Unaudited Interim Report and Financial Statements For the period 1 October 2014 to 31 March 2015

Transcription

1 Standard Bank International Funds Limited (formerly Melville Douglas Multi Manager Funds Limited) Unaudited Interim Report and Financial Statements For the period 1 October 2014 to 2015

2 Contents page Administration 2 Report of the Directors 3 Investment Manager s Report 5 Statements of Total Return 8 Statements of Change in Shareholders Net Assets 9 Balance Sheets 10 Notes to the Financial Statements 12 Fund Statistics 31 Portfolio Statements 34 1

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 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 Ireland Investment Manager Standard Bank International Investments Limited Standard Bank House La Motte Street St. Helier Jersey JE2 4SZ Channel Islands 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 2 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. SFMJ04/2014

4 Report of the Directors The directors submit their unaudited interim report and financial statements for the period 1 October 2014 to 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 24 September 1999 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 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 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 period are set out in the Statements of Total Return on page 8. 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 period from 1 October 2014 to Directors The directors of the Company during the period ended 2015 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. 3

5 Report of the Directors (continued) Director s responsibilities Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year in accordance with any generally accepted accounting principles. The financial statements of the Company are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing these financial statements, the directors should: select suitable accounting policies and then apply them consistently; make judgments 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 Company will continue in operation. The directors are responsible for keeping proper accounting records which are sufficient to show and explain its transactions and are such as to disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements prepared by the Company comply with the requirements of the Companies (Jersey) Law They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Significant Events Change of Company name from Melville Douglas Multi Manager Funds Limited to Standard Bank International Funds Limited. This name change is effective from 30 March Fund Name Changes (effective 30 March 2015) Global Equity Fund () to Equity Fund () Global Equity Fund () to Equity Fund () Global Balanced Fund () to Balanced Fund () Global Balanced Fund () to 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 period were carried out as if negotiated at arm s length and were in the best interests of shareholders. By order of the Board STANLIB Fund Managers Jersey Limited Secretary 21 July

6 Investment Manager s Report Performance Commentary Equity Classes (formerly Global Equity Classes) Investment objective To provide long-term capital appreciation through investment solely in equity-orientated funds. The investment manager will look to maintain a fully invested strategy at all times. A minimum exposure of 40% to larger capitalised shares means that the investment 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 Fund s return for the period was 3.23%. The Fund s benchmark is the FTSE All World Total Return Net Index in US dollars; the benchmark s return was 2.77%. Sterling Class The Fund s return was 10.32% for the period under review. The 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 9.0% for the period. Commentary Equity markets were turbulent throughout the period and despite mixed results in terms of earnings growth, equity indices continued to climb the wall of worry to post a respectable gain. Some of the biggest moves were in the currency markets, with US dollar strength and euro weakness the main drivers, with obvious implications for companies with costs or earnings in foreign currency. This also accounts for the divergence in the absolute return for the two currency classes. The Equity Fund performed reasonably well, with returns ahead of the benchmark index. Most of our tactical positions worked favourably, with the over-weights to Healthcare, Technology, China, Europe and Japan all adding value. The best performing funds were the Polar Healthcare and Fidelity China Consumer funds, which rose 19.8% and 13.5% respectively, in US dollar terms. We have been meeting regularly with the managers of the Healthcare fund as we are concerned that valuations are becoming stretched in certain areas of this sector. While this is certainly true, most of the performance in this fund has come from stock picking success and the early identification of specific themes. We remain convinced that we are still in the early stages of the secular growth in this sector, where demographic shifts and advances in technology are driving significant changes that are translating to substantial earnings growth for successful companies. Forward thinking It was pleasing to note that after a very difficult year for active investment strategies in 2014, 2015 is so far proving to be more rewarding and the majority of our regional managers have also been able to beat their benchmark indices. The underperformance of small and mid-cap companies has abated and may be at an inflection point and there are also signs that investors are beginning to favour growth strategies which would also suit our investment style. We are considering increasing our overall exposure to more cyclical strategies, however in the very short term we are concerned that markets will continue to be volatile and the S&P 500 in particular looks expensive and vulnerable to a correction. We are therefore likely to make any changes after a pullback in markets or when if we detect an improvement in investor sentiment. 5

