Standard Bank International Funds Limited. (formerly Melville Douglas Multi Manager Funds Limited)

Transcription

1 Standard Bank International Funds Limited (formerly Melville Douglas Multi Manager Funds Limited) Annual Report and Audited Financial Statements Year ended

2 Standard Bank International Funds Limited (formerly Melville Douglas Multi Manager Funds Limited) Contents Annual Report and Audited Financial Statements For the year ended Page Administration 2 Report of the Directors 3 Report of the Custodian 5 Investment Manager s Report 6 Independent Auditors Report 9 Statements of Comprehensive Income 11 Statements of Changes in Equity 13 Statements of Financial Position 14 Notes to the Financial Statements 16 Fund Statistics 36 Portfolio Statements 38

3 Administration Directors Graham Baillie Michael Farrow Helen Holmes Oliver Sonnbichler Registered Office Standard Bank House La Motte Street St. Helier Jersey JE2 4SZ Channel Islands Manager and Secretary STANLIB Fund Managers Jersey Limited Standard Bank House La Motte Street St. Helier Jersey JE2 4SZ Channel Islands Investment Manager Standard Bank International Investments Limited Standard Bank House La Motte Street St. Helier Jersey JE2 4SZ Channel Islands Sub-Custodian and Banker The Bank of New York Mellon SA/NV London Branch The Bank of New York Mellon Centre 160 Queen Victoria Street London EC4V 4LA United Kingdom Administrator to the Manager BNY Mellon Fund Services (Ireland) Limited Guild House, Guild Street International Financial Services Centre Dublin 1 Ireland Independent Auditors PricewaterhouseCoopers One Spencer Dock North Wall Quay Dublin 1 Ireland Legal Adviser Ogier Ogier House The Esplanade St. Helier Jersey JE4 9WG Channel Islands Custodian Capita Trust Company (Jersey) Limited 12 Castle Street St. Helier Jersey JE2 3RT Channel Islands Melville Douglas is a registered business name of Standard Bank International Investments Limited. Standard Bank International Investments Limited, Standard Bank Jersey Limited and STANLIB Fund Managers Jersey Limited are regulated by the Jersey Financial Services Commission. SFMJ04/ / 2

4 Report of the Directors The directors submit their audited annual report and financial statements for the year ended. Incorporation Standard Bank International Funds Limited (formerly Melville Douglas Multi Manager Funds Limited) (the Company or Fund ) is an Umbrella Fund and an open-ended investment Company incorporated in Jersey on with limited liability under the Law. Participating shares may be issued and redeemed at prices based upon each Class s underlying net asset value. Structure The Company offers investors a choice of classes (each such class being referred to as a Class Fund ) and the opportunity to switch from one Class Fund to another. At present there are six Class Funds available, see Objective and investment policy section for more details. The assets, liabilities, income and expenses attributable to each class of participating share are applied to the Class Fund established for that class. If they are not attributable to any particular class of participating shares, they are allocated between all the Class Funds in such manner as the directors deem to be equitable. The Company is a single legal entity. As a result, although the assets, income, earnings, liabilities and expenses attributable to each Class Fund will be segregated and kept separate from those attributable to other Class Funds, in the event of the Company not being able to meet the liabilities attributable to any particular Class Fund out of the assets of such Class Fund, the excess liabilities may be met out of the assets attributable to other Class Funds. Objective and investment policy The objective of the Company is to provide investors with a worldwide range of investment opportunities, which are professionally managed, with the aim of achieving long-term growth through capital gains and accumulation of income. The Company offers investors a choice of classes of Participating Shares each such class being designated by reference to a separate investment portfolio referred to as a Class Fund. There are currently six Class Funds within the Company. The Multi Manager Global Equity Class Funds & (formerly the Global Equity Class Funds & ) are fund of funds which only invest in collective investment funds and are designed to provide long term capital appreciation through investment solely in equity oriented funds with a bias towards the domestic markets of the base currency of each Class Fund. The Investment Manager will look to maintain a fully invested equity strategy at all times. These aggressive portfolios are suited to investors seeking the longer-term reward of equity investment and are prepared to accept the higher level of volatility normally associated with this type of investment. The Multi Manager Global Balanced Class Funds & (formerly the Global Balanced Class Funds & ) are fund of funds which only invest in other collective investment funds and are designed to provide long term capital appreciation through investment in a broad range of funds covering primarily equity and fixed income asset classes and cash. These aggressive portfolios are suited to investors seeking the longer term reward of equity investment and are prepared to accept the higher level of volatility normally associated with this type of investment. The Multi Manager Absolute Return Class Funds & (formerly Absolute Return Class Funds & ) are primarily fund of funds which invest in collective investment funds but may also make some direct investments as described below. They are designed to provide long term capital growth through investing in a diversified portfolio of alternative investments. The principal investment policy of each class will be to invest in a diversified blend of single manager funds, structured products, alternative fixed-income funds, quoted investment trusts, investible indices, exchange tradable securities, forward foreign exchange contracts and cash positions (together the Permitted Investments). Each Class Fund may enter into derivatives for the purpose of efficient portfolio management. Results and dividends The results for the year are set out in the Statements of Comprehensive Income on pages 11 and 12. The Company s present policy is to accumulate income and as such the Company has not declared or paid a dividend in respect of the year from 1 October to. / 3

