and Interim Financial Statements

and Interim Financial StatementsHorizons Mondiale Fund

June 30, 2007

Interim Management Report of Fund Performance

Contents

Horizons Mondiale Fund

INTERIM MANAGEMENT REPORT OF FUND PERFORMANCE . . . . 1

INTERIM FINANCIAL STATEMENTS

Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . 14

Statement of Investment Portfolio . . . . . . . . . . . . . . . . . . . . . . 15

NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 18

Horizons Mondiale FundINTERIM MANAGEMENT REPORT OF FUND PERFORMANCE

Investment Objective

The investment objective of the Fund is to provide superior returns through investment in a diversifiedportfolio of securities and derivatives such as standard futures contracts based on equity indices, standardfutures contracts based on foreign exchange and exchange traded funds which invest in securities, whileutilizing money management techniques that include limiting risk and percentage capital commitment to anyone trade. For a summary of the risk controls adopted by the Fund Advisor, or for copies of the most recentAnnual Audited Financial Statements of the Fund, and/or the Annual Management Report of FundPerformance please refer to the prospectus on our website at www.jovfunds.com or through SEDAR atwww.sedar.com.

Investment Strategies

The Fund Advisor trades across a broad range of financial markets combining both long and short positionsin the portfolio. The Fund Advisor anticipates trading in securities and derivatives markets on exchanges inthe United States, Canada, Europe and Asia. The Fund will also invest in debt securities guaranteed by theCanadian government which will be used to support the Fund’s derivative positions.

Reference Price

The Fund is valued daily and additions and redemptions can also be made on a daily basis at the price of the Fund quoted at the close of business for the day on which such request for addition or redemption isreceived, before the cut-off time of 4:00 p.m.

Risk

Investments in the Units of the Fund are speculative, involve a high degree of risk and are suitable only forpersons who are able to assume the risk of losing their entire investment. Prospective investors shouldconsider the following risks, among others, before subscribing for Units.

1. Derivatives are volatile in price and can quickly lead to large losses as well as large gains. In addition,trading in derivatives may be highly leveraged. Accordingly, an investor must be able to afford to lose allof his investment.

2. Trading in derivatives by the Fund may be difficult or impossible due to commodity exchangelimitations on price fluctuations and speculative position limits.

3. The Fund must pay brokerage commissions whether or not it realizes a profit on trades and accordinglyits assets may be depleted or exhausted.

4. No regular disbursements or revenues are planned, although redemptions of Units are permitted undercertain conditions.

5. Unitholders have not and will not have the benefit of advice from independent counsel, accountants andother experts regarding the Fund unless they retain such at their own cost.

6. There is risk that the financial failure of the entities with which the Fund trades may affect the financialperformance of the Fund.

Please refer to the prospectus for other risk factors.

1

Horizons Mondiale FundINTERIM MANAGEMENT REPORT OF FUND PERFORMANCE (continued)

Results of Operations

The Horizons Mondiale Fund returned 2.1% through the first half of 2007. The Fund has consistentlyexhibited a low level of downside volatility with its worst 12-month performance being 1999 when the Funddeclined in value by 4.9%. The Fund has also exhibited the ability to earn positive returns in periods whenglobal markets have been weak.

For the period from January to June 2007, the strategy performance of Asian and North American indicesoutpaced those on European indices. Returns in Asia were led by robust performance from strategies on the Hang Seng China index and the Nikkei 225. Strategies on midcap indices were the strongest of thecapitalization spectrum in the US. In Europe, the Fund broke even overall while producing very good resultsin Germany, Switzerland, and Greece, but poor results in Sweden, France, and Italy. Given the equity markettrends, strategies adopting short market exposure were a drain on performance for almost every index. Fixedincome markets were the weakest segment of the portfolio as interest rate uncertainty and choppy marketscontributed to poor short-term trending characteristics.

Recent Developments

Changes to the portfolio composition have slowed since the flurry of market additions in 2005-06. Recentadditions have included the Norwegian OBX, the FTSE Midcap 250, and the TAIEX Taiwan StockExchange Index. Another interesting development has been the listing of real estate futures on the ChicagoBoard of Trade. While the Fund has historically accessed REITs using exchange-traded funds, theintroduction of futures allows the Fund to adopt short exposure to the real estate sector for the first time.

Adoption of New Accounting Standards

On April 1, 2005, the Canadian Institute of Chartered Accountants (‘‘CICA’’) issued Section 3855,‘‘Financial Instruments – Recognition and Measurement’’ of the CICA Handbook – Accounting, whichestablishes standards for the fair valuation of investments as well as the accounting treatment of transactioncosts. Section 3855 applies to fiscal years beginning on or after October 1, 2006. Additionally, Section 14.2of National Instrument 81-106 (‘‘NI 81-106’’), issued by the Canadian Securities Administrators in 2005,requires the daily net asset value of an investment fund to be calculated in accordance with CanadianGenerally Accepted Accounting Principles (‘‘GAAP’’). The adoption of Section 3855 would result in the useof different valuation techniques for certain investments.

Canadian securities regulatory authorities granted relief to investment funds from the requirement to complywith Section 3855, for the purposes of calculating of net asset value used for the investor transactions(“Pricing NAV”) for a one year period ending September 30, 2007. The Canadian Securities Administratorsare currently reviewing the suitability of applying Section 3855 for the purposes other than the preparation of financial statements. Depending on the outcome of such review, the method by which net asset value iscalculated may change on October 1, 2007. We have adopted the provisions of Section 3855 withoutrestatement of prior periods.

2

Horizons Mondiale FundINTERIM MANAGEMENT REPORT OF FUND PERFORMANCE (continued)

Independent Review Committee

The Manager has established an independent review committee (the ‘‘Independent Review Committee’’) forall of the investment funds managed by the Manager and related entities. The Independent Review Committeeis composed of three individuals, each of whom is independent of the Manager and its related entities.

