TIDMBABS TIDMBABS TIDMBABE TIDMBABU TIDMBABV
RNS Number : 4122R
BlueCrest AllBlue Fund Ltd
29 April 2009
?
29 April 2009
BlueCrest AllBlue Fund Limited
(the "Company")
Annual Financial Report for the year ended 31 December 2008
BlueCrest AllBlue Fund Limited (LSE: BABS, BABU, BABE) today, in accordance with
DTR 6.3.5, releases its annual results for the year ended 31 December 2008. The
Company is a self-managed closed-ended investment company incorporated in
Guernsey, focused on providing consistent long-term capital growth through an
investment policy of investing substantially all of its assets in AllBlue
Limited ("AllBlue") or any successor vehicle of AllBlue. The Shares of the
Company are admitted to the Official List and to trading on main market of the
London Stock Exchange.
Note: AllBlue Limited is a fund of hedge funds exempted company incorporated
with limited liability in the Cayman Islands as an open-ended investment
company.
Copies of the Annual Financial Report will be available from the Company's
website www.bluecrestallblue.co.uk on 30 April 2009.
For further information, please visit www.bluecrestallblue.co.uk or contact:
+------------------------------------+-----------------------------------+
| Anson Fund Managers Limited, | 01481 722260 |
| Secretary | |
+------------------------------------+-----------------------------------+
CHAIRMAN'S STATEMENT
Dear Shareholder,
The 2008 financial year saw significant progress by the Company in its second
full year of trading. Investment performance in exceptionally challenging
markets was in line with expectations notwithstanding very difficult trading
conditions, particularly in the fourth quarter of the year. In June 2008 the
Company completed the migration of its listing from the AIM Market of the London
Stock Exchange to the Official List and changed its name to BlueCrest AllBlue
Fund Limited. In July 2008, the Company raised GBP92.7 million following a
successful placing and offer for subscription of C shares. This was achieved
despite the challenging capital markets environment during the year.
Investment and Share Price Performance
During 2008, the published Sterling Share NAV rose from 111.84p to 124.89, a
return of 11.66% for the year, which is within the targeted range of 10% to 15%.
Within the underlying AllBlue fund into which the Company invests, five of the
six major strategies delivered positive returns for the year. This represents a
very strong performance relative to alternative asset management indices and to
broader asset classes in general:
2008
HFRI Fund Weighted Composite Index (19.0%)
MSCI World Index Gross Total Return (USD) (40.3%)
BarclaysCap Global Bond index 6.8%
Notwithstanding the appreciation in NAV, the market price of a Sterling Share
fell from 117p to 103.75p over the year. A combination of the global financial
crisis and weaker performance from a number of companies in our sector has
precipitated a decline in share prices across the sector which is now
characterised by trading levels at significant discounts to NAV. The average
discounts over the year for each of the Sterling, Euro and US Dollar Share
classes were 2.5%, 3.4% and 2.8%, respectively.
Taking advantage of the prevailing discount, the Company repurchased 450,000 of
its Sterling Shares during the year at a weighted average cost of 107.14 pence,
which represented a weighted average discount to the then-prevailing NAV of
13.4%.
Despite excellent underlying investment performance, the Company has triggered
its rolling 12 month discount floor provision for both the Euro class and US
Dollar class of shares, by reference to the final NAV as at 27 February 2009 and
31 March 2009, respectively.
This requires, in accordance with the Company's articles of incorporation, a
continuation vote to be proposed for these classes of shares by way of ordinary
resolutions. In the Board's opinion, it is likely that the Company's rolling 12
month discount floor provision will also be triggered for the Sterling class of
shares by reference to the final NAV as at 30 April 2009.
On the assumption that the Sterling class triggers the requirement for a
continuation vote within the anticipated time-frame, as referred to above, it is
proposed that the continuation votes for all three share classes will be held at
the same time. Accordingly, the Board intends to post a circular to Shareholders
once all three share classes have triggered a requirement for a continuation
vote. The circular will convene separate class meetings to be held at which the
requisite continuation resolutions will be proposed.
Impact of Changed Financial Environment
The significantly changed environment during the fourth quarter had relatively
little impact on the investment objectives, allocations, leverage and risk
management of AllBlue and the Underlying Funds.
Although AllBlue received approximately 30% net redemptions during the fourth
quarter, in line with the hedge fund industry as a whole, it was able to reduce
its investments in the Underlying Funds accordingly without any impact on the
desired allocations to underlying strategies. Where adjustments to capital
allocations did occur, the driver was typically to reduce exposure to areas
considered most at risk (e.g. emerging markets) whilst increasing allocations to
areas deemed most likely to deliver stronger returns (e.g. trend following
systematic trading). The report by Bluecrest as the manager of AllBlue on page
12 contains a more detailed review of the returns for the year from the
different underlying strategies.
Risk and Leverage
BlueCrest has advised the Company that its established risk management practices
and policies continued to be applied during the period and proved robust despite
the volatile environment. This helped to restrict the maximum drawdown (on a
weekly observed basis) during the period to approximately 1.5%.
Your Board is informed that the Underlying Funds to which AllBlue allocates
capital do not, in general, rely on explicit leverage to fund investment
positions, and as such were largely unaffected by the global deleveraging of the
fourth quarter and the associated decline in availability of leverage during the
year. BlueCrest's measure of implicit leverage in the Underlying Funds it
manages, the levels of unencumbered cash within those funds, remained within
targeted ranges and on a weighted basis across the Underlying Funds, ended the
year at approximately 56% of assets under management.
In the context of the financial difficulties facing the financial sector,
BlueCrest has advised the Company that it has taken a number of steps to control
counterparty exposure in the Underlying Funds. These exposures are
well-diversified, and tiered according to BlueCrest's perception of associated
counterparty risk. BlueCrest has also taken steps to ensure that counterparty
balances are, where and to the extent possible contained in segregated accounts
in order to minimise credit exposure.
The Board
During the year, the Board appointed Jonathan Hooley and Andrew Dodd as
non-executive directors. Mr Hooley was also appointed as Chairman of the Audit
Committee.
Outlook
The Company has enjoyed a positive start to 2009, and has been advised by
BlueCrest that the investment environment for trading-based strategies remains
attractive.
I look forward to reporting to you again in the Interim Report and Accounts for
the period ended 30 June 2009.
Richard Crowder
Chairman
Management Report
A description of important events which have occurred during the financial year,
their impact on the performance of the Company as shown in the financial
statements and a description of the principal risks and uncertainties facing the
Company, together with an indication of important events that have occurred
since the end of the financial year and the Company's likely future development
is given in the the Chairman's Statement on page 9 to 11, the Report of the
Directors on pages 27 to 35 and the notes to the financial statements on pages
48 to 64 and is incorporated here by reference.
There were no material related party transactions which took place in the
financial year, other than those disclosed at note 5 to the financial statement.
Responsibility Statement
The Board of Directors jointly and severally confirm that, to the best of their
knowledge:
(a) the financial statements, prepared in accordance with International
Financial Reporting
Standards, give a true and fair
view of the assets, liabilities, financial position and profit
or loss of the Company; and
(b) This Management Report includes or incorporates by reference a fair
review of the development
and performance of the business and
the position of the Company, together with a description
of the
principal risks and uncertainties that it faces.
