Annuai. nancjaj Statements. Year ended ebrua 2076

Transcription

1 PSG Multi-Management Global Flexible Fund (Dollar) Audited Financial Statements for the year ended 29 February 2015

2 VVV T. J V. (.VV I V V PSG MUIj-,M FLEXIsMENT GLOBAL 29 nancjaj Statements Year ended ebrua 2076 Annuai

3

4 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) ANNUAL FINANCIAL STATEMENTS for the year ended 29 February 2016 Contents Pages Management, administration and other information 2 Report of the Manager 3-4 Statement of the Manager s Responsibilities 5 Report of the Investment Manager 6 Report of the Trustee 7 Independent Auditors Report 8 Statement of financial position 9 Statement of comprehensive income 10 Statement of changes in net assets attributable to holders of redeemable participating units 11 Statement of cash flows 12 Notes to the Financial Statements

5 n \

6 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) ANNUAL FINANCIAL STATEMENTS for the year ended 29 February 2016 Management, administration and other information Directors of the Manager A Ahern H Burger 1st Floor, PSG House SmartCity Malta Aiphen Park SCMOI, Unit G02 Constantia, 7806 Ricasali, Malta South Africa SCMI 001 S Platt-Ransom 11 New Street St. Peter Port Guernsey GY1 2PF Administrator and Registrar Registered Office Manager Investment Manager Trustee and Banker Legal Advisor Auditors Vistra Fund Services (Guernsey) Limited 11 New Street St Peter Port Guernsey GYI 2PF 11 New Street St. Peter Port Guernsey GYI 2PF PSG Fund Management (CI) Limited 11 New Street, St. Peter Port Guernsey GY1 2PF PSG Multi-Management (Pty) Limited 1st Floor, Roland Garros 57 Sloane Street The Campus Bryanston, Johannesburg 2191 South Africa BNP Paribas Securities Services SCA - Guernsey Branch BNP Paribas House St. Julian s Avenue St. Peter Port Guernsey GYI 1WA Channel Islands Walkers (Guernsey) LLP New Street St. Peter Port Guernsey GYI2PF Channel Islands PricewaterhouseCoopers Cl LLP Royal Bank Place I Glategny Esplanade St. Peter Port Guernsey GYI 4ND Channel Islands 2

7

8 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) THE REPORT OF THE MANAGER for the year ended 29 February 2016 The Manager presents its Report and the audited Financial Statements for the year ended 29 February Activities and Status PSG Multi-Management Global Flexible Fund (Dollar) (the Fund ) was established by the Trust Instrument dated 5th November 2001 by which the Trust was created and its base currency is United States Dollars. The Fund was originally named PSG Alphen Global Flexible Fund (Dollar) but has changed its name twice by Supplemental Trust Instruments. I The Fund is authorised by the Guernsey Financial Services Commission as a Class B Scheme under the provisions of The Protection of Investors (Bailiwick of Guernsey) Law, Statement of Investment Objective The objective of the Fund is long term capital appreciation through active asset allocation management of a diversified portfolio of collective investment schemes established, recognised or regulated in any Approved Country, and assets in liquid form. The emphasis of the Manager s investment approach will be on equities but subject to the Principal Particulars there will be no limit on the asset classes in which the Manager may invest and if the Manager considers that circumstances warrant it, the Fund may be invested predominantly or entirely in bond funds,cash funds or cash. The Fund is a fund of funds and primarily invests in collective investment schemes and other investment trusts where the Funds investments are represented by units held in those respective funds. The unit value in each of its investments is based on the fair value of the underlying assets in those funds. Net Asset Values per unit at the last valuation date for the previous five years. Comparative Table PSG Multi-Management Global Flexible Fund (Dollar) $ $ $ $ $ Distribution Policy All, or substantially all, dividends, interest and other income of each Class Fund, net of all fees and other expenses of each Class Fund, will be distributed by the Trustee on the Distribution Date to Unitholders registered on the Register on the Dealing Day immediately prior to the Distribution Date. No distributions were made for the current financial period. Results As at year end the net asset values in respect of each Class Fund were as follows: NAV per unit Percentage Class Fund change PSG Multi-Management Global Flexible Fund (Dollar) $ $ (12%) The price history for the period 29 February 2016 is as follows: Highest NAV Class Fund per unit Lowest NAV per unit PSG Multi-Management Global Flexible Fund (Dollar) $ $ At 29 February 2016 the net assets of the Fund applicable to the participating redeemable units are as stated above. The financial statements are based on the final/last valuation day in the year. 3

9

10 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) THE REPORT OF THE MANAGER for the year ended 29 February 2016 (continued) Scheme Particulars Full details of the Fund can be found in its Scheme Particulars, copies of which can be obtained free of charge from the Manager. The information contained in the Management, administration and other information page forms part of this report. Events subsequent to statement of net assets date No matter which is material to the financial affairs of the Fund has occurred between 29 Febwary 2016 and the date of approval of the financial statements. Approved by the Board of Directors of the Manager and signed on its behalf on Director

11

12 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) STATEMENT OF MANAGERS RESPONSIBILITY for the year ended 29 February 2016 The Manager is responsible for preparing financial statements in accordance with International Financial Reporting Standards and the applicable Guernsey Law which give a true and fair view of the state of affairs of the Fund at the end of each financial year and of the profit or loss for the year then ended. In preparing the financial statements, the Manager should: 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 presume that the Fund will continue in business as a going concern. The Manager confirms that they have complied with the above requirements in preparing the financial statements. The Manager is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Fund and enable them to ensure that the financial statements comply with the Trust Instrument and The Protection of Investors (Bailiwick of Guernsey) Law, They are also responsible for safeguarding the assets of the Fund and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. So far as the Manager is aware, there is no relevant audit information of which the Fund s auditors are unaware, and the Manager has taken all the steps that they ought to have taken as the Manager in order to make itself aware of any relevant audit information and to establish that the Fund s auditors are aware of the information. Independent Auditors During the year PricewaterhouseCoopers Cl LLP were the independent auditors of the Fund and have indicated their willingness to continue in office, and the Manager intends to reappoint them as independent auditors to the Fund. /%7,øfr ector of the Manager Director of the Manager Date (