The Independent Review Committee will be fully operational by November 1, 2007 and once operational willfunction in accordance with the applicable securities laws, including National Instrument 81-107 – IndependentReview Committee for Investment Funds (‘‘NI 81-107’’). In accordance with NI 81-107, the mandate of theIndependent Review Committee will be to consider and provide recommendations to the Manager and its relatedentities on conflicts of interest to which they are subject when managing investment funds under their respectivemanagement. The Manager is required under NI 81-107 to identify conflicts of interest inherent in its managementof the investment funds managed by it, and request input from the Independent Review Committee on how itmanages those conflicts of interest, as well as comply with its written policies and procedures outlining itsmanagement of those conflicts of interest. The Independent Review Committee will provide its recommendations to the Manager and its related parties with a view to the best interests of the investment funds managed by them.The Independent Review Committee will report annually to unitholders of the investment funds as required by NI 81-107. The reports of the Independent Review Committee will be available on the Manager’s website atwww.jovfunds.com or at the unitholder’s request at no cost, by contacting the Manager at 26 Wellington StreetEast, Suite 700, Toronto, ON M5E 1S2, or by email at [email protected] The first report of the IndependentReview Committee will be available on and after April 29, 2008 and thereafter on or about March 31 of each year.

The compensation and other reasonable expenses of the Independent Review Committee will be paid prorata out of the assets of each investment fund for which the Investment Review Committee acts as anindependent review committee.

Related Party Transactions

There were no related party portfolio transactions during the current reporting period.

Certain services have been provided to the Fund by related parties, and those relationships are described below.

Manager and Trustee

The Manager and Trustee of the Fund is Horizons Funds Inc., a corporation originally incorporated underthe laws of British Columbia and continued under the Canada Business Corporations Act, whose mailingaddress is 26 Wellington Street East, Suite 700, Toronto, Ontario, M5E 1S2.

JovFunds Management Inc. (“JovFunds”), also a wholly-owned subsidiary of Jovian is a consolidation ofseveral divisions and product lines, including HFI. JovFunds oversees the operations of HFI and the Fundalong with the other management companies and products within the Jovian group.

For further information on the Manager and Trustee, call (800) 665-1158 or visit www.jovfunds.com.

3

Horizons Mondiale FundFINANCIAL HIGHLIGHTS

Fund Advisor

Mondiale Asset Management Ltd., a corporation organized under the laws of British Columbia is theInvestment Advisor to the Fund and has been granted registration under the provisions of the Securities Act(B.C.), the Securities Act (Ontario) and the Commodity Futures Act (Ontario) in respect of providing advisoryservices to the Fund. Mondiale manages all investment activities of the Fund.

For further information on the Fund Advisor, call (604) 688-9250 or visit their website at www.mondiale.ca.

The following tables show selected key financial information about the Fund and are intended to help youunderstand the Fund’s financial performance for the last five years. This information is derived from theFund’s audited annual financial statements and the current interim financial statement. Please see the frontpage for information on how you may obtain the fund’s annual financial statements.

The Fund’s Net Asset Value (NAV) per Unit

MONDIALE – SERIES A June 30, Dec. 31, Dec. 31, Dec. 31, Dec.31,Periods ended 2007 2006 2005 2004 2003

FUND NET ASSET VALUE

Net asset value, beginning of period (1) $ 9.48 $ 9.56 $ 9.74 $ 9.81 $ 9.71

Initial adoption of new accounting policy (2) – N/A N/A N/A N/A

Increase (decrease) from operations:Total revenue 0.56 1.23 0.16 0.23 0.20 Total expenses (0.20) (0.53) (0.47) (0.42) (0.61)Realized gains (losses) (0.12) 0.15 1.15 0.15 1.25 Unrealized gains (losses) (0.04) (0.01) 0.02 (0.03) 0.10

Total increase (decrease) from operations (3) 0.20 0.86 (0.18) (0.07) 0.94

Distributions:From income(excluding dividends) – (0.94) – – (0.84)From dividends – – – – – From capital gains – – – – – Return of capital – – – – –

Total distributions (4) – (0.94) – – (0.84)

Net asset value, end of period (5) $ 9.67 $ 9.48 $ 9.56 $ 9.74 $ 9.81

Pricing net asset value, end of period (5) $ 9.67 N/A N/A N/A N/A

4

Horizons Mondiale FundFINANCIAL HIGHLIGHTS (continued)

The Fund’s Net Asset Value (NAV) per Unit

MONDIALE – SERIES F June 30, Dec. 31, Dec. 31, Dec. 31,Periods ended 2007 2006 2005 2004

FUND NET ASSET VALUE

Net asset value, beginning of period (1) $ 9.89 $ 9.88 $ 9.95 $10.00

Initial adoption of new accounting policy (2) – N/A N/A N/A

Increase (decrease) from operations:Total revenue 0.58 1.42 0.06 0.23 Total expenses (0.16) (0.61) (0.18) (0.42)Realized gains (losses) (0.13) 0.17 0.06 0.15 Unrealized gains (losses) 0.72 0.01 (0.01) (0.01)

Total increase (decrease) from operations (3) 1.01 0.99 (0.07) (0.05)

Distributions:From income(excluding dividends) – (0.98) – –From dividends – – – –From capital gains – – – –Return of capital – – – –

Total distributions (4) – (0.98) – –

Net asset value, end of period (5) $ 10.15 $ 9.89 $ 9.88 $ 9.95

Pricing net asset value, end of period (5) $ 10.15 N/A N/A N/A

(1) Class A units were listed for $10 per unit until October 18, 1991. The inception date for Class F units was September 10, 2004.

