TIDMHSGU TIDMHSGS
RNS Number : 5606M
HSBC Global Absolute Limited
30 January 2009
?
HSBC GLOBAL ABSOLUTE LIMITED
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2008
HSBC GLOBAL ABSOLUTE LIMITED
TABLE OF CONTENTS
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| General Information | 1-2 |
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| Directors' Report | 3-5 |
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| Directors' Responsibility Statement | 6 |
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| Investment Adviser's Report | 7 |
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| Chairman's Statement | 8 |
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| Independent Auditor's Report | 9 |
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| Financial Statements: | |
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| ? Income Statement | 10 |
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| ? Statement of Changes in Shareholders' Equity | 11 |
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| ? Balance Sheet | 12 |
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| ? Statement of Cash Flows | 13 |
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| ? Notes to the Financial Statements | 14-33 |
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| Schedule of Investments | 35-36 |
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HSBC GLOBAL ABSOLUTE LIMITED
GENERAL INFORMATION
Manager, Company Secretary HSBC Management (Guernsey) Limited
and Registered Office
St. Martin's House
Le Bordage
St. Peter Port
Guernsey GY1 1BP
Directors Mr Raymond Philip Apsey (Chairman)
Mr Stuart Francis Carnegie (resigned 12 August 2008)
Mr Paul Wrench
Mr Keith Dorrian
Banker HSBC Private Bank (C.I.) Limited
Park Place
Park Street
St. Peter Port
Guernsey GY1 1EE
Investment Adviser HSBC Alternative Investments Limited
5th Floor,
78 St. James's Street
London SW1A 1JB
Solicitors to the Company Herbert Smith LLP
and to the Issue in EnglandExchange House
Primrose Street
London EC2A 2HS
United Kingdom
Legal Advisers to the Company Carey Olsen
and to the Issue in Guernsey PO Box 98
7 New Street
St. Peter Port
Guernsey GY1 4BZ
Channel Islands Sponsor HSBC Management (Guernsey) Limited
St. Martin's House
Le Bordage
St. Peter Port
Guernsey GY1 1BP
Independent Auditors KPMG Channel Islands Limited
20 New Street
St. Peter Port
Guernsey GY1 4AN
Registrar Capita Registrars (Guernsey)
Limited
Longue Hogue House
St Sampson
Guernsey GY2 4JN
Custodian State Street Custodial Services (Ireland) Limited
Block D
Iveagh Court
Harcourt Road
Dublin 2
The Fund HSBC Global
Absolute Limited (the "Company") is a Guernsey registered, closed-end investment
company. The Company was incorporated and registered in Guernsey on 14 August
2001, under the Companies (Guernsey) Laws 1994 to 1996 (as amended) with
registered number 38660. The initial Shares in the Company were offered at a
price of 100p each by HSBC and were also available in US Dollar denominated
Global Depositary Receipts ("GDRs"). As of 30 November 2004, the Company
introduced currency hedging on the Sterling class to protect from fluctuations
in the US Dollar/Sterling exchange rate. This was carried out by reclassifying
Sterling class shares previously held directly by Shareholders, i.e. not in the
form of GDRs, into new Sterling Hedged Shares. At the same time, all shares
previously represented by GDRs, were reclassified as new US Dollar Shares.
Shareholders automatically received new US Dollar Shares if they held GDRs
and/or Sterling Hedged Shares if they held their Shares directly. Shareholders
may, however, elect to receive shares of the other class. The Company is listed
on the Channel Islands Stock Exchange and the London Stock Exchange.
Objective The Company's
objective is to seek to achieve equity like returns with lower levels of
volatility. Its policy is to achieve this by investing in a diversified
portfolio of hedge funds and managed accounts investing in global markets which
are managed to seek to provide investors with an absolute total return with a
lower volatility than equities generally.
Net Asset Value The Net Asset
Value ("NAV") of the Company is calculated monthly with the relevant valuation
point being 5 pm (Guernsey time) on the last Business Day of each month. A
further two estimated NAVs are calculated and published each month.
HSBC GLOBAL ABSOLUTE LIMITED
DIRECTORS' REPORT
The Directors present their report together with the audited financial
statements of HSBC Global Absolute Limited (the "Company") for the year ended 30
September 2008. The results of operations are set out on page 10. A detailed
review of activities is contained in the Investment Adviser's Report on page 7.
In light of the performance of the Company since incorporation it is the view of
the Directors that it is in the best interests of the Shareholders to continue
with the current appointment of the Investment Adviser under the terms agreed.
Principal activity
The Company is a Guernsey registered closed-ended investment company listed on
the London Stock Exchange
Investment Objective
The Company's objective is to seek to achieve equity like returns with lower
levels of volatility. Its policy is to achieve this by investing in a
diversified portfolio of hedge funds and managed accounts investing in global
markets which are managed to seek to provide investors with an absolute total
return with a lower volatility than equities generally.
Going Concern
The Directors have examined significant areas of possible financial risk and
have satisfied themselves that no material exposures exist. The Directors
therefore consider that the Company has adequate resources to continue in
operational existence for the foreseeable future and after due consideration
believe it is appropriate to adopt the going concern basis in preparing the
financial statements.
Corporate Governance
Principles Statement
The Directors are committed to high standards of corporate governance and have
made it Company policy to adopt best practice in this area, insofar as the
Directors believe it is relevant and appropriate to the Company, and
notwithstanding the fact that the Company is not obliged to comply with the
'Combined Code' (i.e. the Code of Best Practice published by the Committee on
the Financial Aspects of Corporate Governance) as it is a Guernsey registered
company.
Role of the Board
The Board has determined that its role is to consider and determine the
following principal matters which it considers are of strategic importance to
the Company:
* review the overall objectives for the Company as described in the Prospectus and
set the Company's strategy for fulfilling those objectives within an appropriate
risk framework;
* consider any shifts in strategy that it considers may be appropriate in light of
market conditions;
* review the capital structure of the Company including consideration of an
appropriate use of gearing both for the Company and in any joint ventures in
which the Company may invest in from time to time;
* appoint the Investment Manager, Administrator and other appropriate skilled
service providers and monitor effectiveness through regular reports and
meetings; and
* review key elements of the Company's performance including NAV and payment of
dividends.
Board Decisions
At its Board meetings, the Board ensures that all the strategic matters listed
under 'Role of the Board' are considered and resolved by the Board. Issues
associated with implementing the Company's strategy are generally considered by
the Board to be non strategic in nature and are delegated by the Board to either
the Manager or the Administrator.
Directors, Rotation of Directors and Directors Tenure
The Directors who held office during the year were:
Mr Raymond Philip Apsey (appointed August 2001)
Mr Stuart Francis Carnegie (appointed August 2001, resigned August 2008)
Mr Paul Wrench (appointed March 2005)
Mr Keith Dorrian (appointed April 2005)
The Combined Code recommends that Directors should be appointed for a specified
period. The Board has resolved in this instance that Director appointments need
not comply with this requirement as all Directors are non-executive and the
respective appointments can be terminated at any time without penalty.
Directors' Interests
None of the Directors have a service contract with the Company. Mr Paul Wrench
is a Director of the Manager. He does not draw a fee for his services as a
Director of the Company.
The Directors directly or indirectly held the following Sterling Hedge shares in
issue:
+--------------------------------------+----------------------+------------------+
| | 30 September 2008 | 30 September |
| | | 2007 |
+--------------------------------------+----------------------+------------------+
| | | |
+--------------------------------------+----------------------+------------------+
| Raymond Philip Apsey | 5,000 | 5,000 |
+--------------------------------------+----------------------+------------------+
| Stuart Francis Carnegie | - | 5,000 |
+--------------------------------------+----------------------+------------------+
Audit Committee
The Board as a whole fulfils the function of an audit committee in relation to,
amongst other things, monitoring the internal controls of the Company and its
service providers, reviewing the financial statements of the Company, monitoring
the independence of the auditor and the effectiveness of the audit process and
reviewing the findings of the auditor.
Remuneration Committee
The Board as a whole fulfils the function of a remuneration committee in
relation to the setting and periodic review of the fees of the Directors and the
Chairman, taking into account, amongst other factors, prevailing market
conditions and the need to attract to the Board, and retain thereafter, suitable
persons.
Nomination Committee
The Board as a whole fulfils the function of a nomination committee.
