,778 AvalonBay Communities, Inc. 4,637,005 6,406,13986,000 BioMed Realty Trust Inc. 1,854,528 2,149,75019,680 Boston Properties, Inc. 1,894,923 2,939,09688,800 Brandywine Realty Trust 1,325,863 1,646,77376,900 Brixmor Property Group Inc. 1,818,895 2,218,11557,260 Cousins Properties, Inc. 785,673 758,85941,800 DCT Industrial Trust Inc. 1,411,050 1,730,793

191,500 Developers Diversified Realty Corporation 2,824,187 4,080,23793,900 Douglas Emmett, Inc. 2,292,345 3,097,490

150,400 Duke Realty Corporation 2,429,427 3,525,682107,715 Equity Residential Real Estate Investment Trust 6,139,277 8,983,33420,295 Essex Property Trust, Inc. 3,426,586 4,866,725

182,600 General Growth Properties, Inc. 3,447,100 5,960,93598,288 Health Care Real Estate Investment Trust, Inc. 5,847,887 8,631,14061,400 Healthcare Realty Trust Inc. 1,490,611 1,946,67354,400 Healthcare Trust of America Inc. 1,328,211 1,703,27526,620 Highwoods Properties, Inc. 920,337 1,367,91670,400 Hilton Worldwide Holdings Inc. 1,752,762 2,131,526

272,397 Host Hotels & Resorts Inc. 4,567,600 7,518,81555,200 Kilroy Realty Corporation 2,674,773 4,426,82692,654 Kimco Realty Corporation 1,760,121 2,703,170

103,800 Lexington Realty Trust 1,158,774 1,322,64619,500 Liberty Property Trust 690,343 851,55540,763 Macerich Company, The 2,120,809 3,944,082

114,700 Paramount Group Inc. 2,325,816 2,481,15128,100 Pebblebrook Hotel Trust 747,416 1,487,99233,300 Post Properties, Inc. 1,555,179 2,271,140

155,706 ProLogis 5,697,854 7,775,36215,284 Public Storage Real Estate Investment Trust 1,888,040 3,280,28752,500 Ramco-Gershenson Properties Trust 878,988 1,141,75548,665 Simon Property Group, Inc. 6,252,690 10,296,33942,910 SL Green Realty Corp. 3,153,142 5,929,069

198,500 Spirit Realy Capital, Inc. 2,339,199 2,738,964129,000 Strategic Hotels & Resorts Inc. 1,469,845 1,980,58525,000 Sun Communities, Inc. 1,402,772 1,755,39672,600 Sunstone Hotel Investors, Inc. 880,048 1,391,00225,587 Tanger Factory Outlet Centers, Inc. 841,568 1,097,47719,500 Taubman Centers Inc 1,321,012 1,730,039

133,300 UDR Inc 3,493,796 4,767,676



FOR

EIG

NE

QU

ITY

FUN

DS

131



AverageCost ($)

CarryingValue ($)

EQUITIES (cont’d)United States (cont’d)

46,980 Vornado Realty Trust Real Estate InvestmentTrust 4,129,072 6,418,383

100,255,677 144,066,140


Currency Spot Contracts – 0.0% 42OTHER ASSETS, LESS LIABILITIES – 2.3% 6,312,199

NET ASSETS – 100.0% 273,316,587



December 31, 2014 ($)


(Depreciation)

Jan. 2, 2015 Canadian Dollar 10,333 European Euro 7,330 10,291 42




FOR

EIG

NE

QU

ITY

FUN

DS

132



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term returns through income and capital growth, by investing primarily in

U.S., Canadian and non-North American real estate stocks and real estate investment trusts (REITs). The Fund’s investmentsmay consist of up to 40% Canadian securities, up to 100% REITs, up to 100% foreign content, and up to 15% cash and cashequivalents.













3. Risks Associated with Financial Instruments (note 4)i) Interest Rate Risk


ii) Currency risk


December 31, 2014






US Dollar 147,372,643 53.9 14,737,264 5.4

Japanese Yen 35,877,313 13.1 3,587,731 1.3

British Pound 19,362,330 7.1 1,936,233 0.7

European Euro 19,361,590 7.1 1,936,159 0.7

Hong Kong Dollar 16,278,767 6.0 1,627,877 0.6

Australian Dollar 15,215,393 5.6 1,521,539 0.6

Singapore Dollar 9,267,794 3.4 926,779 0.3

Swiss Franc 1,298,344 0.5 129,834 0.0

Swedish Krona 1,085,068 0.4 108,507 0.0

Total 265,119,242 97.1 26,511,923 9.6

FOR

EIG

NE

QU

ITY

FUN

DS


133



December 31, 2013






U.S. Dollar 151,987,605 48.4 15,198,761 4.8

Japanese Yen 54,895,421 17.5 5,489,542 1.7

European Euro 25,583,171 8.1 2,558,317 0.8

Hong Kong Dollar 21,406,115 6.8 2,140,611 0.7


British Pound 19,352,930 6.2 1,935,293 0.6

Singapore Dollar 9,428,689 3.0 942,869 0.3

Swedish Krona 2,331,052 0.7 233,105 0.1

Swiss Franc 1,706,176 0.5 170,618 0.1

Total 306,184,734 97.4 30,618,474 9.7

January 1, 2013






U.S. Dollar 99,565,749 44.6 9,956,575 4.5

Japanese Yen 27,309,826 12.2 2,730,983 1.2

Hong Kong Dollar 24,104,285 10.8 2,410,429 1.1


British Pound 12,829,790 5.7 1,282,979 0.6

European Euro 12,401,013 5.6 1,240,101 0.6

Singapore Dollar 10,045,710 4.5 1,004,571 0.4

Swedish Krona 1,845,589 0.8 184,559 0.1

Swiss Franc 1,452,965 0.7 145,297 0.1

Brazilian Real 389,612 0.2 38,961 –

Total 211,441,273 94.7 21,144,128 9.6



iv) Credit risk


FOR

EIG

NE

QU

ITY

FUN

DS


134



v) Liquidity risk





Less than3 months


Unrealized loss on currency spot contracts – – – 6,794 – 5,629


$273,316,587 $222,005 $314,340,471 $4,669,233 $223,238,850 $697,265






Australia 5.6 6.1 9.7

Brazil – – 0.2

Canada 0.7 1.9 2.8

France 2.0 2.7 4.5

Germany 1.8 0.7 0.8

Hong Kong 7.1 7.6 12.1

Japan 13.1 17.5 12.0

Luxembourg 0.8 – –

Netherlands 2.5 4.8 0.3

Singapore 3.4 2.9 4.5

Sweden 0.4 0.7 0.8







Equities $146,156,746 $120,792,331 $ – $266,949,077

Warrants – 55,269 – 55,269


$146,156,788 $120,847,600 $ – $267,004,388

FOR

EIG

NE

QU

ITY

FUN

DS


135




Equities $152,086,715 $156,042,978 $ – $308,129,693


152,087,572 156,042,978 – 308,130,550


$152,080,778 $156,042,978 $ – $308,123,756


Equities $103,419,897 $114,532,724 $ – $217,952,621


103,421,593 114,532,724 – 217,954,317


$103,415,964 $114,532,724 $ – $217,948,688










Pinnacle Series 17.28 17.28 14.42 14.42

Series F 16.76 16.76 14.03 14.03

Series I 17.92 17.92 14.95 14.95

FOR

EIG

NE

QU

ITY

FUN

DS


136

Pinnacle Income Portfolio


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $12,902,775 $13,272,894 $14,396,439Cash 119,792 250,269 –Accrued investment income 124 57 140Receivable for securities sold – 9,000 240,996Subscriptions receivable 1,016 527 404

13,023,707 13,532,747 14,637,979

LIABILITIESCurrent liabilitiesBank indebtedness – – 65,051Redemptions payable – 938 –

– 938 65,051



Series A Units $13,023,707 $13,531,809 $14,572,928

UNITS OUTSTANDINGSeries A Units 1,081,558 1,186,415 1,313,218


Series A Units $ 12.04 $ 11.41 $ 11.10


2014 2013


Dividends $ 109,213 $ 86,330Interest for distribution purposes 309,560 362,734Capital gains distributions received 32,461 355,592Net realized gain (loss) on non-derivative financial assets 274,188 340,341Change in unrealized appreciation (depreciation) of non-

derivative financial assets 436,834 (218,185)

Net gain (loss) on investments 1,162,256 926,812

Total income (loss) 1,162,256 926,812

EXPENSESManagement fees (note 5) 244,324 264,576Administration fees (note 6) 7,009 –Harmonized Sales Tax/Goods and Services Tax 26,283 27,732Audit fees 317 74Independent Review Committee fees 35 864Custodian fees 1,272 423Filing fees 9,781 14,678Legal fees 166 38Unitholder reporting costs 4,432 4,226Unitholder administration and service fees 3,820 5,708Overdraft charges 209 276Foreign withholding taxes/tax reclaims 7,710 6,425

Total expenses 305,358 325,020

Net expenses 305,358 325,020

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $ 856,898 $ 601,792


Series A Units $ 856,898 $ 601,792


Series A Units $ 0.77 $ 0.48

WEIGHTED AVERAGE NUMBER OF UNITSSeries A Units 1,111,486 1,263,862



2014 2013


Series A Units $13,531,809 $14,572,928


Series A Units 856,898 601,792


Series A Units (113,437) (122,484)From realized gain

Series A Units (16,784) (87,157)

(130,221) (209,641)


Series A Units 1,468,566 1,161,382Reinvested distributions

Series A Units 124,285 201,211Payments on redemption

Series A Units (2,827,630) (2,795,863)

(1,234,779) (1,433,270)


Series A Units (508,102) (1,041,119)


Series A Units $13,023,707 $13,531,809


2014 2013


redeemable units $ 856,898 $ 601,792Adjustments For:

Net realized (gain) loss on sale of non-derivative financialassets (274,188) (340,341)

Change in unrealized (appreciation) depreciation on saleof non-derivative financial assets (436,834) 218,185

Purchases of non-derivative financial assets (596,013) (1,180,403)Proceeds from sale of non-derivative financial assets 1,686,154 2,658,100Accrued investment income (67) 83

Net cash provided by (used in) operating activities 1,235,950 1,957,416


Net cash provided by (used in) financing activities (1,366,427) (1,642,096)Net increase (decrease) in cash (130,477) 315,320Cash (Bank Indebtedness) at beginning of period 250,269 (65,051)






TH

EP

INN

AC

LEP

OR

TFO

LIO

S

137

Pinnacle Income Portfolio (Continued)

SCHEDULE OF INVESTMENT PORTFOLIOAs at December 31, 2014Number ofUnits Issuer

AverageCost ($)

CarryingValue ($)

FIXED INCOME FUNDS – 68.9%199,210 Scotia Private American Core-Plus Bond

Pool Series I 1,673,678 1,907,398130,674 Scotia Private High Yield Income Pool Series I 1,160,988 1,235,624534,851 Scotia Private Income Pool Series I 5,890,834 5,832,176

8,725,500 8,975,198

CANADIAN EQUITY FUNDS – 11.0%68,432 Scotia Private Canadian Growth Pool Series I 829,598 1,048,19717,636 Scotia Private Canadian Value Pool Series I 314,361 375,608

1,143,959 1,423,805

FOREIGN EQUITY FUNDS – 19.2%13,110 Scotia Private Emerging Markets Pool Series I 127,537 128,26619,339 Scotia Private Global Equity Pool Series I 234,975 389,98360,198 Scotia Private Global Real Estate Pool Series I 648,808 1,078,59917,353 Scotia Private International Small to Mid Cap

Value Pool Series I 258,460 393,65332,734 Scotia Private U.S. Value Pool Series I 317,509 513,271

1,587,289 2,503,772



NET ASSETS – 100.0% 13,023,707



TH

EP

INN

AC

LEP

OR

TFO

LIO

S

138



1. The Fund (note 1)i) The Fund’s investment objective is to generate current income and long-term capital growth, with a bias towards income. The

Fund is an asset allocation fund that allocates your investment between four asset classes: bonds, Canadian equities, foreignequities and equities of real estate companies. The majority of the Fund will be invested in bonds with the balance invested inequities which will include Canadian and foreign equities and may include equities of real estate companies and real estateinvestment trusts.