(2) The impact of the adoption of the new accounting policy Section 3855 on net assets may result in a different valuation of securitiesheld by the Fund, for financial reporting purposes, than the market value used to determine net asset value of the Fund for thepurchase and redemption of the Fund’s shares (“pricing NAV”). As a result, the net asset value and the net asset value per sharepresented may differ from the pricing NAV and pricing net asset value per share as of June 30, 2007.

(3) Net asset value and distributions are based on the actual number of units outstanding at the relevant time. The increase/decreasefrom operations is based on the weighted average number of units outstanding over the financial period.

(4) Distributions were paid in cash/reinvested in additional units of the Fund, or both.

(5) The Financial Highlights are not intended to act as a continuity of the opening and closing NAV.

5

June 30, Dec. 31, Dec. 31, Dec. 31, Dec.31,Periods ended (1) 2007 2006 2005 2004 2003

Ratios and Supplemental Data – Series A

Net assets (pricing NAV) (2) (000’s) $ 86,380 $ 91,382 $ 111,207 $ 175,961 $ 161,237Number of units outstanding (000’s) 8,930 9,639 11,632 18,066 16,439Management expense ratio (3) 4.28% 4.70% 3.18% 3.51% 5.73%Management expense ratio before waivers

or absorptions(4) 4.28% 4.70% 3.18% 3.51% 5.73%Portfolio turnover ratio (5) (7) 2,770.60% N/A N/A N/A N/ATrading expense ratio (6) (7) 0.04% N/A N/A N/A N/A

Ratios and Supplemental Data – Series F

Net assets (pricing NAV) (2) (7) (000’s) $ 3,443 $ 3,432 $ 3,085 $ 2,296 N/A Number of units outstanding (000’s) 339 375 324 227 – Management expense ratio (3) (7) 3.28% 4.70% 3.18% N/A –Management expense ratio before waivers

or absorptions (4) (7) 3.28% 4.70% 3.18% 0.00% –Portfolio turnover ratio (5) (7) 2,770.60% N/A N/A N/A –Trading expense ratio (6) (7) 0.04% N/A N/A N/A N/A

(1) This information is provided as at December 31 or June 30 of the period(s) shown, as applicable.

(2) The impact of the adoption of the new accounting policy Section 3855 on net assets may result in a different valuation of securities heldby the Fund, for financial reporting purposes, than the market value used to determine net asset value of the Fund for the purchase andredemption of the Fund’s shares (“pricing NAV”). As a result, the net asset value and the net asset value per share presented maydiffer from the pricing NAV and pricing net asset value per share as of June 30, 2007.

(3) Management expense ratio is based on total expenses for the stated period and is expressed as an annualized percentage of dailyaverage net assets during the period. Out of its management fees, the Manager pays for such services to the Fund as portfolio advisorcompensation, service fees and marketing.

(4) The Manager, at its discretion, waived and/or absorbed a portion of the fees and/or expenses otherwise payable by the Fund. Thewaiving and/or absorption of such fees and/or expenses by the Manager may be terminated at any time, or continued indefinitely, at thediscretion of the Manager.

(5) The Fund’s portfolio turnover rate indicates how actively the Fund’s portfolio adviser trades its portfolio investments. A portfolioturnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year.The higher a Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater thechance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rateand the performance of a Fund.

(6) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage ofdaily average net assets during the period.

(7) Certain information for Series A and Series F are not available as they were not previously tracked.


6

Management Fees

The following table shows the Fund’s annual management fee rates and the maximum trailer fee rates for each series of units. Horizons pays trailer fees to dealers out of management fees. The trailer fees are a percentage of the average daily value of the units of each Horizons Fund held by the dealer’s clients. The fees depend on the series of units held.

SERIES OF UNIT MANAGEMENT FEE TRAILER FEE SALES CHARGE

Series A Units 2.50% 1.00% Up to 5%

Series F Units 1.50% 0.00% N/A

Past Performance

Sales commissions, trailing commissions, management fees and expenses all may be associated with mutualfund investments. Please read the prospectus before investing. The indicated rates of return are the historicalannual compounded total returns including changes in unit value and reinvestment of all distributions and donot take into account sales, redemption, distribution or optional charges or income taxes payable by anyinvestor that would have reduced returns. Mutual funds are not guaranteed. Their values change frequentlyand past performance may not be repeated. The Fund’s performance numbers assume that all distributionsare reinvested in additional units of the Fund. If you hold this Fund outside of a registered plan, income and capital gains distributions that are paid to you increase your income for tax purposes whether paid to you incash or reinvested in additional units. The amount of the reinvested taxable distributions is added to theadjusted cost base of the units that you own. This would decrease your capital gain or increase your capitalloss when you later redeem from the Fund, thereby ensuring that you are not taxed on this amount again.Please consult your tax advisor regarding your personal tax situation.


7

Year-by-Year Returns

The following charts show the investment fund’s annual performance for each of the years shown, andillustrate how the investment fund’s performance has changed from year to year. In percentage terms, thecharts show how much an investment made on the first day of each financial year would have grown ordecreased by the last day of each financial year. Year-by-year returns are not comprehensive of thereinvestment of any distributions.


Horizons Mondiale Fund Series A

-0.48%

-0.45%-1.28%

-0.55% -0.41%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Ra

teo

fR

etu

rns

SHORT LONG TOTAL

Horizons Mondiale Fund Series F

-1.28%

0.50% 0.64%3.07%

-0.48%-0.45%-0.47%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2004 2005 2006 2007

Years

Ra

teo

fR

etu

rns

SHORT LONG TOTAL

8

The return figures from prior periods have been adjusted to reflect the reporting standards of NationalInstrument 81-106, which governs the disclosure presented in this document.

The performance shown for short positions is based on the pure performance of such postions, while the performance shown for long positions is comprehensive of all fees and expenses, as is the performance foreach series of the fund as a total.