Board Meetings
The Board meets quarterly and as required from time to time to consider specific
issues reserved to the Board. At the quarterly meeting it considers papers
circulated seven days in advance including reports provided by the Manager and
the Administrator. The Manager's report comments on:
* The investment market including recommendations for any changes in strategy that
the Manager considers may be appropriate;
* Performance of the Company's portfolio and key asset management initiatives;
* Transactional activity undertaken over the previous quarter and being
contemplated for the future;
* The Company's financial position including its relationship with its bankers and
lenders.
The Administrator provides a compliance report. These reports enable the Board
to assess the success with which the Company's investment strategy and other
associated matters are being implemented and also to consider any relevant risks
and how they should properly be managed.
The following table shows the attendance at Board meetings and additional Ad Hoc
meetings during the year to 30 September 2008:
+---------------------------------+---------------------------+----------------------------+
| | Board Meeting Attended | Ad Hoc Meeting Attended |
+---------------------------------+---------------------------+----------------------------+
| Mr Raymond Philip Apsey | 4 | 4 |
+---------------------------------+---------------------------+----------------------------+
| Mr Stuart Francis Carnegie | 3 | 2 |
+---------------------------------+---------------------------+----------------------------+
| Mr Paul Wrench | 4 | 8 |
+---------------------------------+---------------------------+----------------------------+
| Mr Keith Dorrian | 4 | 5 |
+---------------------------------+---------------------------+----------------------------+
| Number of meetings during the | 4 | 8 |
| year | | |
+---------------------------------+---------------------------+----------------------------+
In between its regular quarterly meetings, duly appointed Committees of the
Board have also met on a number of occasions during the period to approve
specific transactions.
(Note - Liability insurance is maintained for the Directors and Officers
although the Company has no employees and none of its Directors are Executive.)
Internal Controls
The Directors review the effectiveness of the Company's system of internal
controls at least once annually.
The System's key controls reviewed by the Directors are as shown below. The
Board considers risk management and internal control on a regular basis during
the year although such a system can only provide reasonable and not absolute
assurance against material misstatement or loss, as it is designed to manage
rather than eliminate risk of failure.
Investment Management services and Administration services are provided to the
Company by HSBC Management (Guernsey) Limited ("HMG") and State Street Fund
Services (Ireland) Limited. The Company's system of internal control therefore
is substantially reliant on HMG's and IFS's internal controls and their internal
audit.
The key elements designed to provide effective control are as follows:
* Financial Reporting - A regular review of relevant financial data including NAV
calculations and performance projections.
* Management and Administration Agreements - Contractual documentation with
appropriately regulated entities which clearly describes responsibilities for
the two principal service providers.
* Management Systems - The Manager's system of internal controls is based on clear
written processes, a formal investment committee and clear lines of
responsibility and reporting which are monitored by HMG's internal risk team.
* Investment Strategy - The Company's strategy is authorised and monitored on a
regular basis by the Board.
Secretary
HSBC Management (Guernsey) Limited held the office of Secretary throughout the
year.
Results and Dividends
The results for the year are shown on page 10. The Directors do not propose the
payment of a dividend for the year ended 30 September 2008 (2007: Nil).
Independent Auditor
A resolution for the re-appointment of KPMG Channel Islands Limited is to be
proposed at the forthcoming Annual General Meeting.
Statement of the Directors' Responsibilities
The Directors are responsible for preparing financial statements for each
financial year which give a true and fair view of the state of affairs of the
Company and of the profit or loss for that year and are in accordance with
applicable laws and International Financial Reporting Standards. In preparing
these financial statements the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed subject to any
material departures disclosed and explained in the accounts; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
The Companies (Guernsey) Law, 1994. 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.
By order of the Board
____________________ __________________
Keith DorrianPaul Wrench
Director Director
Date: 26 January 2009
HSBC GLOBAL ABSOLUTE LIMITED
DIRECTORS' RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
* the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the issuer and the undertakings
included in the consolidation taken as a whole as required by Disclosure and
Transparency Rules ("DTR") 4.1.12R; and
* the management report includes a fair review of the development and performance
of the business and the position of the issuer and the undertakings included in
the consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face as required by DTR 4.1.12R.
By order of the Board
____________________ __________________
Keith Dorrian Paul Wrench
Director Director
Date: 26 January 2009
HSBC GLOBAL ABSOLUTE LIMITED
INVESTMENT ADVISER'S REPORT
For the period 1 October 2007 to 30 September 2008 the Fund fell by 8.57% in the
US Dollar Class and by 7.58% in the Sterling Class. These returns were ahead of
the target return of 50% US Dollar 3M LIBOR + 50% MSCI World Index, which fell
by 11.63% over the period. Net assets in the Fund fell from US$137.9m to
US$99.6m at the end of the year.
The period saw some of the most dramatic negative financial developments in
living memory. Over the course of the summer of 2007 it became apparent that
liquidity was being withdrawn from various quarters of the global financial
system. This withdrawal of liquidity, which has since been dubbed the 'credit
crunch', led to a steady decrease in the value of risky assets such as sub-prime
mortgage debt and collateralised debt obligations. Whilst the initial impact of
these developments was limited to specialist investment vehicles it rapidly
spread across markets and, in dramatic style, to the high streets of Britain
with the collapse of mortgage lender Northern Rock Plc. The ensuing months saw
a broad range of institutions drawn into a crisis characterised by falling
markets and dramatic withdrawal of liquidity and credit. Over the course of
2008 record losses were reported by a raft of banks that ranged from German
regional lenders to international investment banks and insurance companies.
Across 2008 governments and international organisations struggled to limit the
impact of the growing crisis. Responses ranged from dramatic cuts in interest
rates, the provision of capital infusions for banks and in some cases
nationalisation of publicly held institutions. The crisis took on a further
dramatic turn during September 2008 as the leading US investment bank Lehman
Brothers collapsed under a weight of losses and asset write downs.
The impact of these developments on financial market indices has
been significant. The HFRI Fund of Funds composite index fell by 10.07%.Global
equity markets, represented by the MSCI World Index (unhedged in US Dollars)
fell by 25.6%, the S&P 500 (total return) Index fell by 22.0% and the FTSE-100
fell by 25.1%. Equity volatility, measured by the VIX index, spiked to very
high levels at the end of the period and lowered slightly during the final days
of September 2008. The JP Morgan Global Govt Bond index gained 6.1% during the
period. The price of WTI Crude oil peaked and then fell rapidly. The price of
Gold ($/OZ) gained 17.1%. In the currency space the US Dollar was initially
weak as the Fed cut interest rates, but then rallied towards the end of the
period as investors priced in rate cuts in other economies and the
de-leveraging process benefited the US Dollar.
Against this background, the two best performing strategies
were high-yield/distressed and merger arbitrage. In particular,
one high-yield/distressed manager generated a significant positive return in
2007 and in the first half of 2008 from shorting US sub-prime credit securities.
However, in the third quarter of 2008, gains from short exposure to the
financial sector were offset in part by losses in resource names. The merger
arbitrage strategy also benefited from similar short sub-prime credit exposure.
Managed futures strategies performed strongly, benefiting from trends in
commodity markets, currencies and interest rates. The market neutral strategy
also performed well with the statistical arbitrage manager gaining from
the elevated levels of stock volatility during the period. Long/short equity
and multi-strategy event driven managers suffered as positive performance
generated through long exposure to energy, technology, basic materials and
emerging markets detracted in the third quarter of 2008 as the high levels of
volatility and deleveraging drove share prices ahead of fundamentals. Macro
managers gained in 2007 from a range of markets including from long exposure to
the emerging markets, however one of the managers suffered in 2008 as these
markets corrected sharply. Finally, the convertible arbitrage strategy suffered
as the collapse of Lehman Brothers and a widely adopted restriction on short
selling in September 2008 led to widespread selling of convertibles in all
geographies.
The allocation to convertible arbitrage, equity long/short and merger arbitrage
were decreased in favour of high-yield/ distressed, managed futures and macro
focused specialists. The investment adviser believes that these allocation
changes made a positive contribution to performance over the period. The
investment adviser also believes that the fund continues to offer investors a
diversified exposure to high quality hedge funds, pursuing a range of
sub-strategies.