The Fund invests in underlying funds, which are exposed to interest rate risk. As at December 31, 2014, had the prevailing interestrates increased or decreased by 0.25%, assuming a parallel shift in the yield curve and all other variables held constant, net assetsattributable to holders of redeemable units would have decreased or increased, respectively, by $125,255 or approximately 1.0%(December 31, 2013 – $112,534 or approximately 0.8%, January 1, 2013 – $170,594 or approximately 1.2%). In practice, actual resultsmay differ from this sensitivity analysis and the difference could be material.

ii) Currency risk

The Fund could be exposed to indirect currency risk to the extent that the Underlying Funds held financial instruments that weredenominated in a currency other than its functional currency.


Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 30.2% (December 31, 2013 – 29.9%, January 1, 2013 – 30.5%) of the Fund’s net assets attributable to holders ofredeemable units were invested in Underlying Funds which were exposed to other price risk. If prices of these investments haddecreased or increased by 10%, with all other variables held constant, net assets attributable to holders of redeemable units of theFund would have decreased or increased, respectively, by approximately $392,758 (December 31, 2013 – $403,863, January 1, 2013 –$444,467). In practice, actual results will differ from this sensitivity analysis and the difference could be material.

iv) Credit risk

The Fund could be exposed to indirect credit risk to the extent that the Underlying Funds invested in debt instruments andderivatives.

v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $ – $ – $938 $ – $65,051


$13,023,707 $ – $13,531,809 $938 $14,572,928 $65,051

Redeemable units are redeemable on demand at the holder’s option. However, the Manager does not expect that the contractualmaturity disclosed in the table above will be representative of the actual cash outflows, as holders of these instruments typicallyretain them for a longer term. T

HE

PIN

NA

CLE

PO

RT

FOLI

OS


139




Concentration risk arises as a result of the concentration of exposures within the same category, geographical location, asset type,industry sector or counterparty type. The table(s) below is a summary of the Fund’s concentration risk.



Fixed Income Funds 68.9 68.2 68.3

Canadian Equity Funds 11.0 11.0 11.1

Foreign Equity Funds 19.2 18.9 19.4




Mutual Funds $12,902,775 $ – $ – $12,902,775


Mutual Funds $13,272,894 $ – $ – $13,272,894


Mutual Funds $14,396,439 $ – $ – $14,396,439



5. Interest in Underlying Funds (note 2)The following tables provide information about the Fund’s interest in Underlying Funds as at December 31, 2014, December 31, 2013and January 1, 2013.

December 31, 2014

Underlying FundNet asset value ofunderlying fund

Investmentfair value

% of NetAssets

Scotia Private Emerging Markets Pool Series I $172,517,483 $ 128,266 1.0

Scotia Private Income Pool Series I 334,449,630 5,832,176 44.8

Scotia Private High Yield Income Pool Series I 910,438,382 1,235,624 9.5

Scotia Private American Core-Plus Bond Pool Series I 628,345,246 1,907,398 14.6

Scotia Private Canadian Value Pool Series I 129,640,369 375,608 2.9

Scotia Private Canadian Growth Pool Series I 331,181,286 1,048,197 8.0

Scotia Private U.S. Value Pool Series I 289,278,933 513,271 3.9

Scotia Private International Small to Mid Cap ValuePool Series I 37,451,491 393,653 3.0

Scotia Private Global Equity Pool Series I 459,739,970 389,983 3.0

Scotia Private Global Real Estate Pool Series I 273,276,031 1,078,599 8.4

$12,902,775 99.1

TH

EP

INN

AC

LEP

OR

TFO

LIO

S


140



December 31, 2013



% of NetAssets











$13,272,894 98.1

January 1, 2013



% of NetAssets











$14,396,439 98.8







Series A 12.04 12.04 11.41 11.41T

HE

PIN

NA

CLE

PO

RT

FOLI

OS


141

Pinnacle Balanced Portfolio


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $82,854,868 $76,380,393 $61,565,200Cash 27,518 385,621 404,935Accrued investment income 190 268 283Receivable for securities sold 40,000 45,600 –Subscriptions receivable 75,967 12,157 11,270

82,998,543 76,824,039 61,981,688

LIABILITIESCurrent liabilitiesPayable for securities purchased – 86,000 –Redemptions payable 13,509 2,018 117,908

13,509 88,018 117,908


NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS PER SERIES

Series A Units $82,985,034 $76,736,021 $61,863,780

UNITS OUTSTANDINGSeries A Units 6,273,642 6,226,172 5,597,961

NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS PER UNIT

Series A Units $ 13.23 $ 12.32 $ 11.05


2014 2013


Dividends $1,240,588 $ 923,434Interest for distribution purposes 1,175,298 1,094,169Capital gains distributions received 1,106,759 1,515,783Net realized gain (loss) on non-derivative financial assets 1,463,887 951,079Change in unrealized appreciation (depreciation) of non-


Net gain (loss) on investments 8,047,517 9,478,097Other income 189 –


EXPENSESManagement fees (note 5) 1,711,263 1,396,603Administration fees (note 6) 23,867 –Harmonized Sales Tax/Goods and Services Tax 163,035 135,108Audit fees 1,608 1,635Independent Review Committee fees 216 973Custodian fees (178) 317Filing fees 1,853 15,280Legal fees 925 7,607Unitholder reporting costs 5,821 5,265Unitholder administration and service fees 20,814 23,668Overdraft charges 96 167Foreign withholding taxes/tax reclaims 74,462 53,023

Total expenses 2,003,782 1,639,646Absorbed expenses (300) –

Net expenses 2,003,482 1,639,646



Series A Units $6,044,224 $7,838,451



WEIGHTED AVERAGE NUMBER OF UNITSSeries A Units 6,287,191 5,717,492




TH

EP

INN

AC

LEP

OR

TFO

LIO

S

142

Pinnacle Balanced Portfolio (Continued)


2014 2013


Series A Units $ 76,736,021 $ 61,863,780


Series A Units 6,044,224 7,838,451

DISTRIBUTIONS TO UNITHOLDERS OF REDEEMABLEUNITSFrom net investment income

Series A Units (382,900) (358,501)


Series A Units 11,975,909 17,760,769

Reinvested distributionsSeries A Units 377,619 354,371

Payments on redemptionSeries A Units (11,765,839) (10,722,849)

587,689 7,392,291


Series A Units 6,249,013 14,872,241


Series A Units $ 82,985,034 $ 76,736,021


2014 2013



Net realized (gain) loss on sale of non-derivativefinancial assets (1,463,887) (951,079)

Change in unrealized (appreciation) depreciation onsale of non-derivative financial assets (3,060,985) (4,993,632)

Purchases of non-derivative financial assets (9,202,416) (6,017,923)Proceeds from sale of non-derivative financial assets 7,172,413 5,421,464Accrued investment income 78 15

Net cash provided by (used in) operating activities (510,573) 1,297,296


Net cash provided by (used in) financing activities 152,470 (1,316,610)Net increase (decrease) in cash (358,103) (19,314)Cash (Bank Indebtedness) at beginning of period 385,621 404,935


Interest received(1) 1,175,376 1,094,184Dividends received, net of withholding taxes(1) 1,166,126 870,411




TH

EP

INN

AC

LEP

OR

TFO

LIO

S

143



AverageCost ($)

CarryingValue ($)

FIXED INCOME FUNDS – 39.2%854,168 Scotia Private High Yield Income Pool Series I 7,973,149 8,076,844

2,240,350 Scotia Private Income Pool Series I 24,650,717 24,429,443

32,623,866 32,506,287

CANADIAN EQUITY FUNDS – 30.0%577,641 Scotia Private Canadian Growth Pool Series I 7,312,635 8,847,954237,720 Scotia Private Canadian Mid Cap Pool Series I 3,448,304 4,796,31885,024 Scotia Private Canadian Small Cap Pool Series I 1,964,438 2,771,141

399,778 Scotia Private Canadian Value Pool Series I 7,384,134 8,514,557

20,109,511 24,929,970

FOREIGN EQUITY FUNDS – 30.6%167,777 Scotia Private Emerging Markets Pool Series I 1,640,215 1,641,444125,934 Scotia Private Global Equity Pool Series I 1,636,342 2,539,593476,350 Scotia Private Global Real Estate Pool Series I 6,405,598 8,534,946317,354 Scotia Private International Equity Pool Series I 3,462,075 3,802,09175,302 Scotia Private International Small to Mid Cap

Value Pool Series I 1,213,145 1,708,226248,548 Scotia Private U.S. Large Cap Growth Pool Series I 1,799,305 3,578,845230,452 Scotia Private U.S. Value Pool Series I 2,594,573 3,613,466

18,751,252 25,418,611



NET ASSETS – 100.0% 82,985,034

Portfolio Adviser: 1832 Asset Management L.P.