5 Report of the Directors (continued) Directors The directors of the Company during the year ended and subsequently to the date of this report are set out on page 2. No director has a service contract with the Company or holds any interest in the capital of the Company. All Directors are non-executive. Graham Baillie and Helen Holmes are Directors of the Investment Manager, Standard Bank International Investments Limited. Oliver Sonnbichler is an employee of the Investment Manager. Michael Farrow is an independent Non - Executive Director. Statement of Director s Responsibilities The directors are responsible for preparing the financial statements in accordance with applicable Jersey law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS102). The Companies (Jersey) Law, 1991 requires the directors to prepare the financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and of the results of the Company for that year. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state whether applicable accounting standards have been followed subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to assume that the Company will continue in operation. The Directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991 and FRS 102. They are also responsible for safeguarding the assets of the Company and hence taking reasonable steps for the prevention and detection of error, fraud and non-compliance with law or regulations. So far as each person who is a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of fellow directors and the Company s auditor, each director has taken all the steps that he/she is obliged to take as a director in order to make himself/herself aware of any relevant audit information and to establish that the auditor is aware of the information. Independent Auditors PricewaterhouseCoopers Ireland have indicated their willingness to continue in office. A resolution to reappoint PricewaterhouseCoopers Ireland as independent auditors of the Company will be proposed at the annual general meeting. A copy of the Notice of the Annual Form of Proxy General Meeting is attached and form part of these financial statements. Significant Events The Company changed its name from Melville Douglas Multi Manager Funds Limited to Standard Bank International Funds Limited, on March. Fund Name Changes (effective March ) Global Equity Fund () to Multi Manager Global Equity Fund () Global Equity Fund () to Multi Manager Global Equity Fund () Global Balanced Fund () to Multi Manager Global Balanced Fund () Global Balanced Fund () to Multi Manager Global Balanced Fund () Absolute Return Fund () to Multi Manager Absolute Return Fund () Absolute Return Fund () to Multi Manager Absolute Return Fund () Connected Parties The Directors are satisfied that there are arrangements in place to ensure that transactions with connected parties entered into during the year were carried out as if negotiated at arm s length and were in the best interests of shareholders. Secretary The Secretary of the Company during the year ended was STANLIB Fund Managers Jersey Limited. By order of the Board STANLIB Fund Managers Jersey Limited Secretary 18 January 2016 / 4

6 Report of the Custodian To the members of Standard Bank International Funds Limited (formerly Melville Douglas Multi Manager Funds Limited). The Custodian is responsible for the safekeeping of all the property of the Company which is entrusted to it, as prescribed in the Custodian Agreement. Under the principles of the Guide to open-ended unclassified collective investment funds offered to the general public (the OCIF Guide ), issued by the Jersey Financial Services Commission, the Custodian has a duty to take reasonable care to ensure that the methods adopted by the Company s Manager in respect to the pricing of, and dealing in, shares in the Company are compliant with the Company s principal documents. It is the opinion of Capita Trust Company (Jersey) Limited in respect of the year ended that to the best of our information, knowledge and belief, that in all material respects, the Manager managed the Class Funds in that year: a) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Articles and Prospectus and; b) otherwise in accordance with the provisions of the Management and Custodian Agreements. Capita Trust Company (Jersey) Limited Custodian 18 January 2016 / 5