9


Annual Compound Returns

The following table shows the Fund’s historical annual compound total returns since inception and for theperiod ended June 30, 2007 compared with the Fund’s applicable benchmark. The table shown is used onlyto illustrate the effects of the compound growth rate and is not intended to reflect future values of the Fundor future returns on investments in the Fund.

Series A Return Series F Return MSCI WorldPeriod % % Index

Current period 2.09% 2.59% -1.02%

3 Year – Total Position 8.31% 11.52% 30.29%

5 Year – Total Position 18.02% N/A 11.05%

Since Inception - Total 96.22% 30.15%

Position1 11.52% 38.24%

1. Reflecting December 31, 1997 as the start date for Series A and November 2003 for Series F

The MSCI World Index measures the performance of global equity market performance. It is a free-float,market-value weighted index, with each stock’s weight in the index proportionate to its market valueadjusted for the proportion of shares available for public trading. The MSCI World Index is reported in USdollars and includes the reinvestment of dividends.

Summary of Investment Portfolio As at June 30, 2007

% of Fund’s Description Net Assets Net Assets

Long Positions

Cash and Cash Equivalents $87,860,869 97.8%Canadian Index Shares 2,166,510 2.4%Foreign Index Shares 192,143 0.2%Index Futures 178,655 0.2%Bond Futures 5,035 0.0%Currency Futures (40,772) -0.1%Net Other Assets (498,232) -0.5%

Short Positions

Currency Futures (37,608) 0.0%Index Futures (4,102) 0.0%

Total Investments Portfolio $89,822,498 100.0%


Top 25 Issuers

Description % of Total NAV

iShares Canadian S&P/TSX Completion Index Fund 2.4%PowerShares Zacks Micro Cap Portfolio ETF 0.1%iShares S&P SmallCap 600 Index Fund ETF 0.1%NIKKEI 225 Futures 0.1%Topix Index Futures 0.0%MDAX Index Futures 0.0%IBEX 35 Index Futures 0.0%iShares Canadian S&P/TSX SmallCap Index Fund 0.0%Japanese Yen Currency Futures 0.0%CAC40 10 Euro Futures 0.0%S&P/TSE 60 Index Futures 0.0%Swiss Market Index Futures 0.0%Amsterdam Index Futures 0.0%Austrian Traded Index Futures 0.0%US Long Bond Futures 0.0%Swiss MID Cap Futures 0.0%S&P/MIB Index Futures 0.0%S&P500 E-Mini Futures 0.0%FTSE/ASE-20 Index Futures 0.0%DJ Euro Stock 50 Futures 0.0%DJIA Mini E-CBOT Futures 0.0%OMX Stockholm 30 Index Futures 0.0%Resource Index Futures 0.0%NASDAQ 100 E-Mini Futures 0.0%Euro-Bund Futures 0.0%

Important NoteThe summary of investment portfolio may change due to the ongoing portfolio transactions of the Fund. The most recent annual report or semi-annual report is available at no cost by calling 1-866-278-8696, bywriting to us at Horizons Funds Inc., 26 Wellington Street East, Suite 700, Toronto, Ontario, M5E 1S2, by visiting our website at www.jovfunds.com or through SEDAR at www.sedar.com.

10

11

Interim Financial Statements of

Horizons MondialeFund

For the Six Months Ended June 30, 2007

12

Horizons Mondiale FundStatement of Net AssetsAs at June 30, 2007 (unaudited) and December 31, 2006

2007) 2006)(note 2) (note 2)

AssetsCash and term deposits $ 74,322,820 $ 74,509,898 Investments 2,358,653 8,006,390 Margin deposits (note 4) 13,538,049 13,565,400 Accounts receivable relating to securities issued 312,204 –Amounts receivable relating to portfolio assets sold 7,533,031 –Amounts receivable relating to accrued income 940,917 –Derivatives 101,208 Funds held in trust (note 5) 158,008 154,181

99,264,890 96,235,869

LiabilitiesAccrued expenses (note 6) 810,861 1,352,464 Liabilities for securities redeemed 274,135 –Liabilities for portfolio assets purchased 8,357,396 68,128

9,442,392 1,420,592

Total net assets and securityholders’ equity $ 89,822,498 $ 94,815,277

Total net assets and securityholders’ equity, Series A $ 86,379,942 $ 91,382,370Net asset value per security, Series A 9.67 9.48

Total net assets and securityholders’ equity, Series F $ 3,442,556 $ 3,432,907Net asset value per security, Series F 10.15 9.89

See accompanying notes to financial statements.

Approved on behalf of the Board of Horizons Funds Inc.

_________________________ _________________________Philip Armstrong Mark Arthur

13

Horizons Mondiale FundStatement of Operations (unaudited)For the Six Months Ended June 30

2007 2006

Investment IncomeDividend revenue $ 107,006 $ – Interest revenue 1,611,334 1,732,854 Income from derivatives 3,673,277 Less: foreign withholding taxes 10,561 –

5,381,056 1,732,854

ExpensesManagement fees (note 7) 1,188,167 1,394,817 Performance fees (note 7) 358,666 640,514 Audit fees 57,101 9,100 Custodial fees 38,975 18,256 Legal fees – 12,804 Securityholder reporting costs 2,115 – Administration fees 302,690 241,021 Brokerage fees – 370,288 Other expenses 8,063 –

1,955,777 2,686,800

Net investment income (loss) for the period 3,425,279 (953,946)

Realized gains (losses) (1,201,846) 5,182,496 Transaction costs (note 2) (36,339) –Unrealized gains 18,962 1,485,740

Increase in net assets from operations $ 2,206,056 $ 5,714,290

Increase in net assets from operations, Series A [note 1(b)] $ 1,822,030 $ N/A Increase in net assets from operations per security, Series A 0.20 N/A