TH

EP

INN

AC

LEP

OR

TFO

LIO

S

144



1. The Fund (note 1)i) The Fund’s investment objective is to achieve a balance of long-term capital growth and current income. The Fund is an asset

allocation fund that allocates your investment between four asset classes: bonds, equities of real estate companies, Canadianequities and foreign equities. The majority of the Fund will be invested in equities which will include Canadian and foreignequities and equities of real estate companies and real estate investment trusts. The equities allocation will have a slight focuson Canadian equities. In addition, a significant allocation of the Fund will be invested in bonds.




ii) Currency risk



Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 60.6% (December 31, 2013 – 61.4%, January 1, 2013 – 60.2%) of the Fund’s net assets attributable to holders ofredeemable units were invested in Underlying Funds which were exposed to other price risk. If prices of these investments haddecreased or increased by 10%, with all other variables held constant, net assets attributable to holders of redeemable units of theFund would have decreased or increased, respectively, by approximately $5,034,858 (December 31, 2013 – $4,713,256, January 1,2013 – $3,720,838). In practice, actual results will differ from this sensitivity analysis and the difference could be material.

iv) Credit risk


v) Liquidity risk





Less than3 months



$82,985,034 $13,509 $76,736,021 $88,018 $61,863,780 $117,908

Redeemable units are redeemable on demand at the holder’s option. However, the Manager does not expect that the contractualmaturity disclosed in the table above will be representative of the actual cash outflows, as holders of these instruments typicallyretain them for a longer term. T

HE

PIN

NA

CLE

PO

RT

FOLI

OS


145













Mutual Funds $82,854,868 $ – $ – $82,854,868


Mutual Funds $76,380,393 $ – $ – $76,380,393


Mutual Funds $61,565,200 $ – $ – $61,565,200




December 31, 2014



% of NetAssets

Scotia Private Emerging Markets Pool Series I $172,517,483 $ 1,641,444 2.0



Scotia Private Canadian Value Pool Series I 129,640,369 8,514,557 10.3


Scotia Private Canadian Small Cap Pool Series I 538,492,305 2,771,141 3.3

Scotia Private Canadian Mid Cap Pool Series I 57,129,896 4,796,318 5.8

Scotia Private U.S. Value Pool Series I 289,278,933 3,613,466 4.3

Scotia Private U.S. Large Cap Growth Pool Series I 70,405,342 3,578,845 4.3

Scotia Private International Equity Pool Series I 600,735,759 3,802,091 4.6

Scotia Private International Small to Mid Cap ValuePool Series I 37,451,491 1,708,226 2.0

Scotia Private Global Equity Pool Series I 459,739,970 2,539,593 3.1


$82,854,868 99.8

TH

EP

INN

AC

LEP

OR

TFO

LIO

S


146



December 31, 2013



% of NetAssets














$76,380,393 99.8

January 1, 2013



% of NetAssets














$61,565,200 99.3







Series A 13.23 13.23 12.32 12.32

TH

EP

INN

AC

LEP

OR

TFO

LIO

S


147

Pinnacle Growth Portfolio


December 31,2014

December 31,2013

January 1,2013


Non-derivative financial assets $12,274,317 $11,890,494 $7,587,965Cash 150,908 225,255 77,844Accrued investment income 168 76 66Receivable for securities sold – 10,400 23,999Subscriptions receivable 15,886 9,131 175

12,441,279 12,135,356 7,690,049

LIABILITIESCurrent liabilitiesPayable for securities purchased – 7,000 –


NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS PER SERIES

Series A Units $12,441,279 $12,128,356 $7,690,049

UNITS OUTSTANDINGSeries A Units 900,654 945,071 695,476

NET ASSETS ATTRIBUTABLE TO HOLDERSOF REDEEMABLE UNITS PER UNIT

Series A Units $ 13.81 $ 12.83 $ 11.06


2014 2013


Dividends $ 229,182 $ 187,804Interest for distribution purposes 92,166 79,838Capital gains distributions received 231,357 147,495Net realized gain (loss) on non-derivative financial assets 233,747 265,628Change in unrealized appreciation (depreciation) of non-

derivative financial assets 492,298 1,044,031

Net gain (loss) on investments 1,278,750 1,724,796


EXPENSESManagement fees (note 5) 298,388 214,710Administration fees (note 6) 6,738 –Harmonized Sales Tax/Goods and Services Tax 30,690 22,723Audit fees (55) 1,245Independent Review Committee fees 33 849Custodian fees 203 418Filing fees 14,891 2,207Legal fees 110 1,383Unitholder reporting costs 3,720 4,220Unitholder administration and service fees 4,696 2,994Overdraft charges 100 90Foreign withholding taxes/tax reclaims 10,826 8,328

Total expenses 370,340 259,167Absorbed expenses – (944)

Net expenses 370,340 258,223

Increase (decrease) in Net Assets attributable to holders ofredeemable units from operations $ 908,410 $1,466,573


Series A Units $ 908,410 $1,466,573



WEIGHTED AVERAGE NUMBER OF UNITSSeries A Units 916,972 756,156



2014 2013


Series A Units $12,128,356 $ 7,690,049


Series A Units 908,410 1,466,573


Series A Units 1,392,236 4,915,420Payments on redemption

Series A Units (1,987,723) (1,943,686)

(595,487) 2,971,734


Series A Units 312,923 4,438,307


Series A Units $12,441,279 $12,128,356


2014 2013


redeemable units $ 908,410 $ 1,466,573Adjustments For:

Net realized (gain) loss on sale of non-derivative financialassets (233,747) (265,628)

Change in unrealized (appreciation) depreciation on saleof non-derivative financial assets (492,298) (1,044,031)

Purchases of non-derivative financial assets (851,852) (977,220)Proceeds from sale of non-derivative financial assets 1,197,474 1,958,875Accrued investment income (92) (10)

Net cash provided by (used in) operating activities 527,895 1,138,559

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of redeemable units 1,385,481 952,538Amounts paid on redemption of redeemable units (1,987,723) (1,943,686)

Net cash provided by (used in) financing activities (602,242) (991,148)Net increase (decrease) in cash (74,347) 147,411Cash (Bank Indebtedness) at beginning of period 225,255 77,844






TH

EP

INN

AC

LEP

OR

TFO

LIO

S

148

Pinnacle Growth Portfolio (Continued)


AverageCost ($)

CarryingValue ($)

FIXED INCOME FUNDS – 19.4%73,661 Scotia Private High Yield Income Pool Series I 675,992 696,525

158,023 Scotia Private Income Pool Series I 1,745,709 1,723,132

2,421,701 2,419,657

CANADIAN EQUITY FUNDS – 48.7%144,442 Scotia Private Canadian Growth Pool Series I 1,893,727 2,212,47652,469 Scotia Private Canadian Mid Cap Pool Series I 816,916 1,058,62119,927 Scotia Private Canadian Small Cap Pool Series I 502,977 649,475

100,536 Scotia Private Canadian Value Pool Series I 1,910,499 2,141,245

5,124,119 6,061,817

FOREIGN EQUITY FUNDS – 30.5%24,914 Scotia Private Emerging Markets Pool Series I 235,832 243,75018,963 Scotia Private Global Equity Pool Series I 272,113 382,41170,369 Scotia Private Global Real Estate Pool Series I 978,640 1,260,82346,661 Scotia Private International Equity Pool Series I 456,445 559,02610,864 Scotia Private International Small to Mid Cap

Value Pool Series I 187,478 246,44939,027 Scotia Private U.S. Large Cap Growth Pool Series I 324,167 561,95534,339 Scotia Private U.S. Value Pool Series I 409,405 538,429

2,864,080 3,792,843



NET ASSETS – 100.0% 12,441,279



TH

EP

INN

AC

LEP

OR

TFO

LIO

S

149



1. The Fund (note 1)i) The Fund’s investment objective is to achieve long-term capital growth and provide some current income. The Fund is an asset

allocation fund that allocates your investment between four asset classes: bonds, equities of real estate companies, Canadianequities and foreign equities. The Fund will be principally invested in equities which will include a significant position inCanadian equities and smaller positions in foreign equities and equities of real estate companies and real estate investmenttrusts. Approximately 20% of the Fund will be invested in bonds.




ii) Currency risk



Other price risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market prices (otherthan those arising from interest rate risk or currency risk) caused by factors specific to a security, its issuer or all factors affecting amarket or a market segment. Exposure to other price risk is mainly in equities and commodities, if applicable. As at December 31,2014, approximately 79.2% (December 31, 2013 – 79.1%, January 1, 2013 – 79.3%) of the Fund’s net assets attributable to holders ofredeemable units were invested in Underlying Funds which were exposed to other price risk. If prices of these investments haddecreased or increased by 10%, with all other variables held constant, net assets attributable to holders of redeemable units of theFund would have decreased or increased, respectively, by approximately $985,466 (December 31, 2013 – $959,578, January 1, 2013 –$609,564). In practice, actual results will differ from this sensitivity analysis and the difference could be material.

iv) Credit risk


v) Liquidity risk





Less than3 months

Accounts payable and accrued liabilities $ – $ – $ – $7,000 $ – $ –


$12,441,279 $ – $12,128,356 $7,000 $7,690,049 $ –

Redeemable units are redeemable on demand at the holder’s option. However, the Manager does not expect that the contractualmaturity disclosed in the table above will be representative of the actual cash outflows, as holders of these instruments typicallyretain them for a longer term.T

HE

PIN

NA

CLE

PO

RT

FOLI

OS


150












Mutual Funds $12,274,317 $ – $ – $12,274,317


Mutual Funds $11,890,494 $ – $ – $11,890,494


Mutual Funds $ 7,587,965 $ – $ – $ 7,587,965




December 31, 2014



% of NetAssets



Scotia Private High Yield Income Pool Series I 910,438,382 696,525 5.6



Scotia Private Canadian Small Cap Pool Series I 538,492,305 649,475 5.2



Scotia Private U.S. Large Cap Growth Pool Series I 70,405,342 561,955 4.5

Scotia Private International Equity Pool Series I 600,735,759 559,026 4.5




$12,274,317 98.6

TH

EP

INN

AC

LEP

OR

TFO

LIO

S


151



December 31, 2013



% of NetAssets










Scotia Private U.S. Mid Cap Value Pool Series I 25,917,835 137,659 1.1





$11,890,494 98.0

January 1, 2013



% of NetAssets







Scotia Private Canadian Mid Cap Pool Series I 40,759,759 666,648 8.7






Scotia Private Global Real Estate Pool Series I 223,229,954 760,003 9.9

$7,587,965 98.7







Series A 13.81 13.81 12.83 12.83

TH

EP

INN

AC

LEP

OR

TFO

LIO

S


152

Notes to the Financial StatementsFor the years indicated in Note 1.

1. The Funds1832 Asset Management L.P., a wholly owned subsidiary of theBank of Nova Scotia (“Scotiabank”), is the manager andtrustee of the Funds. In this document, “we”, “us”, “our”, the“Manager”, the “Trustee”, and “1832 Asset Management” referto 1832 Asset Management L.P. The registered office of theFunds is 1 Adelaide St. E, 28th Floor, Toronto, Ontario.

The funds presented in these financial statements are eitheropen-ended mutual fund trusts (“Trust Funds” or “Portfolios”).We refer to a Trust Fund, or a Portfolio, as a “Fund” andcollectively, as the “Funds”.

All of the Scotia Private Pools and Pinnacle Portfoliospresented in these financial statements are open ended mutualfund trusts established under the laws of the Province ofOntario pursuant to an Amended and Restated MasterDeclaration of Trust (“Declaration of Trust”) datedNovember 24, 2011, as amended from time to time.

The Schedule of Investment Portfolio for each of the Funds isas at December 31, 2014. The Statements of Financial Positionare as at December 31, 2014, December 31, 2013 andJanuary, 1, 2013, and the Statements of ComprehensiveIncome, Changes in Net Assets Attributable to Holders ofRedeemable Units and Cash Flows are for the years endedDecember 31, 2014 and 2013. Throughout this document,reference to the reporting period refers to the reporting perioddescribed above.

These financial statements were approved by the Board ofDirectors of 1832 Asset Management G.P. Inc., as generalpartner for and on behalf of 1832 Asset Management L.P., in itscapacity as Trustee and authorized for issue on March 6, 2015.