7 Investment Manager s Report Multi Manager Global Equity Classes (formerly Global Equity Classes) Investment objective To provide long-term capital appreciation through investment solely in equity-orientated funds. The manager will look to maintain a fully invested strategy at all times. A minimum exposure of 40% to larger capitalised shares means that the manager can position the fund significantly away from that of the peer group or benchmark in order to optimise performance. It is therefore suited to investors who are willing to accept the higher level of volatility associated with a fund of this flexibility. Quantitative analysis US Dollar Class The Class Fund s return for the year was -7.95%. The Class Fund s benchmark is the FTSE All World Total Return Net Index in US dollars; the benchmark s return was -6.51%. Sterling Class The Class Fund s return was 1.45% for the year under review. The Class Fund s benchmark is composed of 40% FTSE UK Total Return Net Index in sterling and 60% FTSE All World Total Return Net Index in sterling. The benchmark return was -1.78% for the year. Commentary The first six months of the period were broadly encouraging, with robust economic data and the announcement of quantitative easing in Europe helping to push equity markets higher. However the summer months proved to be far more turbulent, with broad market sentiment deteriorating in response to growth concerns and the somewhat erratic policy responses to market volatility in China, along with rising uncertainty on US monetary policy, where the delay in raising interest rates and the inconsistent messages from the US Federal Reserve send conflicting signals to markets. It appears from the reaction to the Federal Reserve meeting decision to leave rates unchanged, that investors are increasingly concerned that either the US Central Bank is behind the curve or that deflationary pressures will severely impact global growth prospects. The strong performance of the US dollar led to the dispersion of results between the currency classes. The US dollar class struggled against this headwind in absolute terms but also underperformed slightly in relative terms. This was partially due to the lag in the valuation points of the underlying funds, where the strong rally in the last two trading sessions is not fully reflected in the Fund, but also due to a degree of underperformance from our US managers. The UK managers posted far better relative returns and this was the primary driver of the outperformance of the sterling class. The slowing growth rates in China are a worry as incremental changes to the world s second largest economy have widespread global ramifications. Most of the concern focusses on deteriorating manufacturing and fixed capital formation data, which has been interpreted as the end of the Chinese growth story. Fixed Capital Formation, which is largely infrastructure spend, is currently 46% of China s GDP growth and these elevated levels are simply not sustainable. A fall towards %-35% over the next decade is to be expected and would be indicative of the gradual transition towards a more balanced consumption and service based economic model. We are confident that China is slowing, not collapsing, and that the market reaction is overdone. Forward thinking The main change in our geographic thinking was the initiation of an overweight exposure to Europe on the announcement of quantitative easing from the European Central Bank in January. The porfolio remains overweight Japan and slightly underweight to both the US and UK, primarily on valuation concerns. The portfolios have retained a bias towards value strategies which has been in place since market volatility began to rise in the second quarter. Our longer term view remains that the volatility and drawdown we are experiencing is not untypical during inflection points of the monetary cycle and as such is a correction in a bull market rather than the precursor to a recession. We have therefore been focussing our research efforts on identifying areas of the market that offer the best blend of valuation and future earnings growth potential when markets stabilise and recover. Specifically, we have identified several US mid and small cap managers that offer exposure to the domestic US economy, where we see strong earnings growth potential, even in a low global growth backdrop. We also see selective opportunities in select emerging markets, where the broad brush sell-off is presenting good stock picking opportunities. For the time being though, we are waiting for some signs of stability in markets before initiating these trades. Whilst we are confident and hopeful that market conditions are set to improve, we are also cognisant that sentiment is extremely fragile and further deterioration in the short term fundamentals could lead to more market weakness, for which the portfolio would require a more defensive bias. / 6