Richard CrowderJonathan Hooley
DirectorDirector
STATEMENT OF OPERATIONS
For the year ended 31 December 2008
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| |Notes | | Sterling | | Euro | | US$ | | Total |
| | | | Share | | Share | | Share | | |
| | | | Class | | Class | | Class | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | GBP | | EUR | | $ | | GBP |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| Net gain on | 6 | | 23,992,457 | | 751,300 | | 1,610,492 | | 26,225,629 |
| financial assets at | | | | | | | | | |
| fair value through | | | | | | | | | |
| profit or loss | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| Operating expenses | 2 | | (1,186,262) | | (36,387) | | (75,274) | | (1,259,383) |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| Currency | | | - | | - | | - | | 2,955,097 |
| consolidation | | | | | | | | | |
| adjustment | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| Increase in net | | | 22,806,195 | | 714,913 | | 1,535,218 | | 27,921,343 |
| assets attributable | | | | | | | | | |
| to shareholders | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| | | | | | | | | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| Earnings per share | | | Pence | | Cent | | Cents | | |
| for the year | | | (GBP) | | (EUR) | | ($) | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
| - Basic and Diluted | 4 | | 13.79 | | 12.74 | | 12.60 | | |
+----------------------+-------+--+-------------+--+----------+--+-----------+--+-------------+
In arriving at the results for the financial year, all amounts above relate to
continuing operations.
There are no recognised gains or losses for the year other than those disclosed
above.
Reconciliation of basic and diluted earnings per share for investment purposes
to earnings per share per the financial statements:
+----------------------+-------+--+----------+--+---------+--+----------+--+----------+
| | | | Pence | | Cent | | Cents | | |
| | | | (GBP) | | (EUR) | | ($) | | |
+----------------------+-------+--+----------+--+---------+--+----------+--+----------+
| Earnings per share | | | 14.51 | | 13.39 | | 13.22 | | |
| for investment | | | | | | | | | |
| purposes | | | | | | | | | |
+----------------------+-------+--+----------+--+---------+--+----------+--+----------+
| Adjustment to | | | (0.72) | | (0.66) | | (0.62) | | |
| include expenses on | | | | | | | | | |
| an accruals basis | | | | | | | | | |
+----------------------+-------+--+----------+--+---------+--+----------+--+----------+
| Earnings per share | | | 13.79 | | 12.73 | | 12.60 | | |
| per the financial | | | | | | | | | |
| statements | | | | | | | | | |
+----------------------+-------+--+----------+--+---------+--+----------+--+----------+
BALANCE SHEET
as at 31 December 2008
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| |Notes | | Sterling | | Euro | | US$ Share | | Total |
| | | | Share | | Share | | Class | | |
| | | | Class | | Class | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | GBP | | EUR | | $ | | GBP |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| FIXED ASSETS | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Unquoted financial | 6 | | 256,625,844 | | 7,845,388 | | 25,226,771 | | 281,412,397 |
| assets designated as | | | | | | | | | |
| at fair value through | | | | | | | | | |
| profit or loss | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| CURRENT ASSETS | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Receivables | 7 | | 49,045 | | 205 | | 377 | | 7,295 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Cash at bank | | | 837,331 | | 13,610 | | 43,391 | | 880,075 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | 886,376 | | 13,815 | | 43,768 | | 887,370 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| LIABILITIES EXCLUDING | | | | | | | | | |
| NET ASSETS | | | | | | | | | |
| ATTRIBUTABLE TO | | | | | | | | | |
| SHAREHOLDERS | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Payables | 8 | | 135,215 | | 14,957 | | 53,831 | | 144,195 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | 135,215 | | 14,957 | | 53,831 | | 144,195 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| NET CURRENT ASSETS / | | | 751,161 | | (1,142) | | (10,063) | | 743,175 |
| (LIABILITIES) | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| TOTAL ASSETS LESS | | | 257,377,005 | | 7,844,246 | | 25,216,708 | | 282,155,572 |
| CURRENT LIABILITIES | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| NET ASSETS | | | 257,377,005 | | 7,844,246 | | 25,216,708 | | 282,155,572 |
| ATTRIBUTABLE TO | | | | | | | | | |
| SHAREHOLDERS | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Represented by: | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| CAPITAL AND RESERVES | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Share capital | 9 | | - | | - | | - | | - |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Share premium | 10 | | - | | - | | - | | - |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Purchase of own shares | 11 | | (483,079) | | - | | - | | (483,079) |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| Distributable reserves | 12 | | 257,860,084 | | 7,844,246 | | 25,216,708 | | 282,638,651 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | 257,377,005 | | 7,844,246 | | 25,216,708 | | 282,155,572 |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| SHARES IN ISSUE | | | 205,485,106 | | 6,500,194 | | 20,719,155 | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
| NAV PER SHARE | | | GBP1.2525 | | EUR1.2068 | | $1.2171 | | |
+------------------------+-------+--+-------------+--+-----------+--+------------+--+-------------+
Reconciliation of published NAV per share to NAV per share per the financial
statements:
+------------------------+----+----+-----------+---+----------+--+----------+--+----+
| | | | Sterling | | Euro (EUR) | | US$ ($) | | |
| | | | (GBP) | | | | | | |
+------------------------+----+----+-----------+---+----------+--+----------+--+----+
| Published NAV per | | | 1.2526 | | 1.2070 | | 1.2182 | | |
| share | | | | | | | | | |
+------------------------+----+----+-----------+---+----------+--+----------+--+----+
| Adjustment to include | | | (0.0001) | | (0.0002) | | (0.0011) | | |
| expenses on an | | | | | | | | | |
| accruals basis | | | | | | | | | |
+------------------------+----+----+-----------+---+----------+--+----------+--+----+
| NAV per share per the | | | 1.2525 | | 1.2068 | | 1.2171 | | |
| financial statements | | | | | | | | | |
+------------------------+----+----+-----------+---+----------+--+----------+--+----+
The published NAV per represents the NAV per share attributable to shareholders
in accordance with the Prospectus.