13 *

14 REPORT OF THE INVESTMENT MANAGER to the unitholders of PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) for the year ended 29 February 2016 There was no scarcity of memorable moments for global markets in 2015 with the likes of China s devaluation, the bust in commodity prices, the Greece saga, negative rates in parts of Europe and of course the first Fed rate hike since 2006 all playing their part. Whilst asset class returns were generally poor over the last year, the MSCI World Index declined 0.3% in 2015, global stock markets witnessed higher levels of volatility and were characterized by very divergent performances between various sectors, regions and currencies. The big winner in 2015 was the Nikkei, up 10.4%, boosted by accommodative monetary policy and a stable Yen following three years of currency weakness, while in China the Shanghai Composite (+6.2%) finished the year up even though it found itself 63% higher during June before suffering severe declines. Whilst the S&P 500 index delivered a positive return of 1.4% it does not paint an accurate picture of market developments over the year. If it wasn t for the FANG stocks (Facebook, Apple, Nefflix and Google), the index return would have been negative as market breadth was extremely poor and was significantly weighed down by the weak performance of the energy complex driven by substantially lower oil prices (Brent -44.1%, WTI -30.5%). European equities experienced a strong start to the year but could not escape the sell-off in the second half of the year with the DAX 30 ending the year negative 1.6%, the CAC 40 up 0.5% and the FTSE 100 down 6.7%, in US dollar terms.. The prospect of rising US rates coupled with declining commodity prices were amongst the factors causing emerging market assets to be the clear losers over the past year with the MSCI Emerging Markets index declining 14.6% in US dollars. Political and economic fragility saw South African (-25.1%), Turkish (-31.6%) and Brazilian (-41.8%) indices record significant declines. US Dollar strength was a dominant theme over the past year with the Dollar index returning a hefty +9.3% in 2015, before giving back some of its gains in early For the year ahead market participants will need to manoeuvre around themes such as the US rate hiking cycle, a Brexit, negative rates in a large parts of the developed world including Japan and the ripple effects of China s slowing economic growth. PSG Multi-Management Global Flexible Fund (Dollar) The objective of the Fund is long term capital appreciation through active asset allocation management of a diversified portfolio of collective investment schemes established, recognised or regulated in any Approved Country, and assets in liquid form. The emphasis of the Manager s investment approach will be on equities but subject to the Scheme Particulars there will be no limit on the asset classes in which the Manager may invest and lithe Manager considers that circumstances warrant it, the Fund may be invested predominantly or entirely in bond funds cash funds or cash. For and on behalf of PSG Fund Management (Cl) Limited 6

15 S S u I (S

16 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) REPORT OF THE TRUSTEE for the year ended 29 February 2016 In respect of the year ended 29th February 2016, we state that in our opinion, PSG Fund Management (Cl) Limited, (the Manager), has managed the PSG Multi-Management Global Flexible Fund (Dollar): a) in accordance with the limitations imposed on the investment and borrowing powers of the Fund by the principal documents, by the scheme particulars and by The Protection of Investors (Bailiwick of Guernsey) Law,1987; and b) in accordance with the provisions of the principal documents and The Authorised Collective Investment Schemes (Class B) Rules For and on behalf of BNP Paribas Securities Services SCA - Guernsey Branch 7

17 C... H.

18 INDEPENDENT AUDITORS REPORT TO THE UNITHOLDERS OF PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) Report on the financial statements We have audited the accompanying financial statements of PSG Multi-Management Global Flexible Fund (Dollar) ( the Fund ) which comprise the statement of financial position as at 29 February 2016 and the statement of comprehensive income, the statement of changes in net assets attributable to holders of redeemable participating units and the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information. Manager s responsibility for the financial statements The Manager is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and with the requirements of Guernsey law. The Manager is also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Fund as 29 February 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and have been properly prepared in accordance with the requirements of the Trust Instrument. Report on other legal and regulatory requirements We read the other information contained in the Annual Report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. The other information comprises the management, administration and other information page, the report of the manager, the statement of managers responsibilities, the report of the investment manager and the report of the trustee. In our opinion the information given in the report of the Manager is consistent with the financial statements. This report, including the opinion, has been prepared for and only for the Fund s unitholders as a body in accordance with paragraph 6.02(1) of the Authorised Collective Investment Schemes (Class B) Rules 2013 and for no other purpose. We do not, in giving this opinion, 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. PricewaterhouseCoopers Cl LLP Chartered Accountants Guernsey, Channel Islands

19 / I

20 holders of redeemable units) PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) STATEMENT OF FINANCIAL POSITION as at 29 February All amounts ar stated in USD Notes Assets Current assets Financial assets at fair value through profit or loss 5 8,599,681 13,755,360 13,574,329 Cash and cash equivalents 7 71, , ,898 Due from brokers 100,004 1,503,410 - Prepayments Other receivables 4,945 7,533 6,442 Total assets 8,776,477 15,371,501 14,144,503 - (260,000) Liabilities Current liabilities Due to brokers Management fee payable 10 (11,130) (17,545) (14,292) Administration fee payable 10 (1,855) (2,924) (2,382) Twstee fee payable (519) (819) (667) Other payables (1,530) (1,411) (100,495) Liabilities (excluding net assets attributable to (15,034) (22,699) (377,836) Net assets attributable to holders of redeemable units 8,761,443 15,348,802 13,766,667 Represented by: Net assets attributable to holders of redeemable units (at trading value) 8,761,443 15,348,802 13,766,667 Adjustment for difference in valuation inputs - Net assets attributable to holders of redeemable units 8,761,443 15,348,802 13,766,667 The accompanying notes on pages 13 to 34 form part of these financial statements. Approved of Directors of the Manager and signed on its behalf on..f tpc..ø( tor,/ Di etor 9

21

22 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) STATEMENT OF COMPREHENSIVE INCOME for the year ended 29 February All amounts are stated in USD Income Other income Net foreign currency gains and losses on cash and cash equivalents and other balances Net changes in fair value of financial assets and liabilities carried at fair value through profit or loss: - Unrealised gains and losses - Realised gains and losses Notes , (1,750,363) 328,357 62,244 (29) (239,907) 508,508 Total net (Ioss)Iincome (1,367,052) 330,816 Operating expenses Management fees Admin fees Performance fees Transaction costs Trustee fees Directors fees Audit fees Other operating expenses Total operating expenses 10 (186,159) (239,336) 10 (31,025) (39,888) 10 - (72,086) (9,398) (13,543) (8,686) (11,168) (2,188) (1,404) (3,730) (4,217) (241,186) (381,642) (Loss) for the year (1,608,238) (50,826) Other comprehensive income Total comprehensive (loss) for the year (1,608,238) (50,826) Changes in net assets attributable to holders of redeemable participating units per unit (0.21) (0.00) The accompanying notes on pages 13 to 34 form part of these financial statements. 10