The investment advisor continues to closely monitor the impact of the financial
crisis on the hedge fund industry. The investment advisor is aware of a number
of hedge funds that have closed following losses as well as instances where
hedge funds have modified liquidity terms as a result of weak markets. A small
number of positions within the portfolio have been impacted by these
developments and certain provisions are noted within the financial statements.
These challenges not withstanding the investment advisor believes that hedge
funds will continue to retain a significant advantage over more traditional long
only asset managers. The investment advisor noted the great flexibility of the
managers within the portfolio as demonstrated by significant reduction in risk
taking (for example gross exposure and leverage) by hedge fund managers within
the portfolio. This flexibility has enabled the portfolio to significantly
outperform a broad range of investment indices over the period and ensure that
the company remains well positioned for the months ahead.
HSBC Alternative Investments Limited
January 2009
HSBC GLOBAL ABSOLUTE LIMITED
CHAIRMAN'S STATEMENT
In presenting the seventh Annual Report of HSBC Global Absolute Limited (the
"Company"), I would like to thank you for your continued support and welcome all
new shareholders. I hope that you find the information presented here to be
interesting and informative.
Since the launch of the company in November 2001, the Company's portfolio has
been designed to achieve an absolute total return with volatility generally
lower than that of equities. In both respects, the Company has performed in line
with its stated objectives at the time of the launch. The US Dollar share class
has returned 37.65% since its inception in November 2001. The Sterling Hedged
share class has returned 21.49% since its inception in November 2004. The
volatility seen in the returns from both the US Dollar share class and the
Sterling Hedged shares is less than half that seen in equity indices such as the
MSCI World Index.
During the period the company's performance has faced challenges from a very
difficult investment environment. Against this backdrop the net asset value
("NAV") of the Company's US Dollar share class fell, after all fees and
expenses, by 8.57% whilst the Sterling Hedged share class fell by 7.58%. These
returns were ahead of the target return that seeks to match the performance of a
combination of 50% US Dollar 3 Month LIBOR plus 50% MSCI World Index. This
combined index fell by 11.63% over the period. It is also important to note that
many major asset classes saw significant losses over this 12 month period. The
HFRI Fund of Funds composite index fell by 10.07%, the MSCI World Index
(unhedged in US Dollar) fell by 25.62% and the S&P 500 (total return) Index fell
by 21.98%, whilst the FTSE-100 fell by 25.12%.
Over the 12 month period to 30 September 2008, the Company's US Dollar class
shares traded at an average daily premium to NAV of 2.15% and the company bought
back a net 12,058,880 US Dollar shares. The Sterling Hedged class shares traded
at an average discount to NAV of 0.95% and the company bought back a net
1,368,417 shares.
The Company's board has taken a number of steps during the period to manage any
discount to NAV that may develop in the trading of the shares. At the annual
general meeting of 5 June 2008 an ordinary resolution was passed allowing the
board, before the 2009 AGM, to buy back up to 14.99% of company shares as a
means of addressing any imbalance that may develop in the supply of and demand
for shares. Further, the board authorised a tender purchase of 25% of the
company shares as at the 30 June 2008 NAV. The board will continue to monitor
the situation and will take appropriate steps as they see fit.
On 12 August 2008 non-executive director Stuart Carneige resigned his
directorship with effect from that date. The Board thanks Mr Carnegie for his
contribution.
The investment adviser, HSBC Alternative Investment Ltd, believes that the
Company's portfolio of investments in hedge funds is well positioned for the
coming months.
Raymond P. Apsey
Chairman, HSBC Global Absolute Limited
November 2008
HSBC GLOBAL ABSOLUTE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF HSBC GLOBAL ABSOLUTE LIMITED
We have audited the financial statements of HSBC Global Absolute Limited for the
year ended 30 September 2008 which comprise of the Income Statement, Statement
of Change in Shareholders' Equity, Balance Sheet, Statement of Cash Flows and
the related notes. These financial statements have been prepared under the
accounting policies set out therein.
This report is made solely to the Company's members, as a body, in accordance
with section 64 of The Companies (Guernsey) Law, 1994. Our audit work has been
undertaken so that we might state to the Company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable Guernsey law and
International Financial Reporting Standards as set out in the Statement of
Directors' Responsibilities on page 5.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view, and are properly prepared in accordance with The Companies
(Guernsey) Law, 1994. We also report to you if, in our opinion, the Company has
not kept proper accounting records, or if we have not received all the
information and explanations we require for our audit.
We read the Directors' Report and consider the implications for our report if we
become aware of any apparent misstatement within it.
We read the other information accompanying the financial statements and consider
whether it is consistent with those statements. We consider the implications for
our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis of evidence relevant to the amounts and disclosures
in the financial statements. It also includes an assessment of the significant
estimates and judgments made by the Directors in the preparation of the
financial statements, and of whether the accounting policies are appropriate to
the company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanation which we consider necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion the financial statements:
* give a true and fair view, in accordance with International Financial
Reporting Standards, of the state of the Company's affairs as at 30 September
2008 and of its loss for the year then ended; and
* have been properly prepared in accordance with The Companies (Guernsey) Law,
1994.
KPMG CHANNEL ISLANDS LIMITED
CHARTERED ACCOUNTANTS
Guernsey
Date:26 January 2009
+---------------+--------+--------+-----------+--------+-----------+
| INCOME STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER |
| 2008 |
+------------------------------------------------------------------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | 30 | | 30 |
| | | | September | | September |
| | | | 2008 | | 2007 |
+---------------+--------+--------+-----------+--------+-----------+
| | Note | | US$'000 | | US$'000 |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Interest | | | | | |
| income | | | | | |
| for | | | | | |
| financial | | | | | |
| assets | | | | | |
| that are | | | | | |
| not at | | | | | |
| fair | | | | | |
| value | | | | | |
| through | | | | | |
| profit or | | | | | |
| loss: | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| - Cash | | | 28 | | 68 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Net | 4 | | (8,266) | | 22,706 |
| (loss)/gain | | | | | |
| on | | | | | |
| financial | | | | | |
| assets held | | | | | |
| at fair | | | | | |
| value | | | | | |
| through | | | | | |
| profit or | | | | | |
| loss | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Net | | | (8,238) | | 22,774 |
| investment | | | | | |
| (loss)/income | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Management | 9 | | (1,995) | | (2,134) |
| fee | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Performance | 9 | | (36) | | (794) |
| fee | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Directors | 9 | | (112) | | (87) |
| fees and | | | | | |
| expenses | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Audit | | | (14) | | (14) |
| fees | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Other | | | (570) | | (173) |
| operating | | | | | |
| expenses | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Total | | | (2,727) | | (3,202) |
| operating | | | | | |
| expenses | | | | | |
| before | | | | | |
| finance | | | | | |
| costs | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Net | | | (10,965) | | 19,572 |
| (loss)/income | | | | | |
| from | | | | | |
| operations | | | | | |
| before | | | | | |
| finance costs | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| Interest | | | | | |
| expense | | | | | |
| for | | | | | |
| financial | | | | | |
| liabilities | | | | | |
| that are | | | | | |
| not at fair | | | | | |
| value | | | | | |
| through | | | | | |
| profit or | | | | | |
| loss: | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| - | | | (174) | | (285) |
| Interest | | | | | |
| expense | | | | | |
| on | | | | | |
| loans | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| (Loss)/profit | | | (11,139) | | 19,287 |
| for the year | | | | | |
| after finance | | | | | |
| costs | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+---------------+--------+--------+-----------+--------+-----------+
| The items in the above statement are | |
| derived from continuing operations | |
+---------------+--------+--------+-----------+--------+-----------+
The notes on pages 14 to 32 form an integral part of these financial statements.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 30 SEPTEMBER
2008
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | Redeemable Preference Shares | |
+--------------------------+------+----------+--------------------------------+----------+
| | | Nominal | Share | Share |Retained | Total |
| | | shares | capital | premium |earnings | |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Balance at 30 September | | 1,619 | 1,121 | 129,907 | (18,620) | 114,027 |
| 2006 | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Profit for the year | | - | - | - | 19,287 | 19,287 |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Issue of Shares | | 100 | 363 | 33,976 | - | 34,439 |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Redemption of Shares | | (29) | (296) | (29,473) | - | (29,798) |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Balance at 30 September | | 1,690 | 1,188 | 134,410 | 667 | 137,955 |
| 2007 | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Loss for the year | | - | - | - | (11,139) | (11,139) |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Issue of Shares | | 91 | 225 | 25,682 | - | 25,998 |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Redemption of Shares | | (45) | (455) | (53,250) | - | (53,750) |
+--------------------------+------+----------+----------+----------+----------+----------+
| | | | | | | |
+--------------------------+------+----------+----------+----------+----------+----------+
| Balance at 30 September 2008 | 1,736 | 958 | 106,842 | (10,472) | 99,064 |
+--------------------------+------+----------+----------+----------+----------+----------+
The notes on pages 14 to 32 form an integral part of these financial statements.