8 Investment Manager s Report (continued) Multi Manager Global Balanced Classes (formerly Global Balanced Classes) Investment objective To provide long-term capital growth through investing in a diverse range of asset classes including international, regional and thematic equity funds together with fixed income funds, exchange traded funds and cash. The diverse nature of the asset classes has historically resulted in a moderate level of volatility, although given the potential exposure ranges to equity as an asset class, the Fund is suitable only for investors with a longer term investment horizon, and who are prepared to tolerate the risk of shorter term loss. Quantitative analysis US Dollar Class The Class Fund s return for the year was -7.05%. The Class Fund s benchmark is composed of % FTSE All World Total Return Net Index in US dollars, 20% FTSE USA Total Return Net Index in US dollars and 50% Bloomberg/EFFAS Bond Indices US Government 1-10 Year Index. The benchmark return was -0.26% for the year. Sterling Class The Class Fund s return for the year was 0.00%. The Class Fund s benchmark is composed of % FTSE All World Total Return Net Index in sterling, 20% FTSE UK Total Return Net Index in sterling and 50% Bloomberg/EFFAS Bond Indices UK Government 1-10 Year Index. The benchmark return was 1.59% for the year. Commentary It has been a turbulent and perplexing period for financial markets, global equities ultimately posted a decline of 6.6% in US dollar terms, while the 1-10 year US Government Bond Index gained 3.24% for the year to. Investor sentiment has been extremely fragile, with concerns over global growth and inflation expectations exacerbated by confusing and sometimes conflicting responses from policy makers in China and the US. The weak data has mostly come from China, and whilst any change in growth expectations for the world s second largest economy has global ramifications, the market reaction was amplified by the central government s mixed messages regarding state intervention in currency and domestic stock markets. Markets were further shaken by the change in rhetoric from the US Federal Reserve, where the announcement after the no change decision suggested that US rates will stay lower for longer, despite the relatively strong domestic economic backdrop. The Multi Manager Global Balanced Fund has retained the overweight exposure to equity markets throughout the year, largely as a result of the robust fundamentals and attractive relative value of equities versus other asset classes available. This has led to a significant degree of underperformance in the short term, particularly in the US dollar class, where strength in the US dollar has significantly amplified the relative losses. It is worth noting given the degree of underperformance in the class that in attribution terms, approximately 2% of the underperformance is due to asset allocation and currency effects, 3% due to manager underperformance, while the remainder is due to a pricing anomaly, due to the lag in the valuation points of the underlying funds. As a result of this, the strong rally in US equities in the last two trading sessions is not fully reflected in the Fund performance. Additionally, the Fund is carrying exposure to China and Energy which were both sold down heavily, although we would note that the position sizes in both holdings was reduced before the market sell-off to a combined weighting of around 5%. Forward thinking Throughout the period we have maintained the overweight equity exposure and most of our efforts have been challenging our asset allocation views. We still believe equities will provide the best medium to long term returns based on a central case of modest global GDP growth over the next few years. Even though we do not expect markets to be anything other than volatile in the short term, on dividend income and growth expectations, equities appear attractive based on low inflation, stable interest rates and modest economic growth. In short, we are convinced that it is wrong to be overly pessimistic and capitulate to the uncertainties and volatility, which we believe are typical of the period around the inflection point of US monetary policy. Several changes to the blend of global equity managers are being considered, partially to offset unintended currency exposures but also to reflect our views on mid and small cap companies where we believe there are superior stock specific growth opportunities, especially given the low global growth backdrop. / 7

9 Investment Manager s Report (continued) Multi Manager Absolute Return Classes (formerly Absolute Return Classes) Investment Objectives The Class Fund seeks to generate positive returns that are independent of market cycles, by targeting enhanced return opportunities through a diversified range of investment strategies. These seek to provide, either a regular reliable income stream, or inflation-protected returns, where the prime investment objective is to preserve the real value of capital. The principal investment policy of each class will be to invest in a diversified blend of single manager funds (OIECs), Absolute Return Fixed Income funds (UCITS), investible indices, exchange tradable securities, forward foreign exchange contracts and cash positions. Quantitative Analysis Class The Class Fund s return for the year was -2.22%.The Class Funds benchmark is US CPI which return +0.19% over the year. Sterling Class The Class Fund s return for the year was +0.00%.The Class Funds benchmark is UK CPI which return +0.08% over the year. Commentary The Class Fund has witnessed choppy trading conditions during the first six months under review, but notable volatility in the second six months. In the early part of, speculation over the timing of the first interest rate increase in the United States intensified, as a distinct lack of global inflationary pressures continued to co-exist with encouraging domestic economic growth conditions. The consensus that prevailed at the time was that a rate hike would be sanctioned after the June FOMC meeting, at some point in the third quarter. On-going speculation over the timing of a US interest rate hike, combined with growing concerns of a potential meaningful economic slowdown in China continued to influence trading patterns in the second quarter. Other factors lurking in the background were questions about the potential impact that poor weather conditions at the start of the year might have had on US GDP growth, together with worries about a possible Greek exit from the Euro and European Monetary Union. All these fears appeared to unravel in July, which proved to be an especially volatile month for both commodities and emerging markets, most notably oil, as the West Texas Intermediate (WTI) oil price declined over -21%, which was its largest monthly fall since October Uncertainty about the economic growth outlook in China combined with Saudi Arabia and Iraq pumping at record levels, together with the imminent prospect of Iranian oil entering the market, were the main catalysts for this weakness. Unsurprisingly, both emerging and high yield debt markets struggled, together with commodity based currencies. Then in August, global equity markets fell sharply, pre-empted by growth concerns in China and the 3% devaluation of the Yuan. Volatility spiked higher, with the VIX index rising from at the end of July, to peak at in late August, before settling back to by month end. Unsurprisingly, its peak roughly coincided with global equity market lows. Local emerging debt markets came under renewed pressure (again), with domestic currencies falling sharply against the US dollar, most notably those commodity-linked, whilst spread differentials widened further, as foreign investors continued to exit this asset class. Finally, was dominated by speculation as to whether the Federal Reserve would raise interest rates. The subsequent decision not to sanction a hike initially unnerved markets, raising fears that not only a prolonged period of monetary uncertainty might ensue, but highlighted the risks of a sharp economic slowdown in emerging markets. Forward thinking Activity in the Class Fund continues to focus on its underlying exposure to four core areas, overall duration, the convertible, credit and commercial property exposures, plus an increasingly important factor in determining performance, the currency overlay in each share class. More specifically, over the last 12 months, the exposure to global convertible fund strategies has been gradually increased to 22% in the Sterling Class and 21% in the US Dollar Class, whilst the exposure to UK Commercial Property is in the process of being increased to just below its maximum permitted weighting of 20%. Standard Bank International Investments Limited Investment Manager 21 October / 8