23

24 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING UNITS for the year ended 29 February All amounts are stated in USD Operating activities Changes in net assets attributable to holders of redeemable participating units (1,608,238) (50,826) Capital share transactions Proceeds from redeemable participating units issued 1,099,049 5,114,004 Redemption of redeemable participating units (6,078,170) (3,481,043) Change in net assets attributable to holders of redeemable participating units from capital share transactions (4,979,121) 1,632,961 Change in net assets attributable to holders of redeemable participating units in the year (6,587,359) 1,582,135 Net asset value attributable to holders of redeemable participating units at the beginning of the year 15,348,802 13,766,667 Net asset value attributable to holders of redeemable participating units at the end of the year 8,761,443 15,348,802 The accompanying notes on pages 13 to 34 form part of these financial statements. 11

25 - k

26 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) STATEMENTOF CASH FLOWS for the year ended 29February All amounts are stated in USD Note Cash flows from operating activities Changes in net assets attributable to holders of redeemable participating units Adjustment for: - Adjustment for difference in valuation inputs - Realised gains and losses - Unrealised gains and losses - Exchange gains/losses on cash and cash equivalents Changes from operating assets and liabilities Decrease! (increase) in other receivables and prepayments (Decrease)! increase in management fee payable (Decrease)! increase in administration fee payable (Decrease)! increase in trustee fee payable Increase! (decrease) in other payables Decrease / (increase) in amounts due to and from brokers Proceeds on purchases of investments Proceeds on sale of investments Cash used in operations Dividend received Net cash used in operating activities (1,608,238) (50,826) (328,357) 1,750,363 (234) (186,466) 2,960 (870) (6,415) 3,253 (1,069) 542 (300) ,403,406 (5,226,827) 8,960,500 4,945,908 (508,508) 239, (319,398) (99,084) (1,763,410) (3,586,897) 3,674,467 (2,091,245) 4,945,908 (2,091,245) Cash flows from financing activities Proceeds from redeemable participating units issued Redemption of redeemable participating units 1,099,049 (6,078,170) 5,114,004 (3,481,043) Net cash from financing activities (4,979,121) 1,632,961 Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Exchange gains/(losses) on cash and cash equivalents 7 (33,213) 104, (458,284) 562,898 (29) Cash and cash equivalents at end of the year 7 71, ,585 The accompanying notes on pages 13 to 34 form part of these financial statements. 12

27

28 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February General information - The Fund A Trust Instrument dated 5 November 2001, as amended on 17 May 2002 and 21 January 2005, between the Manager and the Trustee established the Fund as an exempt unit trust under the laws of the Island of Guernsey. The Fund is authorised by the Guernsey Financial Services Commission as a Class B provisions of The Protection of Investors (Bailiwick of Guernsey) Law, Scheme under the The objective of the Fund is long term capital appreciation through active asset allocation management of a diversified portfolio of collective investment schemes established, recognised or regulated in any Approved Country, and assets in liquid form. The emphasis of the Manager s investment approach will be on equities but subject to the Principal Particulars there will be no limit on the asset classes in which the Manager may invest and if the Manager considers that circumstances warrant it, the Fund may be invested predominantly or entirely in bond funds,cash funds or cash. The Fund s investment activities are managed by PSG Fund Management (Cl) Limited (the Investment Manager ), with the admistration delegated to Vistra Fund Services (Guernsey) Limited (the Administrator ). The Fund is a fund of funds and primarily invests in collective investment schemes and other investment trusts where the Funds investments are represented by units held in those respective funds. The unit value in each of its investments is based on the fair value of the underlying assets in those funds. 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. 2.1 Basis of preparation and adoption of IFRS The financial statements of the Fund have been prepared on a going concern basis and in accordance with International Financial Reporting Standards (IFRS). Previously, the Fund prepared its financial statements in accordance with the United Kingdom Generally Accepted Accounting Standards. The Fund has consistently applied the accounting policies used in the preparation of its opening IFRS statement of financial position as at I March 2014 and through all periods presented, as if these policies had always been in effect. Note 12 discloses the impact of the transition to IFRS on the Fund s reported financial position, financial performance, including the nature and effect of significant changes in accounting policies from those used in the Fund s financial statements for the year ended 29 February The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Fund s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4. In accordance with IFRS 1, the Fund presents three statements of financial position in its first IFRS financial statements. In future periods, (AS I requires two comparative periods to be presented for the statement of financial position only in certain circumstances. (a) Standards, interpretations and amendments to published standards and amendments that are effective for the first time in 2016 New and amended standards, interpretations and amendments adopted by the Fund - Amendments to IFRS 13- Fair value measurement (effective 1 July2014) - Amendments to las 24 - Related party disclosures (effective 1 July 2014) These standards, interpretations and amendments have no impact on measurements of assets and liabilities or disclosures in the current or prior years. 13

29

30 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) 2.1 Basis of preparation and adoption of IFRS (continued) (a) Standards, interpretations and amendments to published standards and amendments that are effective for the first time in 2016 (continued) New and amended standards, interpretations and amendments not currently relevant to the Fund s operations Amendment to las 19, Employee benefits, on defined benefit plans (effective 1 July 2014) - Amendment to IFRS 8, Operating segments (effective 1 July 2014) - Amendments - las - IFRS - las - IFRS - las - las to IFRS 7 - Financial Instruments; Disclosures (effective 1 January 2016) 16, Property, plant and equipment, and las 38, Intangible assets (effective 1 July 2014) 3, Business combinations (effective 1 July 2014) 40, Investment property (effective 1 July 2014) 5 Non-current Assets Held for Sale and Discontinued Operations (effective 1 January 2016) 19 Employee Benefits (effective I January2016) 34 Interim Financial Reporting (effective 1 January 2016) These standards, interpretations and amendments have no impact on measurements of assets and liabilities or disclosures in the current or prior years. (b) Standards, interpretations and amendments to published standards and amendments that are not yet effective Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Fund s accounting periods beginning on or after 1 March 2016 or later periods, but which the Fund has not early adopted are as follows: - IFRS 9 Financial Instruments (2009 &2010) (effective I January2018) This IFRS is part of the IASB s project to replace las 39. IFRS 9 addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in las 39 with a single model that has three classification categories: amortised cost, fair value through OCI and fair value through profit and loss. For financial liabilities, the standard retains most of the las 39 requirements and the impairment requirements for financial instruments are based on a forward-looking expected credit loss model that should result in a more timely recognition of loan losses. The IASB has updated IFRS 9, Financial instruments to include guidance on financial liabilities and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from las 39, Financial instruments: Recognition and measurement, without change, except for financial liabilities that are designated at fair value through profit or loss. 14