The investment objectives for each of the Funds are providedin the respective Fund’s “Fund Specific Notes”. The inceptiondate for each Fund is as follows:

Scotia Private Pools Inception Date

Scotia Private American Core-Plus Bond Pool January 28, 2002

Scotia Private Canadian Growth Pool September 3, 1997

Scotia Private Canadian Mid Cap Pool January 28, 2002

Scotia Private Canadian Small Cap Pool September 3, 1997

Scotia Private Canadian Value Pool September 3, 1997

Scotia Private Emerging Markets Pool September 8, 2010

Scotia Private Global Equity Pool September 3, 1997

Scotia Private Global Real Estate Pool January 28, 2002

Scotia Private High Yield Income Pool September 3, 1997

Scotia Private Income Pool September 3, 1997

Scotia Private International Equity Pool September 3, 1997

Scotia Private International Small to Mid Cap Value Pool January 28, 2002

Scotia Private Short Term Income Pool September 3, 1997

Scotia Private Strategic Balanced Pool September 3, 1997

Scotia Private U.S. Large Cap Growth Pool January 18, 2001

Scotia Private U.S. Mid Cap Growth Pool September 3, 1997

Scotia Private U.S. Mid Cap Value Pool January 28, 2002

Scotia Private U.S. Value Pool September 3, 1997

Pinnacle Portfolios

Pinnacle Balanced Portfolio April 22, 2005

Pinnacle Growth Portfolio April 22, 2005

Pinnacle Income Portfolio April 22, 2005

Each of the Funds may offer one or more Series of securities:Pinnacle Series/Series A units, Series F units, Series I units,and Series M units. Each Series of a Fund is authorized to issuean unlimited number of units, which are redeemable at theoption of the unitholder at their respective net asset value nextdetermined following receipt of the sell order by the Fund.Each Series of units of a Fund is intended for differentinvestors. A description of each Series of units is providedbelow:

• Series A units are only available through ScotiaMcLeod orotherwise permitted by the Manager.

• Pinnacle Series units are only available to investors whoparticipate in the Pinnacle program.

• Series F units are generally available to investors who havefee-based accounts.

• Series I units are available to eligible institutional investorsand other qualified investors. Series I units are currentlyonly available through the Manager.

• Series M units are available to investors who have signed adiscretionary investment management agreement with theManager or Scotiatrust.

The Manager has Guidelines for Business Conduct (the“Code”) which applies to all of its employees. The Code is inplace to protect the interest of all of the Manager’s clients. TheCode provides policies governing the conduct of businessincluding conflicts of interest, privacy issues andconfidentiality.

2. Summary of Significant Accounting PoliciesThese financial statements have been prepared in compliancewith International Financial Reporting Standards (“IFRS”) aspublished by the International Accounting Standards Board(IASB). The Funds adopted this basis of accounting in 2014 asrequired by Canadian securities legislation and the CanadianAccounting Standards Board. Previously, the Funds preparedtheir financial statements in accordance with Canadiangenerally accepted accounting principles as defined in Part Vof the CPA Handbook (Canadian GAAP). The Funds haveconsistently applied the accounting policies used in thepreparation of their opening IFRS statements of financialposition at January 1, 2013 and throughout all periodspresented, as if these policies had always been in effect. The“Fund Specific Notes” include disclosures of the impact of thetransition to IFRS on the Fund’s reported financial position,financial performance, including the nature and effect of

153

significant changes in accounting policies from those used inthe Funds’ financial statements for the year endedDecember 31, 2013 prepared under Canadian GAAP.

(a) Classification of Redeemable Units Issued by the Fund

The Funds’ outstanding redeemable units qualify as “puttableinstruments” as required by the International AccountingStandard 32: Financial Instruments: Presentation (“IAS 32”)which states that units or shares of an entity that include acontractual obligation for the issuer to repurchase or redeemthem for cash or another financial asset should be classified as“puttable instruments” or financial liability. Certain Fundsissue different types of units that are equally subordinated buthave different features. In addition, the Funds have acontractual obligation to distribute any taxable incomeannually that allows the unitholders to request cash paymentfor any distributions or dividends paid. These features violatecriteria that are required in order for the redeemable units tobe presented as equity under IAS 32. Consequently, the Funds’outstanding redeemable units are classified as financialliabilities in these financial statements.

(b) Financial instrument disclosures

Financial instrument disclosures include a three level fairvalue hierarchy which provides information about the relativeobservability of inputs to the fair value measurement offinancial assets and liabilities. The levels are defined asfollows:

• Level 1: Fair value is based on unadjusted quoted prices inactive markets for identical assets or liabilities;

• Level 2: Fair value is based on inputs other than unadjustedquoted prices included in Level 1 that are observable for theassets or liabilities, either directly or indirectly.

• Level 3: Fair value is based on at least one significant non-observable input that is not supported by market data forthe financial assets or liabilities.

The three level fair value hierarchy, transfers between levelsand a reconciliation of level 3 financial instruments aredisclosed in the respective Fund’s “Fund Specific Notes”.

The Funds’ policy is to recognize transfers into and out of thefair value hierarchy levels as of the date of the event or changein circumstances giving rise to the transfer.

(c) Financial instruments

The Funds recognize financial instruments at fair value uponinitial recognition, plus transaction costs in the case offinancial instruments measured at amortized cost. The Funds’investments and derivative assets and liabilities are measuredat fair value through profit or loss (FVTPL) includinginvestments in securities which have been designated atFVTPL and derivatives which are classified as held for trading.Purchases and sales of financial assets are recognized at theirtrade date.

The Funds’ obligation for net assets attributable to holders ofredeemable units is presented at the redemption amount. Allother financial assets and liabilities are measured at amortizedcost. These balances are short-term in nature and, therefore,their carrying values approximate fair value.

(d) Fair value measurement

Fair value is the price that would be received to sell an asset orpaid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. The fair value offinancial assets and liabilities traded in active markets (suchas publicly traded derivatives and marketable securities) arebased on quoted market prices at the close of trading on thereporting date. The Funds use the last traded market price forboth financial assets and financial liabilities where the lasttraded price falls within that day’s bid-ask spread. Incircumstances where the last traded price is not within thebid-ask spread, the Manager determines the point within thebid-ask spread that is most representative of fair value basedon the specific facts and circumstances.

The Funds’ accounting policies for measuring the fair value ofits investments and derivatives are identical to those used inmeasuring its net asset value for transactions with unitholdersin accordance with Part 14 of National Instrument 81-106Investment Funds for Continuous Disclosure (“NI 81-106”),except where the last traded market price for financial assetsand liabilities are not within the bid-ask spread as describedabove. A comparison of the net assets per unit in theStatements of Financial position in accordance to IFRS (“IFRSNAV”) and the net assets per unit calculated in accordance toNI 81-106 (“Pricing NAV”) are presented in the “Fund SpecificNotes” for each Fund.

The fair value of financial assets and liabilities that are nottraded in an active market, including over the-counterderivatives, is determined using valuation techniques. TheFunds use a variety of methods and make assumptions that arebased on market conditions existing at each reporting date.Valuation techniques include the use of comparable recentarm’s length transactions, reference to other instruments thatare substantially the same, discounted cash flow analysis,option pricing models and others commonly used by marketparticipants and which make the maximum use of observableinputs. The Manager is responsible for performing the fairvalue measurements included in the financial statements ofthe Funds, including level 3 measurements. The Managerobtains pricing from a third party pricing vendor, which ismonitored and reviewed by the valuation team daily. At eachfinancial reporting date, the Manager reviews and approves alllevel 3 fair value measurements. The Funds also have aValuation Committee which includes the Chief FinancialOfficer, members of the finance team, as well as members ofthe portfolio management and compliance teams. Thecommittee meets quarterly to perform detailed reviews of thevaluations of investments held by the Funds.

The fair value of financial assets and liabilities as at thefinancial reporting period end dates are determined as follows:

(i) North American equities are valued at the closingmarket price recorded by the security exchange onwhich the security is principally traded. Non-NorthAmerican equities are valued at fair value based oninformation provided by an independent pricing source.

(ii) Fixed income securities, including bonds andmortgage-backed securities, are valued using modelswith inputs including interest rate curves, creditspreads and volatilities.

154

(iii) Short-term debt instruments are carried at amortizedcost, which approximates fair value.

(iv) Mortgages are valued at their fair value using theprevailing rate of return on new mortgages of similartype and term.

(v) Investments in underlying funds are valued based onthe Net Asset Value per unit provided by the underlyingfund’s manager at the end of each valuation date.

(vi) Open forward currency contracts are valued at the gainor loss that would arise as a result of closing theposition on the valuation date. The unrealized gain orloss, for the period is reflected in the Statements ofComprehensive Income as “Change in unrealizedappreciation (depreciation) of currency forwards”.Realized gains or losses on forward currency contractswould arise as a result of the closing of a position onthe settlement date. The net realized gain or loss isreported as “Net realized gain (loss) on currencyforwards” in the Statements of Comprehensive Income.

(vii) Unlisted warrants are valued using the Black-Scholesoption valuation model. The model factors in the timevalue of money and the volatility inputs significant tosuch valuation.

(viii) Futures contracts are valued at their close prices forfinancial reporting purposes at the close of business oneach valuation date of the reporting period. Anydifference between the settlement value at the close ofbusiness on the current valuation date and that of theprevious valuation date is settled into cash daily andrecorded in the Statements of Comprehensive Incomeas “Net realized gain (loss) on futures contracts” or“Index futures contract income”. Amounts receivable(payable) on settlement of futures contracts arereflected in the Statements of Financial Position as“Margin deposited on futures” which includes the anymargin cash held in relations to the futures account.

(ix) Options are valued at their close price as reported bythe principal exchange or over-the-counter market onwhich the contract is traded. Any difference resultingfrom revaluation at the reporting date is treated asunrealized appreciation (depreciation) of investments.

Premiums paid for purchased call and put options areincluded in options purchased in the Statements ofFinancial Position. When a purchased option expires,the Fund will realize a loss in the amount of the cost ofthe option. For the closing transaction of the purchasedput options, the Fund will realize a gain or lossdepending on whether the proceeds are greater or lessthan the premium paid at the time of purchase. When apurchased call option is exercised, the cost of securitypurchased is increased by the premium paid at thetime of purchase.

Premiums received from writing options are includedas a liability for written options in the Statements ofFinancial Position. When a written option expiresunexercised, premiums received from writing optionsare recorded as income on the Statements of

Comprehensive Income. When a written call option isexercised, the Fund will record a realized loss if thecost of closing the transaction exceeds the premiumreceived; the Fund will record a realized gain if thepremium received is greater than the amount paid forclosing the transaction. When a written put isexercised, the cost of the security purchased is reducedby the premiums received at the time the option waswritten.

(x) A forward equity accumulator contract(“accumulator”) is an agreement between two parties(a Fund and the counterparty) that require thecounterparty to sell shares of the specified underlyingsecurity at a predetermined strike price to the Fund(the buyer). A Fund buys a forward accumulator on theexpectation that a certain stock will trade within aspecific price range during the term of the contract.This range is bound by the strike price and a maximumprice (usually a knock-out that triggers termination ifthe underlying price goes above this threshold).

The buyer has an obligation to purchase the underlyingshares acquired by the counterparty with periodicsettlement as specified in the contract. The sharesacquired are included in the Statements of FinancialPosition in “Investments”, and the change in value ofthe accumulator contract is included in the Statementsof Financial Position in “Unrealized gain (loss) onaccumulator contracts” and in the Statements ofComprehensive Income in “Change in unrealizedappreciation (depreciation) of accumulator contracts”.When a forward equity accumulator contract is closedout, gains or losses are realized and included in theStatements of Comprehensive Income in “Net realizedgain (loss) on accumulator contracts”.