10 Independent Auditors Report to the Members of Standard Bank International Funds Limited (Formerly Melville Douglas Multi Manager Funds Limited) Report on the financial statements Our Opinion In our opinion Standard Bank International Funds Limited s Financial Statements (the Financial Statements ): give a true and fair view of the state of the company s affairs as at and of its profit/loss for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102, The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland ; and have been properly prepared in accordance with the requirements of the Companies (Jersey) Law What we have audited The financial statements comprise: the Statements of Financial Position as at ; the Statements of Comprehensive Income the Statements of Changes in Equity for the year then ended; the accounting policies; and the notes to the financial statements which include other explanatory information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Generally Accepted Accounting Practice, including FRS 102, The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland. In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. Opinion on other matter In our opinion, the information given in the Directors Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Other matters on which we are required to report by exception Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion: we have not received all the information and explanations we require for our audit; or proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records We have no exceptions to report arising from this responsibility. Responsibilities for the financial statements and the audit Our responsibilities and those of the directors As explained more fully in the Statement of Directors Responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. / 9

11 Independent Auditors Report to the Members of Standard Bank International Funds Limited (Formerly Melville Douglas Multi Manager Funds Limited) (continued) Our responsibilities and those of the directors (continued) This report, including the opinions, has been prepared for and only for the company s members as a body in accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. We primarily focus our work in these areas by assessing the directors judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements. We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Declan Murphy for and on behalf of PricewaterhouseCoopers Chartered Accountants Dublin 18 January 2016 / 10

12 Statements of Comprehensive Income For the year 1 October to (Comparatives are for the year 1 October 2013 to ) Multi Manager Global Equity Fund ()* Multi Manager Global Equity Fund ()* Multi Manager Global Balanced Fund ()* Income Notes Dividend income 2(d) 27,333 27,637 45, ,4 75,856 49,439 Deposit income 563 Net (loss)/gain on financial assets at fair value through profit or loss 3 (4,328,529) 6,250,513 3,027,164 5,737,964 (635,629) 6,578 Total net (loss)/gain (4,1,196) 6,278,150 3,072,610 5,942,268 (559,773) 680,580 Expenses Management fees 4 1,1,261 1,179,381 1,171,269 1,155, , ,249 Custodian fees 4 23,938 24,756 20,187 20,082 5,000 5,001 Sub-Custodian fees 4 39,291 24,600 24,436 23,447 8,8 7,692 Directors' fees 4 8,463 10,991 6,387 6,920 10,341 10,995 Audit fees 4 4,800 7,784 3,044 4,864 4,800 7,780 Sundry expenses 12,646 8,905 11,094 8,182 6,248 5,386 Total operating expenses 1,219,399 1,256,417 1,236,417 1,219, , ,103 Net (expense)/income before finance costs (5,520,595) 5,021,733 1,836,193 4,723,252 (765,401) 498,477 Finance Costs: Bank overdraft interest (948) (11) (6) Total finance costs (948) (11) (6) Taxation 6 (1,516) (15,989) (Decrease)/Increase in net assets attributable to holders of redeemable shares from operations (5,521,543) 5,021,733 1,834,666 4,707,257 (765,401) 498,477 * Global Equity Fund (), Global Equity Fund () and Global Balanced Fund () changed their names to Multi Manager Global Equity Fund (), Multi Manager Global Equity Fund () and Multi Manager Global Balanced Fund () on March. All of the above results are from continuing operations. There are no recognised gains or losses for the year other than those set out in the Statement of Comprehensive Income. There are no differences between the results above and those under historical cost with the exception of the effect of revaluation of investments. The notes on pages 16 to 35 form an integral part of these financial statements. / 11