Increase in net assets from operations, Series F [note 1(b)] $ 384,026 $ N/A Increase in net assets from operations per security, Series F 1.01 N/A


14

Horizons Mondiale FundStatement of Changes in Net Assets (unaudited)For the Six Months Ended June 30

2007) 2006)(note 2)

Net assets at the beginning of the period $ 94,815,277 $ 114,291,647

Increase in net assets from operations 2,206,056 5,714,290 Capital transactions

Proceeds from the issuance of securities of the investment fund 4,868,190 3,727,013 Aggregate amounts paid on redemption of securities of the investment fund (12,193,330) (24,329,180)Net transfer of securities from other funds 126,305 –

Net assets at the end of the period $ 89,822,498 $ 99,403,770

Net assets at the beginning of the period, Series A $ 91,382,370 $ N/A

Increase in net assets from operations, Series A [note 1(b)] 1,822,030 – Capital transactions, Series A

Proceeds from the issuance of securities of the investment fund 4,213,276 –Aggregate amounts paid on redemption of securities of the investment fund (10,999,630) –Net transfer of securities to other funds (38,104) –

Net assets at the end of the period, Series A $ 86,379,942 $ N/A

Net assets at the beginning of the period, Series F $ 3,432,907 $ N/A

Increase in net assets from operations, Series F [note 1(b)] 384,026 – Capital transactions, Series F

Proceeds from the issuance of securities of the investment fund 654,914 –Aggregate amounts paid on redemption of securities of the investment fund (1,193,700) – Net transfer of securities from other funds 164,409 –

Net assets at the end of the period, Series F $ 3,442,556 $ N/A


15

INDEX SHARES (2.6%)Canadian Index Shares (2.4%)

iShares Canadian S&P/TSX Completion Index Fund 23,000 $ 2,154,609 $ 2,146,820 iShares Canadian S&P/TSX SmallCap Index Fund 1,000 19,815 19,690

2,174,424 2,166,510 Foreign Index Shares (0.2%)

iShares S&P SmallCap 600 Index Fund ETF 1,000 76,680 75,568 PowerShares Zacks Micro Cap Portfolio ETF 6,000 120,832 116,575

197,512 192,143

TOTAL INDEX SHARES 2,371,936 2,358,653

DERIVATIVES (0.1%)Index Futures (0.2%)

Long PositionsAmsterdam Index Futures July 2007 14 – 6,509 Austrian Traded Index September 2007 18 – 5,656 CAC40 10 Euro Futures July 2007 11 – 7,942 CAC40 10 Euro Futures July 2007 11 – 8,299 DJ Euro Stock 50 September 2007 2 – 169 DJ Euro Stock 50 September 2007 1 – 389 DJ Stock MID Index Futures September 2007 3 – (78)DJ Stock MID Index Futures September 2007 2 – (233)DJIA Mini E-CBOT September 2007 15 – (316)DJIA Mini E-CBOT September 2007 10 – 427 FTSE 250 Index Futuresure September 2007 1 – (750)FTSE/ASE-20 Index Futures September 2007 45 – 960 H-Shares Index Futures July 2007 40 – (13,064)IBEX 35 Index Futures July 2007 7 – 11,048 IBEX 35 Index Futures July 2007 7 – 10,750 MDAX Index Futures September 2007 70 – 15,359 MDAX Index Futures September 2007 68 – 12,967 MSCI TAIWAN Index July 2007 2 – (307)MSCI TAIWAN Index July 2007 1 – (259)NASDAQ 100 E-Mini September 2007 7 – 134 NASDAQ 100 E-Mini September 2007 6 – (360)NIKKEI 225 September 2007 91 – 66,728 Russell Mini Futures September 2007 11 – (5,544)Russell Mini Futures September 2007 10 – (4,661)S&P MID 400 E-Mini September 2007 12 – (6,695)

Horizons Mondiale FundStatement of Investment Portfolio (unaudited)As at June 30, 2007

Number of Shares/Units Average Market Held or Sold Cost Value

16

Horizons Mondiale FundStatement of Investment Portfolio (unaudited) (continued)As at June 30, 2007


S&P MID 400 E-Mini September 2007 10 $ – $ (6,234)S&P/MIB Index September 2007 3 – 3,080 S&P/TSE 60 Index Futures September 2007 16 – 11,797 S&P500 E-Mini Futures September 2007 13 – 705 S&P500 E-Mini Futures September 2007 12 – 722 Swiss Market Index Futures September 2007 25 – 11,612 Swiss MID Cap Futures September 2007 29 – 2,319 Swiss MID Cap Futures September 2007 27 – 2,131 Taiex Index Futures July 2007 2 – (516)Topix Index Futures September 2007 41 – 37,969

– 178,655 Short PositionsDAX Index Futures September 2007 (1) – (1,524)FTSE/ASE MID 40 Futures July 2007 (3) – (468)Kospi 200 Index Futures September 2007 (3) – (2,024)OMX Stockholm 30 Index Futures September 2007 (2) – 10 Resource Index Futures September 2007 (3) – 144 Resource Index Futures September 2007 (2) – (240)

– (4,102)

Total Index Futures – 174,553

Bond Futures (0.0%)10-year US Long Bond Futures September 2007 8 – 1,454 10-year US Long Bond Futures September 2007 8 – 1,349 30-year US Long Bond Futures September 2007 5 – 1,319 30-year US Long Bond Futures September 2007 5 – 1,199 Euro-Bund Futures September 2007 1 – (130)Euro-Bund Futures September 2007 1 – (156)

– 5,035

Total Bond Futures – 5,035

Currency Futures (-0.1%)Long PositionsCanadian Dollar Currency Index Futures September 2007 190 – (37,424)Korean Won Futures July 2007 19 – (3,348)