(xi) Financial assets and liabilities other than investmentsecurities are valued at cost or amortized cost. Thesebalances are short-term in nature; therefore, theircarrying values approximate fair values.

(e) Investment transactions and income recognition

Investment transactions are accounted for on a trade datebasis. The cost of an investment security (excludingtransaction costs), realized gains/losses and unrealized gain/losses is determined on an average cost basis. Transactioncosts, such as brokerage commissions incurred in theacquisition or disposal investment securities are shown asexpenses in the Statements of Comprehensive Income.

Dividend income and distributions from underlying funds arerecognized on the ex-dividend date. Distributions receivedfrom income trusts are recognized based on the nature of theunderlying components such as dividend income, interestincome, capital gains, and return of capital by applyingprevious year characterizations reported by the trust ascurrent year characterizations are not available until thefollowing year.

Interest for distribution purposes represents the couponinterest received by the Funds, recognized on an accrual basis.The Funds do not amortize premiums paid or discountsreceived on the purchase of fixed income securities except for

155

zero coupon bonds which are amortized on a straight line basis.Realized gain or loss on the sale of short-term debt instrumentsare recorded as an adjustment to interest income.

Income, realized gain (loss) and unrealized gain (loss) areallocated among the Series on a pro rata basis.

(f) Functional and presentation currency and foreign exchangetranslation

The functional and presentation currency of the Funds is theCanadian dollar. Canadian dollars is the currency of primaryeconomic environment in which the Funds operate or wheremixed indicators exist in the primary environment, theCanadian dollar is the currency in which they raise capital.

Any other currency other than functional currency representsforeign currency to the Funds. Amounts denominated inforeign currencies are converted into the functional currencyas follows:

(i) fair value of investments, forward and spot currencycontracts and other assets and liabilities at the rates ofexchange prevailing as at the valuation date; and

(ii) purchase and sale of investments and investmentincome at the rates of exchange prevailing on therespective dates of such transactions.

Foreign exchange gain (loss) on purchases and sales of foreigncurrencies are included in “Net realized gain (loss) on foreignexchange” in the Statements of Comprehensive Income.

(g) Increase (decrease) in net assets attributable to holders ofredeemable units per unit

“Increase (decrease) in net assets attributable to holders ofredeemable units per unit” is disclosed in the Statements ofComprehensive Income and represents, for each Series ofunits, the increase or decrease in net assets attributable toholders of redeemable units from operations for the periodattributable to each Series divided by the weighted averagenumber of units outstanding for the corresponding Seriesduring the period.

(h) Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount ispresented in the Statements of Financial Position only when aFund has a legal right to offset the amounts and it intendseither to settle on a net basis or to realize the asset and settlethe liability simultaneously. Income and expenses arepresented on a net basis only when permitted under IFRS, forgains and losses arising from a group of similar transactions,such as gains and losses from financial instruments at fairvalue through profit or loss. Financial assets and liabilities thatare subject to master netting or comparable agreements andthe related potential effect of offsetting are disclosed in therespective Fund’s “Fund Specific Notes”.

(i) Investments in unconsolidated structured entities

Certain Funds invest in mutual funds managed by the Manageror by third party investment managers. The relevant Fundsconsider all investments in other funds (“Underlying Funds”)to be investments in unconsolidated structured entities. TheseFunds invest in Underlying Funds whose objectives will assistthe Funds in achieving their primary objectives and whoseinvestment strategy does not include the use of leverage. The

Underlying Funds finance their operations by issuingredeemable units or shares which are puttable at the holder’soption, and entitle the holder to a proportional stake in therespective fund’s net assets. The Funds hold redeemableshares or units in each of its Underlying Funds.

The change in fair value of each Underlying Fund is included inthe Statements of Comprehensive Income in ‘Change inunrealized appreciation (depreciation) of non-derivativefinancial assets’.

The Funds’ investments in Underlying Funds are subject to theterms and conditions of the respective Underlying Funds’offering documentation and are susceptible to market pricerisk arising from uncertainties about future values of thoseUnderlying Funds. The exposure to investments in UnderlyingFunds at fair value is disclosed in the Fund’s “Fund SpecificNotes”. These investments are included in non-derivativefinancial assets in the Statements of Financial Position. TheFunds’ maximum exposure to loss from its interests inUnderlying Funds is equal to the total carrying value of itsinvestments in Underlying Funds.

3. Significant accounting judgments andestimatesThe preparation of financial statements requires managementto use judgment in applying its accounting policies and tomake estimates and assumptions about the future. Theseestimates are made based on information available as at thedate of issuance of the financial statements. Actual resultscould materially differ from those estimates. The followingdiscusses the most significant accounting judgments andestimates that the Funds have made in preparing the financialstatements:

Fair value measurement of derivatives and securities not quoted in anactive marketKey areas of estimation, where the Manager has made complexor subjective judgments, include the determination of fairvalues of financial instruments and derivatives that are notquoted in an active market. The use of valuation techniques forfinancial instruments and derivatives that are not quoted in anactive market requires the Manager to make assumptions thatare based on market conditions existing as at the date of thefinancial statements. Changes in these assumptions as a resultof changes in market conditions could affect the reported fairvalue of financial instruments and derivatives.

Classification and measurement of investments and application of thefair value optionIn classifying and measuring financial instruments held by theFunds, the Manager is required to make significant judgmentsabout whether or not the business of the Funds is to invest on atotal return basis for the purpose of applying the fair valueoption for financial assets under IAS 39, Financial Instruments:Recognition and Measurement. The most significant judgmentsmade include the determination that certain financialinstruments are held-for-trading and that the fair value optioncan be applied to those which are not.

156

4. Discussion of Financial Instrument RiskEach Fund’s investment activities expose it to a variety offinancial risks: market risk (including interest rate risk,currency risk, and other price risk), credit risk and liquidityrisk. Each Fund’s investment practices include portfoliomonitoring to ensure compliance with stated investmentguidelines. The Manager seeks to minimize potential adverseeffects of risks on each Fund’s performance by employing andoverseeing professional and experienced portfolio advisors thatregularly monitor each Fund’s securities and financial marketdevelopments. The risks are measured using a method thatreflects the expected impact on the results and Net Assetsattributable to holders of redeemable units of the Funds fromreasonably possible changes in the relevant risk variables.

The Manager maintains a risk management practice thatincludes monitoring compliance with investment restrictionsto ensure that the Funds are being managed in accordancewith the Funds’ stated investment objectives, strategies andsecurities regulations.

Some Funds invest in underlying funds. These Funds areindirectly exposed to market risk, credit risk, and liquidity riskin the event that the underlying funds invest in financialinstruments that are subject to those risks.

A Fund’s exposure to market risk, credit risk and liquidity risk,where applicable, is disclosed in the respective Fund’s “FundSpecific Notes”. Where the exposure to a particular risk is notdisclosed, the Manager has assessed the potential impact ofthat risk to be not significant.

a) Market risk(i) Interest rate riskInterest rate risk arises from the possibility that changes ininterest rates will affect the future cash flows or the fair valuesof interest-bearing financial instruments. Each Fund’sexposure to interest rate risk is concentrated in itsinvestments in debt securities (such as bonds and debentures)and interest rate derivative instruments, if any. Short-terminvestments and other assets and liabilities are short-term innature and/or non-interest bearing and are not subject to asignificant amount of interest rate risk due to fluctuations inthe prevailing levels of market interest rates.

(ii) Currency riskThe Fund’s may invest in monetary and non-monetary assetsdenominated in currencies other than their functionalcurrency. Currency risk is the risk that the value of foreigninvestments will fluctuate due to changes in the foreignexchange rates of those currencies in relation to a Fund’sfunctional currency. Other financial assets (includingdividends and interest receivable and receivable forinvestments sold) and financial liabilities that aredenominated in foreign currencies do not expose the Funds tosignificant currency risk. Funds may enter into foreignexchange forward contracts or currency futures contracts forhedging purposes to reduce their foreign currency riskexposure.

(iii) Other price riskOther price risk is the risk that the fair value of a Fund’sfinancial instruments will fluctuate as a result of changes inmarket prices (other than those arising from interest rate riskor currency risk) caused by factors specific to a security, itsissuer or all factors affecting a market or a market segment.Exposure to other price risk is mainly in equities andcommodities. The maximum risk resulting from these financialinstruments is equivalent to their fair value, except for writtenoptions and futures contracts sold, where possible losses canbe unlimited.

(iv) Credit riskCredit risk is the risk that the counterparty to a financialinstrument will fail to discharge an obligation or commitmentthat it has entered into with the Funds. A Fund’s investment indebt instruments represents the main concentration of creditrisk. The fair value of debt instruments includes considerationof the creditworthiness of the issuer, and accordingly,represents the maximum credit risk exposure to the Funds.Credit risk may also exist in relation to counterparties toderivatives. All the transactions in listed securities are settledor paid upon delivery using approved brokers. The risk ofdefault is considered minimal, as delivery of securities sold isonly made once the broker has received payment. Payment isonly made on a purchase once the securities have beenreceived by the broker.

The credit ratings reported for counterparties to debtinstruments are Standard & Poor’s credit rating or Standard &Poor’s equivalent for credit ratings from other approved ratingagencies. In addition, custody and derivative transactions arecarried out by counterparties that have a Standard & Poor’scredit rating of A- or higher.

A Fund may enter into securities lending transactions withcounterparties whereby the Fund temporarily exchangessecurities for collateral with a commitment by the counterpartyto deliver the same securities on a future date. Credit riskassociated with these transactions is considered minimal as allcounterparties have approved credit rating and the marketvalue of cash or securities held as collateral must be at least104% of the fair value of the securities loaned as at the end ofeach trading day.

(a) Liquidity risk

The Funds’ exposure to liquidity risk arises primarily from thedaily cash redemption of units. The Funds primarily invest insecurities that are traded in active markets and can be readilydisposed of. In addition, the Funds aim to retain sufficient cashand cash equivalent positions to maintain liquidity. The Fundsmay, from time to time, enter into over-the-counter derivativecontracts or invest in securities that are not traded in an activemarket and may be illiquid. Illiquid securities are identified inthe respective Fund’s Schedule of Investment Portfolio.

(b) Concentration risk

Concentrations of risk arise from financial instruments thathave similar characteristics and are affected similarly bychanges in economic or other conditions. The identificationand disclosure of risks concentration is provided in therespective Fund’s “Fund Specific Notes”.