7 Investment Manager s Report (continued) 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 Fund s return for the period was 1.53%. The Fund s benchmark is composed of 30% 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 3.15% for the period. Sterling Class The Fund s return for the period was 7.20%. The Fund s benchmark is composed of 30% 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 6.47% for the period. Commentary There were some significant moves in financial markets during the period, with most asset classes ultimately posting positive returns in response to a moderately improving macro outlook, ongoing monetary stimulus from the Bank of Japan and the announcement of Quantitative Easing in Europe from the European Central Bank. Equity markets were turbulent but continued to grind higher, fixed income markets also pushed higher despite the looming rate rises in both the US and the UK, however some of the most significant moves were in currency markets, with US dollar strength and Euro weakness the dominant theme. Currency moves account for the divergence of fortunes between the two currency classes of the Global Balanced Fund. The sterling share class was a beneficiary of the US dollar strength and posted a very respectable 7.2% gain, well ahead of the composite benchmark, with the overweight to equities and in particular overseas equities driving returns. The US dollar class struggled in comparison, overall returns were positive, however the overweight allocation to overseas equities was a negative contributor due to the currency effect, which led to a slight underperformance relative to benchmark. The thematic funds posted the best returns during the period; the highlights were the Polar Healthcare and Fidelity China Consumer funds, which rose 19.8% and 13.5% respectively, in US dollar terms. It was also pleasing to note that after a very difficult year for active investment strategies in 2014, 2015 is so far proving to be more rewarding and the majority of our regional managers have also been able to beat their benchmark indices. Our Global Equity managers did not fare so well, with the majority underperforming, largely down to an underweight exposure to the US dollar. Forward thinking The main changes to the portfolio exposures were in response to the European Quantitative Easing announcement, we envisage the positive impact of monetary stimulus in Europe and Japan will support asset prices and potentially increase investor appetite for more cyclical assets. The exposure to equities was increased to the maximum of 70% while the exposures to cash, fixed income and other interest rate sensitive strategies such as REITs were slightly reduced. Looking longer term we remain of the opinion that the global growth backdrop remains fairly robust and that equities will outperform albeit with higher volatility than the last three years. 6

8 Investment Manager s Report (continued) Multi Manager Absolute Return Classes (formerly Absolute Return Classes) Investment objective The 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 Fund s return for the 6 month period was -0.74%.The Funds benchmark is US CPI which return -1.32% over the period. Sterling Class The Fund s return for the 6 month period was +1.53%.The Funds benchmark is UK CPI which return -0.70% over the period. Commentary In January, oil price movements dominated market sentiment, as the price of Brent crude reached a low of $46.59 in the middle of the month, a decline of over -56% from the high of $ in August last year, before recovering to the mid $50 s by the month end. The Greek election at the end of January saw a big win for the far-left Syriza Party led by Alexis Tsipras. With his vote all but giving him an overall majority he has thrown down a big challenge to Europe, but the danger involved in acceding to Greece s request for a big cut in its debt, is that it could push voters in Spain and Italy the same way. Whilst the risk of an exit from Europe is present, it is not our base case and we feel that some form of compromise will be achieved involving a complicated mix of measures. In a world of increasingly divergent monetary policy, ongoing volatility should be expected and February proved to be a case in point, with sharply weaker government bond markets and firmer global equity markets. The S&P 500 made an all-time new high at the beginning of March and the FTSE 100 index looks set to breach 7,000 for the first time. Given that global government bonds incurred meaningful losses during the month, with US 10 year issues falling almost -2% and longer dated 30 year bonds falling over -5%, it is comforting that the majority of the underlying Absolute Return Bond funds held recorded positive gains, most notably those with a negative duration, such as the F&C Global Macro Fund (US Dollar class), which rose +1.8%. Finally, the performance in March was positive for the Sterling share classes, rising +0.76%, but negative for the US dollar share class, with a marginal decline of -0.21%. The largest influence on performance between the two share classes was the 4% rise in the US dollar against Sterling, from at the end of February to at quarter end. The Sterling class currently has a 17% unhedged position to the US dollar, where the maximum permitted unhedged allocation is 20%. The US dollar share class is currently 97% hedged, with a small 3% exposure to emerging currencies. Forward thinking Activity in the 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. Standard Bank International Investments Limited Investment Manager 2 June