+----------+--------------------------------+--------+--------+-----------+--------+-----------+
| BALANCE SHEET AS AT 30 SEPTEMBER 2008 | | | | |
+----------------------------------------------------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | 30 | | 30 |
| | | | September | | September |
| | | | 2008 | | 2007 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | Note | | US$'000 | | US$'000 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Assets | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Cash and cash equivalents | 2 | | 2,192 | | 4 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Financial assets at fair value through | 3 | | 108,224 | | 133,816 |
| profit or loss | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Other receivables | 6 | | 6,747 | | 12,257 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Total assets | | | 117,163 | | 146,077 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Liabilities | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Financial liabilities at fair value | 3 | | (167) | | - |
| through profit or loss | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Loans payable | 10 | | (15,683) | | (7,131) |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Accounts payables and accrued expenses | 7 | | (2,249) | | (991) |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Total liabilities | | | (18,099) | | (8,122) |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Net assets | | | 99,064 | | 137,955 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Equity: | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Share capital | | | 958 | | 1,188 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Share premium | | | 106,842 | | 134,410 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Nominal shares | | | 1,736 | | 1,690 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| Retained earnings | | | (10,472) | | 667 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | 99,064 | | 137,955 |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| US$ redeemable participating preference | 13 | | US$1.8367 | | US$2.0199 |
| shares - net asset value per share | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| GBP Hedged redeemable participating | 13 | | GBP0.9915 | | GBP1.0789 |
| shares - net asset value per share | | | | | |
+-------------------------------------------+--------+--------+-----------+--------+-----------+
| |
+----------------------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------------------+
| The financial statements on pages 10 to 32 were approved by the Board of Directors |
| on 26 January 2009 and were signed on its behalf by: |
+----------------------------------------------------------------------------------------------+
| | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| K | | | | | |
| Dorrian | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| Director | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| P. | | | | | |
| Wrench | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| Director | | | | | |
+----------+-----------------------------------------+--------+-----------+--------+-----------+
| | | | | | |
+----------+--------------------------------+--------+--------+-----------+--------+-----------+
The notes on pages 14 to 32 form an integral part of these financial statements.
+------------------------------------------+------+----------+----------+--+----------+----------+
| STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2008 |
+------------------------------------------------------------------------------------------------+
| | | | | |
+------------------------------------------+------+---------------------+--+---------------------+
| | | 2008 | | 2007 |
+------------------------------------------+------+---------------------+--+---------------------+
| | | US$'000 | US$'000 | | US$'000 | US$'000 |
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Operating activities: | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| (Loss)/Profit for the year | | (11,139) | | | 19,287 | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Adjustments for: | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net realised gain on investments | | (7,736) | | | (9,262) | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net unrealised loss/(gain) on | | 13,248 | | | (9,863) | |
| investments | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net movement in unrealised loss/(gain) | | 424 | | | (563) | |
| on forward foreign currency contracts | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Decrease/(increase) in debtors | | 67 | | | (70) | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| (Decrease)/Increase in creditors | | (742) | | | 499 | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net cash (outflow)/inflow from operating | | | (5,878) | | | 28 |
| activities | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Investing activities: | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Purchase of financial assets designated | | (41,642) | | | (73,061) | |
| at fair value through profit or loss | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Sale of financial assets designated at | | 68,956 | | | 61,270 | |
| fair value through profit or loss | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net cash inflow/(outflow) from investing | | | 27,314 | | | (11,791) |
| activities | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Financing activities: | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Repayment of loans | | (29,374) | | | (59,493) | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| New loans advanced | | 37,926 | | | 66,624 | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Proceeds from issue of redeemable | | 25,907 | | | 34,340 | |
| participating preference shares | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Amounts paid on redemption of redeemable | | (53,707) | | | (29,769) | |
| participating preference shares | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net cash inflow/(outflow) from financing | | | (19,248) | | | 11,702 |
| activities | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Net increase/(decrease) in cash and cash | | | 2,188 | | | (61) |
| equivalents | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Cash and Cash equivalents at start of | | | 4 | | | 65 |
| year | | | | | | |
+------------------------------------------+------+----------+----------+--+----------+----------+
| Cash and Cash equivalents at end of year | | | 2,192 | | | 4 |
+------------------------------------------+------+----------+----------+--+----------+----------+
+------------------------------------------+------+---------+---------+--+----------+---------+
| Supplementary Information on cash flow from operating activity: | | | |
+---------------------------------------------------------------------+--+----------+---------+
| Interest received | | | 28 | | | 68 |
+------------------------------------------+------+---------+---------+--+----------+---------+
| Interest paid | | | (174) | | | (285) |
+------------------------------------------+------+---------+---------+--+----------+---------+
The notes on pages 14 to 32 form an integral part of these financial statements.
HSBC GLOBAL ABSOLUTE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1SIGNIFICANT ACCOUNTING POLICIES
HSBC Global Absolute Limited (the "Company") is a close-ended investment fund
incorporated as a limited liability company under the Companies (Guernsey) Laws
1994 to 1996 of Guernsey on 14 August 2001. The Company's shares are listed on
the London Stock Exchange.
The objective of the Company is to provide shareholders with an absolute total
return and with a lower volatility than equities in general through a simple
structure and diversified portfolio managed by an experienced investment team.
The Company's investment policy is to invest in hedge funds and hedge fund
strategies managed by a number of different investment managers which invest
globally. The Investment Adviser will seek to achieve this by investing in a
diversified portfolio of holdings in hedge funds and managed accounts exposed to
long/short strategies investing in global markets.
These financial statements were authorised for issue by the Board of Directors
on 26 January 2009.
a) Statement of compliance
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and interpretations adopted by the
International Accounting Standards Board (IASB).
The accounting polices that follow have been applied in preparing the financial
statements for the year ended 30 September 2008 and the comparative information
presented in these financial statements for the year ended 30 September 2007.
New accounting standards
The Company has adopted IFRS 7 Financial Instruments: Disclosures - which is
effective for annual period beginning on or after 1 January 2007. It requires
the disclosure of qualitative and quantitative information about exposures to
risks arising from financial instruments, including specified minimum
disclosures about credit, liquidity and market risks, including sensitivity
analysis to market risk. Application of this standard will not affect any amount
recognised in the financial statements, but will impact the type of information
disclosed in relation to the Company's financial instruments. This standard is
applicable for accounting periods commencing on or after 1 January 2007. IFRS 7
supersedes the disclosure requirement of IAS 32: Financial Instruments:
Disclosure and Presentation.
A number of new standards, amendments to standards and interpretations are not
yet effective for the year ended 30 September 2008, and have not been applied in
preparing these consolidated financial statements:
IFRS 8 Operating Segments introduces the "management approach" to segment
reporting. IFRS 8, which becomes mandatory on 1 January 2009, will require the
disclosure of segment information. As the Company is organised and operates as
one segment, it is anticipated that segment reporting will not apply.
Consequently no segment reporting will be provided in the Company's financial
statements.
b) Basis of preparation
The accounting policies set out below have been applied consistently to all
periods presented in the financial statements.
The financial statements are presented in U.S. dollars and rounded to the
nearest thousand dollars. They are prepared on a fair value basis for
derivative financial instruments, financial assets and financial liabilities at
fair value through profit or loss. Other financial assets and financial
liabilities are stated at amortised cost.
1 SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
b) Basis of preparation (continued)
The preparation of financial statements in conformity with IFRSs requires
management to make judgments, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expense. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The accounting policies have been applied consistently by the Company in
dealings with items which are considered material in relation to the Company's
financial statements.
c) Foreign currency translation
Presentational and functional currency
Items included in the Company's financial statements are measured using the
currency of the primary economic environment in which it operates (the
"functional currency"). The Company's functional currency is the US Dollar
(US$), and the Company has also selected the US Dollar as the currency in which
it presents the financial statements.