157

5. Management FeesEach Fund pays the Manager a management fee with respect toeach series of units, other than Series I units, for providinggeneral management services. The management fees cover thecosts of managing the Fund, arranging for investment analysis,recommendations and investment decision making for thefund, arranging for distribution of the Funds, marketing andpromotion of the Funds and providing or arranging for otherservices. Management fees for Series I units of a Fund arenegotiated and paid directly by the investor, not by the Fund,and will not exceed 1.25% on Money Market and Bond Fundsand 2.5% on all other Funds. The Funds’ management fees arecalculated daily and payable monthly on the first business dayof the following calendar month. The Manager is entitled to amaximum annual management fee, exclusive of sales taxes, asfollows:

% of Net Asset Value

Pinnacle SeriesUnits or Series A Series F Units Series M Units

Scotia Private Pools

Scotia Private American

Core-Plus Bond Pool – 0.75% –

Scotia Private Canadian

Growth Pool – 1.00% –

Scotia Private Canadian Mid

Cap Pool – 1.00% –


Small Cap Pool – 1.00% –


Value Pool – 1.00% –

Scotia Private Emerging

Markets Pool – – 0.70%

Scotia Private Global Equity

Pool – 1.00% –

Scotia Private Global Real

Estate Pool – 1.00% –

Scotia Private High Yield

Income Pool – 0.75% 0.30%

Scotia Private Income Pool – 0.70% –

Scotia Private International

Equity Pool – 1.00% –

Scotia Private International

Small to Mid Cap Value Pool – 1.00% –

Scotia Private Short Term

Income Pool – 0.50% –

Scotia Private Strategic

Balanced Pool – 1.00% –

Scotia Private U.S. Large Cap

Growth Pool – 1.00% –

Scotia Private U.S. Mid Cap

Growth Pool – 0.80% 0.55%

Scotia Private U.S. Mid Cap

Value Pool – 0.80% 0.55%

Scotia Private U.S. Value Pool – 1.00% –

Pinnacle Portfolios

Pinnacle Balanced Portfolio 2.10% – –

Pinnacle Growth Portfolio 2.40% – –

Pinnacle Income Portfolio 1.85% – –

Management fees disclosed for the Pinnacle Portfolios areinclusive of the management fees charged to the underlyingfunds. There is no duplication of fees.

No management fees are charged by the Manager in respect ofthe Pinnacle Series units of the Scotia Private Pools.

Effective August 22, 2014, the management fee rate for Series Funits of Scotia Private U.S. Mid Cap Value Pool and Series Funits of Scotia Private U.S. Mid Cap Growth Pool were loweredfrom 1.00% to 0.80%.

6. Fixed Administration FeesEffective August 22, 2014, the Manager began paying certainoperating expenses of the Funds. These expenses includeregulatory filing fees and other day-to-day operating expensesincluding, but not limited to, transfer agency andrecordkeeping, accounting and fund valuation costs, custodyfees, audit and legal fees, administration costs, bank charges,costs of preparing and distributing annual and semi-annualreports, prospectuses, annual information forms, Fund Factsand statements, investor communications and continuousdisclosure materials. The Manager is not obligated to pay anyother expense, cost or fee, including those arising from newgovernment or regulatory requirements relating to theforegoing expenses, costs and fees. In return, each Series of theFunds pays a fixed administration fee to the Manager (the“Fixed Administration fee”). Up to December 31, 2016, theFixed Administration Fee payable by each Series of the Fundsare subject to a transitional adjustment payment, details ofwhich are presented in the Fund’s simplified prospectus. TheFixed Administration Fee is calculated and accrued daily andpaid monthly.

In addition to the Fixed Administration Fee, each Series of theFunds pays certain operating expenses directly (“Other FundCosts”.). These include the costs and expenses related to theIRC of the Funds, costs associated with the conversion to IFRSand the ongoing audit costs associated with compliance withIFRS, any new fees introduced by a securities regulator orother government authority that is based on the assets or othercriteria of the Funds, any transaction costs, including all feesand costs related to derivatives, and any borrowing costs, andtaxes (including, but not limited to, GST or HST, asapplicable). Refer to the simplified prospectus of the Funds formore details on Other Fund Costs. Other Fund Costs will beallocated among the Funds and each Series of the Fund isallocated its own expenses and its proportionate share of theseexpenses that are common to all Series.

Prior to August 22, 2014, the Funds were responsible foroperating expenses relating to the carrying on of its business.Each Series of the Funds were allocated its own expenses andits proportionate share of the Fund’s expenses that arecommon to all Series. Operating expenses may include legalfees and other costs incurred in order to comply with legal andregulatory requirements and policies, audit fees, custodial fees,taxes, unitholder communication costs, IRC fees and otheradministration costs. Examples of other administrative costsinclude departmental expenses incurred and paid by theManager which support the daily operation of the Funds.

The Manager, at its’ sole discretion, absorbs operatingexpenses otherwise payable by certain Series. The absorbedexpenses are reflected in the Statements of ComprehensiveIncome.

158

The Administration Fee is calculated and accrued daily and paid monthly. The maximum annual rates of the administration fee,which are a percentage of the net asset value for each series of units of each Fund, are as follows:

Scotia Private Pools Series A Units Series Pinnacle Units Series Advisor Units Series F Units Series I Units Series M Units

Scotia Private American Core-Plus Bond Pool – 0.18 – 0.10 0.03 –

Scotia Private Canadian Growth Pool – 0.15 – 0.10 0.04 –

Scotia Private Canadian Mid Cap Pool – 0.24 – 0.10 0.08 –

Scotia Private Canadian Small Cap Pool – 0.22 – 0.10 0.03 –

Scotia Private Canadian Value Pool – 0.15 – 0.10 0.05 –

Scotia Private Emerging Markets Pool – 0.23 – – 0.07 0.09

Scotia Private Global Equity Pool – 0.31 – 0.10 0.04 –

Scotia Private Global Real Estate Pool – 0.11 – 0.10 0.03 –

Scotia Private High Yield Income Pool – 0.11 – 0.05 0.03 0.03

Scotia Private Income Pool – 0.07 – 0.08 0.03 –

Scotia Private International Equity Pool – 0.24 – 0.10 0.04 –

Scotia Private International Small to Mid Cap

Value Pool – 0.50 – 0.10 0.10 –

Scotia Private Short Term Income Pool – – – – – –

Scotia Private Strategic Balanced Pool – 0.30 – 0.10 – –

Scotia Private U.S. Large Cap Growth Pool – 0.27 – 0.10 0.07 –

Scotia Private U.S. Mid Cap Growth Pool – 0.50 – 0.10 0.04 0.05

Scotia Private U.S. Mid Cap Value Pool – 0.49 – 0.10 0.10 0.08

Scotia Private U.S. Value Pool – 0.21 – 0.10 0.03 –

Pinnacle Portfolios

Pinnacle Balanced Portfolio 0.08 – – – – –

Pinnacle Growth Portfolio 0.15 – – – – –

Pinnacle Income Portfolio 0.15 – – – – –

Administration service expense paid to the Manager for the ofperiod from January 1, 2014 to August 21, 2014 and for the yearended December 31, 2013 are presented below:

Scotia Private Pools August 21, 2014 December 31, 2013

Scotia Private Short Term Income Pool 418 1,059

Scotia Private Income Pool 15,687 47,804

Scotia Private High Yield Income Pool 41,888 115,971

Scotia Private American Core-Plus Bond

Pool 26,017 61,444

Scotia Private Global Real Estate Pool 12,139 46,182

Scotia Private Strategic Balanced Pool 2,104 5,584

Scotia Private Canadian Value Pool 6,697 17,846

Scotia Private Canadian Mid Cap Pool 3,186 8,164

Scotia Private Canadian Growth Pool 14,375 37,457

Scotia Private Canadian Small Cap Pool 22,240 55,657

Scotia Private U.S. Value Pool 14,701 62,271

Scotia Private U.S. Mid Cap Value Pool 1,459 3,888

Scotia Private U.S. Large Cap Growth

Pool 3,311 8,380

Scotia Private U.S. Mid Cap Growth

Pool 6,739 15,191

Scotia Private International Equity Pool 26,552 107,048

Scotia Private International Small to Mid

Cap Value Pool 2,202 5,438

Scotia Private Emerging Markets Pool 8,100 30,551

Scotia Private Global Equity Pool 19,484 75,632

Pinnacle Portfolios

Pinnacle Income Portfolio 669 2,272

Pinnacle Balanced Portfolio 4,056 11,545

Pinnacle Growth Portfolio 634 1,724

The ratio of operating expenses (excluding taxes, interest andbrokerage commissions) expressed as a percentage of theaverage daily NAV of the respective Fund is referred to as theoperating expense ratio. The operating expense ratio ofPinnacle Series of each Scotia Private Pool may not exceed0.50% on an annualized basis as specified in the Scotia Private

Pools’ simplified prospectus. Each Series of the Funds incursthe expenses which are directly attributable to that Series.Common expenses of the Funds are allocated on a pro ratabasis to each Series of the Funds based on its respective NAV.

7. Redeemable UnitsUnits issued and outstanding represent the capital of eachFund. Each of the Funds may issue an unlimited number ofunits. Each unit is redeemable at the option of the unitholderin accordance with the Declaration of Trust, ranks pari passuwith all other units of the Funds and entitles the unitholder toa proportionate undivided interest in the Net Asset Value ofthe Funds. Unitholders are entitled to distributions whendeclared. Distributions on units of a Fund are reinvested inadditional units of the Fund or at the option of the unitholder,paid in cash. The Funds’ capital is managed in accordance witheach of the Funds’ investment objectives, policies andrestrictions, as outlined in the Funds’ prospectus. The Fundshave no specific restrictions or specific capital requirementson the subscriptions or redemptions of units, other thanminimum subscription requirements.

The units of each Series of the Funds are issued and redeemedat their NAV per unit of each Series which is determined as ofthe close of business on each day that the Toronto StockExchange is open for trading. The NAV per unit is calculated bydividing the Net Assets per Series by the total number ofoutstanding units of each Series.

159

For the years ended December 31, 2014 and 2014, the following number of units were issued, re-invested and redeemed:

December 2014 December 2013

Scotia Private PoolsOpeningUnits

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

EndingUnits

OpeningUnits

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

EndingUnits


Pool

Pinnacle Series Units 3,610,634 1,266,398 108,843 695,869 4,290,006 3,035,648 1,022,064 89,986 537,064 3,610,634

Series F Units 15,359 248 250 2,056 13,801 12,033 3,737 242 653 15,359

Series I Units 41,999,468 19,803,843 1,642,545 1,999,474 61,446,382 26,003,440 16,613,367 1,052,869 1,670,207 41,999,468

Scotia Private Canadian Growth Pool

Pinnacle Series Units 7,754,708 1,542,511 130,241 1,276,759 8,150,701 7,818,029 1,310,924 133,704 1,507,949 7,754,708

Series F Units 77,444 13,725 303 18,421 73,051 49,041 36,005 755 8,357 77,444

Series I Units 10,946,464 3,903,490 231,669 1,562,987 13,518,636 7,013,282 3,915,232 199,672 181,722 10,946,464

Scotia Private Canadian Mid Cap Pool

Pinnacle Series Units 2,242,982 407,427 369,392 458,236 2,561,565 2,357,831 394,541 30,134 539,524 2,242,982

Series F Units 8,643 2,190 965 2,434 9,364 4,459 5,359 58 1,233 8,643

Series I Units 264,099 31,793 44,094 31,889 308,097 293,473 10,664 3,999 44,037 264,099

Scotia Private Canadian Small Cap Pool


Series F Units 26,365 35,341 5,924 9,521 58,109 16,758 9,989 2,238 2,620 26,365

Series I Units 9,927,139 3,752,870 1,678,429 936,235 14,422,203 7,230,922 2,320,302 945,348 569,433 9,927,139

Scotia Private Canadian Value Pool

Pinnacle Series Units 5,009,436 1,339,034 142,400 824,480 5,666,390 4,641,593 1,134,657 125,303 892,117 5,009,436