The financial statements were approved by the Board of Directors on 29 April
2009 and are signed on its behalf by:
Richard Crowder Jonathan Hooley
Director Director
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the financial year ended 31 December 2008
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Opening balance | | 150,920,222 | | 6,174,123 | | 10,738,553 | | 160,868,140 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Issue of shares | | 86,411,419 | | 1,930,000 | | 9,544,950 | | 94,797,140 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Share issue costs | | (864,114) | | (19,300) | | (95,450) | | (947,972) |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Increase in net assets | | 22,806,195 | | 714,913 | | 1,535,218 | | 24,966,246 |
| attributable to | | | | | | | | |
| shareholders excluding | | | | | | | | |
| currency consolidation | | | | | | | | |
| adjustment | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Currency consolidation | | - | | - | | - | | 2,955,097 |
| adjustment | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | 259,273,722 | | 8,799,736 | | 21,723,271 | | 282,638,651 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Purchases of own shares | | (483,079) | | - | | - | | (483,079) |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Share conversions | | (1,413,638) | | (955,490) | | 3,493,437 | | - |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Closing balance | | 257 377,005 | | 7,844,246 | | 25,216,708 | | 282,155,572 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the financial year ended 31 December 2007
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Opening balance | | 137,357,032 | | 5,706,673 | | 9,807,554 | | 146,208,645 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Issue of shares | | - | | - | | - | | - |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Share issue costs | | - | | - | | - | | - |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Increase in net assets | | 13,765,213 | | 467,450 | | 930,999 | | 14,588,653 |
| attributable to | | | | | | | | |
| shareholders excluding | | | | | | | | |
| currency consolidation | | | | | | | | |
| adjustment | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Currency consolidation | | - | | - | | - | | 272,865 |
| adjustment | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | 151,122,245 | | 6,174,123 | | 10,738,553 | | 161,070,163 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Purchases of own shares | | (202,023) | | - | | - | | (202,023) |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Closing balance | | 150,920,222 | | 6,174,123 | | 10,738,553 | | 160,868,140 |
+--------------------------+--+-------------+--+-----------+--+------------+--+-------------+
STATEMENT OF CASH FLOWS
for the year ended 31 December 2008
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Operating activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Increase in net assets | | 22,806,195 | | 714,913 | | 1,535,218 | | 24,966,246 |
| attributable to | | | | | | | | |
| shareholders | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Less: Unrealised | | (23,168,989) | | (546,576) | | (972,931) | | (24,769,564) |
| appreciation on | | | | | | | | |
| financial assets at | | | | | | | | |
| fair value through | | | | | | | | |
| profit or loss | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Less; Realised gains on | | (541,826) | | (196,756) | | (624,335) | | (1,157,743) |
| conversions | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Less: Interest income | | (60,900) | | (1,306) | | (2,309) | | (63,297) |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Add: Interest expense | | 11,573 | | 406 | | 758 | | 12,342 |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Less: (Decrease) / | | (52,790) | | 7,634 | | 39,727 | | (14,094) |
| Increase in accrued | | | | | | | | |
| expenses | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Add: (Increase) / | | (39,434) | | 169 | | 344 | | (39,250) |
| Decrease in prepayments | | | | | | | | |
| and accrued income | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Net cashflow from | | (1,046,171) | | (21,516) | | (23,528) | | (1,065,360) |
| operating activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Investing activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Interest received | | 60,900 | | 1,306 | | 2,309 | | 63,297 |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Purchase of financial | | (84,529,941) | | (1,919,166) | | (9,470,026) | | (92,853,963) |
| assets | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Proceeds from sale of | | 1,275,812 | | 41,711 | | 84,045 | | 1,373,278 |
| financial assets | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Net cashflow from | | (83,193,229) | | (1,876,149) | | (9,383,672) | | (91,417,388) |
| investing activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Financing activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Proceeds of issue of | | 86,411,419 | | 1,930,000 | | 9,544,950 | | 94,797,140 |
| shares | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Share issue costs | | (864,114) | | (19,300) | | (95,450) | | (947,972) |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Purchase of own shares | | (483,079) | | - | | - | | (483,079) |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Interest paid | | (11,573) | | (406) | | (758) | | (12,342) |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Net cashflow from | | 85,052,653 | | 1,910,294 | | 9,448,742 | | 93,353,747 |
| financing activities | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Cash at beginning of | | 24,078 | | 981 | | 1,849 | | 25,731 |
| period | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Currency consolidation | | - | | - | | - | | (16,655) |
| adjustment | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Increase in cash and | | 813,253 | | 12,629 | | 41,542 | | 870,999 |
| cash equivalents | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Cash at end of period | | 837,331 | | 13,610 | | 43,391 | | 880,075 |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
(a) Basis of preparation
The financial statements have been prepared in conformity with International
Financial Reporting Standards and applicable Guernsey law. The financial
statements have been prepared on an historical cost basis except for the
measurement at fair value of unquoted financial assets designated at fair value
through profit or loss.
The financial statements are presented in GBP because that is the currency of
the primary economic environment in which the Company operates.
The following Standards or Interpretations have been issued but not yet
effective for the year ended 31 December 2008:
IFRS 2 (revised 2008) Share-based Payment effective for annual periods beginning
on or after 1 January 2009.
IFRS 3 (revised 2008) Business Combinations effective for annual periods
beginning on or after 1 July 2009.
IFRS 8 Operating Segments effective for annual periods beginning on or after 1
January 2009.
IFRIC 13 Customer Loyalty Programmes effective for annual periods beginning on
or after 1 July 2008.
IFRIC 15 Agreements for the Construction of Real Estate, effective for annual
periods beginning on or after 1 January 2009.
IFRIC 16 Hedges of a Net Investment in Foreign Operation, effective for annual
periods beginning on or after 1 October 2009.
IAS 1 (revised 2007) Presentation of financial statements effective for annual
periods beginning on or after 1 January 2009.
IAS 23 (revised 2008) Borrowing Costs effective for annual periods on or after 1
January 2009.
IAS 27 (revised 2008) Consolidated and Separate Financial Statements effective
for annual periods beginning on or after 1 July 2009.
Amendments to IAS 32 and IAS 1 Puttable Financial Instruments effective for
annual periods beginning on or after 1 January 2009.
Amendments to IFRS 2 Vesting Conditions and Cancellations, effective for annual
periods beginning on or after 1 January 2009.
Amendments to IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate, effective for annual periods beginning on or
after 1 January 2009.
Amendments to IAS 39 and IFRS 7 Reclassification of Financial Assets effective
for annual periods beginning on or after 1 July 2008
Amendments to IFRS 7 Improving disclosures about Financial Instruments effective
for annual periods beginning on or after 1 October 2009
Amendments to IAS 39 Eligible hedged items effective for annual periods
beginning on or after 1 July 2009
IFRIC 17 Distribution of Non-cash Assets to owners effective for annual periods
beginning on or after 1 July 2009
IFRIC 18 Transfer of assets from customers effective for annual periods
beginning on or after 1 July 2009
Amendment to IFRIC 9 and IAS 39 Embedded derivatives effective for annual
periods beginning on or after 30 June 2009.
These Standards and Interpretations may require additional disclosure in future
financial statements.
The Company has early adopted the amendment made to IAS 28 through the 2008
Annual Improvements Project (applicable for accounting periods beginning on or
after 1 January 2009) in relation to disclosures for investments in associates
accounted for at fair value in accordance with IAS 39.
(b) Going concern
As described in note 9, should the average 12 month discount of the share price
of any class exceed 5% of net asset value per share, the Company is obliged to
offer a continuation vote to class shareholders. As at the balance sheet date,
none of the Company's three share classes had triggered the discount management
provisions. However, both the Euro and US Dollar share classes triggered the
provision after the balance sheet date and it is expected that the Sterling
Class will trigger in the near future.
There is a material uncertainty as to whether any or all classes of shareholder
would vote to discontinue their share class which may cast a significant doubt
about the likelihood of the Company to continue as a going concern.
Notwithstanding such uncertainty, the financial statements are prepared on a
going concern basis because on the basis of their present assessment the
expectations of the Directors are that the Company will continue for the
foreseeable future.
If it were expected that classes of shareholders would vote to discontinue
their share class, the financial statements would be prepared on a break up
basis. Subject to the matters referred to in note 14 (c), no adjustments would
be required to the carrying amounts of the investments or other net asset, but a
provision would be required for the costs of winding up the Company. The
directors estimate these costs would be immaterial relative to the NAV of the
Company.
(c) Taxation
The Company has been granted exemption under the Income Tax (Exempt Bodies)
(Guernsey) Ordinance, 1989 from Guernsey Income Tax, and is charged an annual
fee of GBP600.