– (40,772)Short PositionsEuro Foreign Exchange Futures September 2007 (24) – (47,691)Swiss Franc Currency Futures September 2007 (8) – (7,145)Japanese Yen Currency Futures September 2007 (15) – 17,228

– (37,608)

Total Currency Futures – (78,380)

Horizons Mondiale FundStatement of Investment Portfolio (unaudited) (continued)As at June 30, 2007


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TOTAL DERIVATIVES $ – $ 101,208

TOTAL LONG POSITIONS 2,371,936 2,501,571

TOTAL SHORT POSITIONS – (41,710)

Transaction costs (note 2) (17,989) –

TOTAL INVESTMENT PORTFOLIO (2.7%) $ 2,353,947 2,459,861

Cash and Short Term Notes (97.8%) 87,860,869

Other Assets less Other Liabilities (-0.5%) (498,232)

NET ASSETS (100.0%) $ 89,822,498

* Non Canadian Holdings


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Horizons Mondiale FundNotes to Financial StatementsFor the Six Months Ended June 30, 2007 and the Year Ended December 31, 2006

1. ORGANIZATION

(a) Legal structure

The Horizons Mondiale Fund (the “Fund”) is an open-end mutual investment fund established by HorizonsFunds Inc. (“HFI”) as a trust under the laws of British Columbia by a Trust Indenture dated February 12,1991, between HFI as both seller and manager and Royal Trust Company as Trustee. The Trust Indenture, asamended, has appointed HFI as the successor Trustee.

At the October 1995 unitholders' meeting, the unitholders gave approval to amend the Trust Indenture,effective December 6, 1995, to allow the Fund to invest in permitted derivatives and to carry on the businessas a commodity pool.

At the July 1999 unitholders' meeting, the unitholders gave approval to amend the Trust Indenture to changethe name of the Fund to Horizons Mondiale Hedge Fund and to revise the management and incentive feespayable by the Fund. The name was subsequently amended to Horizons Mondiale Fund pursuant to a furtheramendment to the Trust Indenture dated August 14, 2006.

In May 2006, Jovian Capital Corporation (“Jovian”), through its wholly owned subsidiary, Jovian AssetManagement Inc. (“JAMI”), acquired 51.7% of the common shares of HFI. JAMI now holds 67.3% of theissued and outstanding common shares. Jovian is a publicly-traded company listed on the TSX VentureExchange (JVN). Jovian is a management and holding company with interests in a variety of financialservice firms specializing in wealth and asset management. The Jovian group of companies operates as anational financial services organization.

JovFunds Management Inc. (“JovFunds”), also a wholly-owned subsidiary of Jovian is a consolidation ofseveral divisions and product lines, including HFI. JovFunds oversees the operations of HFI and the Fund,along with the other management companies and products within the Jovian group.

The Fund’s investments are exchange traded futures contracts, exchange traded funds and debt securitieswhich are guaranteed by the Canadian government. The Fund is managed by HFI (the “Manager”).Mondiale Asset Management Limited (the “Fund Advisor”) acts as the appointed Fund Advisor to the Fund.

(b) Financial reporting dates

The statement of investment portfolio is as at June 30, 2007, and the statements of net assets are as at June 30, 2007 and December 31, 2006, as applicable. The statements of operations and changes in net assetsare for the six months ended June 30, 2007 and June 30, 2006. Increase (decrease) in net assets attributableto each series for June 30, 2006 is not available.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Generally accepted accounting principles

These financial statements have been prepared in accordance with Canadian Generally Accepted AccountingPrinciples (“GAAP”). The following is a summary of significant accounting policies followed by the Fund inthe preparation of these financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(a) Adoption of new accounting standards

On April 1, 2005, the Canadian Institute of Chartered Accountants (‘‘CICA’’) issued Section 3855,‘‘Financial Instruments – Recognition and Measurement’’ of the CICA Handbook – Accounting, whichestablishes standards for the fair valuation of investments as well as the accounting treatment of transactioncosts. Section 3855 applies to fiscal years beginning on or after October 1, 2006. Additionally, Section 14.2of National Instrument 81-106 (‘‘NI 81-106’’), issued by the Canadian Securities Administrators in 2005,requires the daily net asset value of an investment fund to be calculated in accordance with CanadianGenerally Accepted Accounting Principles (‘‘GAAP’’). The adoption of Section 3855 would result in the useof different valuation techniques for certain investments.

Canadian securities regulatory authorities granted relief to investment funds from the requirement to complywith Section 3855, for the purposes of calculating of net asset value used for the investor transactions(“Pricing NAV”) for a one year period ending September 30, 2007. The Canadian Securities Administratorsare currently reviewing the suitability of applying Section 3855 for the purposes other than the preparationof financial statements. Depending on the outcome of such review, the method by which net asset value iscalculated may change on October 1, 2007. For these financial statements, we have adopted the provisionsof Section 3855, without restatement of prior periods.

Accordingly, the statement of net assets as at June 30, 2007 reflects the revised GAAP, including Section 3855,and the balances as at December 31, 2006 reflect ‘pre Section 3855’ GAAP, now referred to as Pricing NAV.Also, the opening net asset value in the statement of changes in net assets for the six months ended June 30,2007 has been adjusted. Refer to note 10 for the amount adjusted for each series.

(b) Valuation of financial instruments

(i) Securities listed upon a recognized public stock exchange are valued at their bid prices on the financialstatement date. Securities with no available bid prices are valued at their closing sale prices.

(ii) Any investment for which a market quotation is not readily available (“private companies”) shall bevalued at cost, in the absence of any subsequent financing shall be valued at its fair value asdetermined by the Fund Manager.

(iii) Investments which are restricted as to transferability are valued at the fair value of the unrestrictedinvestment as provided in paragraphs (i) and (ii) above, less a discount as prescribed by the Manager ofthe Fund. The process of valuing investments for which no published market exists is inevitably basedon inherent uncertainties and the resulting valuation may differ from values that would have been usedhad a ready market existed for investments.