31 r

32 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2 Summary of significant accounting policies (continued) 2 1 Basis of preparation and adoption of IFRS (continued) (b) - Amendment Standards, interpretations and amendments to published standards and amendments that are not yet effective (continued) to IFRS 9 - Financial instruments on general hedge accounting (effective 1 January 2018) * The IASE has amended IFRS 9 to align hedge accounting more closely with an entity s risk management. The revised standard also establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in las Amendments to IFRS 10, Consolidated financial statements and las 28, Investments in associates and joint ventures on sale or contribution of assets (postponed) The postponement applies to changes introduced by the IASB in 2014 through narrow-scope amendments to IFRS 10 Consolidated Financial Statements and las 28 Investments in Associates and Joint Ventures. Those changes affect how an entity should determine any gain or loss it recognises when assets are sold or contributed between the entity and an associate or joint venture in which it invests. The changes do not affect other aspects of how entities account for their investments in associates and joint ventures. The reason for making the decision to postpone the effective date is that the lass is planning a broader review that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures. - Amendments to IFRS 10 Consolidated financial statements, IFRS 12 and las 28 Investment entities Applying the consolidation exception (effective 1 January 2016) The amendments clarify the application of the consolidation exception for investment entities and their subsidiaries. - Amendments to IFRS 11 Joint arrangements (effective 1 January 2016) * This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions IFRS 14 Regulatory deferral accounts (effective 1 January 2016) * The lass has issued IFRS 14, Regulatory deferral accounts specific to first time adopters (IFRS 14 ), an interim standard on the accounting for certain balances that arise from rate-regulated activities ( regulatory deferral accounts ). Rate regulation is a framework where the price that an entity charges to its customers for goods and services is subject to oversight and/or approval by an authorised body. - IFRS 15 Revenue from contracts with customers (effective 1 January2018) The FASB and lass issued their long awaited converged standard on revenue recognition on 29 May It is a single, comprehensive revenue recognition model for all contracts with customers to achieve greater consistency in the recognition and presentation of revenue. Revenue is recognised based on the satisfaction of performance obligations, which occurs when control of good or service transfers to a customer. 15

33 ( 2 N 2

34 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2 Summary of significant accounting policies (continued) 2.1 Basis of preparation and adoption of IFRS (continued) (b) Standards, interpretations and amendments to published standards and amendments that are not yet effective (continued) - Amendments to las I Presentation of financial statements disclosure initiative (effective 1 January 2016) A In December 2014 the IASB issued amendments to clarify guidance in las I on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies. - Amendment to las 16, Property, plant and equipment and las 38, Intangible assets, on depreciation and amortisation (effective 1 January 2016) * In this amendment the IASB has clarified that the use of revenue based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. - Amendments to las 27, Separate financial statements on equity accounting (effective 1 January 2016) A In this amendment the IASB has restored the option to use the equity method to account for investments in subsidiaries, joint ventures and associates in an entity s separate financial statements. - Amendments to las 16, Property, plant and equipment and las 41, Agriculture on bearer plants (effective I January2016) * In this amendment to las 16 the IASB has scoped in bearer plants, but not the produce on bearer plants and explained that a bearer plant not yet in the location and condition necessary to bear produce is treated as a self-constructed asset. In this amendment to las 41, the IASB has adjusted the definition of a bearer plant include examples of non-bearer plants and remove current examples of bearer plants from las Amendment to las 12 Income taxes (effective 1 January 2017) * The amendments were issued to clarify the requirements for recognising deferred tax assets on unrealised losses. The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset s tax base. They also clarify certain other aspects of accounting for deferred tax assets. The amendments clarify the existing guidance under las 12. They do not change the underlying principles for the recognition of deferred tax assets. - Amendment to las 7 Cash flow statements (effective 1 January 2017) A In January 2016, the International Accounting Standards Board (IASB) issued an amendment to las 7 introducing an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. 16

35 I.

36 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) 2.1 Basis of preparation and adoption of IFRS (continued) (b) Standards, interpretations and amendments to published standards and amendments that are not yet effective (continued) - IFRS 16 Leases (effective 1 January 2019) * After ten years of joint drafting by the IASB and FASB they decided that lessees should be required to recognise assets and liabilities arising from all leases (with limited exceptions) on the balance sheet. Lessor accounting has not substantially changed in the new standard. Key The model reflects that, at the start of a lease, the lessee obtains the right to use an asset for a period of time and has an obligation to pay for that right. In response to concerns expressed about the cost and complexity to apply the requirements to large volumes of small assets, the IASB decided not to require a lessee to recognise assets and liabilities for short-term leases (less than 12 months), and leases for which the underlying asset is of low value (such as laptops and office furniture). * Management has assessed the impact of these standards, interpretations and amendments on the reported results of the Fund and do not foresee any impact. Management is in the process of assessing the impact of these standards, interpretations and amendments on the reported results of the Fund. + Management has assessed the impact of these amendments on the reported results of the Fund and foresee only minor disclosure changes. 17

37

38 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) 2.2 Foreign Currency translation (a) Functional and presentation currency These financial statements are presented in US Dollars, which is the Fund s functional and presentation currency. The subscriptions and redemptions of redeemable units are denominated in US Dollars and the performance of the Fund is measured and reported to investors in US Dollars. The Manager considers the US Dollar as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the statement of financial position date. Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the statement of comprehensive income within the net foreign currency gains and losses on cash and cash equivalents and other balances. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive income within net changes in fair value on financial assets and financial liabilities at fair value through profit or loss. 2.3 Financial assets and financial liabilities (a) Classification The Fund classifies financial assets and financial liabilities into the following categories. Financial assets at fair value through profit and loss: Held for trading: derivative financial instruments. Designated as at fair value through profit or loss: equity investments. Financial assets at amortised cost: Loans andreceivables: cash and cash equivalents and balances due from brokers. Financial liabilities at fair value through profit and loss: Held for trading: securities sold short and derivative financial instruments. Financial liabilities at amortised cost: Other liabilities: balances due to brokers. A financial instrument is classified as held for trading if: It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; on initial recognition, it is part of the portfolio that is managed together and for which there is evidence of a recent pattern of short-term profit-taking; or it is a derivative, other than a designated and effective hedging instrument. For a reconciliation of line items in the statement of financial position to the categories of financial instruments, as defined by las 39, see note 6. 18