(d) Expenses
All expenses are accounted for on an accruals basis.
(e) Interest income
Interest income is accounted for on an accruals basis.
(f) Share issue costs
The share issue costs incurred during the year in relation to the issue of C
shares amounted to GBP864,114 in the Sterling share class, EUR19,300 in the Euro
share class and $95,450 in the US Dollar share class.
Because the Company's ordinary shares have no fixed redemption date the costs
are recognised in the statement of changes in equity.
(g) Cash and Cash Equivalents
Cash and cash equivalents are defined as call deposits and, short term deposits
readily convertible to known amounts of cash and subject to insignificant risk
of changes in value, together with bank overdrafts. For the purposes of the
Statement of Cash Flows, cash and cash equivalents consist of cash and deposits
at bank, together with bank overdrafts.
(h) Investments
All investments are designated upon initial recognition as financial assets at
"fair value through profit or loss". Investments are initially recognised on the
date of purchase at cost, being the fair value of the consideration given,
excluding transaction costs associated with the investment, with unrealised
gains and losses on investments and impairment of investments recognised in the
Statement of Operations. Investments are derecognised on disposal.
Realised gains or losses are determined on the disposal of investments and
unrealised gains or losses are determined based on the change in value of
investments since the prior period.
In order to assess whether any impairment of the unquoted investments has
occurred and in order to determine the recoverable amount of the unquoted
investments, the Directors consider the net asset value of the underlying
investment in AllBlue Limited.
The Company's net asset value is based on valuations of unquoted investments. In
calculating the net asset value and the net asset value per Share, the
Administrator relies on net asset values of the shares in AllBlue Limited
supplied by the administrator of AllBlue Limited. Those net asset values are
based on the market value of the various investments held by AllBlue Limited.
(i) Foreign currency translation
The financial statements are presented in Sterling, which is the Company's
functional and presentation currency. Transactions in foreign currencies are
initially recorded at the functional currency rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are translated at the functional currency rate of exchange ruling at the balance
sheet date. All differences are taken to the Statement of Operations.
Income and expense items are translated at the average exchange rates for the
period. Exchange differences arising on currency consolidation due to
translation of foreign currency balances to presentation currency are taken to
the Statement of Operations.
(j)Segment information
In the opinion of the directors, the Company has only one business and
geographical segment, being investment in three share classes of a fund of hedge
funds incorporated in the Cayman Islands.
(k) Shares
Sterling, Euro and US Dollar shares have been reclassified as liabilities in
accordance with IAS 32 because the Company as a whole does not have the power to
determine the outcome of the continuation votes by share class under the
discount management provisions of the articles described in note 9. This
represents a change from prior accounting periods and has no effect on either
the individual share class profit or loss for the year or amount of net assets
attributable to shareholders. The Directors have been advised that this
treatment does not result in the shares being treated as a liability for the
purpose of applying the solvency test set out in Section 527 of the Companies
(Guernsey) Law, 2008.
2 OPERATING EXPENSES
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 1 Jan 2008 to 31 Dec 2008 |
+-------------------------+--+--------------------------------------------------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Shareholder liaison | | 687,655 | | 24,116 | | 45,062 | | 733,332 |
| agent's fee | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Administration fees | | 79,950 | | 2,804 | | 5,239 | | 85,261 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Directors' remuneration | | 141,950 | | 4,978 | | 9,302 | | 151,379 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Registration fees | | 22,187 | | 778 | | 1,454 | | 23,661 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Directors & Officers | | 13,899 | | 487 | | 911 | | 14,822 |
| insurance | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Broker fees | | 56,398 | | 1,978 | | 3,696 | | 60,144 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Audit fees | | 16,879 | | 592 | | 1,106 | | 18,000 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Annual fees | | 17,860 | | 626 | | 1,170 | | 19,046 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Legal & Professional | | 140,657 | | 4,933 | | 9,217 | | 150,000 |
| fees | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Nominated Advisor fees | | 8,205 | | 288 | | 538 | | 8,750 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Printing of annual | | (3,751) | | (132) | | (246) | | (4,001) |
| reports | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Printing of interim | | (1,500) | | (53) | | (98) | | (1,600) |
| reports | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Bank interest on | | 11,573 | | 406 | | 758 | | 12,342 |
| overdraft facility | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Bank facility fee and | | 51,853 | | 1,886 | | 3,524 | | 55,425 |
| charges | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| (Profit) / Loss on | | (1,567) | | (6,166) | | (4,372) | | (9,122) |
| exchange | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Other operating | | 4,914 | | 172 | | 322 | | 5,240 |
| expenses | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 1,247,162 | | 37,693 | | 77,853 | | 1,322,680 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Less: Bank interest | | (60,900) | | (1,306) | | (2,309) | | (63,297) |
| earned | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Total expenses for the | | 1,186,262 | | 36,387 | | 75,274 | | 1,259,383 |
| year | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
With effect from 1 August 2008, the Company dispensed with the services of the
Shareholder liaison agent. During the year under review, GBP733,332 (2007:
GBP997,774) of costs were incurred with this service provider.
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 1 Jan 2007 to 31 Dec 2007 |
+-------------------------+--+--------------------------------------------------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Shareholder liaison | | 935,625 | | 38,599 | | 71,892 | | 997,774 |
| agent's fee | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Administration fees | | 64,553 | | 2,663 | | 4,960 | | 68,841 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Directors' remuneration | | 48,761 | | 2,012 | | 3,747 | | 52,000 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Registration fees | | 16,094 | | 664 | | 1,237 | | 17,163 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Directors & Officers | | 15,131 | | 624 | | 1,163 | | 16,136 |
| insurance | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Broker fees | | 14,066 | | 580 | | 1,081 | | 15,000 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Audit fees | | 9,028 | | 372 | | 694 | | 9,628 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Annual fees | | 11,890 | | 491 | | 914 | | 12,680 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Legal & Professional | | 1,125 | | 46 | | 86 | | 1,199 |
| fees | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Nominated Advisor fees | | 15,717 | | 648 | | 1,208 | | 16,761 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Printing of annual | | 7,523 | | 310 | | 578 | | 8,022 |
| reports | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Printing of interim | | 4,464 | | 184 | | 343 | | 4,760 |
| reports | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Bank interest on | | 12,110 | | 500 | | 930 | | 12,914 |
| overdraft facility | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Bank facility fee and | | 14,632 | | 506 | | 935 | | 15,443 |
| charges | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| (Profit) / Loss on | | 1,220 | | 1,424 | | (2,755) | | 853 |
| exchange | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Other operating | | 3,869 | | 161 | | 297 | | 4,127 |
| expenses | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 1,175,808 | | 49,784 | | 87,310 | | 1,253,303 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Less: Bank interest | | (3,796) | | (132) | | (213) | | (3,993) |
| earned | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Total expenses for the | | 1,172,012 | | 49,654 | | 87,097 | | 1,249,310 |
| year | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
3 DIRECTORS' REMUNERATION
For the period from 1 January 2008 to 19 June 2008, each director received a fee
of GBP15,000 per annum from the Company, except for the Chairman who received
GBP20,000 for the period. From 19 June 2008, each director received a fee of
GBP35,000 per annum from the Company, except for the Chairman, who received
GBP50,000 per annum. The Chairman of the Audit Committee is also paid an
additional fee of GBP5,000 per annum (increased from GBP2,000 per annum on 19
June 2008). Upon migration to the LSE, each director also received additional
remuneration in the sum of GBP10,000 each. Mr Dodd waived his entitlement to a
fee.