Transactions and balances
Transactions in foreign currencies, other than US Dollars, are translated at the
foreign currency exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are translated to US
Dollars at the foreign currency closing exchange rate ruling at the balance
sheet date. Foreign currency exchange differences arising on translation and
realised gains and losses on disposals or settlements of monetary assets and
liabilities are recognised in the income statement. Foreign currency exchange
differences relating to investments at fair value through the profit or loss and
derivative financial instruments are included in net gains and losses on
investments and net foreign exchange gains and losses, respectively.
d) Financial instruments
* Classification
IAS 39 establishes specific categories into which all financial assets and
liabilities must be classified. The classification of financial instruments
dictates how these assets and liabilities are subsequently measured in the
financial statements. There are four categories of financial assets: assets at
fair value through profit or loss, available for sale, loans and receivables and
held to maturity.
The Company classifies its investments in debt and equity securities, and
related derivatives, as financial assets or financial liabilities at fair value
through profit or loss. These financial assets and financial liabilities are
classified as held for trading or designated by the Board of Directors at fair
value through profit or loss at inception.
Classification of debt and equities
* Financial assets or financial liabilities held for trading are those acquired or
incurred principally for the purposes of selling or repurchasing in the short
term. Derivatives are also categorised as financial assets or financial
liabilities held for trading. These include forward foreign currency contracts.
The Company does not classify any derivatives as hedges in a hedging
relationship. All derivatives in a net receivable position (positive fair value)
are reported as financial assets held for trading. All derivatives in a net
payable position (negative fair value) are reported as financial liabilities
held for trading.
1 SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
d) Financial instruments (continued)
* Financial assets and financial liabilities designated at fair value through
profit or loss at inception are those that are managed and their performance
evaluated on a fair value basis in accordance with the Company's documented
investment strategy. The Company's policy is for the Investment Manager and the
Board of Directors to evaluate the information about these financial assets on a
fair value basis together with other related financial information. These
included investment in Investment Funds.
* Financial assets that are classified as loans and receivables include accounts
receivable and equalisation paid on investments.
* Financial liabilities that are not at fair value through profit or loss include
accounts payable.
(ii) Recognition
Financial assets and liabilities are recognised on the Company's balance sheet
when the Company becomes a party to the contractual provisions of the
instrument.
A regular way purchase of financial assets is recognised using trade date
accounting - the date on which the Company commits to purchase or sell the
investment. Investments are derecognised where the rights to receive cash flows
from the investments have expired or the Company has transferred substantially
all risks and rewards of ownership. From this date any gains and losses arising
from changes in fair value of the financial assets or financial liabilities are
recorded.
(iii) Measurement
Financial instruments are measured initially at fair value. Transaction costs on
financial assets and financial liabilities at fair value through profit or loss
are expensed immediately. Subsequent to initial recognition, all instruments
classified at fair value through profit or loss are measured at fair value with
changes in their fair value recognised in the income statement.
Financial assets classified as loans and receivables are carried at amortised
cost using the effective interest rate method, less impairment losses, if any.
Financial liabilities, other than those at fair value through profit or loss,
are measured at amortised cost using the effective interest rate method.
(iv) Fair value measurement principles
The fair value of financial instruments traded in active markets is based on
quoted market bid prices at the balance sheet date. The fair value of
investments in investment funds is based on the net asset value per share of the
underlying investment funds as at the balance sheet date as advised by the fund
administrators of those funds.
The Company may from time to time invest in financial instruments that are not
traded on an active market. The fair value of such instruments is determined by
using appropriate valuation techniques, which in the opinion of the directors,
provide the best estimates of the fair value of such investments.
(v) Right of offset
Financial assets and liabilities are offset and the net amount presented in the
Balance Sheet when, and only when, the company has a legal right to set off the
amounts and intends either to settle on a net basis only when permitted by the
accounting standards.
1 SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
d) Financial instruments (continued)
(vi) Impairment
Financial assets that are stated at cost or amortised cost are reviewed at each
balance sheet date to determine whether there is objective evidence of
impairment. If any such indication exists, an impairment loss is recognised in
the income statement as the difference between the asset's carrying amount and
the present value of estimated future cash flows discounted at the financial
asset's original effective interest rate.
If in a subsequent period the amount of an impairment loss recognised on a
financial asset carried at amortised cost decreases and the decrease can be
linked objectively to an event occurring after the write down, the write down is
reversed through the income statement.
(vii) Specific instruments
Cash and cash equivalents
Cash comprises cash balances and call deposits with banks. Cash equivalents are
short-term highly liquid investments that are readily convertible to known
amounts of cash, are subject to an insignificant risk of changes in value, and
are held for the purpose of meeting short-term cash commitments rather than for
investment or other purposes.
Forward contracts
Forward contracts are commitments to either purchase or sell a designated
financial instrument, currency or an index at a specified future date for a
specified price and may be settled in cash or another financial asset. Forward
contracts are valued by reference to the forward price at which a new contract
of the same size and maturity could be undertaken at the valuation date. The
unrealised gain or loss on open forward contracts is calculated as the
difference between the contract rate and this forward price (the rate to close
out the contract). Unrealised gains and losses on forward contracts are
recognised in the income statement and reported in the Balance Sheet as an asset
or a liability respectively.
e) Revenue and expenses
Interest income and expense is recognised in the income statement as it accrues,
using the original effective interest rate of the instrument calculated at the
acquisition or origination date. Interest income includes the amortisation of
any discount or premium, transaction costs or other differences between the
initial carrying amount of an interest-bearing instrument and its amount at
maturity calculated on an effective interest rate basis.
Expenses are accounted for on an accruals basis.
f) Shares
The Company has a twice yearly tender facility under which, subject to certain
limitations and the Directors exercising their discretion to operate the
facility, shareholders are entitled to have their shareholding, up to a maximum
specified by the Board, purchased by the Company at a price equal to the net
asset value per share (less any tender costs), as appropriate, calculated as at
the relevant tender date. The Directors meet regularly to consider the operation
of the tender facility in the light of prevailing market conditions, shareholder
sentiment and legal constraints.
The Company also has a twice yearly conversion facility under which, subject to
certain limitations and the Directors exercising their discretion to operate the
facility, investors are provided the opportunity to convert shares of either
class into shares of the other class. Such conversion will be on the basis of
the ratio of the last reported net asset value of the class of shares held to
the last reported net asset value of the class of shares into which they will be
converted and otherwise as set out in the Company's articles of association.
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
| 2 | | CASH | 2008 | | 2007 |
| | | AND | | | |
| | | CASH | | | |
| | | EQUIVALENTS | | | |
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
| | | | US$'000 | | US$'000 |
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
| | | | | | |
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
| | | Cash | 2,192 | | 4 |
| | | and | | | |
| | | Cash | | | |
| | | Equivalents | | | |
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
| | | | | | |
+---------------------+--------+-------------------------------+---------------------------+--------+---------------------------+
Cash and Cash Equivalents is made up of cash deposits of EUR10,995,000
(US$15,807,512) and cash overdraft of US$13,615,714. These amounts are offset
as part of the Custodian Agreement. Material cash balances are held with the
custodian, State Street Custodial Services (Ireland) Limited.