39 / / N

40 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued).2. Summary of significant accounting policies (continued) 2.3 Financial assets and financial liabilities (continued) (b) Recognition and initial measurement Financial assets and liabilities at fair value through profit or loss are initially recognised on the trade date, which is the date the Fund becomes a party to the contractual provisions of the instrument. Other financial assets and financial liabilities are recognised on the date which they are originated. Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value, with transactions costs recognised in profit or loss. Financial assets or financial liabilities not at fair value through profit or loss are initially recognised at fair value plus transactions cost that are directly attributable to their acquisition or issue. Subsequent to initial recognition, all flnancial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the financial assets or financial liabilities at fair value through profit or loss category are presented in the statement of comprehensive income within other net changes in fair value of financial assets and liabilities at fair value through profit or loss. Dividend income from financial assets carried at fair value through profit or loss is recognised in the statement of comprehensive income within dividend income when the Fund s right to receive payments is established. (c) Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurment date The fair value of financial assets and laibilities traded in active markets are based on quoted market prices at the close of trading on the reporting date The Fund adopted IFRS 13 Fair value measurement from 1 March 2013 which did not impact the fair value measurement as the fund valued its unit-linked investments at the quoted price on the last day of the financial year The fair value of financial assets and liabilities that are not traded in an active market is determined using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Valuation techniques used include the use of comparable recent arm s length transactions, reference to other instruments that are substantially the same and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity-specific inputs. (d) Amortised cost measurement The amortised cost of a financial asset or liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal payments, plus or minus the cumulative amortisation using the the effective interest rate method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment. (e) Impairment A financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence of impairment. A financial asset or a group of financial assets is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset(s) and that loss event(s) had an impact on the estimated future cash flows of that asset(s) that can be estimated reliably. 19

41 *

42 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) 2.3 Financial assets and financial liabilities (continued) (e) Impairment (continued) Objective evidence that financial assets are impaired includes significant financial difficulty of the borrower or issuer, default or delinquency by a borrower, restructuring of the amount due on terms that the Fund would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, or adverse changes in the payment status of the borrowers. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset s original effective interest rate. Losses are recognised in profit and loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised. If an event occurring after the impairment was recognised causes the amount of impairment loss to decrease then the decrease in impairment loss is reversed through profit and loss (f) Derecognition The Fund derecognises a financial asset when the contractual rights to the cash flows from the asset expire or transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Fund neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset that is derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss. Any interest in such transferred financial assets that is created or retained by the Fund is recognised as a seperate asset or liability. The Fund derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. (g) Transfers between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period. 2.4 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position where the Fund currently has a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Fund or the counterparty. 2.5 Due from and due to brokers Amounts due from and to brokers represent receivables for securities sold and payable for securities purchased that have been contracted for but not yet settled or delivered on the statement of financial position date respectively. 20

43 K

44 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) Due from and due to brokers (continued) These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment for amounts due from brokers. A provision for impairment of amounts due from brokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant brokers. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from brokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premium or discounts Cash and cash equivalents Cash and cash equivalents includes cash in hand deposits held at call with banks and other short-term investments in an active market with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown in current liabilities in the statement of financial position. 2.7 Other payables and accrued expenses Other payables and accrued expenses are recognised when the Fund has a present obligation arising from past events the settlement of which is expected to result in an outflow of economic benefits from the Fund Other payables and accrued expenses are recognised initially at fair value and and subsequently stated at amortised cost using the effective interest rate method. 2.8 Redeemable units The Fund issues one class of redeemable units, which are redeemable at the holder s option. Such units are classified as financial liabilities. Redeemable units can be put back to the Fund at any dealing date for cash equal to a proportionate share of the Fund s net asset value attributable to the unit class. Units are redeemable daily. The redeemable units are carried at the redemption amount that is payable at the statement of financial position date if the holder exercises the right to redeem their units in the Fund. Redeemable units are issued and redeemed at the holder s option at prices based on the Fund s net asset value per unit at the time of issue or redemption. The Fund s net asset value per unit is calculated by dividing the net assets attributable to the holders of each class of redeemable units with the total number of outstanding redeemable units for each respective class. In accordance with the provisions of the Fund s regulations, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per unit for subscriptions and redemptions. 21

45 I - L

46 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) 2. Summary of significant accounting policies (continued) 2.8 Redeemable units (continued) The total proceeds and amounts paid out from redeemable participating units issued and redeemed, as reflected per the Statement of changes in net assets attributable to holders of redeemable participating units and the Statement of cash flows on pages 11 and 12 respectively, are indicative of the net amounts received or paid out by the Fund on a daily basis for subscriptions and redemptions Note 8 reflects the individual capital share transactions for each unit class whereas the individual cash values are shown on a net basis as noted above. 2.9 Structured entities A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes: (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support and (U) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches). The Fund considers all of its investments in other funds ( Investee funds ) to be investments in unconsolidated structured entities. The Investee funds apply various investment strategies to accomplish their respective investment objectives. The Investee funds finance their operations by issuing redeemable interests (e.g. shares) which are puftable at the holder s option and entitles the holder to a proportional stake in the respective fund s net assets. The Fund holds redeemable interests in each of its Investee funds. The change in fair value of each Investee fund is included in the statement of comprehensive income in Net changes in fair value of financial assets and liabilities carried at fair value through profit or loss Income Interest income is recognised on a time-proportionate basis using the effective interest rate method. Dividend income is recognised when the right to receive payment is established. Where applicable, withholdings taxes are deducted at source on investment income and the gross amounts recognised in the statement of comprehensive income. Other income is recognised on an accrual basis or when the right to receive payment is established Transaction costs Transaction costs are costs incurred to acquire financial assets and liabilities at fair value through profit or loss. They include fees and commissions paid to agents, advisers, brokers and dealers. Transactions costs, when incurred, are immediately recognised in profit or loss as an expense Expenses Expenses are recognised on an accrual basis and recognised in the statement of comprehensive income. 22