Series F Units 31,767 3,044 281 7,545 27,547 26,528 10,074 468 5,303 31,767

Series I Units 518,352 43,189 13,648 57,239 517,950 505,435 31,192 13,584 31,859 518,352

Scotia Private Emerging Markets Pool


Series I Units 18,695,803 4,836,502 302,743 11,029,075 12,805,973 10,505,631 8,230,723 257,638 298,189 18,695,803

Series M Units 2,173,362 790,758 20,362 1,572,721 1,411,761 1,779,549 1,240,195 14,155 860,537 2,173,362

Scotia Private Global Equity Pool


Series F Units 26,072 32,384 113 11,582 46,987 26,575 7,073 25 7,601 26,072

Series I Units 27,173,176 5,565,242 209,222 12,674,245 20,273,395 22,253,165 7,321,959 316,180 2,718,128 27,173,176

Scotia Private Global Real Estate Pool


Series F Units 31,254 78,898 2,466 12,592 100,026 14,601 19,227 321 2,895 31,254

Series I Units 13,478,887 1,896,280 247,247 8,475,521 7,146,893 8,805,446 4,896,698 283,964 507,221 13,478,887

Scotia Private High Yield Income Pool


Series F Units 1,355,346 248,200 16,439 83,404 1,536,581 1,154,540 239,877 16,543 55,614 1,355,346

Series I Units 34,719,535 15,810,414 2,578,020 3,116,676 49,991,293 22,913,212 11,663,520 1,985,672 1,842,869 34,719,535

Series M Units 31,104,735 10,828,415 1,228,355 13,047,674 30,113,831 24,060,230 14,331,585 1,259,528 8,546,608 31,104,735

Scotia Private Income Pool

Pinnacle Series Units 24,308,721 6,988,960 820,863 4,539,515 27,579,029 21,510,621 5,312,930 2,168,123 4,682,953 24,308,721

Series F Units 458,770 12,835 5,543 226,718 250,430 1,607,255 87,016 39,668 1,275,169 458,770

Series I Units 2,787,803 234,867 92,255 181,701 2,933,224 2,405,181 244,608 249,788 111,774 2,787,803

Scotia Private International Equity Pool

Pinnacle Series Units 5,004,030 1,462,265 85,555 718,127 5,833,723 5,034,866 863,955 65,614 960,405 5,004,030

Series F Units 66,466 13,039 271 16,166 63,610 45,397 23,387 427 2,745 66,466

Series I Units 59,631,634 15,488,857 745,148 31,456,653 44,408,986 41,441,228 19,354,207 900,251 2,064,052 59,631,634

Scotia Private International Small to Mid

Cap Value Pool


Series F Units 11,345 32,527 391 5,337 38,926 7,894 3,775 132 456 11,345

Series I Units 109,111 5,593 1,963 10,463 106,204 150,134 2,421 2,230 45,674 109,111

Scotia Private Short Term Income Pool

Pinnacle Series Units 612,953 420,149 2,939 467,820 568,221 871,221 831,009 3,881 1,093,158 612,953

Series F Units 8,316 15,730 52 15,066 9,032 7,267 4,274 50 3,275 8,316

Scotia Private Strategic Balanced Pool


Series F Units 35,496 7,615 342 21,573 21,880 21,991 13,086 419 – 35,496

160

December 2014 December 2013

Scotia Private PoolsOpeningUnits

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

EndingUnits

OpeningUnits

UnitsIssued

UnitsReinvested

UnitsRedeemed (i)

EndingUnits

Scotia Private U.S. Large Cap Growth Pool


Series F Units 27,924 13,220 70 5,656 35,558 13,263 17,821 134 3,294 27,924

Series I Units 367,599 46,365 4,141 71,661 346,444 404,494 21,897 4,073 62,865 367,599

Scotia Private U.S. Mid Cap Growth Pool

Pinnacle Series Units 477,061 178,168 461 97,156 558,534 449,479 128,203 747 101,368 477,061

Series F Units 4,056 1,668 – 130 5,594 2,825 1,288 – 57 4,056

Series I Units 3,634,890 1,928,927 25,634 298,242 5,291,209 2,607,812 1,074,056 20,846 67,824 3,634,890

Series M Units 613,846 228,361 – 191,748 650,459 677,042 170,200 30 233,426 613,846

Scotia Private U.S. Mid Cap Value Pool

Pinnacle Series Units 818,376 154,328 83,643 141,055 915,292 861,149 233,691 5,644 282,108 818,376

Series F Units 9,964 8,856 1,375 3,886 16,309 6,515 3,512 35 98 9,964

Series I Units 10,607 8,307 350 10,607 8,657 13,129 161 77 2,760 10,607

Series M Units 1,175,086 403,972 116,179 394,852 1,300,385 1,152,768 335,375 6,495 319,552 1,175,086

Scotia Private U.S. Value Pool

Pinnacle Series Units 4,446,873 847,163 460,993 700,979 5,054,050 4,078,416 1,054,223 123,410 809,176 4,446,873

Series F Units 41,087 11,143 2,003 24,784 29,449 13,167 28,371 782 1,233 41,087

Series I Units 23,742,449 4,126,158 1,259,696 15,631,913 13,496,390 18,530,517 6,471,934 701,431 1,961,433 23,742,449

Pinnacle Portfolios

Pinnacle Balanced Portfolio

Series A Units 6,226,172 928,031 28,601 909,162 6,273,642 5,597,961 1,526,772 29,031 927,592 6,226,172

Pinnacle Growth Portfolio

Series A Units 945,071 102,665 – 147,082 900,654 695,476 414,091 – 164,496 945,071

Pinnacle Income Portfolio

Series A Units 1,186,415 123,754 10,333 238,944 1,081,558 1,313,218 102,619 17,693 247,115 1,186,415

(i) Included in units redeemed are redemptions related to payments of the Pinnacle Program Fee, where applicable.

Pinnacle Program FeeEach Pinnacle Series unitholder of the Scotia Private Pools hasagreed to pay, on a quarterly basis, a negotiated asset based feefor all services in respect of their respective investment in theScotia Private Pools. These fees are paid directly toScotiaMcLeod by redemption of units held in the Scotia PrivatePools, unless otherwise determined by ScotiaMcLeod.

8. Income TaxesThe Funds qualify as mutual fund trusts under the Income TaxAct (Canada). The Funds are not subject to tax on theirincome, including net realized capital gains that are paid orpayable to their unitholders. Each of the Funds distributessufficient amounts of its net investment income, including netrealized capital gains, less the amount retained to enable eachFund to utilize any available tax losses or tax creditattributable to redemptions during the period to its unitholderssuch that no income tax will be paid or payable by the Funds.Such net investment income, including net realized capitalgains are taxable in the hands of the unitholders. Accordingly,no provision for income taxes has been recorded in thesefinancial statements.

In certain circumstances, the Funds may distribute a return ofcapital. A return of capital is generally not taxable tounitholders but will reduce the adjusted cost base of the unitsheld.

Losses Carried ForwardCapital losses may be carried forward indefinitely to reducefuture net realized capital gains. Non-capital losses for incometax purposes may be carried forward for up to twenty years andapplied against all sources of income. The following Fundshave capital and/or non-capital losses carried forward as atDecember 15, 2014.

Scotia Private PoolsYear ofexpiry

Non-CapitalLoss $

CapitalLoss $

Scotia Private American Core-Plus Bond Pool – – 4,382,957

Scotia Private Canadian Growth Pool – – 43,364,317

Scotia Private Canadian Mid Cap Pool – – –

Scotia Private Canadian Small Cap Pool – – –

Scotia Private Canadian Value Pool – – 11,302,854

Scotia Private Emerging Markets Pool – – 9,489,586

Scotia Private Global Equity Pool – – 2,512,777

Scotia Private Global Real Estate Pool – – 22,085,312

Scotia Private High Yield Income Pool – – –

Scotia Private Income Pool – – 2,923,770

Scotia Private International Equity Pool – – 2,058,308

Scotia Private International Small to Mid Cap

Value Pool – – 22,459,045

Scotia Private Short Term Income Pool – – –

Scotia Private Strategic Balanced Pool – – 10,242,854

Scotia Private U.S. Large Cap Growth Pool – – 4,892,476

Scotia Private U.S. Mid Cap Growth Pool – – 31,552,634

Scotia Private U.S. Mid Cap Value Pool – – –

Scotia Private U.S. Value Pool – – –

Pinnacle Portfolios

Pinnacle Balanced Portfolio – – 764,960

Pinnacle Growth Portfolio 2030 204,326 1,294,211

2032 2,849 –

Pinnacle Income Portfolio – – –

161

Since the Funds do not record income taxes, the tax benefit ofcapital and non-capital losses have not been reflected in theStatements of Financial Position as a deferred income taxasset.

Withholding TaxesThe Funds currently incur withholding taxes imposed bycertain countries on investment income and capital gains.Such income and gains are recorded on a gross basis and therelated withholding taxes are shown as a separate expense inthe Statements of Comprehensive Income.

9. Client Brokerage CommissionsClient brokerage commissions are arrangements pursuant towhich products or services, other than the execution ofportfolio securities transactions, are obtained by a portfolioadviser from or through a broker-dealer in exchange fordirecting client securities transactions to the broker-dealer.The ascertainable client brokerage commission arrangementsin connection with investment portfolio transactions for theperiods ended December 31, 2014 and 2013 are set out below.

Fund 2014 2013

Scotia Private American Core-Plus Bond Pool $ – $ –

Scotia Private Canadian Growth Pool 8,862 3,650

Scotia Private Canadian Mid Cap Pool 4,553 –


Scotia Private Canadian Value Pool – –

Scotia Private Emerging Markets Pool 130,340 65,340

Scotia Private Global Equity Pool 24,104 62,981


Scotia Private High Yield Income Pool – –

Scotia Private Income Pool – –

Scotia Private International Equity Pool 18,532 15,060

Scotia Private International Small to Mid Cap Value Pool 22,696 22,869

Scotia Private Short Term Income Pool – –

Scotia Private Strategic Balanced Pool – –

Scotia Private U.S. Large Cap Growth Pool – –

Scotia Private U.S. Mid Cap Growth Pool 2,265 23,577


Scotia Private U.S. Value Pool 53,147 50,854

For client brokerage commissions paid to related parties,please refer to Note 11(c) for more information.

10. Securities LendingSome of the Funds may enter into securities lendingtransactions under a securities lending program with theircustodian, The Bank of Nova Scotia (“Scotiabank) (creditrating of A+ by Standard & Poor’s). These transactions involvethe temporary exchange of securities for collateral with acommitment to return the same securities to the Fund on afuture date. The income earned from these securities lendingtransactions is recorded in the Statements of ComprehensiveIncome. The fair value of the securities lent and collateral heldis determined on a daily basis. The securities lendingarrangement can be terminated by the borrower, the securitieslending agent or the Fund at any time. The aggregate market

value of all securities loaned by a Fund cannot exceed 50% ofthe Net Assets of the Fund.