+--------+--------+-------------+----------+--------+---------+
| 3 | | FINANCIAL | | | |
| | | INSTRUMENT | | | |
| | | CATEGORY | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | 2008 | | 2007 |
+--------+--------+-------------+----------+--------+---------+
| | | | US$'000 | | US$'000 |
+--------+--------+-------------+----------+--------+---------+
| | | Assets | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Financial | | | |
| | | assets at | | | |
| | | fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Held | | | |
| | | for | | | |
| | | trading: | | | |
+--------+--------+-------------+----------+--------+---------+
| | | - | ? | | 258 |
| | | Derivatives | | | |
| | | (note 5) | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | ? | | 258 |
| | | held | | | |
| | | for | | | |
| | | trading | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Designated | | | |
| | | at fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss: | | | |
+--------+--------+-------------+----------+--------+---------+
| | | - | 108,224 | | 133,558 |
| | | Hedge | | | |
| | | funds | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | 108,224 | | 133,558 |
| | | designated | | | |
| | | at fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | 108,224 | | 133,816 |
| | | financial | | | |
| | | assets at | | | |
| | | fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Loans | 8,939 | | 12,261 |
| | | and | | | |
| | | receivables | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | 117,163 | | 146,077 |
| | | Assets | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Liabilities | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Financial | | | |
| | | liabilities | | | |
| | | at fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Held | | | |
| | | for | | | |
| | | trading: | | | |
+--------+--------+-------------+----------+--------+---------+
| | | - | (167) | | ? |
| | | Derivatives | | | |
| | | (note 5) | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | (167) | | ? |
| | | held | | | |
| | | for | | | |
| | | trading | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | (167) | | ? |
| | | financial | | | |
| | | liabilities | | | |
| | | at fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Financial | (17,932) | | (8,122) |
| | | liabilities | | | |
| | | measured at | | | |
| | | amortised | | | |
| | | cost | | | |
+--------+--------+-------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------+----------+--------+---------+
| | | Total | (18,099) | | (8,122) |
| | | liabilities | | | |
+--------+--------+-------------+----------+--------+---------+
Loans and receivables presented above represents cash and cash equivalents and
other receivables as detailed in the Balance Sheet.
Financial liabilities measured at amortised cost presented above represents
balances loans payable and accounts payable and accrued expenses as detailed in
the balance sheet.
+--------+--------+-------------------+----------+--------+---------+
| 4 | | NET (LOSSES)/GAINS ON FINANCIAL |
| | | ASSETS HELD AT FAIR VALUE THROUGH |
| | | PROFIT OR LOSS |
+--------+--------+-------------------------------------------------+
| | | | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | | 2008 | | 2007 |
+--------+--------+-------------------+----------+--------+---------+
| | | | US$'000 | | US$'000 |
+--------+--------+-------------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | Net | | | |
| | | (losses)/gains | | | |
| | | on financial | | | |
| | | assets | | | |
| | | designated at | | | |
| | | fair value | | | |
| | | through profit | | | |
| | | or loss: | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | - | 7,736 | | 9,262 |
| | | Realised | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | - | (13,248) | | 9,863 |
| | | Unrealised | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | Total | (5,512) | | 19,125 |
| | | (losses)/gains | | | |
| | | on financial | | | |
| | | assets | | | |
| | | designated at | | | |
| | | fair value | | | |
| | | through profit | | | |
| | | or loss | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | Net | | | |
| | | (losses)/gains on | | | |
| | | financial assets | | | |
| | | held for trading: | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | - | (2,330) | | 3,018 |
| | | Realised | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | - | (424) | | 563 |
| | | Unrealised | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | Total | (2,754) | | 3,581 |
| | | (losses)/gains | | | |
| | | on financial | | | |
| | | assets held | | | |
| | | for trading | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | | | | |
+--------+--------+-------------------+----------+--------+---------+
| | | Total | (8,266) | | 22,706 |
| | | net | | | |
| | | (loss)/gain | | | |
| | | on | | | |
| | | financial | | | |
| | | assets held | | | |
| | | at fair | | | |
| | | value | | | |
| | | through | | | |
| | | profit or | | | |
| | | loss | | | |
+--------+--------+-------------------+----------+--------+---------+
5 HEDGING AND DERIVATIVES
The only derivative instruments the Company holds are foreign exchange forwards.
Forwards are a contractual obligation by one party to buy and another party to
sell a financial instrument, equity, commodity or currency at a specific future
date. Forwards held by the Company are forward foreign currency contracts and
are used to hedge against the foreign currency assets held and the foreign share
classes.
The notional amounts of certain types of financial instruments provide a basis
for comparison with instruments recognised on the balance sheet, but they do not
necessarily indicate the amounts of future cash flows involved or the current
fair value of the instruments and do not therefore indicate the Company's
exposure to credit or market price risks. The derivative instruments become
favourable (assets) or unfavourable (liabilities) as a result of fluctuations in
market interest rate or foreign exchange rates relative to their terms. The
aggregate contractual or notional amount of derivative financial instruments on
hand, the extent to which instruments are favourable or unfavourable and, thus
the aggregate fair values of derivatives financial assets and liabilities can
fluctuate significantly from time to time.
The Company's open forward foreign exchange contracts at 30 September 2008 are
detailed below:
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| Settlement Date | | Amount Bought | | Amount Sold | Counterparty | Unrealised |
| | | | | | | Loss |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| | | | | | | US$'000 |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| Forward foreign exchange contract used to hedge GBP share class | |
+-----------------------------------------------------------------------------+-------------+
| 31 October 2008 | | GBP12,909,000 | | USD23,425,962 | State Street | (71) |
| | | | | | Boston | |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| |
+-------------------------------------------------------------------------------------------+
| Forward foreign exchange contract used to hedge foreign currency assets |
+-------------------------------------------------------------------------------------------+
| 31 October 2008 | | USD15,741,542 | | EUR10,995,000 | State Street | (96) |
| | | | | | Boston | |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| | |
+-----------------------------------------------------------------------------+-------------+
| Total unrealised loss on forward foreign exchange contracts | (167) |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
The Company's open forward foreign exchange contracts at 30 September 2007 are
detailed below:
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| Settlement Date | | Amount Bought | | Amount Sold | Counterparty | Unrealised |
| | | | | | | Gain |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| | | | | | | US$'000 |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| Forward foreign exchange contract used to hedge GBP share class | |
+-----------------------------------------------------------------------------+-------------+
| 31 October 2007 | | GBP17,896,000 | | USD36,035,386 | State Street | 256 |
| | | | | | Boston | |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| |
+-------------------------------------------------------------------------------------------+
| Forward foreign exchange contract used to hedge foreign currency contracts |
+-------------------------------------------------------------------------------------------+
| 31 October 2007 | | GBP3,170,100 | | USD6,426,967 | State Street | 2 |
| | | | | | Boston | |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
| | |
+-----------------------------------------------------------------------------+-------------+
| Total unrealised gains on forward foreign exchange contracts | 258 |
+-----------------+-+------------------+-+---------------+--------------------+-------------+
+--------+--------+--------------+--------+---------+--------+---------+
| 6 | | OTHER | | 2008 | | 2007 |
| | | RECEIVABLES | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | | | US$'000 | | US$'000 |
+--------+--------+--------------+--------+---------+--------+---------+
| | | | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | Amounts | | 5,000 | | 10,455 |
| | | paid in | | | | |
| | | advance | | | | |
| | | of | | | | |
| | | securities | | | | |
| | | purchased | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | Amounts | | 11 | | 75 |
| | | receivable | | | | |
| | | on | | | | |
| | | securities | | | | |
| | | sold | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | Amounts | | 1,736 | | 1,689 |
| | | due | | | | |
| | | from | | | | |
| | | Investment | | | | |
| | | Manager | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | Equalisation | | - | | 37 |
| | | paid on | | | | |
| | | investments | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | Other | | - | | 1 |
| | | receivables | | | | |
+--------+--------+--------------+--------+---------+--------+---------+
| | | | | 6,747 | | 12,257 |
+--------+--------+--------------+--------+---------+--------+---------+
+--------+--------+-------------+--------+---------+--------+---------+
| 7 | | ACCOUNTS | | 2008 | | 2007 |
| | | PAYABLE | | | | |
| | | AND | | | | |
| | | ACCRUED | | | | |
| | | EXPENSES | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | | | US$'000 | | US$'000 |
+--------+--------+-------------+--------+---------+--------+---------+
| | | | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | Amount | | (2,000) | | - |
| | | received | | | | |
| | | in | | | | |
| | | advance | | | | |
| | | of | | | | |
| | | securities | | | | |
| | | sold | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | Accrued | | (16) | | (31) |
| | | directors' | | | | |
| | | fees | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | Accrued | | (139) | | (153) |
| | | management | | | | |
| | | fees | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | Accrued | | (30) | | (794) |
| | | performance | | | | |
| | | fee | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | Other | | (64) | | (13) |
| | | accrued | | | | |
| | | expenses | | | | |
+--------+--------+-------------+--------+---------+--------+---------+
| | | | | (2,249) | | (991) |
+--------+--------+-------------+--------+---------+--------+---------+
8SHARE CAPITAL
The Company's capital is represented by the nominal shares and redeemable shares
outstanding. The Company does not have any externally imposed capital
requirements.