13 Statements of Comprehensive Income (continued) For the year 1 October to (Comparatives are for the year 1 October 2013 to ) Multi Manager Global Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Income Notes Dividend income 2(d) 70,326 61,623 93, , , ,518 Investment fund fee rebate 1,062 Net gain/(loss) on financial assets at fair value through profit or loss 3 73, ,111 (756,108) 635, , ,191 Total net (loss)/gain 144, ,734 (662,763) 745, , ,771 Expenses Management fees 4 126, , , , , ,057 Custodian fees 4 3,128 3,128 16,944 10,314 10,316 9,417 Sub-Custodian fees 4 4,547 6,239 22,717 7,387 17,168 3,692 Directors' fees 4 6,448 6,920 9,824 7,595 6,170 3,120 Audit fees 4 3,044 4,860 4,678 9,980 3,044 4,860 Sundry expenses 4,127 3,8 6,675 7,468 4,027 11,429 Total operating expenses 147, , , , , ,575 Net (expense)/income before finance costs (3,478) 299,166 (1,135,820) 452,357 (10,603) 571,196 Finance Costs: Bank overdraft interest (32) Total finance costs (32) Taxation 6 (3,591) (3,912) (4,923) (4,152) (Decrease)/Increase in net assets attributable to holders of redeemable shares from operations (3,478) 299,166 (1,139,443) 448,445 (15,526) 567,044 * Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their names to Multi Manager Global Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on March. All of the above results are from continuing operations. There are no recognised gains or losses for the year other than those set out in the Statement of Comprehensive Income. There are no differences between the results above and those under historical cost with the exception of the effect of revaluation of investments. The notes on pages 16 to 35 form an integral part of these financial statements. / 12

14 Statements of Changes in Equity For the year 1 October to (Comparatives are for the year 1 October 2013 to ) Multi Manager Global Equity Fund ()* Multi Manager Global Equity Fund ()* Multi Manager Global Balanced Fund ()* Notes Net assets attributable to holders of redeemable shares at the beginning of the year 84,431,060 52,228,409 77,550,464 71,936,5 10,490,156 7,388,911 Proceeds from the issue of shares 7 9,978,880 34,586,369 4,241,019 9,339,486 2,282,783 3,029,168 Payments on the redemption of shares 7 (20,489,341) (7,405,451) (13,072,781) (8,432,584) (1,718,076) (426,400) (Decrease)/Increase in net assets attributable to holders of redeemable shares from operations (5,521,543) 5,021,733 1,834,666 4,707,257 (765,401) 498,477 Net assets attributable to holders of redeemable shares at the end of the year 68,399,056 84,431,060 70,553,368 77,550,464 10,289,462 10,490,156 Multi Manager Global Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Notes Net assets attributable to holders of redeemable shares at the beginning of the year 7,982,986 7,285,926 41,200,576 25,620,072 27,310,017 26,092,396 Proceeds from the issue of shares 7 1,495,326 1,049,517 14,725,884 20,901,160 8,097,178 4,316,718 Payments on the redemption of shares 7 (1,356,703) (651,623) (4,166,815) (5,769,101) (3,741,479) (3,666,141) (Decrease)/Increase in net assets attributable to holders of redeemable shares from operations (3,478) 299,166 (1,139,443) 448,445 (15,526) 567,044 Net assets attributable to holders of redeemable shares at the end of the year 8,118,131 7,982,986 50,620,202 41,200,576 31,650,190 27,310,017 * Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their names to Multi Manager Global Equity Fund (), Multi Manager Global Equity Fund (), Multi Manager Global Balanced Fund (), Multi Manager Global Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on March. The notes on pages 16 to 35 form an integral part of these financial statements. / 13

15 Statements of Financial Position As at (Comparatives as at ) Multi Manager Global Equity Fund ()* Multi Manager Global Equity Fund ()* Multi Manager Global Balanced Fund ()* Assets Notes Financial assets at fair value through profit or loss 2(b),9.3 68,238,903 84,149,134 70,445,508 76,274,551 9,551,962 9,669,599 Cash and bank balances 2(c) 419, , ,575 1,271, , ,975 Receivable for shares sold 19, ,008 21, ,031 Receivable for investments sold 241, , ,000 Total assets 68,918,976 84,7,519 71,117,465 77,804,975 10,317,631 10,519,574 Liabilities Payable for investments purchased 110,000 2,325 Payable for shares redeemed 404,759 57, , ,552 Management fees payable 4 96, ,344 98, ,691 15,169 14,526 Custodian fees payable 4 2,076 2,336 1,774 1, Sub-Custodian fees payable 4 5,139 2,179 7,832 8,320 1,583 2,542 Director fees payable 4 3,951 6,593 5,870 6,749 5,512 6,276 Audit fees payable 4 4,758 4,758 6,227 6,183 4,582 4,583 Other payables 2,342 2,738 2,195 2, ,039 Total liabilities 519, , , ,511 28,169 29,418 Net assets attributable to holders of redeemable shares 68,399,056 84,431,060 70,553,368 77,550,464 10,289,462 10,490,156 Net asset value per share * Global Equity Fund (), Global Equity Fund () and Global Balanced Fund () changed their names to Multi Manager Global Equity Fund (), Multi Manager Global Equity Fund () and Multi Manager Global Balanced Fund () on March. The notes on pages 16 to 35 form an integral part of these financial statements. / 14