The directors of the Company are considered key management personnel.
4 EARNINGS PER SHARE
The earnings per each class of share is based on the net gain for the year of
GBP22,806,195 (2007: GBP13,765,213) and 165,337,468 (2007: 135,194,714) shares
in the Sterling share class, EUR714,913 (2007: EUR467,450) and 5,612,979 (2007:
5,676,877) shares in the Euro share class and $1,535,218 (2007: $930,999) and
12,182,427 (2007: 9,632,602) shares in the US$ share class, each being the
weighted average number of shares in issue during the year.
5 RELATED PARTY TRANSACTIONS
Transactions with related parties are made on items equivalent to those that
prevail in an arm's length transaction.
Anson Fund Managers Limited is the Company's administrator and secretary, Anson
Registrars Limited is the Company's registrar, transfer agent and paying agent
and Anson Administration (UK) Limited is the Company's UK Transfer agent. John R
Le Prevost is a director and controller of Anson Fund Managers Limited, Anson
Registrars Limited and Anson Administration (UK) Limited. GBP108,922 (2007:
GBP86,004) of costs were incurred by the Company with these related parties in
the year, of which GBP25,379 (2007: GBP6,893) was due to these related parties
at 31 December 2008.
In accordance with IAS 28 the Company's investment transactions with AllBlue
Limited represent a holding in excess of 20%, therefore they are effectively
transactions with a related party. The totals of such transactions are shown in
Note 6.
6 INVESTMENTS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | As at 31 December 2008 |
+-------------------------+--+-------------------------------------------------------------+
| UNQUOTED FINANCIAL | | Sterling | | Euro | | US$ | | Total |
| ASSETS | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Portfolio cost brought | | 130,773,126 | | 5,492,777 | | 9,319,964 | | 139,505,585 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Unrealised appreciation | | 20,301,412 | | 687,314 | | 1,430,123 | | 21,527,068 |
| on valuation brought | | | | | | | | |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Valuation brought | | 151,074,538 | | 6,180,091 | | 10,750,087 | | 161,032,653 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Movements in the | | | | | | | | |
| period: | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Gross share conversions | | (1,413,638) | | (955,490) | | 3,493,437 | | - |
| in the year | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Adjustment for realised | | 541,826 | | 196,756 | | 624,335 | | 1,157,743 |
| gains on share | | | | | | | | |
| conversions | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Purchases at cost | | 84,529,941 | | 1,919,166 | | 9,470,026 | | 92,853,963 |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Sales | | (1,275,812) | | (41,711) | | (84,045) | | (1,373,278) |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Exchange gains on | | - | | - | | - | | 2,971,752 |
| currency balances | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Portfolio cost carried | | 213,155,443 | | 6,611,498 | | 22,823,717 | | 235,115,765 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Unrealised appreciation | | 43,470,401 | | 1,233,890 | | 2,403,054 | | 46,296,632 |
| on valuation carried | | | | | | | | |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Valuation carried | | 256,625,844 | | 7,845,388 | | 25,226,771 | | 281,412,397 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Realised gains on sales | | 823,468 | | 204,724 | | 637,561 | | 1,456,065 |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Increase in unrealised | | 23,168,989 | | 546,576 | | 972,931 | | 24,769,564 |
| appreciation | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Gains on investments | | 23,992,457 | | 751,300 | | 1,610,492 | | 26,225,629 |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | As at 31 December 2007 |
+-------------------------+--+-------------------------------------------------------------+
| UNQUOTED FINANCIAL | | Sterling | | Euro | | US$ | | Total |
| ASSETS | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Portfolio cost brought | | 132,291,000 | | 5,551,000 | | 9,419,000 | | 140,839,371 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Unrealised appreciation | | 5,461,831 | | 172,515 | | 417,851 | | 5,791,376 |
| on valuation brought | | | | | | | | |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Valuation brought | | 137,752,831 | | 5,723,515 | | 9,836,851 | | 146,630,747 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Movements in the | | | | | | | | |
| period: | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Adjustment to opening | | - | | - | | - | | - |
| valuation for share | | | | | | | | |
| conversions | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Purchase at cost | | - | | - | | - | | - |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Sales | | (1,517,874) | | (58,223) | | (99,036) | | (1,610,560) |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Exchange gains on | | - | | - | | - | | 276,774 |
| currency balances | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Portfolio cost carried | | 130,773,126 | | 5,492,777 | | 9,319,964 | | 139,505,585 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Unrealised appreciation | | 20,301,412 | | 687,314 | | 1,430,123 | | 21,527,068 |
| on valuation carried | | | | | | | | |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Valuation carried | | 151,074,538 | | 6,180,091 | | 10,750,087 | | 161,032,653 |
| forward | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Realised gains on sales | | 97,644 | | 2,303 | | 5,824 | | 102,271 |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Increase in unrealised | | 14,839,581 | | 514,799 | | 1,012,272 | | 15,735,692 |
| appreciation | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Gains on investments | | 14,937,225 | | 517,102 | | 1,018,096 | | 15,837,963 |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
7 RECEIVABLES
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | 31 December 2008 |
+--------------------+--+---------------------------------------------------------------------+
| | | Sterling | | Euro | | US$ | | Elimina-tion | | Total |
| | | Share | | Share | | Share | | | | |
| | | Class | | Class | | Class | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | GBP | | EUR | | $ | | GBP | | GBP |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| Prepayments | | 6,841 | | 205 | | 377 | | - | | 7,295 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| Inter class loan | | 42,204 | | - | | - | | (42,204) | | - |
| accounts | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | 49,045 | | 205 | | 377 | | (42,204) | | 7,295 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | 31 December 2007 | | |
+--------------------+--+---------------------------------------------------------+--+--------+
| | | Sterling | | Euro | | US$ | | Elimina-tion | | Total |
| | | Share | | Share | | Share | | | | |
| | | Class | | Class | | Class | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | GBP | | EUR | | $ | | GBP | | GBP |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| Prepayments | | 9,611 | | 374 | | 721 | | - | | 10,249 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| Inter class loan | | - | | - | | - | | - | | - |
| accounts | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
| | | 9.611 | | 374 | | 721 | | - | | 10,249 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+--------+
8 PAYABLES
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| | | 31 December 2008 |
+--------------------+--+----------------------------------------------------------------------+
| | | Sterling | | Euro | | US$ | | Elimina-tion | | Total |
| | | Share | | Share | | Share | | | | |
| | | Class | | Class | | Class | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| | | GBP | | EUR | | $ | | GBP | | GBP |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued | | - | | - | | - | | - | | - |
| shareholder | | | | | | | | | | |
| liaison agent's | | | | | | | | | | |
| fee | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued | | 20,811 | | 623 | | 1,148 | | - | | 22,193 |
| administration | | | | | | | | | | |
| fees | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued | | 2.988 | | 89 | | 165 | | - | | 3,186 |
| registration fees | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued broker | | 36,211 | | 1,084 | | 1,997 | | - | | 38,616 |
| fees | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued bank | | 51,574 | | 1,545 | | 2,845 | | - | | 55,000 |
| facility fee | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued audit fees | | 16,879 | | 506 | | 931 | | - | | 18,000 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Accrued printing | | 4,689 | | 140 | | 259 | | - | | 5,000 |
| costs | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Inter class loan | | - | | 10,908 | | 46,372 | | (42,204) | | - |
| accounts | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| Other sundry | | 2,063 | | 62 | | 114 | | - | | 2,200 |
| accruals | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| | | | | | | | | | | |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
| | | 135,215 | | 14,957 | | 53,831 | | (42,204) | | 144,195 |
+--------------------+--+-----------+--+----------+--+----------+--+--------------+--+---------+
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 31 December 2007 |
+-------------------------+--+--------------------------------------------------------+
| | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued shareholder | | 164,100 | | 6,392 | | 12,310 | | 175,000 |
| liaison agent's fee | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued administration | | 5,415 | | 211 | | 406 | | 5,775 |
| fees | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued registration | | 1,048 | | 41 | | 79 | | 1,118 |
| fees | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued broker fees | | - | | - | | - | | - |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued bank facility | | - | | - | | - | | - |
| fee | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued audit fees | | 7,502 | | 292 | | 563 | | 8,000 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Accrued printing costs | | 9,940 | | 387 | | 746 | | 10,600 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Inter class loan | | - | | - | | - | | - |
| accounts | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Other sundry accruals | | - | | - | | - | | - |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | 188,005 | | 7,323 | | 14,104 | | 200,493 |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
9 SHARE CAPITAL
Authorised Share Capital
An unlimited number of Unclassified shares of no par value each.