9 Statements of Total Return For the period 1 October 2014 to 2015 (Comparatives are for the period from 1 October 2013 to 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* Notes Net capital gains 3 3,057,090 5,752,899 8,444,390 5,611, , ,176 Revenue 4 26,825 27,143 45,445 73,131 42,541 25,252 Expenses 5 (618,991) (569,959) (623,086) (605,003) (101,845) (85,408) Net expense for the period before taxation (592,166) (542,816) (577,641) (531,872) (59,304) (60,156) Taxation 7 (1,516) (4,568) Net expense for the period after taxation (592,166) (542,816) (579,157) (536,440) (59,304) (60,156) Change in net assets attributable to shareholders from investing activities 2,464,924 5,210,083 7,865,233 5,074, , ,020 Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Notes Net capital gains/(losses) 3 618, ,478 (148,387) 453, , ,293 Revenue 4 40,410 26,427 34,794 58,565 54, ,802 Expenses 5 (72,568) (68,479) (226,225) (138,368) (141,650) (130,277) Finance costs: Interest (32) Net expense for the period before taxation (32,158) (42,322) (191,463) (79,803) (87,012) (13,475) Taxation 7 (1,361) (467) (508) (2,923) Net expense for the period after taxation (32,158) (42,322) (192,824) (80,270) (87,520) (16,398) Change in net assets attributable to shareholders from investing activities 586, ,156 (341,211) 372, , ,895 *Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March All of the above results are from continuing operations. 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 12 to 30 form an integral part of these financial statements. 8

10 Statements of Changes in Shareholders Net Assets For the period 1 October 2014 to 2015 (Comparatives are for the period from 1 October 2013 to 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* Net assets at the start of the period 84,431,060 52,228,409 77,550,464 71,936,305 10,490,156 7,388,911 Amounts receivable on creation of shares 2,710,420 31,151,254 1,711,931 6,475,097 1,409,648 2,479,575 Amounts paid on redemption of shares (17,676,936) (3,718,387) (5,410,663) (4,115,916) (470,335) (192,600) Change in net assets attributable to shareholders from investing activities 2,464,924 5,210,083 7,865,233 5,074, , ,020 Net assets at the end of the period 71,929,468 84,871,359 81,716,965 79,370,327 11,622,100 10,137,906 Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Net assets at the start of the period 7,982,986 7,285,926 41,200,576 25,620,072 27,310,017 26,092,396 Amounts receivable on creation of shares 850, ,845 10,937,702 6,713,319 2,729,745 2,055,338 Amounts paid on redemption of shares (700,987) (240,476) (2,374,658) (5,389,170) (676,535) (1,870,280) Change in net assets attributable to shareholders from investing activities 586, ,156 (341,211) 372, , ,895 Net assets at the end of the period 8,718,413 7,827,451 49,422,409 27,317,084 29,821,015 26,533,349 *Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March The notes on pages 12 to 30 form an integral part of these financial statements. 9

11 Balance Sheets As at 2015 (Comparatives as at 30 September 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* September September September 2014 Assets Investments 71,576,521 84,149,134 81,537,784 76,274,551 11,105,830 9,669,599 Cash and bank balances 509, , ,262 1,271, , ,975 Amounts due on creations 149, ,008 10, , ,858 Debtors on sale of investments 446, , ,864 Sundry debtors 4,438 Total assets 72,686,904 84,730,519 83,015,916 77,804,975 11,776,396 10,519,574 Liabilities Creditors on purchase of investments 110, ,802 Amounts due on redemptions 650,455 57,511 1,167, ,552 Management fees payable 94, , , ,691 15,588 14,526 Custodian fees payable 2,029 2,336 1,805 1, Sub-Custodian fees payable 2,179 8,126 8,320 1,372 2,542 Director fees payable 3,871 6,593 6,025 6,749 5,554 6,276 Audit fees payable 2,562 4,758 4,824 6,183 2,387 4,583 Other creditors and accrued fees 3,622 2,738 3,127 2,239 2,141 1,039 Total liabilities 757, ,459 1,298, , ,296 29,418 Net assets attributable to shareholders 71,929,468 84,431,060 81,716,965 77,550,464 11,622,100 10,490,156 Net asset value per share *Global Equity Fund (), Global Equity Fund () and Global Balanced Fund () changed their name to Equity Fund (), Multi Manager Global Equity Fund () and Balanced Fund () on 30 March The notes on pages 12 to 30 form an integral part of these financial statements. 10