47 ) /

48 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otherwise stated 2. Summary of significant accounting policies (continued) Distributions payable to holders of redeemable units All, or substantially all, dividends, interest and other income of each Class Fund, net of all fees and other expenses of each Class Fund, will be distributed by the Trustee on the Distribution Date to Unitholders registered on the Register on the Dealing Day immediately prior to the Distribution Date Increaseldecrease in net assets attributable to holders of redeemable units from operations Income not distributed is included in net assets attributable to holders of redeemable units. Movements in net assets attributable to holders of redeemable units are recognised in the statement of comprehensive income Taxation The Director of Income Tax in Guernsey has confirmed that the Fund is exempt from Guernsey Income Tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance Pursuant to the exemption granted under the above mentioned Ordinance, the Fund is subject to an annual fee, currently 1,200, payable for the Global Scheme to the Guernsey Authorities. The Fund currently incurs withholdings taxes imposed by certain countries on investment income. Such income or gains are recorded gross of withholdings taxes in the statement of comprehensive income. Withholdings taxes are shown as a separate item in the statement of comprehensive income. 3. Financial risks 3.1 Financial risk factors The Fund s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Fund is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securities held in trust occassioned by the insolvency or negligence of the trustee. Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the trustee, in the event of its failure, the ability of the Fund to transfer securities might be temporarily impaired. The Fund s overall risk management programme seeks to maximise the returns derived for the level of risk to which the Fund is exposed and seeks to minimise potential adverse effects on the Fund s financial performance. The management of these risks is carried out by the Investment Manager under policies approved by the Manager. The Manager provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and the investment of excess liquidity. The Fund uses different methods to measure and manage the various types of risk to which it is exposed; these methods are explained below Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and market prices. 23

49

50 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 201 6(continued) All amounts are in USD unless otherwise stated 3. Financial risks (continued) 3.1 Financial risk factors (continued) Market risk (continued) (a) Price risk The Fund is exposed to price risk from the underlying equity securities within the Funds investments in other funds. This arises from investments held by the Fund in other funds for which prices in the future are uncertain. Where non-monetary financial instruments - for example, equity securities - are denominated in currencies other than US Dollar, the price initially expressed in foreign currency and then converted into US Dollar will also fluctuate because of changes in foreign exchange rates. Paragragh (b) Foreign exchange risk below sets out how this component of price risk is managed and measured. The Fund s policy is to manage price risk through diversification and selection of funds holding securities and other financial instruments within specified limits set by the Manager. The Fund s policy does not limit the asset classes in which the Manager may invest and if the Manager considers that the circumstances warrant it, the Fund may be invested predominantly or entirely in bond funds or cash. However, certain investment limits apply as this is a sub-fund approved by the South African Financial Services Board. These provisions have been applied in order to promote sound investment decision making and investor protection in the markets that they supervise. As at year end the Funds overall exposure to price risk was as follows: Fair value of unit-linked investments 8,599,681 13,755,360 13,574,329 The Fund s underlying investments are largely concentrated within the equity sector and is thus classified as an equity portfolio for the price sensitivity analysis. The Manager deems the use of 20% variance to be a reasonable estimate of possible fluctuations in the underlying fund prices. The table below summarises the sensitivity of the Fund s net assets attributable to holders of redeemable units to equity price movements as at year end Effect on net assets attributable to redeemable units to a 20% increase in underlying fund prices 1,719,936 2,751,072 2,714,866 Effect on net assets attributable to redeemable units to a 20% decrease in underlying fund prices (1,719,936) (2,751,072) (2,714,866) The Fund s investments in Investee funds are subject to the terms and conditions of the respective Investee fund s offering documentation and are susceptible to market price risk arising from uncertainties about future values of those Investee funds. The Manager makes investment decisions after extensive due diligence of the underlying fund, its strategy and the overall quality of the underlying fund s manager. All of the Investee funds in the investment portfolio are managed by portfolio managers who are compensated by the respective Investee funds for their services. Such compensation generally consists of an asset based fee and a performance based incentive fee and is reflected in the valuation of the Fund s investment in each of the Investee funds. 24

51

52 - PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless othe,wise stated 3. Financial risks (continued) 3.1 Financial risk factors (continued) Market risk (continued) (a) Price risk (continued) The exposure to investments in Investee funds at fair value is disclosed as part of Note 6. These investments are included in Financial assets at fair value through profit or loss in the statement of financial position The Fund s maximum exposure to loss from its interests in lnvestee funds is equal to the total fair value of its investments in investee funds. (b) Foreign exchange risk The Fund operates internationally and holds both monetary and non-monetary assets denominated in currencies other than US Dollar, the functional currency. Foreign currency risk as defined in IFRS 7 arises as the value of future transactions, recognised monetary assets and monetary liabilities denominated in other currencies fluctuate due to changes in foreign exchange rates. IFRS 7 considers the foreign exchange exposure relating to non-monetary assets and liabilities to be a component of market price risk not foreign currency risk. However, the Manager monitors the exposure on all foreign currency denominated assets and liabilities. The table below provides analysis between monetary and non-monetary items to meet the requirements of IFRS 7. The table below summarises the Fund s assets and liabilities, monetary and non-monetary, which are denominated in a currency other than US Dollar. Concentration of foreign currency exposure Currency Assets Monetary GBP Non-monetary GBP Liabilities Monetary GBP (2,753) (2,299) (3,611) Non-monetary GBP The table below summarises the sensitivity of the Fund s net asset value to changes in foreign exchange movements at year end. The analysis is based on the assumptions that the relevant foreign exchange rate increased/decreased by the percentage disclosed in the table below, with all other variables held constant. This represents the Manager s best estimate of a reasonable possible shift in the foreign exchange rates, having regard to historical volitality of those rates Reasonable possible shift in rate +/-20% +/-20% /-20% Currency GBP - Monetary / I - 25