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Issued Share Capital | | Sterling | | Euro | | US$ | | Total |
| | | Share | | Share | | Share | | |
| | | Class | | Class | | Class | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Number of shares in | | 205,485,106 | | 6,500,194 | | 20,719,155 | | 232,704,455 |
| issue at 31 December | | | | | | | | |
| 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| The movement in shares took place as follows: |
| |
+---------------------------------------------------------------------------------------------+
| Date of movement | | Number | | Number | | Number | | |
| | | of | | of Euro | | of US$ | | |
| | | Sterling | | Shares | | Shares | | |
| | | Shares | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Issue 21 April 2006 | | 2 | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Issue 25 May 2006 | | 135,283,597 | | 5,676,877 | | 9,632,602 | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| As at 31 December 2007 | | 135,283,597 | | 5,676,877 | | 9,632,602 | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Conversion 1 April 2008 | | 2,323,063 | | (1,064,142) | | (2,999,848) | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Cancellation 19 May | | (198,000) | | - | | - | | |
| 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Conversion 1 July 2008 | | (9,400) | | - | | 19,068 | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Conversion of C shares | | 71,997,994 | | 1,663,467 | | 8,086,481 | | |
| 4 September 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Conversion 1 October | | (3,462,150) | | 223,992 | | 5,980,852 | | |
| 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of treasury | | (100,000) | | - | | - | | |
| shares 26 November 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of treasury | | (100,000) | | - | | - | | |
| shares 16 December 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of treasury | | (150,000) | | - | | - | | |
| shares 19 December 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of treasury | | (100,000) | | - | | - | | |
| shares 31 December 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | 205,485,106 | | 6,500,194 | | 20,719,155 | | |
+-------------------------+--+-------------+--+-------------+--+-------------+--+-------------+
As detailed in Note 11, the following Sterling shares were purchased by the
Company during the year:
+------------------+--+------------+--+----------+--+----------+--+------------+
| Date | | Number of | | Amount | | | | |
| | | shares | | GBP | | | | |
+------------------+--+------------+--+----------+--+----------+--+------------+
| 26 November 2008 | | 100,000 | | 108,592 | | | | |
+------------------+--+------------+--+----------+--+----------+--+------------+
| 16 December 2008 | | 100,000 | | 111,222 | | | | |
+------------------+--+------------+--+----------+--+----------+--+------------+
| 19 December 2008 | | 150,000 | | 160,069 | | | | |
+------------------+--+------------+--+----------+--+----------+--+------------+
| 31 December 2008 | | 100,000 | | 103,196 | | | | |
+------------------+--+------------+--+----------+--+----------+--+------------+
On 4 August 2008, the Company issued the following no par value C shares (of
which an unlimited number were authorised): 86,411,419 Sterling shares,
1,930,000 Euro shares and 9,544,950 US Dollar shares. All of the C shares issued
were fully paid These shares were issued under terms that stated that the
Company could, at its discretion, redeem all or any of the C shares by agreement
with the holders and at a price agreed between the Company and the C
shareholders. The C shares were converted to Ordinary shares on 4 September 2008
as shown on the previous page. A conversion ratio was applied based on the
relevant Net Asset Values of each share class on that date. The new Ordinary
Shares ranked pari passu with the Ordinary Shares then in issue.
In the event of a return of capital on a winding-up or otherwise, shareholders
are entitled to participate in the distribution of capital after paying all the
debts and satisfying all the liabilities attributable to the relevant share
class.
The holders of shares of the relevant share class shall be entitled to receive
by way of capital any surplus assets of the share class in proportion to their
holdings. In the event that the share class has insufficient funds or assets to
meet all the debt and liabilities attributable to that share class, any such
shortfall shall be paid out of funds or assets attributable to the other share
classes in proportion to the respective net assets of the relevant share classes
as at the date of winding-up.
The Company's Articles incorporate a discount management provision (which
applies to each class of Ordinary Shares individually) that will require a
continuation vote to be proposed in respect of the particular class of Ordinary
Shares at a class meeting of the relevant Shareholders (by way of ordinary
resolution) if, over the previous 12 month rolling period commencing from 1
January 2008, the relevant class of Ordinary Shares has traded, on average
(calculated by averaging the closing mid-market share price on the dates which
are 5 Business Days after the date on which each estimated Published NAV
announcement is made for each NAV Calculation date over the period) at a
discount in excess of 5 per cent to the average Net Asset Value per Ordinary
Share of that class (calculated by averaging the NAV per Ordinary Share of that
class as at the NAV Calculation Date at the end of each month during the
period).
In the event that a vote to continue is proposed and passed for any class of
Ordinary Shares as a result of the operation of such mechanism, no further
continuation vote will be capable of being proposed for that class for a further
12 months.
If such continuation vote is not passed, the Directors will be required to
formulate redemption proposals to be put to the Shareholders of that class
offering to redeem their Ordinary Shares at the relevant Published Net Asset
Value on the NAV Calculation Date immediately preceding such redemption (less
the costs of all such redemptions). However, where one or more such resolutions
in respect of the same period is/are not passed and the class(es) of Ordinary
Shares involved represent 75 per cent, or more of the Company's net assets
attributable to all Ordinary Shares at the last NAV Calculation Date on or
immediately preceding the date of the latest continuation resolution being
defeated, the Directors may first (at their discretion) put forward alternative
proposals to all Shareholders to offer to repurchase their Shares or to
reorganise, reconstruct or wind up the Company. If, however, such alternative
proposals are not passed by the necessary majority of shareholders of the
relevant class, the Directors must proceed to offer to redeem the relevant
class(es) of Ordinary Shares on the terms described above.