12 Balance Sheets (continued) As at 2015 (Comparatives as at 30 September 2014) Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Notes September September September 2014 Assets Investments 8,299,048 7,349,854 46,037,629 30,911,898 27,087,163 25,785,110 Cash and bank balances 450, ,404 3,952,881 10,167,417 2,610,459 1,526,067 Unrealised gain on forward foreign currency contracts , , ,001 31,094 Amounts due on creations 57,997 9,747 Sundry debtors 2,256 2, ,370 Total assets 8,749,653 8,005,258 50,241,428 41,243,081 29,851,407 27,343,641 Liabilities Unrealised loss on forward foreign currency contracts 10 4,713 Creditors on purchase of investments 764,130 Amounts due on redemptions 8,915 Management fees payable 11,717 10,945 37,841 27,537 22,728 21,061 Custodian fees payable ,558 1, Sub-Custodian fees payable 2,989 2,283 Director fees payable 3,738 4,462 3,010 3,932 1,986 2,411 Audit fees payable 2,212 3,571 5,387 7,583 3,298 4,657 Other creditors and accrued fees 1, ,380 2,319 1,442 4,626 Total liabilities 31,240 22, ,019 42,505 30,392 33,624 Net assets attributable to shareholders 8,718,413 7,982,986 49,422,409 41,200,576 29,821,015 27,310,017 Net asset value per share *Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March 2015 The Financial statements were approved by the board on 21 July 2015 and signed on its behalf by: Director The notes on pages 12 to 30 form an integral part of these financial statements. 11

13 Notes to the Financial Statements 1. Incorporation The Company was incorporated in Jersey, Channel Islands on 24 September The principal accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to all periods presented. The 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 United Kingdom Accounting Standards. A summary of the more important accounting policies are set out below. 2. Accounting policies a. Basis of accounting The financial statements have been prepared in accordance with United Kingdom Accounting Standards and the Statement of Recommended Practice ( SORP ) for Authorised Funds issued by the Investment Management Association ( IMA ) in October There are no significant developments in United Kingdom Generally Accepted Accounting Principles ( UK GAAP ) that would impact the financial statements of the Company for the period ended 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 Total Return. 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 Total Return 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. 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 Balance Sheet date. Differences arising on the translation of investments are included in the Statement of Total Return 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 Equity Fund ()*, Balanced Fund ()* and Multi Manager Absolute Return Fund ()*, Sterling for the Equity Fund ()*, 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 Statement of Total Return with revenue or expenses. 12

14 Notes to the Financial Statements (continued) 2. Accounting Policies (continued) 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. Cash Flow Statement The Company is exempt from preparing a cash flow statement as it meets the following exemption criteria in FRS 1 Cash Flow Statements : Substantially all of the Company s investments are highly liquid; The investments are measured and reported at fair value; and The Company prepares a Statement of Changes in Net Assets. i. Aggregation The Statement of Recommended Practice for Authorised funds states that Umbrella Funds should produce an aggregation of financial statements of each Class Fund. 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. j. Total Expense Ratio The Total Expense Ratio ( TER ) is calculated and disclosed as per the guidelines issued by the IMA. The ratio expresses the sum of all costs charged on an ongoing basis to the Class Fund taken retrospectively as a percentage of the Class Fund s average net assets. For clarity, when the fund is investing in other funds, the ongoing cost of these funds is not incorporated in the calculation of the TER. k. Distribution policy The Company s policy is to not distribute any income on its participating share. *Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