53

54 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otheiwise stated 3. Financial risks (continued) 3.1 Financial risk factors (continued) Market risk (continued) (c) Interest rate risk Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates on the fair value of financial assets and liabilities. The Fund holds cash and cash equivalents and unit-linked investments. Cash and cash equivalents do not expose the Fund to fair value interest rate risk as the bank accounts are non-interest bearing. Unit-linked investments that are predominantly invested in interest bearing instruments will expose the fund to fair value interest rate risk. At year end the Fund did not hold such investments Liquidity risk Liquidity risk is the risk that the Fund may not be able to generate sufficient cash resources to settle its obligations in full as they fall due or can only do so on terms that are materially disadvantageous. The Fund s investments are considered readily realisable, as the majority are investments in collective investments schemes, which under normal market conditions are readily convertible to cash. In addition, the Fund s policy is to maintain sufficient cash and cash equivalents to meet normal operating requirements and expected redemption requests. In order to manage the Fund s overall liquidity, the Manager may limit the total number of units redeemed or converted on any redemption dealing day to 5% of the total number of redeemable units in issue in the Fund. The Manager did not limit any redemptions during 2016 and The table below analyses the Fund s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows. Carrying Less than 7 7 days to 3 amount days months > 3 months At 29 February 2016 Managementfee payable 11,130-11,130 - Administration fee payable 1,855-1,855 - Trustee fee payable Other payables 1, ,008 Net assets attributableto holders of redeemable units 8,761,443 2,190,361 6,571,082 - Contractual cash out flows 8,776,477 2,190,361 6,585,108 1,008 At 28 February 2015 Management fee payable 17,545-17,545 - Administration fee payable 2,924-2,924 - Trusteefeepayable Other payables 1, ,295 Net assets attributable to holders of redeemable units 15,348,802 3,837,201 11,511,602 - Contractual cash outflows 15,371,501 3,837,201 11,533,005 1,295 26

55

56 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otherwise stated 3. Financial risks (continued) 3.1 Financial risk factors (continued) Liquidity risk (continued) Carrying Less than 7 7daysto3 At 28 February 2014 amount days months > 3 months Due to brokers 260, , Management fee payable 14,292-14,292 - Administration fee payable 2,382-2,382 - Trustee fee payable Other payables 100,495-98,299 2,196 Net assets attributable to holders of redeemable units 13,766,667 3,441,667 10,325,000 - Contractual cash outflows 14,144,503 3,701,667 10,440,640 2,196 Redeemable units are redeemed on demand at the holder s option. However, the Manager does not envisage that the contractual maturity disclosed in the table above will be representative of the actual cash outflows, as holders of these instruments typically retain them for the medium to long term. The Fund manages its liquidity risk by investing predominantly in securities that it expects to be able to liquidate within 7 days or less. The following table illustrates the expected liquidity of assets held: At 29 February 2016 Less than 7 days 7 days to I month 1-12 months Total assets 8,776, At 28 February 2015 Total assets 15,370, At 28 February 2014 Total assets 14,143, Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Fund is exposed to counterparty credit risk on cash and cash equivalents, amounts due from brokers and other receivable balances P-I 71, , ,898 Unrated 104,949 1,510,943 6,442 Total 176,555 1,615, ,340 All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. 27

57 /

58 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otherwise stated 3. Financial risks (continued) 3.1 Financial risk factors (continued) Credit risk (continued) The maximum exposure to credit risk at year end is the carrying amount of the financial assets as set out below Cash and cash equivalents 71, , ,898 Amounts due from brokers 100,004 1,503,410 - Other receivable 4,945 7,533 6,442 Total 176,555 1,615, ,340 None of these assets are impaired nor past due but not impaired. The clearing and depository operations for the Fund s security transactions are mainly concentrated with one prime broker, namely BNP Paribas, a members of a major securities exchange, and at 29 February 2016 had a credit rating of P-i (2015: P-I ). Moodys is the reputable credit rating institution. At year end substantially all cash and cash equivalents, balances due from custodians and investments are placed in custody with BNP Paribas. 3.2 Fair value estimation The fair value of financial assets and liabilities traded in active markets are based on quoted market prices at the close of trading on the year end date. The fund classifies fair value measurements within a hierarchy which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest prority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are: Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 - inputs other than quoted prices included in level I that are observable for the asset or liability, either directly or indirectly; and Level 3 - inputs are unobservable for the asset or liability. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurment in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes observable requires significant judgement by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities. The Fund does not adjust the quoted price for these investments. 28

59 r;w. C-

60 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otheiwise stated 3. Financial risks (continued) 3.2 Fair value estimation (continued) Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include listed equities. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations maybe adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. Level 3 instruments include private equity. As observable prices are not available for these securities, the Fund will use valuation techniques to derive the fair value. The following table analyses within the fair value hierarchy the Fund s assets and liabilities measured at fair value: As at 29 February 2016 Level I Level 2 Level 3 Total Unit-linked investments - 8,599,681-8,599,681 As at 28 February 2015 Unit-linked investments - 13,755,360-13,755,360 As at 28 February 2014 Unit-linked investments 13,574,329 13,574,329 All fair value measurements above are recurring. Fair values are classified as level I when the related sedurity is actively traded and a quoted price is available. If an instrument classified as level I subsequently ceases to be actively traded, it is transferred out of level 1. In such cases, instruments are reclassified into level 2, unless the measurement of it s fair value requires the use of significant unobservable inputs, in which case it is classified as level Capital risk management The capital of the Fund is represented by the net assets attributable to holders of redeemable units. The amount of net assets attributable to holders of redeemable units can change significantly on a daily basis, as the Fund is subject to daily subscriptions and redemptions at the discretion of unitholders, as well as changes resulting from the Fund s performance. The Fund s objective when managing capital is to safeguard the Fund s ability to continue as a going concern in order to provide returns to unitholders, provide benefits for other stakeholders and maintain a strong capital base to support the development of the investment activities of the Fund. In order to maintain the capital structure, the funds policy is to redeem and issue new units in accordance with the supplemental particulars of the Fund, which include the ability to restrict redemptions and require certain minimum holdings and subscriptions. 29

61 /

62 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otherwise stated 4. Critical accounting estimates and judgements 4.1 Critical accounting estimates and assumptions The Manager makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related results. These estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below. (a) Fair value of securities not quoted in an active market The fair value of such securities not quoted in an active market may be determined by the Fund using reputable pricing sources (such as pricing agencies). Broker quotes as obtained from the pricing sources may be indicative and not executable or binding. The Fund would exercise judgement and estimates on the quantity and quality of pricing sources used. Whereno market data is available, the Fund may value positions using its own models, which are usually based on valuation methods and techniques generally recognised as standard within the industry. Models use obervable data, to the extent practicable. The determination of what constitutes observable requires significant judgement by the Fund. The Fund considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. 4.2 Critical judgements Functional currency The Manager considers the US Dollar the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. The US Dollar is the currency in which the Fund measures its performance and reports its results, as well as the currency in which it receives subscriptions from its investors. 5. Financial assets at fair value through profit or loss Financial assets designated at fair value through profit or loss at inception -Unit-linked Investments 8,599,681 13,755,360 13,574,329 Total financial assets at fair value through profit or loss 8,599,681 13,755,360 13,576,329 Other net changes in fair value on financial assets at fair value through profit or loss: - Realised 328, , ,562 - Change in unrealised (1,750,363) (239,907) (1,314,189) Total (losses)lgains (1,422,006) 268,601 (1,183,627) 30