The Company strives to invest the subscriptions of redeemable shares in
investments that meet the Company's investment objectives while maintaining
sufficient liquidity to meet operating requirements.
The Company has the authority to purchase up to 10% of the Redeemable
participating reference shares in issue and hold them as Treasury Shares until a
time when they are either re-issued or cancelled.As at 30 September 2008 the
Company held 4,026,576 US Dollar Shares and 1,080,759 Sterling Hedged Shares in
treasury (2007: Nil US Dollar Shares and Nil Sterling Hedged Shares).
+---------------------------------------------------------------+-----------+---+-----------+
| The authorised shares of the Company at the | 2008 | | 2007 |
| year end were: | | | |
+---------------------------------------------------------------+-----------+---+-----------+
| | GBP | | GBP |
+---------------------------------------------------------------+-----------+---+-----------+
| | | | |
+---------------------------------------------------------------+-----------+---+-----------+
| 100 Founder Shares of GBP1 each (founder shares) | 100 | | 100 |
+---------------------------------------------------------------+-----------+---+-----------+
| 400,000,000 Redeemable Participating Preference Shares of | 4,000,000 | | 4,000,000 |
| GBP0.01 (the "shares") | | | |
+---------------------------------------------------------------+-----------+---+-----------+
| 100,000,000 Unclassified Shares of GBP0.01 ("unclassified | 1,000,000 | | 1,000,000 |
| shares") | | | |
+---------------------------------------------------------------+-----------+---+-----------+
| | 5,000,100 | | 5,000,100 |
+---------------------------------------------------------------+-----------+---+-----------+
On incorporation, 2 Founder Shares were allotted to the subscribers to the
Memorandum of Association. As Founder Shares are not participating shares of the
Company and do not form part of the Net Asset Value of the Company, they are
disclosed in the financial statements by way of this note only. The Unclassified
Shares may be allotted and issued as Shares of one or more classes or as non
Participating Redeemable Shares of 0.01p each (Nominal Shares).The Company's
Articles grant discretion to the Board to issue the Shares with such preferred,
deferred or other special rights or restrictions as the Board may determine. As
at 30 September 2008, the Board has issued shares designated as US Dollar
Shares and Sterling Hedged Shares.
US Dollar Shares have a nominal value of 1p per share although their share price
is quoted in US Dollars. US Dollar Shares are entitled to the net asset of the
Company attributable to the US Dollar Shares (based on the NAV of the US Dollar
Shares) on a winding up. All distributions payable to the holders of the US
Dollar Shares will be paid in US Dollars.
Sterling Hedged Shares have a nominal value of 1p per share and their price will
be quoted in British Pound Sterling. Sterling Hedged Shares are entitled to the
net assets of the Company attributable to Sterling Hedged Shares (based on the
net asset value of the Sterling Hedged Shares) on a winding up. It is the
intention of the Investment Manager predominantly to continue to hedge the
currency exposure of the assets of the Company attributable to the Sterling
Hedged Shares into British Pounds Sterling. The costs of providing the currency
hedge or any profits derived there-from are borne by the Sterling Hedged Share
class and this is reflected in their net asset value. All distributions payable
to the holders of the Sterling Hedged Shares will be paid in British Pounds
Sterling.
8SHARE CAPITAL - (CONTINUED)
Issued and fully paid share capital as at 30 September 2008
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | 2008 | | 2008 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | Number of | | US$'000 |
| | shares | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Founder shares | 2 | | - |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Nominal shares | 96,015,596 | | 1,736 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Redeemable participating preference shares | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| US$ redeemable participating preference shares | 41,365,763 | | 747 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| GBP Hedged redeemable participating shares | 11,907,598 | | 211 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Total redeemable participating preference shares in | 53,273,361 | | 958 |
| issue | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
Issued and fully paid share capital as at 30 September 2007
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | 2007 | | 2007 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | Number of | | US$'000 |
| | shares | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Founder shares | 2 | | - |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Nominal shares | 83,240,553 | | 1,690 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Redeemable participating preference shares | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| US$ redeemable participating preference shares | 49,161,576 | | 888 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| GBP Hedged redeemable participating shares | 16,886,828 | | 300 |
+-------------------------------------------------------+---------------------------+---+------------------------------+
| Total redeemable participating preference shares in | 66,048,404 | | 1,188 |
| issue | | | |
+-------------------------------------------------------+---------------------------+---+------------------------------+
The movement in shares during the year to 30 September 2008 is shown below:
+---------------------------------+----------------+-+----------------+-+-----------------+
| | | | Redeemable | | Redeemable |
| | | | Participating | | Participating |
| | | | Preference | | Preference |
| | | | Shares | | Shares |
+---------------------------------+----------------+-+----------------+-+-----------------+
| | Nominal Shares | | US$ Class | | Sterling Hedged |
| | | | | | Class |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares at 30 | 83,240,553 | | 49,161,576 | | 16,886,828 |
| September 2007 | | | | | |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares issued | 25,193,490 | | 9,222,770 | | 3,195,677 |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares redeemed | (12,418,447) | | (17,018,583) | | (8,174,907) |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares at 30 | 96,015,596 | | 41,365,763 | | 11,907,598 |
| September 2008 | | | | | |
+---------------------------------+----------------+-+----------------+-+-----------------+
Treasury Shares are excluded from the Redeemable Participating Preference Shares
US$ and Sterling Hedged Class table above.
8SHARE CAPITAL - (CONTINUED)
The movement in shares during the year to 30 September 2007 is shown below:
+---------------------------------+----------------+-+----------------+-+-----------------+
| | | | Redeemable | | Redeemable |
| | | | Participating | | Participating |
| | | | Preference | | Preference |
| | | | Shares | | Shares |
+---------------------------------+----------------+-+----------------+-+-----------------+
| | Nominal Shares | | US$ Class | | Sterling Hedged |
| | | | | | Class |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares at 1 October | 86,575,906 | | 42,351,149 | | 20,361,902 |
| 2006 | | | | | |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares issued | 14,591,813 | | 13,772,503 | | 4,154,663 |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares redeemed | (17,927,166) | | (6,962,076) | | (7,629,737) |
+---------------------------------+----------------+-+----------------+-+-----------------+
| Number of shares at 30 | 83,240,553 | | 49,161,576 | | 16,886,828 |
| September 2007 | | | | | |
+---------------------------------+----------------+-+----------------+-+-----------------+
The movement in share capital and share premium of redeemable participating
preference shares during the year to 30 September 2008 is shown below:
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$ class | | Sterling | | Total |
| | | | Hedged | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$'000 | | US$'000 | | US$'000 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Share capital | | | | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2007 | 888 | | 300 | | 1,188 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Issued during the year | 167 | | 58 | | 225 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Redeemed during the year | (308) | | (147) | | (455) |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2008 | 747 | | 211 | | 958 |
+---------------------------------------------+------------+-+------------+-+-------------+
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$ class | | Sterling | | Total |
| | | | Hedged | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$'000 | | US$'000 | | US$'000 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Share premium | | | | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2007 | 103,070 | | 31,340 | | 134,410 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Issued during the year | 18,720 | | 6,962 | | 25,682 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Redeemed during the year | (35,440) | | (17,810) | | (53,250) |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2008 | 86,350 | | 20,492 | | 106,842 |
+---------------------------------------------+------------+-+------------+-+-------------+
The movement in share capital and share premium of redeemable participating
preference shares during the year to 30 September 2007 is shown below:
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$ class | | Sterling | | Total |
| | | | Hedged | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$'000 | | US$'000 | | US$'000 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Share capital | | | | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 1 October 2006 | 750 | | 371 | | 1,121 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Issued during the year | 279 | | 84 | | 363 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Redeemed during the year | (141) | | (155) | | (296) |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2007 | 888 | | 300 | | 1,188 |
+---------------------------------------------+------------+-+------------+-+-------------+
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$ class | | Sterling | | Total |
| | | | Hedged | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| | US$'000 | | US$'000 | | US$'000 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Share premium | | | | | |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 1 October 2006 | 90,264 | | 39,643 | | 129,907 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Issued during the year | 25,526 | | 8,450 | | 33,976 |
+---------------------------------------------+------------+-+------------+-+-------------+
| Redeemed during the year | (12,720) | | (16,753) | | (29,473) |
+---------------------------------------------+------------+-+------------+-+-------------+
| Balance at 30 September 2007 | 103,070 | | 31,340 | | 134,410 |
+---------------------------------------------+------------+-+------------+-+-------------+
Rights attaching to shares
Unclassified Shares - The Directors may issue any of the Unclassified Shares of
GBP0.01 each in the capital of the Company as one or more classes of Shares or
as non-participating redeemable shares of GBP0.01 each (Nominal Shares). The
Shares may be issued as separate classes of redeemable participating preference
shares.