(iv) Short-term investments are valued at amortized cost, which approximates market value.

(v) Futures contracts listed upon a principal exchange are valued at their bid prices (for long futurescontracts) and ask prices (for short futures contracts). Where no price quotations are available, the fairvalue as estimated by the Manager will be used.

(vi) The Funds (as prescribed by the prospectus) may make short sales whereby a security that it does notown is sold in anticipation of a decline in the market value of the security. Securities which are soldshort are valued at their asking prices on the financial statement date. Securities with no availableasking prices are valued at their closing price reported by the principal securities exchange on thefinancial statement date. To enter a short sale, the Fund may need to borrow the security for delivery tothe buyer. While the transaction is open, the Fund will also incur a liability for any paid dividends orinterest which is due to the lender of the security.

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(vii) Futures contracts listed upon a principal exchange are valued at their bid prices (for long futurescontracts) and ask prices (for short futures contracts). Futures contracts with no available bid and askprices are valued at their settlement prices. Where no price quotations are available, the fair value asestimated by the Manager will be used.

(viii) The fair values of other financial assets and liabilities approximate their carrying value due to theshort-term nature of these instruments.

(c) Transaction costs

In accordance with Section 3855, portfolio transaction costs are expensed and are included in ‘‘Transactioncosts’’ in the statements of operations. Transaction costs are incremental costs that are directly attributable tothe acquisition, issue or disposal of an investment, which include fees and commission paid to agents,advisors, brokers and dealers, levies by regulatory agencies and securities exchanges. The statement ofinvestments includes only those transaction costs incurred on the acquisition of portfolio investments. Priorto the adoption of Section 3855, transaction costs were capitalized and included in the cost of purchases orproceeds from sale of investments. The impact on the net asset values of the investment fund is the sameregardless of which accounting method is utilized.

(d) Investment transactions and income

Investment transactions are accounted for as of the trade date. Realized gains and losses from investmenttransactions are calculated on an average cost basis. The difference between market value and average cost,as recorded in the financial statements, is included in the statement of operations as part of unrealized gains(losses) on investments.

Interest income is accrued daily and dividend income is recognized on the ex-dividend date.

(e) Foreign currency translation

Investments and other assets and liabilities denominated in foreign currencies are translated into Canadiandollars at the exchange rates prevailing on the valuation date. Investment transactions, income and expensesare translated into Canadian dollars at the exchange rates prevailing on the respective dates of suchtransactions. Foreign exchange gains and losses on the sale of investments and foreign currencies areincluded in the statement of operations as part of realized gains (losses). Unrealized foreign exchange gainsand losses on investments held are included in the statement of operations as part of unrealized gains(losses).

(f) Hedging policy

The Fund may enter into short-term hedging contracts to protect its unitholders from fluctuations in theUnited States versus the Canadian dollar, as the Fund's investments include significant holdings in UnitedStates dollars. These hedges take the form of futures contracts.

(g) Net asset value per security

Net asset value per security by class is computed by dividing the net asset value of the Fund at the valuationdate attributable to each class of units (after the deduction of all expenses attributable to the fund as a whole,and the deduction of any expenses attributable to each class individually) by the total number of units ofeach class of the Fund outstanding.

(h) Increase (decrease) in net assets from operations per security

The increase (decrease) in net assets from operations per security by class in the statement of operationsrepresent the change in net assets from operations attributable to each class divided by the average numberof units of that class outstanding during the period.

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Income, expenses other than management fees, and realized and unrealized capital gains (losses) aredistributed amongst the different classes of securities in proportion to the amount of equity invested in them.

(i) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of changes in net assets during the period. Actual resultscould differ from those estimates.

(j) Income taxes

The Fund distributes all of its net income at the end of each year to its unitholders. Such incomedistributable is taxable in the hands of the unitholders and not in the Fund. Accordingly, no provision forincome taxes has been made in these financial statements.

3. LEVERAGE

The Fund, unlike mutual funds that are not commodity pools subject to Multilateral Instrument 81-104 (“MI 81-104”), is permitted by MI 81-104 to lever its assets; that is, the aggregate underlying marketexposure of all derivatives held by the Fund calculated on a daily mark-to-market basis can exceed theFund's cash and cash equivalents, including cash held as margin on deposit to support the Fund's derivativestrading activities.

While the Fund has used leverage to a limited extent in the past, the Fund has not used leverage during the reporting period.

4. EQUITY WITH FUTURES COMMISSION MERCHANTS

The Fund maintains accounts with Futures Commission Merchants (“FCMs”) to conduct its futures,forwards and option trading activities. The futures, forwards and option trading activities, where applicable,are grouped into the six following categories: currencies futures, bond futures, stock index futures,commodity futures, options purchased and options written.

The FCMs require the maintenance of minimum margins. These requirements are met by the Fund's equityat the FCMs. As at June 30, 2007, the Fund had equity of $13,639,257 (2006 – $13,565,400) with FCMs,which includes margin deposits and derivatives.

5. FUNDS HELD IN TRUST

The balance of $158,008 (2006 – $154,181) represents the balance held as collateral for the operations ofthe clearing facility.

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6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

2007 2006

Horizons Funds Inc., Fund Manager, managementand incentive fees payable $ 222,544 $ 334,360

Mondiale Asset Management Ltd., Fund Advisor,management and incentive fees payable 332,941 635,100

Accrued liabilities 235,719 281,122Cash dividend payable 3,078 96,803Royal Trust Corporation of Canada, as Fund Custodian,

for unsettled trades and custodial fees payable 16,578 5,079

$ 810,861 $ 1,352,464

7. MANAGEMENT AND INCENTIVE FEES

In consideration for the services provided to the Fund, the Manager and Fund Advisor receive annualmanagement and incentive fees.