16 Statements of Financial Position (continued) As at (Comparatives as at ) Multi Manager Global Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Assets Notes Financial assets at fair value through profit or loss 2(b),9.3 7,719,293 7,349,854 46,327,356,911,898 29,829,443 25,785,110 Cash and bank balances 2(c) 429, ,404 4,106,608 10,167,417 1,817,725 1,526,067 Unrealised gain on forward foreign currency contracts 9.5 3, ,314 31,094 Receivable for shares sold 9, ,814 Revenue receivable 2,231 1,473 Other receivables 2,705 1,370 Total assets 8,149,194 8,005,258 50,766,645 41,243,081 31,840,455 27,343,641 Liabilities Unrealised loss on forward foreign currency contracts , ,587 Payable for shares redeemed 8,996 49,627 Management fees payable 4 11,611 10,945 40,367 27,537 25,085 21,061 Custodian fees payable ,653 1,134 1, Sub-Custodian fees payable 4 2,334 2,283 2,134 1,862 Director fees payable 4 3,644 4,462 3,151 3,932 2,015 2,411 Audit fees payable 4 3,614 3,571 7,461 7,583 4,701 4,657 Other payables ,791 2, ,626 Total liabilities 31,063 22, ,443 42, ,265 33,624 Net assets attributable to holders of redeemable shares 8,118,131 7,982,986 50,620,202 41,200,576 31,650,190 27,310,017 Net asset value per share * Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their names to Multi Manager Global Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on March. The Financial statements were approved by the board on 18 January 2016 and signed on its behalf by: Michael Farrow Director The notes on pages 16 to 35 form an integral part of these financial statements. / 15

17 Notes to the Financial Statements 1. Incorporation The Company was incorporated in Jersey, Channel Islands on The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented. These financial statements have been prepared on a going concern basis under the historical cost convention as modified by the measurement at fair value of trading financial assets and derivative financial instruments in accordance with Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS102). A summary of the more important accounting policies is set out below. 2. Accounting policies a. Basis of accounting These audited annual financial statements for the year ended have been prepared in accordance with FRS 102: the Financial Reporting Standard applicable in the UK and Republic of Ireland as issued by the Financial Reporting Council ( FRS 102 ). These audited annual financial statements should be read in conjunction with the audited financial statements for the year ended, which have been prepared in accordance with accounting standards generally accepted in United Kingdom ( UK GAAP ) and the Statement of Recommended Practice for Authorised Funds ( SORP ) issued by the Investment Management Association ( IMA ). The Directors of the Company have applied Financial Reporting Standards 102 The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland for its annual and interim financial statements effective 1 October. Accordingly, these are the Company s first annual financial statements which have been prepared in accordance with FRS 102. The Company has consistently applied the accounting policies used in the preparation of its opening FRS 102 Statements of Financial Position at 1 October throughout all periods presented, as if these policies had always been in effect. The information required by FRS 102, to be included in the Statements of Total Recognised Gains and Losses and Reconciliation of Movements in Shareholders Funds is, in the opinion of the directors, contained in the Statements of Comprehensive Income and Statements of Changes in Equity on page 13. In arriving at the results for the year, all amounts in the Statements of Comprehensive Income on pages 11 and 12 relate to continuing activities. The Company has availed of the exemption available to open-ended investment funds under Section 7 Statement of Cash Flows of FRS 102 (Section 7.1a (c)), not to prepare a cash flow statement on the basis that substantially all of the Company s investments are highly liquid and carried at fair value, and the Company provides Statements of Changes in Equity. The transition to FRS 102 has resulted in no changes to the reported financial position or financial performance compared to that previously presented. No adjustments have been made to either the equity presented in the opening Statement of Financial Position as at 1 October 2013 or at i.e. at the end of the latest period presented in the Fund s most recent annual financial statements determined in accordance with the previous financial reporting framework. b. Investments Investments are recognised at cost on the trade date, being the date on which the Class Fund commits to purchase the investment and becomes party to the contractual provisions of the securities. Transaction costs are recognised as part of the consideration and capitalised in the purchase cost. Subsequent to initial recognition, all investments are valued at closing bid-market prices. Financial liabilities are valued at offer price. Gains and losses arising from the valuation of investments are recognised within net movement in unrealised investment reserves in the Statement of Comprehensive Income. Gains and losses on sales of investments are calculated on an average cost basis and are recognised within net realised gain or loss on investments in the Statement of Comprehensive Income in the period in which the Company commits to dispose of the securities. Investments are derecognised when the Class Fund becomes party to contractual provisions of the securities that give rise to transfer of substantial rights and obligations arising from the securities. On initial application of FRS 102, in accounting for all of its financial instruments, an entity is required to apply either (a) the full requirements of Sections 11 Basic Financial Instruments and Section 12 Other Financial Instruments Issues of FRS 102, (b) the recognition and measurement provisions of International Accounting Standards ( IAS ) 39 Financial Instruments: Recognition and Measurement ( IAS 39 ) as adopted for use in the European Union and the disclosure requirements of Sections 11 and 12, or (c) the recognition and measurement provisions of International Financial Reporting Standards ( IFRS ) 9 Financial Instruments ( IFRS 9 ) and the disclosure requirements of Sections 11 and 12. The Company has elected to apply the full requirements of Sections 11 and Section 12 of FRS 102. The Company has elected to continue to use bid prices on the portfolio statements for the financial statement purposes. / 16