63

64 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless othe,wise stated 6. Financial instruments by category 29 February 2016 Assets as per the statement of financial position Financial assets at fair value through profit or loss Due from brokers Other receivables and prepayments Cash and cash equivalents Total Assets at fair Loans and value through receivables profit or loss Total 100,004 5,186 71, ,796 8,599,681 8,599,681 8,599, ,004 5,186 71,606 8,776, February 2015 Assets as per the statement of financial position Financial assets at fair value through profit or loss - 13,755,360 13,755,360 Due from brokers 1,503,410-1,503,410 Other receivables and prepayments 8,146-8,146 Cash and cash equivalents 104, ,585 Total 1,616,141 13,755,360 15,371, February 2014 Assets as per the statement of financial position Financial assets at fair value through profit or loss 13,574,329 13,574,329 Other receivables and prepayments 7,276 Cash and cash equivalents 562, ,898 Total 570,174 13,574,329 14,144, ,530 Liabilities at Other fair value financial through profit 29 February 2016 liabilities or loss Total Liabilities as per the statement of financial position Managementfee payable 11,130-11,130 Administration fee payable 1,855-1,855 Trustee fee payable 519 Other payables 1,530 Net assets attributable to holders of redeemable units 8,761,443 8,761,443 Total - 15,034 8,761,443 8,776, February Liabilities as per the statement of financial position Management fee payable 17,545-17,545 Administration fee payable 2,924-2,924 Trustee fee payable Otherpayables 1,411-1,411 Net assets attributable to holders of redeemable units 15,348,802 15,348,802 Total 22,699 15,348,802 15,371,501 31

65 - - I S

66 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless othe,wise stated 6. Financial instruments by category (continued) Liabilities at 28 February 2014 Other financial liabilities fair value through profit or loss Total Liabilities as per the statement of financial position Due to broker 260, ,000 Management fee payable 14,292-14,292 Administration fee payable 2,382-2,382 Trustee fee payable Other payables 100, ,495 Net assets attributable to holders of redeemable units - 13,766,667 13,766,667 Total 377,836 13,766,667 14,144,503 I 7. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise the follàwing balances with original maturity of less than 90 days: Cash at bank 71, , ,898 Short-term deposits Total 71, , , Redeemable units The Manager has the ability to limit cash redemptions if it exceeds 5% of the total number of units in issue on any redemption dealing day. The limitation will be applied pro rata to all unitholders who have requested redemptions to be effected on such redemption dealing day so that the proportion of each holding redeemed is the same for all such unitholders. During the year ended, the number of units issued, redeemed and outstanding was as follows: Units outstanding at the beginning of the year 12,059,612 10,805,621 7,177,886 Redeemable units issued 4,049,517 3,676,881 8,303,085 Redeemable units redeemed (8,285,689) (2,422,890) (4,675,350) Units outstanding at the end of the year 7,823,440 12,059,612 10,805,621 All issued redeemable units are fully paid. 9. Distributions All, or substantially all, dividends, interest and other income of each Class Fund, net of all fees and other expenses of each Class Fund, will be distributed by the Trustee on the Distribution Date to Unitholders registered on the Register on the Dealing Day immediately prior to the Distribution Date. No distributions were made for the current financial period. 32

67 / 4 4 / - _t.;4 i - -, -

68 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in USD unless otherwise stated 10. Related-party transactions Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Management fee, performance fee and administration fee The Fund is managed by PSG Fund Management (Cl) Limited (the Manager ), an investment management company incorporated in Guernsey. Under the terms of the management agreement, the Fund appointed PSG Fund Management (Cl) Limited as Manager to provide management services and administration services to the Fund. The Manager receives in return a fee based on the net assct value of the Fund based on traded values, payable monthly in arrears. The Manager is also entitled to a performance fee, which is calculated and crystallised at each dealing day. The performance fee is calculated based on both the High Water Mark (HWM) and the Hurdle Rate (HR) principles and for a performance fee to be considered, the NAV per unit must exceed the HWM at the dealing day. Performance Management Fees Fees Admin Fees PSG Multi-Management Global 10% of 1.5% pa 0.25% pa minimum admin Flexible Fund (Dollar) outperformance fee of p.a Performance fee expense 72,086 60,739 - Performance fee expense accrual Management fee expense 186, , ,083 Management fee expense accrual 11,130 17,545 14,292 Administration fee expense 31,025 39,888 25,013 Administration fee expense accrual 1,855 2,924 2, Subsequent events No mailer which is material to the financial affairs of the Fund has occurred between 29 February 2016 and the date of approval of the financial statements. 12. Transition to IFRS The effect of the Fund s transition to IFRS is summarized in this note as follows: 12.1 Transition elections The Fund did not apply any transition exceptions or exemptions to full retrospective application of IFRS Statement of cash flows Under UK GAAP, the fund was exempt from providing a statement of cash flows. las I requires that a complete set of financial statements include a statement of cash flows for the current and comparative periods, without exception. 33

69

70 PSG MULTI-MANAGEMENT GLOBAL FLEXIBLE FUND (DOLLAR) NOTES TO THE FINANCIAL STATEMENTS for the year ended 29 February 2016 (continued) All amounts are in U$D unless otherwise stated 12. Transition to IFRS (continued) 12.3 Classification of redeemable units issued by the Fund Under UK GAAP, the Fund accounted for its redeemable units as equity. Under IFRS, las 32 requires that the shares of an entity which include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset be classified as a financial liability. The Funds units do not meet the criteria in las 32 for classification as equity and therefore, have been reclassified as financial liabilities on transition to IFRS and they will be measured at FV through profit and loss. There has been no impact on profit for the year ended 28 February 2015 or equity as at 1 March 2014 or 28 February 2015 as a result of the transition to IFRS. 34