Where following redemption of any class of Ordinary Shares under the discount
management provision, the number of Ordinary Shares of that class remaining in
issue represent less than 25 per cent, of the Ordinary Shares of that class in
issue immediately before such redemption or the listing for such class of
Ordinary Shares on the Official List is withdrawn or threatened to be withdrawn
or the Directors determine that the conditions for the continued listing of that
class are not (or they believe will not be) met, then the Company may redeem the
remaining issued Ordinary Shares of that class within 3 months of such
determination at a redemption price equal to the Net Asset Value of Ordinary
Shares of that class on the NAV Calculation Date selected by the Directors for
such purpose (less the costs of such redemption).
10 SHARE PREMIUM
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | Sterling | | Euro | | US | | Total |
| | | Share | | Share | | Dollar | | |
| | | Class | | Class | | Share | | |
| | | | | | | Class | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Share premium as at 1 | | - | | - | | - | | - |
| January 2008 | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Share premium on shares | | 86,411,419 | | 1,921,975 | | 9,525,995 | | 94,776,479 |
| issued | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Less: Share issue costs | | (864,114) | | (11,275) | | (76,495) | | (927,311) |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Transfer to retained | | (85,547,305) | | (1,910,700) | | (9,449,500) | | (93,849,168) |
| earnings | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
| Balance as at 31 | | - | | - | | - | | - |
| December 2008 | | | | | | | | |
+-------------------------+--+--------------+--+-------------+--+-------------+--+--------------+
There was no share premium or movement in the share premium account in the
previous year.
The Company has passed a shareholder resolution to cancel the amount standing to
the credit of its share premium account (less any formation expenses set off
against the share premium account). The Directors obtained from the Court in
Guernsey an order confirming such cancellation of the share premium account in
accordance with the Companies Laws. The reserve created is available as
distributable profits to be used for all purposes permitted by the Companies
Laws, including the buy back of shares and the payment of dividends.
11 PURCHASE OF OWN SHARES
31 Dec 2008
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | Sterling | | Euro | | US | | Total |
| | | Share | | Share | | Dollar | | |
| | | Class | | Class | | Share | | |
| | | | | | | Class | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Balance as at 1 January | | 202,023 | | - | | - | | 202,023 |
| 2008 | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Cancelled during the | | (202,023) | | - | | - | | (202,023) |
| year | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Acquired during the | | 483,079 | | - | | - | | 483,079 |
| year | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Balance as at 31 | | 483,079 | | - | | - | | 483,079 |
| December 2008 | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
31 Dec 2007
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | Sterling | | Euro | | US | | Total |
| | | Share | | Share | | Dollar | | |
| | | Class | | Class | | Share | | |
| | | | | | | Class | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Balance as at 1 January | | - | | - | | - | | - |
| 2007 | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Acquired during the | | 202,023 | | - | | - | | 202,023 |
| year | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
| Balance as at 31 | | 202,023 | | - | | - | | 202,023 |
| December 2007 | | | | | | | | |
+-------------------------+--+------------+--+----------+--+----------+--+------------+
The treasury shares reserve represents 450,000 Sterling Shares purchased in the
market at various prices per share ranging from GBP1.03 to GBP1.11 and held by
the Company for cancellation. The brought forward balance of 198,000 Sterling
Shares were cancelled on 19 May 2008.
12 DISTRIBUTABLE RESERVES
31 Dec 2008
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | Sterling | | Euro | | US | | Total |
| | | Share | | Share | | Dollar | | |
| | | Class | | Class | | Share | | |
| | | | | | | Class | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Balance as at 1 January | | 151,122,245 | | 6,174,123 | | 10,738,553 | | 161,070,163 |
| 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Transfer from share | | 85,547,305 | | 1,910,700 | | 9,449,500 | | 93,849,168 |
| premium | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Net gain for the year | | 22,806,195 | | 714,913 | | 1,535,218 | | 24,966,246 |
| attributable to | | | | | | | | |
| shareholders | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Cancellation of | | (202,023) | | - | | - | | (202,023) |
| treasury shares | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Share conversions | | (1,413,638) | | (955,490) | | 3,493,437 | | - |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Currency consolidation | | - | | - | | - | | 2,955,097 |
| adjustment | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Balance as at 31 | | 257,860,084 | | 7,844,246 | | 25,216,708 | | 282,638,651 |
| December 2008 | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
31 Dec 2007
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | Sterling | | Euro | | US | | Total |
| | | Share | | Share | | Dollar | | |
| | | Class | | Class | | Share | | |
| | | | | | | Class | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | GBP | | EUR | | $ | | GBP |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Balance as at 1 January | | 137,357,032 | | 5,706,673 | | 9,807,554 | | 146,208,645 |
| 2007 | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Net gain for the year | | 13,765,213 | | 467,450 | | 930,999 | | 14,588,653 |
| attributable to | | | | | | | | |
| shareholders | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Currency consolidation | | - | | - | | - | | 272,865 |
| adjustment | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
| Balance as at 31 | | 151,122,245 | | 6,174,123 | | 10,738,553 | | 161,070,163 |
| December 2007 | | | | | | | | |
+-------------------------+--+-------------+--+-----------+--+------------+--+-------------+
13 FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Company's
operations; and
(b) Shares held in AllBlue Limited.
14 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company's financial instruments concerns its
shares in AllBlue Limited and the risks attaching to those shares which are
market price risk, credit risk, liquidity risk and interest rate risk as
explained below.
So far as the Company is concerned the only risk the Board can monitor and
control is the liquidity risk attaching to its ability to realise shares in
AllBlue Limited for the purpose of meeting ongoing expenses of the Company.
Thereafter the Board recognises that the Company has via its holding of shares
in AllBlue Limited an indirect exposure to the risks summarised below though it
must be noted that there is little or nothing which the Board can do to manage
each of these risks within AllBlue Limited ("AllBlue") or the underlying funds
in which AllBlue invests (the "underlying fund(s)").
(a) Price Risk
The success of AllBlue's and the underlying funds' and, therefore, the Company's
activities will be affected by general economic and market conditions, such as
interest rates, availability of credit, inflation rates, economic uncertainty,
changes in laws, trade barriers, currency exchange controls and national and
international political circumstances. These factors may affect the level and
volatility of securities' prices and the liquidity of the underlying funds'
investments. Volatility or illiquidity could impair the underlying funds'
profitability or result in losses.
Details of the Company's Investment Objectives and Policy are given on page 1.
Price sensitivity
The Company invests substantially all its assets in AllBlue and does not
undertake any significant borrowing or hedging activity at the Company level.
Its performance is therefore directly linked to the net asset value of AllBlue,
which itself is driven by the net asset values of the underlying funds, each of
which hold a large number of positions in listed and unlisted securities.
At 31 December 2008, if the net asset value of AllBlue had been 10% higher with
all other variables held constant, the net gain attributable to shareholders for
the year would have been GBP28,141,240 (2007: GBP16,103,265) greater, arising
due to the increase in the fair value of financial assets at fair value through
profit or loss.
If the net asset value of AllBlue had been 10% lower with all other variables
held constant, the net gain attributable to shareholders for the year would have
been GBP28,141,240 (2007: GBP16,103,265) lower, arising due to the decrease in
the fair value of financial assets at fair value through profit or loss.
The sensitivity is higher in 2008 than in 2007 because of an increase in the net
financial assets and liabilities at fair value through profit or loss at the
balance sheet date.