15 Notes to the Financial Statements (continued) 3. Net capital movement (Comparatives are for the period from 1 October 2013 to 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* Non-derivative securities: Net realised gain on investments 3,295,462 2,541,684 2,511,354 4,998, , ,064 Net movement in unrealised gain or loss on investments (238,090) 3,211,974 5,933, , , ,419 3,057,372 5,753,658 8,444,431 5,611, , ,483 Derivative securities: Net realised loss on foreign currency contracts (282) (41) (788) Net movement in unrealised gain or loss on foreign currency contracts (759) 693 (282) (759) (41) (788) 693 Net capital gain 3,057,090 5,752,899 8,444,390 5,611, , ,176 *Global Equity Fund (), Global Equity Fund () and Global Balanced Fund () changed their name to Equity Fund (), Multi Manager Global Equity Fund () and Balanced Fund () on 30 March Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Non-derivative securities: Net realised gain/(loss) on investments 159,446 84,520 (354,945) 19, ,768 (135,249) Net movement in unrealised gain or loss on investments 458, ,958 (687,380) 583,037 56, , , ,478 (1,042,325) 602, , ,597 Derivative securities: Net realised gain/(loss) on foreign currency contracts ,300 (230,002) 112,156 (14,489) Net realised gain/(loss) on foreign currency contracts 34,638 80, ,907 (9,815) ,938 (149,742) 234,063 (24,304) Net capital gains/(losses) 618, ,478 (148,387) 453, , ,293 *Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

16 Notes to the Financial Statements (continued) 4. Revenue (Comparatives are for the period from 1October 2013 to 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* Dividend income 26,825 27,143 45,445 73,131 42,541 25,252 Total Revenue 26,825 27,143 45,445 73,131 42,541 25,252 Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Dividend income 40,410 26,427 34,794 58,565 54, ,740 Investment fund fee rebate 1,062 Total Revenue 40,410 26,427 34,794 58,565 54, ,802 *Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

17 Notes to the Financial Statements (continued) 5. Expenses (Comparatives are for the period from 1 October 2013 to 2014) The Company is responsible for the payment of management, custodian, sub-custodian, directors fees and auditors fees together with any other operational costs. Equity Fund ()* Equity Fund ()* Balanced Fund ()* Management fees 578, , , ,562 84,589 67,094 Custodian fees 12,188 11,418 10,106 9,976 2,493 2,493 Sub-Custodian fees 15,816 11,424 12,406 13,321 3,767 3,678 Directors' fees 3,278 5,684 3,276 3,626 5,278 5,688 Audit fees 2,604 3,941 1,641 2,485 2,604 3,937 Sundry expenses 6,407 4,984 5,572 5,033 3,114 2,518 Total expenses 618, , , , ,845 85,408 Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* Management fees 61,476 56, , , , ,444 Custodian fees 1,560 1,560 8,105 4,814 4,995 4,596 Sub-Custodian fees 2,567 2,701 10,894 4,617 9,124 4,936 Directors' fees 3,276 3,626 4,578 5,688 2,876 3,626 Audit fees 1,641 2,481 2,604 3,937 1,641 2,481 Sundry expenses 2,048 1,793 3,225 2,692 1,970 2,194 Total expenses 72,568 68, , , , ,277 *Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

18 Notes to the Financial Statements (continued) 6. Investment Purchases, Investment Sales and Commissions (Comparatives are for the year ended 30 September 2014) Equity Fund ()* Equity Fund ()* Balanced Fund ()* September September September 2014 Purchase during the period before commission 12,360,851 65,706,913 15,252,953 44,681,148 4,019,012 4,571,137 Gross purchases 12,360,851 65,706,913 15,252,953 44,681,148 4,019,012 4,571,137 Sales during the period before commission 28,060,379 37,039,750 18,427,993 45,339,178 2,844,715 2,826,631 Commission on sales (2,902) (380) (2,392) (470) Gross sales 28,057,477 37,039,370 18,427,993 45,336,786 2,844,715 2,826,161 Balanced Fund ()* Multi Manager Absolute Return Fund ()* Multi Manager Absolute Return Fund ()* September September September 2014 Purchase during the period before commission 1,361,725 2,183,001 33,952,379 24,392,485 11,489,450 20,188,923 Gross purchases 1,361,725 2,183,001 33,952,379 24,392,485 11,489,450 20,188,923 Sales during the period before commission 1,029,122 2,325,765 17,776,695 18,785,167 10,542,858 19,638,681 Commission on sales (24) (40) (21) (31) (48) Gross sales 1,029,122 2,325,741 17,776,655 18,785,146 10,542,827 19,638,633 *Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