18 Notes to the Financial Statements (continued) 2. Accounting policies (continued) c. Cash and bank balances Cash is valued at cost, which approximates fair value. Cash is held in accounts at The Bank of New York Mellon SA/NV London Branch which allows the Class Funds instant access to their accounts. Term deposits are deposits held with various financial institutions bearing fixed or variable interest rates payable at maturity. d. Income Interest income is accounted for on an accruals basis using the effective yield basis. Dividend income, including stock dividends, is accounted for on the ex-dividend date gross of withholding tax deducted at source. Withholding tax is reported as taxation expense in the period in which it is incurred. Interest on deposit accounts is included on an accruals basis. e. Foreign currencies Transactions in foreign currencies are translated into the currency of the Class Funds at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the currency of the Class Funds at the rates of exchange ruling at the Statements of Financial Position date. Differences arising on the translation of investments are included in the Statements of Comprehensive Income within net capital gains or losses on investments in the period in which they arise. The functional and presentational currencies of the Class Funds are US Dollars for the Multi Manager Global Equity Fund (), Multi Manager Global Balanced Fund () and Multi Manager Absolute Return Fund (), Sterling for the Multi Manager Global Equity Fund (), Multi Manager Global Balanced Fund () and Multi Manager Absolute Return Fund (). Foreign currency gains and losses on revenue and expenses due to movements in exchange rates between the record date and settlement date are included in the Statements of Comprehensive Income with revenue or expenses. f. Share issues and redemptions Shares in the Company may be issued at the issue price and redeemed at the redemption price on subscription days at the prices calculated in accordance with the Articles of Association and based on the value of the underlying net assets held in the relevant Class Fund. Participating shares are classified as financial liabilities in the financial statements as they are not the most subordinated class in the Company. g. Expenses The Company is responsible for the payment of management, audit, director, custodian and Sub-Custodian fees which are accrued for on each valuation point, and the payment of other expenses as detailed in the Company s prospectus. All expenses are accounted for on an accruals basis. h. Net gains/(losses) on financial assets at fair value through profit or loss This item includes changes in the fair value of financial assets held for trading and excludes interest and dividend income and expenses. Unrealised gains and losses comprise changes in the fair value of financial instruments for the year. Realised gains and losses on disposals are calculated using the average cost method and are reflected as net gains or losses on investments in the Statement of Comprehensive Income. i. Withholding taxes In some jurisdictions investment income is subject to withholding tax deducted at the source of the income. Withholding tax is a generic term used for the amount of withholding tax deducted at the source of the income and is not significant for the Portfolio. Withholding tax is disclosed separately as a tax charge from the gross investment income in the Statement of Comprehensive Income. j. Aggregation The Directors do not believe that the aggregation of the Class Funds would be of any benefit to the users of the financial statements and, therefore this has not been provided. k. Total Expense Ratio The Total Expense Ratio ( TER ) is calculated and disclosed as per the guidelines issued by the Investment Management Association ( IMA ). The ratio expresses the sum of all costs charged on an ongoing basis to the Class Funds taken retrospectively as a percentage of the Class Fund s average net assets. For clarity, when the Class Fund is investing in other funds, the ongoing cost of these funds is not incorporated in the calculation of the TER. l. Distribution policy The Company s policy is to not distribute any income on its participating shares. / 17