(b) Credit Risk
The nature of commercial arrangements made in the normal course of business
between many prime brokers and custodians means that in the case of any one
prime broker or custodian defaulting on its obligations to AllBlue or any of the
underlying funds, the effects of such a default may have negative effects on
other prime brokers with whom AllBlue or such underlying fund deals. The
underlying funds and, by extension, AllBlue and the Company may, therefore be
exposed to systemic risk when AllBlue or an underlying fund deals with prime
brokers and custodians whose creditworthiness may be interlinked.
The assets of AllBlue and the underlying funds may be pledged as margin with
prime brokers or other counterparties or held with prime brokers or banks. In
the event of the default of any of these prime brokers, banks or counterparties,
AllBlue or the underlying funds may not receive back all or any of the assets
pledged or held with the defaulting party.
The maximum credit risk to which the Company was exposed at the year end was
GBP281,412,397 (2007: GBP161,032,653).
The main concentration of risk for the Company relates to the investments in
AllBlue, as these are the only investments the Company has.
(c) Liquidity Risk
In some circumstances, investments may be relatively illiquid making it
difficult to acquire or dispose of them at the prices quoted on the various
exchanges. Accordingly, an underlying fund's ability to respond to market
movements may be impaired and, consequently, the underlying fund may experience
adverse price movements upon liquidation of its investments which may in turn
affect the value of AllBlue and hence the Company's investment in AllBlue.
Settlement of transactions may be subject to delay and administrative
formalities.
There can be no assurance that the liquidity of the investments of AllBlue and
the underlying funds will always be sufficient to meet redemption requests as,
and when, made. Any such lack of liquidity may affect the ability of the Company
to realise its shares in AllBlue and the value of Shares in the Company. For
such reasons AllBlue's treatment of redemption requests may be deferred in
exceptional circumstances including if a lack of liquidity may result in
difficulties in determining the net asset value and the net asset value per
share in AllBlue. This in turn would limit the ability of the Directors to
realise the Company's investments in AllBlue should they consider it appropriate
to do so and may result in difficulties in determining the net asset value of a
Share in the Company.
The market prices, if any, for such illiquid investments tend to be volatile and
may not be readily ascertainable and the relevant underlying fund may not be
able to sell them when it desires to do so or to realise what it perceives to be
their fair value in the event of a sale. The size of the underlying funds'
positions may magnify the effect if a decrease in market liquidity for such
instruments. Changes in overall market leverage, deleveraging as a consequence
of a decision by the counterparties with which the underlying funds enter into
repurchase/reverse repurchase agreements or derivative transactions, to reduce
the level of leveraging, or the liquidation by other market participants of the
same or similar positions, may also adversely affect the underlying funds'
portfolios.
The sale of restricted and illiquid securities often requires more time and
results in higher brokerage charges or dealer discounts and other selling
expenses than does the sale of securities eligible for trading on national
securities exchanges or in the over-the-counter markets. The underlying funds
may not be able readily to dispose of such illiquid investments and, in some
cases, may be contractually prohibited from disposing of such investments for a
specified period of time. Restricted securities may sell at a price lower than
similar securities that are not subject to restrictions on resale.
The Company's shares in issue are traded on the London Stock Exchange ("LSE").
However, in certain circumstances there may be a limited market for the shares
and it may not be possible for investors to achieve liquidation of their holding
within a short time period or for the investor to realise the full anticipated
value of the shares.
The Company has the use of an overdraft facility in order to settle share
redemptions at times when no cash funds are available.
(d) Interest Rate Risk
The prices of securities tend to be sensitive to interest rate fluctuations.
Unexpected fluctuations in interest rates could cause the corresponding prices
of long positions and short positions adopted to move in directions which were
not originally anticipated. In addition, interest rate increases generally
increase the interest or carrying costs of investments.
The Company's own cash balances are not materially exposed to interest rate risk
as cash and cash equivalents are held on floating interest rate deposits with
banks and the Company does not rely on income from bank interest to meet day to
day expenses.
(e) Leverage by Underlying Funds
Certain underlying funds in which the Company may have an economic interest
operate with a substantial degree of leverage and are not limited in the extent
to which they either may borrow or engage in margin transactions. The positions
maintained by such underlying funds may in aggregate value be in excess of the
net asset value of AllBlue. This leverage presents the potential for a higher
rate of total return but will also increase the volatility of AllBlue and, as a
consequence, the Company, including the risk of a total loss of the amount
invested.
(f) Capital management
The investment objective of the Company is to provide shareholders with
consistent long-term capital growth through an investment policy of investing
substantially all of its assets in AllBlue Limited ("AllBlue") or any successor
vehicle to AllBlue.
As the Company's Ordinary Shares are traded on the LSE, the Ordinary Shares may
trade at a discount to their Net Asset Value per Share. However, in structuring
the Company, the Directors have given detailed consideration to the discount
risk and how this may be managed.
At the last annual general meeting, the Directors were granted authority to buy
back up to 14.99 per cent of the Ordinary Shares in issue. The Company's
authority to make purchases of its own issued Ordinary Shares will expire at the
conclusion of the next general meeting of the Company. A renewal of such
authority to make purchases of Ordinary Shares will be sought at the next
Shareholder meeting of the Company. The timing of any purchases will be decided
by the Board.
The Directors intend that purchases will only be made pursuant to this authority
through the market, for cash, at prices below the prevailing Net Asset Value per
Share where the Directors reasonably believe such purchases will result in an
increase in the Net Asset Value per Share of the remaining Ordinary Shares.
Following approval of the Court in Guernsey, the Company resolved to cancel the
amount standing to the credit of its share premium account following Admission.
The amount released on cancellation has been credited as a distributable reserve
in the books of account and may be used by the Company for the purpose of
funding purchases of its Ordinary Shares as described above and the payment of
dividends.
The Company's authorised share capital is such that further issues of new
Ordinary Shares could be made. Subject to prevailing market conditions, the
Board may decide to make one or more further such issues or reissues of Ordinary
Shares for cash from time to time. Any further issues of new Ordinary Shares or
reissues of Ordinary Shares held in treasury will rank pari passu with Ordinary
Shares in issue.
There are no provisions of the Companies Laws which confer rights of pre-emption
in respect of the allotment of Shares. There are, however, pre-emption rights
contained in the Articles, but the Directors have been granted the power to
issue further Shares on a non-pre-emptive basis until the time of the
Company's annual general meeting in 2009 by a special resolution of Shareholders
dated 30 May 2008. The Directors intend to request that the authority to allot
Shares on a non-pre-emptive basis is renewed at each subsequent annual general
meeting of the Company
Unless authorised by Shareholders, the Company will not issue further Ordinary
Shares or reissue Ordinary Shares out of treasury for cash at a price below the
prevailing Net Asset Value per Share unless they are first offered pro rata to
existing Shareholders.
The Company monitors capital on the basis of the carrying amount of equity as
presented on the face of the balance sheet. Capital for the reporting period
under review is summarised as follows:
+-----------------------+--+-------------+--+---+-------------+--+------------+
| | | 2008 | | | 2007 | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| | | GBP | | | GBP | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| | | | | | | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| Purchase of own | | (483,079) | | | (202,023) | | |
| shares | | | | | | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| Retained earnings | | 282,638,651 | | | 161,070,163 | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| | | | | | | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
| Total | | 282,155,572 | | | 160,868,140 | | |
+-----------------------+--+-------------+--+---+-------------+--+------------+
E&OE - in transmission
This information is provided by RNS
The company news service from the London Stock Exchange
END
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