19 Notes to the Financial Statements (continued) 7. Taxation For the purposes of Jersey taxation, the Company will fall under Article 123C of the Income Tax (Jersey) Law 1961, as amended, as a Jersey resident Company which is neither a utility Company nor a financial services Company and as such will be charged to Jersey income tax at a rate of 0% on its income (other than on any rental income or property development profits arising in respect of Jersey situs real property or land). The Company will not be subject to tax in Jersey on any capital arising to it. Under applicable foreign tax laws, withholding taxes may be deducted from interest, dividends and capital gains attributable to the Company, at various rates. The Company pays withholding tax on foreign dividends, which is deducted at source. This is shown separately as a taxation charge in the Statement of Total Return. The Company pays withholding tax on dividends, which is deducted at source. This is shown separately as a taxation charge in the Statement of Total Return. Overseas Tax Withholding Tax on Dividend Income Currency Equity Fund ()* Equity Fund ()* 1,516 4,568 Balanced Fund ()* Balanced Fund ()* Multi Manager Absolute Return Fund ()* 1, Multi Manager Absolute Return Fund ()* 508 2,923 * Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March Share capital The authorised share capital of the Company is 500,000 divided into 100 management shares of 1.00 each and 49,990,000 unclassified shares of 0.01 each. Management shares have been issued at par as follows: Number of Shares Manager 99 Standard Bank Nominees (Offshore) Limited The management shares exist solely to comply with Jersey Law, which requires that participating redeemable preference shares ( participating shares ) must have preference over another class of capital. The holders of the management shares are entitled to receive notice of general meetings of the Company and to attend and vote thereat. On a poll a holder of management shares is entitled to one vote for each management share held by him. Management shares carry no right to a dividend and are not redeemable. On a winding up, they rank only for a return of paid up nominal pari passu out of the assets of the Company (after the return of nominal capital paid up on participating shares and nominal shares). The management shares and cash issue proceeds of the Company are not shown in the Balance Sheet on materiality grounds. Management shares are regarded as equity. Participating shares carry the right to a proportionate share in the assets of the relevant Class Fund and to any dividends that may be declared. Holders of the shares are entitled to receive notice of all general meetings of the Company and to attend and vote thereat. The holder of each share is entitled to one vote for each share of which he is a holder. Shares are redeemable by shareholders at prices based on the value of the net assets of the relevant Class Fund as determined in accordance with its Articles of Association. 18

20 Notes to the Financial Statements (continued) 8. Share capital (continued) Management shares The management shares have been issued at par and the proceeds of the issue are represented by a separate management fund. Details of the management fund at the Balance Sheet date are as follows: September 2014 Current account Management shares of 1.00 each Authorised, issued and fully paid The management shares are not reflected in the Balance Sheet. All participating shares not previously redeemed will be redeemed by the Company on the last subscription day in 2099 at their respective redemption prices on each subscription day. Subscription day is the day or days upon which all issue, redemptions, purchases and transfers of participating shares shall be effected. Movement of participating shares Number of shares at 30 September 2014 Issued during the period Redeemed during the period Number of shares at 31 March 2015 Equity Fund ()* 7,374, ,244 (1,524,012) 6,088,596 Equity Fund ()* 5,337, ,639 (355,907) 5,096,935 Balanced Fund ()* 890, ,680 (39,643) 971,608 Balanced Fund ()* 709,743 75,595 (62,001) 723,337 Multi Manager Absolute Return Fund ()* 4,354,154 1,159,841 (252,295) 5,261,700 Multi Manager Absolute Return Fund ()* 2,611, ,177 (64,454) 2,806,624 * Global Equity Fund (), Global Equity Fund (), Global Balanced Fund (), Global Balanced Fund (), Absolute Return Fund () and Absolute Return Fund () changed their name to Equity Fund (), Equity Fund (), Balanced Fund (), Balanced Fund (), Multi Manager Absolute Return Fund () and Multi Manager Absolute Return Fund () on 30 March