The Fund pays an annual management fee equal to 2.50% of the Class A's average net asset value and1.50% of Class F’s average net asset value, which are calculated and accrued daily and payable monthly. ForClass A, of the 2.50% management fee, 1.75% is payable to the Manager and 0.75% is payable to the FundAdvisor. For Class F, of the 1.50% management fee, 0.75% is payable to the Manager and 0.75% is payableto the Fund Advisor.

The Fund pays an annual incentive fee equal to 20% of the excess of the Fund's Cumulative Net TradingPerformance at the end of each quarter over the highest previously attained Cumulative Net TradingPerformance, calculated and accrued daily and payable quarterly. Of the 20% incentive fee, 5% is payable tothe Manager and 15% is payable to the Fund Advisor.

Cumulative Net Trading Performance means the total Cumulative Net Trading Profit less the Cumulative T-Bill Benchmark. Cumulative Net Trading Profit means the total cumulative net trading gains (or losses)plus investment income, less round-turn commissions, excluding incentive fees paid. Cumulative T-BillBenchmark means the total income that would have been earned by the Fund in all calendar quarters if thenet assets of the Fund had been invested in 90-day Canadian treasury bills. In calculating the Cumulative T-Bill Benchmark in respect of each calendar quarter, the immediately preceding calendar quarter'sprevailing average yield on 90-day Canadian treasury bills will be used.

8. UNITS ISSUED AND OUTSTANDING

(a) Authorized:

An unlimited number of Series A and Series F units are authorized. Series F units were authorized under therenewal prospectus of the Fund on August 17, 2000.

(b) Issued:

Until October 18, 1991, all units were issued for $10 per unit. After that date, the issue price per unit isdetermined on the basis of the net asset value per unit as at the close of each business day in which the unitsare subscribed for.

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8. UNITS ISSUED AND OUTSTANDING (continued)

(c) Summary of units issued and outstanding:

The change in the number of units issued and outstanding for the period ended June 30, 2007 and the yearended December 31, 2006 are as follows:

Purchases/ AverageBeginning of Reinvestments Redemptions End of number of

Fund Year period during period during period period units

Series A 2006 11,632,481 1,399,078 3,392,068 9,639,491 9,766,919

2007 9,639,491 457,238 1,167,202 8,929,527 9,259,567

Series F 2006 323,705 182,643 131,793 374,555 356,083

2007 374,555 81,975 117,320 339,210 381,602

Unless otherwise requested by the unitholders, distributions will be automatically reinvested in the units ofthe Fund at the current net asset value per unit of the Fund.

(d) Distribution:

On December 31, 2006 the Fund distributed $0.94 and $0.98 (2005: $0.00 and $0.00) on Series A andSeries F units from investment income respectively. The majority of this was reinvested into the Fund unitsduring the year.

9. VALUATION OF EACH UNIT

Units are offered on a continuous basis by the Fund on each day that the Toronto Stock Exchange (“TSX”)is open for business at the applicable Series net asset value per unit.

The net asset value of the units of the Fund is computed separately for each Series of units by adding upsuch Series' proportionate share of the cash, securities and other assets of the Fund; less the liabilitiesapplicable to that Series of units (which includes that Series’ proportionate share of common liabilities, plusliabilities directly attributable to the Series) and dividing the net assets by the total number of units of thatSeries outstanding. The net asset value so determined is adjusted to the nearest cent per unit and will remainin effect until the time as at which the next determination of net asset value is made. The net asset value willbe calculated daily on each day on which the TSX is open.

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10. RECONCILIATION OF NET ASSET VALUE

In accordance with the decision made by the Canadian securities regulatory authorities, a reconciliationbetween the Pricing NAV and the GAAP NAV of an investment fund is required for financial reportingperiods (see note 2). For investments that are traded in an active market where quoted prices are readily andregularly available, Section 3855 requires bid prices (for investments held) and ask prices (for investmentssold short) to be used in the fair valuation of investments, rather than the use of closing sale prices currentlyused for the purpose of determining Pricing NAV. For investments that are not traded in an active market,Section 3855 requires the use of specific valuation techniques, rather than the use of valuation techniques byvirtue of general practice in the investment funds industry.

These changes account for the difference between Pricing NAV and GAAP NAV. The impact of the adoptionof Section 3855 on the net asset value of the Fund is as follows:

As at June 30, 2007

Net Asset Value Net Asset Value per Share Opening NAVPricing Section 3855 GAAP Pricing GAAP Section 3855

NAV Adjustment NAV NAV NAV Adjustment

Horizons Mondiale FundSeries A 86,388,869 (8,927) 86,379,942 9.6745 9.6735 – Series F 3,442,913 (357) 3,442,556 10.1498 10.1487 – Total Net Asset Value 89,831,782 (9,284) 89,822,498 –

11. COMPARATIVE FINANCIAL STATEMENTS

Comparative figures have been reclassified where necessary to afford a meaningful comparison with theprior year.

Manager and TrusteeHorizons Funds Inc.26 Wellington Street East, Suite 700Toronto, Ontario M5E 1S2Tel: 416-367-9333Fax: 416-601-1695Toll Free: 1-800-665-1158www.jovfunds.com

Administrator,Transfer Agent and RegistrarAdministrative Fundamentals Inc.26 Wellington Street East, Suite 204Toronto, Ontario M5E 1S2Tel: 416-601-2228Fax: 416-601-1695Toll Free: 1-877-450-0722

AuditorsKPMG LLP199 Bay Street, Suite 3300Toronto, OntarioM5L 1B2

CustodianRBC Dexia Investor Services Trust77 King Street, 7th FloorToronto, OntarioM5W 1P9

and Interim Financial Statements

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