The Funds receive collateral of at least 104% of the value of thesecurities on loan. Collateral is received in the form of debtobligations of the Government of Canada, a Canadianprovincial government, the government of the United States ofAmerica, certain financial institutions or other qualifiedsecurities, and is not included in the Schedule of InvestmentPortfolio. The aggregate market value of the securities on loanand the collateral received by the Funds as at December 31,2014, December 31, 2013 and January 1, 2013 are as follows:

As at December 31, 2014

FundsMarket value ofsecurities on loan

Market value ofcollateral received


Pool $31,973,802 $34,012,716

Scotia Private Canadian Growth Pool 12,052,136 12,736,364

Scotia Private Canadian Mid Cap Pool 3,069,705 3,240,715

Scotia Private Canadian Small Cap Pool 52,744,395 55,839,710

Scotia Private Canadian Value Pool 2,593,838 2,741,761

Scotia Private Emerging Markets Pool 3,432,385 3,628,332


Scotia Private Income Pool 32,651,592 34,302,804

Scotia Private International Equity Pool 2,881,865 3,038,915

Scotia Private International Small to

Mid Cap Value Pool 153,232 161,632

Scotia Private Strategic Balanced Pool 6,773,267 7,153,999


Pool 398,515 423,927


Scotia Private U.S. Value Pool 9,523,636 10,066,879

As at December 31, 2013




Pool $11,951,233 $12,561,784






Scotia Private Global Real Estate Pool 4,028,919 4,210,871

Scotia Private High Yield Income Pool 58,535,593 61,472,698


Scotia Private International Equity Pool 8,384,667 8,755,047





Pool 71,795 74,677


Pool 3,852,806 4,025,375



162

As at January 1, 2013




Pool $ 9,110,358 $ 9,570,772






Scotia Private Global Real Estate Pool 4,551,135 4,747,190

Scotia Private High Yield Income Pool 47,876,776 50,831,198






Pool 279,857 309,623


Pool 307,589 337,073


11. Related Party Transactions(a) The Manager is a wholly-owned subsidiary of Scotiabankand a related party to the Funds. The Manager earns fees foracting as trustee and manager of the Funds. In addition,Scotiabank is the custodian of the Funds and earns a fee forproviding custody and related services. The management fees,administration fees and custodian fees are disclosed inseparate line items in the Statements of ComprehensiveIncome. Administration service expenses are disclosed inNote 6.

(b) Units of the Funds are distributed through brokers anddealers which include Scotia Securities Inc., Scotia CapitalInc. (“SCI”) (including ScotiaMcLeod and Scotia iTRADE, eacha division of SCI), and HollisWealth Advisory Services Inc., allwholly-owned subsidiaries of Scotiabank and related parties tothe Manager.

(c) The Funds may also invest in securities issued byScotiabank and execute portfolio transactions through SCI.The brokerage fees paid to related parties for the years endedDecember 31, 2014 and 2013 are as follows:

2014 2013

Funds Scotia Capital Inc.

Scotia Private Canadian Growth Pool $15,484 $11,789

Scotia Private Canadian Mid Cap Pool 5,175 5,794


Scotia Private Canadian Value Pool 8,109 10,608

Scotia Private Strategic Balanced Pool 899 631

Scotia Private U.S. Large Cap Growth Pool – 50

(d) As at December 31, 2014, December 31, 2013 andJanuary 1, 2013, certain Funds invested in Funds managed bythe Manager. The holdings are disclosed in the Schedule ofInvestment Portfolio, as applicable.

(e) The Manager received approval from the IndependentReview Committee to invest the Funds’ overnight cash withScotiabank with interest paid by Scotiabank to the Fundsbased on prevailing market rates. The interest earned by the

Funds is reflected in the Statements of Comprehensive Incomein “Interest for distribution purposes” in the Income section.

12. Transition to IFRSThe effect of each of the Funds’ transition to IFRS is summarized inthis note as follows:

Transition electionsThe only voluntary exemption adopted by the Funds upontransition was the ability to designate a financial asset orliability at fair value through profit and loss upon transition toIFRS. All financial assets or liabilities designated at FVTPLupon transition were previously valued at fair value underCanadian GAAP as required by Accounting Guideline 18,Investment Companies.

Statement of cash flowsUnder Canadian GAAP, the Funds were exempt from providinga statement of cash flows. IAS 1 requires that a complete set offinancial statements include a statement of cash flows for thecurrent and comparative periods, without exception.

Reconciliations and explanation of any significant adjustmentsThe following reconciliations between IFRS and CanadianGAAP, as required by IFRS 1 for each Fund are disclosed in therespective Fund’s “Fund Specific Notes”.

• Statement of financial position reconciliation as previouslyreported under Canadian GAAP to IFRS

• Statement of comprehensive income reconciliation aspreviously reported under Canadian GAAP to IFRS

Classification of redeemable units issued by the FundsUnder Canadian GAAP, the Funds accounted for theirredeemable units as equity. Under IFRS, IAS 32 requires thatunits or shares of an entity which include a contractualobligation for the issuer to repurchase or redeem them for cashor another financial asset be classified as financial liability.The Funds’ units do not meet the criteria in IAS 32 forclassification as equity based on this criteria and therefore,have been reclassified as financial liabilities on transition toIFRS.

Revaluation of investments at FVTPLUnder Canadian GAAP, the Funds measured the fair values ofinvestments in accordance with Section 3855, FinancialInstruments – Recognition and Measurement, which requiredthe use of bid prices for long positions and ask prices for shortpositions, to the extent such prices were available. Under IFRS,the Funds measure the fair values of its investments using theguidance in IFRS 13, Fair Value Measurement (IFRS 13),which requires that if an asset or a liability has a bid price andan ask price, then its fair value is to be based on a price withinthe bid-ask spread that is most representative of fair value. Italso allows the use of mid-market pricing or other pricingconventions that are used by market participants as a practicalexpedient for fair value measurements within a bid-ask spread.As a result, upon adoption of IFRS an adjustment wasrecognized to adjust for the carrying amount of the Funds’investments.

163

13. Future Accounting StandardsThe final version of IFRS 9, Financial Instruments, was issuedby the IASB in July 2014 and will replace IAS 39 FinancialInstruments: Recognition and Measurement. IFRS 9 introducesa model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantiallyreformed approach to hedge accounting. The new single,principle based approach for determining the classification offinancial assets is driven by cash flow characteristics and thebusiness model in which an asset is held. The new model alsoresults in a single impairment model being applied to allfinancial instruments, which will require more timelyrecognition of expected credit losses. It also includes changesin respect of own credit risk in measuring liabilities elected tobe measured at fair value, so that gains caused by thedeterioration of an entity’s own credit risk on such liabilitiesare no longer recognized in profit or loss. IFRS 9 is effective forannual periods beginning on or after January 1, 2018, howeveris available for early adoption. In addition, the own creditchanges can be early applied in isolation without otherwisechanging the accounting for financial instruments The Fundsare in the process of assessing the impact of IFRS 9 and havenot yet determined when they will adopt the new standard.

164

Management’sResponsibilityforFinancialReporting

The accompanying financial statements of the Funds (as defined in Note 1) havebeen prepared by 1832 Asset Management L.P. in its capacity as manager(the “Manager”) of the Funds and have been approved by the Board of Directors of1832 Asset Management G.P. Inc., as general partner for and on behalf of 1832 AssetManagement L.P., in its capacity as trustee (the “Trustee”) of the Funds. The Board ofDirectors of 1832 Asset Management G.P. Inc., as general partner for and on behalf of1832 Asset management L.P is responsible for the information and representationscontained in these financial statements and the management report of fundperformance.

The Manager maintains appropriate processes to ensure that relevant and reliablefinancial information is produced. The financial statements have been prepared inaccordance with International Financial Reporting Standards (“IFRS”) and includecertain amounts that are based on estimates and judgments made by the Manager.The significant accounting policies which the Manager believes are appropriate forthe Funds are described in Note 2 to the financial statements.

The Finance Committee of the Board of Directors of 1832 Asset Management G.P. Inc.is responsible for reviewing the financial statements and the management report offund performance and recommending them to the Board of Directors of 1832 AssetManagement G.P. Inc. for approval, in addition to meeting with management, internalauditors and external auditors to discuss internal controls over the financial reportingprocess, auditing matters and financial reporting issues.

PricewaterhouseCoopers LLP is the external auditor of the Funds, appointed by theTrustee of the Funds. The auditor of the Funds has audited the financial statementsin accordance with the Canadian generally accepted auditing standards to enable it toexpress to the securityholders its opinion on the financial statements. The auditor’sreport is set out herein.

Jordy ChilcottCo-President1832 Asset Management L.P.

Michel MartilChief Financial Officer1832 Asset Management L.P.

March 6, 2015

165

Independent Auditor’s Report

To the Unitholders and Trustee of:Scotia Private Short Term Income PoolScotia Private Income PoolScotia Private High Yield Income PoolScotia Private American Core-Plus Bond PoolScotia Private Strategic Balanced PoolScotia Private Canadian Value PoolScotia Private Canadian Mid Cap PoolScotia Private Canadian Growth PoolScotia Private Canadian Small Cap PoolScotia Private U.S. Value PoolScotia Private U.S. Large Cap Growth PoolScotia Private U.S. Mid Cap Value PoolScotia Private U.S. Mid Cap Growth PoolScotia Private International Equity PoolScotia Private International Small to Mid Cap Value PoolScotia Private Emerging Markets PoolScotia Private Global Equity PoolScotia Private Global Real Estate PoolPinnacle Income PortfolioPinnacle Balanced PortfolioPinnacle Growth Portfolio(collectively the Funds)

We have audited the accompanying financial statements of eachof the Funds, which comprise the statements of financialposition as at December 31, 2014 and 2013 and January 1, 2013and the statements of comprehensive income, changes in netassets attributable to holders of redeemable units and cashflows for the years ended December 31, 2014 and 2013, and therelated notes, which comprise a summary of significantaccounting policies and other explanatory information.

Management’s responsibility for the financialstatements

Management is responsible for the preparation and fairpresentation of these financial statements in accordance withInternational Financial Reporting Standards, and for suchinternal control as management determines is necessary toenable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on the financialstatements of each of the Funds based on our audits. Weconducted our audits in accordance with Canadian generallyaccepted auditing standards. Those standards require that wecomply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud

or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity’s preparationand fair presentation of the financial statements in order todesign audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinionon the effectiveness of the entity’s internal control. An auditalso includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimatesmade by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained in each ofour audits is sufficient and appropriate to provide a basis forour audit opinion.

Opinion

In our opinion, the financial statements of each of the Fundspresent fairly, in all material respects, the financial position ofeach of the Funds as at December 31, 2014 and 2013 andJanuary 1, 2013 and the financial performance and the cashflows of each of the Funds for the years ended December 31,2014 and 2013 in accordance with International FinancialReporting Standards.

Chartered Professional Accountants,Licensed Public AccountantsToronto, OntarioMarch 9, 2015

166

SM54D 909811E-1 (03/15)

For more information about Scotia Private Pools® and Pinnacle Portfolios:

visit:www.scotiabank.com/scotiaprivatepoolswww.scotiabank.com/pinnacleportfolios

call:1-800-268-9269 (English)1-800-387-5004 (French)

write:1832 Asset Management L.P.

1 Adelaide Street East 28th Floor

Toronto, OntarioM5C 2V9

® Registered trademark of The Bank of Nova Scotia, used under licence.

Documents

Scotiabank · 2018. 7. 20. · Scotia Private Pools® and Pinnacle Portfolios Annual Report December 31, 2014 Money Market Fund Scotia Private Short Term Income Pool Bond Funds Scotia