21 Notes to the Financial Statements (continued) 9. Related Party Transactions STANLIB Fund Managers Jersey Limited (the Manager ), and the directors of the Company are considered related parties to the Company. The Manager is considered a related party by virtue of its contractual arrangements. The Investment Manager and the directors are considered related parties to the Company as they make key operating decisions for the Company. The Manager has the primary responsibility for the management and administration of the Company. The Manager has appointed the Investment Manager to provide it with investment management services in relation to the Company. The Manager shall be paid a management fee in respect of the Equity Classes, the Balanced Classes at the rate of 1.50% per annum, and at a rate of 0.85% per annum in respect of the Multi Manager Absolute Return Classes, out of the net asset value of the relevant classes, which shall be payable to the Manager by monthly payments in arrears subject to an annual minimum of US$20,000 payable per Class Fund. The fees of the Investment Manager are paid by the Manager out of its fees. 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. Custodian Fees The fees of the Custodian shall be calculated as follows, subject to an overall minimum fee in respect of each Class Fund of US$5,000 per annum (such minimum fee to be waived in respect of cash funds) (the Minimum Fee ): (i) (ii) 0.035% per annum on any and all amounts up to 50 million of the Net Asset Value of that Class Fund; 0.025% per annum on any and all amounts above 50 million of the Net Asset Value of that Class Fund but only up to 100 million; (iii) 0.010% per annum on any and all amounts above 100 million of the Net Asset Value of that Class Fund but only up to 500 million; and (iv) 0.005% per annum on any and all amounts above 500 million of the Net Asset Value of that Class Fund. Such fees shall accrue daily and shall be payable to the Custodian by monthly payments in arrears becoming due on the first Business Day of each month in respect of the preceding month. The Custodian is also entitled to be reimbursed out of the Class Funds for charges and transaction fees levied on it by the Sub-Custodian and other sub-custodians which shall be at rates which have been negotiated on an arm s length basis or are otherwise on commercial terms. Director Fees 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, 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 noncompliance with law or regulations. Michael Farrow is entitled to receive 20,000 per annum as director fees, Helen Homes, Graham Baillie and Oliver Sonnbichler are entitled to 10,000 per director per annum. All transactions with related parties are at arms length. 20

22 Notes to the Financial Statements (continued) 10. Financial risk management The main risks arising from the Company s financial instruments are: Market risk Market risk is a risk that the fair value of, or future cash flows arising from financial instruments will fluctuate because of changes in market variables. Market risk comprises three types of risks: market price risk, foreign currency risk and interest rate risk. Market price risk Market price risk arises mainly from uncertainty about future prices of equity and equity-linked financial instruments. It represents the potential loss that the Company may suffer due to movements in securities prices. The Company s exposure to market price arises from its equity investments with a maximum exposure at the period end represented by the carrying value of investments. The exposure levels are in line with the Company s investment objectives and market price risk is managed through prescribed investment restrictions, which include (generally): Equity and Balanced Class Funds Not more than 10% of the net asset value of each Class Fund may be invested in collective investment schemes which are not open-ended collective schemes; The assets of each Class Fund shall be invested in at least five collective investment schemes, and not more than 20% of the net asset value of each Class Fund may be invested in any one collective investment scheme; and Not more than 5% of the net asset value of each Class Fund shall be invested in any one real property fund. Multi Manager Absolute Return Class Funds Not more than 10% of the net asset value of each Class Fund shall be invested in any single multi-manager hedge fund of funds; Not more than 7.5% of the net asset value of each Class Fund shall be invested in any single manager fund; Not more than 22% of the net asset value of each Class Fund shall be invested in any single fund management group; and Not more than 15% of the net asset value of each Class Fund shall be invested in structured products. A complete list of the investment restrictions for each Class can be found in the prospectus. Each Class Fund s investment portfolio complies with the investment parameters as disclosed in the prospectus. The spread of investments between various geographic sectors is disclosed in the Portfolio Statements at the end of this report. Foreign currency risk Currency risk is the risk that the fair value of, or future cash flows from, financial instruments will fluctuate because of changes in foreign exchange rates. The Company s principal exposure to foreign currency risk comprises its investments priced in currencies other than the base currency of the particular Class Fund, including cash balances in foreign currencies. Foreign currency risk is managed through geographic investment restrictions and in some Class Funds, through use of Forward Currency Contracts. The investment restrictions for the Multi Manager Absolute Return Class Funds require that not more than 20% of the net asset value of the relevant Class Fund shall be exposed to foreign currency exchange rate risk. Exchange rate risk in foreign currency investments held in the Class Fund may be hedged back to the base currency of the Class Fund using forward foreign exchange contracts. 21