8SHARE CAPITAL - (CONTINUED)
Nominal shares - The Nominal Shares may only be issued to the Manager at par and
for the purpose of providing funds for the redemption of Shares. Nominal Shares
do not carry voting rights. Nominal Shares do not carry any general right to
dividends. However, a fixed dividend of GBP100 in aggregate shall be payable to
the holders of Nominal Shares pro rata to their holdings in each year. In the
event of liquidation they rank pari passu inter se but only for a return of the
nominal amount paid up on them. The Company from time to time may redeem at par
all or any of the Nominal Shares for the time being issued and outstanding out
of any monies which may lawfully be applied for the purpose on at least one
month's written notice. Nominal Shares are not participating shares of the
Company and do not form part of the Net Asset Value of the Company.
Rights as to income - Subject to the rights of the holders (if any) of the
Founder Shares, the Shares carry the right to receive all the revenue profits of
the Company available for distribution. The Founder Shares carry the right to
receive out of the profits of the Company available for distribution a fixed
cumulative preferential dividend at the annual rate of 0.01 per cent on the
nominal amount of each share. For so long as there are Shares in issue, the
Founder Shares do not confer any further right to participate in the Company's
profits.
Rights as to capital - On a return of capital or other return of assets of the
Company on winding up or otherwise (other than conversion, redemption or
purchase of Shares), the assets of the Company available for distribution to
Shareholders will be applied as follows (and in each case distributed among
the holders of Shares of each class rateably according to amounts paid up on
such Shares held by them):
(i) first there will be paid to the holders of the Founder Shares in respect of
each such share the amount paid up or treated as paid up thereon; and
(ii) secondly, there will be paid to the holders of the Shares all further
assets of the Company to which their Shares relate subject to any specific
rights attributable thereto as described in a circular or prospectus published
by the Company from time to time
Rights as to voting - The holders of the Shares will have the right to receive
notice of, and to vote at, general meetings of the Company. Each holder of a
Share who is present in person (or, being a corporation by representative) at a
general meeting will have on a show of hands one vote and on a poll every such
holder who is present in person or by proxy (or, being a corporation, by
representative) will have one vote in respect of each Share held by him. For so
long as there are Shares in issue, the holders of the Founder Shares will not
have any right to receive notice of or vote at any general meeting of the
Company. When there are no Shares in issue, the holders of the Founder
Shares will have the right to receive notice of, and to vote at, general
meetings of the Company. In such circumstances, each holder of a Founder Share
who is present in person (or, being a corporation, by representative) at a
general meeting will have on a show of hands one vote and on a poll every such
holder who is present in person or by proxy (or being a corporation, by
representative) will have one vote in respect of each Founder Share held by him.
The Redemption Facility
In order to assist further the narrowing of any discount to Net Asset Value at
which the Shares of the relevant class may be trading, the Company has a twice
yearly redemption facility under which, subject to certain limitations and the
Directors exercising their discretion to operate the facility, Shareholders may
request the redemption of all or part of their holdings of Shares of the
relevant class for cash by giving notice to the Company not less than 60 days'
prior to the Redemption Date, 30 June and/or 31 December of each year.
Redemptions on any Redemption Date will be restricted to up to 25 per cent. (or
such lesser amount as the Directors, in their discretion, resolve) of each class
of Share in issue, with any excess redemption requests being scaled back
pro-rata.
Issue of shares
Subject to any resolution of the Company in general meeting, the Company's
unissued shares shall be at the disposal of the Board which may offer, allot,
grant options over, or otherwise dispose of them to such persons, for such
consideration, on such terms and conditions and at such times as the Board
determines but so that no share shall be issued at a discount and so that the
amount payable on application on each share shall be fixed by the Board.
9 RELATED PARTY TRANSACTIONS
IAS 24, Related Party Disclosures requires the disclosure of information
relating to material transactions with parties who are deemed to be related to
the reporting entity. 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 Agreement
Pursuant to the Management Agreement dated 21 September 2001, the Company has
appointed HSBC Republic Management (Guernsey) Limited as the Manager of the
Company. On 1 January 2004 the Manager changed its name to HSBC Management
(Guernsey) Limited. The Manager is paid periodic fees and (if applicable)
performance fees. The periodic fees are paid monthly at a rate equivalent to
1.5% per annum of the value of the Company's net assets and are paid in arrears.
Such fees are paid by the Company to the Manager, out of which the Manager
discharges the fees to the Investment Adviser and Custodian. The performance fee
(if applicable) equals to 10% of the excess of the growth in the Net Asset Value
of the Company in the Performance Period over the Performance Hurdle. Any
performance fee payable will be subject to a cap equal to 4% of the Net Asset
Value of the Company in any one year. The performance fee for the year was
US$35,542 (2007: US$794,494). The performance fee outstanding at the year end
was US$30,009 (2007: US$794,494). The management fee for the year was
US$1,994,591 (2007: US$ 2,134,026). The management fee outstanding at the year
end was US$139,285 (2007: US$153,172).
The Management Agreement may be terminated by any party giving not less than six
month's notice in writing to the other parties.
Investment Adviser Agreement
Pursuant to the Investment Advisory Agreement dated 21 September 2001 the
Company has appointed HSBC Republic Investments Limited as the Investment
Adviser of the Company. With effect from 1 January 2007, the Investment Adviser
changed its name to HSBC Alternative Investments Limited. The Investment Adviser
fee is included in the management fee.
Directors' Interests
None of the Directors have a service contract with the Company. Mr Stuart
Carnegie is a non-executive director of various investment funds and it is
possible that the Company may invest in one or more funds of which Mr Carnegie
is a non-executive Director. Mr Raymond Apsey is a non-executive Director of
various investment funds and it is possible that the Company may invest in one
or more funds of which Mr Apsey is a non-executive Director. Mr Keith Dorrian is
a non-executive Director of various investment funds and it is possible that the
Company may invest in one or more funds of which Mr Dorrian is a non-executive
Director. Mr Paul Wrench is a Director of the Manager. He does not draw a fee
for his services as a Director of the Company.
+-------------------------------------------+--------------------+---------------------+
| The Directors are paid the following | | |
| fees: | | |
+-------------------------------------------+--------------------+---------------------+
| | 2008 | 2007 |
+-------------------------------------------+--------------------+---------------------+
| Raymond Philip Apsey | GBP25,000 per | GBP25,000 per annum |
| | annum | |
+-------------------------------------------+--------------------+---------------------+
| Stuart Francis Carnegie | GBP10,000 per | GBP10,000 per annum |
| | annum | |
+-------------------------------------------+--------------------+---------------------+
| Paul Wrench | GBP nil per annum | GBP nil per annum |
+-------------------------------------------+--------------------+---------------------+
| Keith Dorrian | GBP15,000 per | GBP15,000 per annum |
| | annum | |
+-------------------------------------------+--------------------+---------------------+
The Directors' fees outstanding at the year end were US$16,355 (2007:
US$31,375). Paul Wrench has waived his entitlement to fees. Stuart Francis
Carnegie resigned on 12 August 2008.
10LOANS
The Company will have the ability to borrow up to 20% of its adjusted total of
capital and reserves for short-term or temporary purposes as may be necessary
for settlement of transactions, to facilitate redemption (where applicable) or
to meet ongoing expenses. It is not intended for the Company to have any
structural gearing.
At 30 September 2008 the loan outstanding in respect of the credit facilities
extended to HSBC Global Absolute Limited by HSBC Private Bank (C.I.) Limited
(formerly HSBC Private Bank (Guernsey) Limited) was US$15,682,924 (2007:
US$7,130,954).
For the year ended 30 September 2008 the interest expense was US$174,243 (2007:
US$280,668) and the interest rate range was a low of 3.65% (2007: 6.13%) and a
high of 6.20% (2007: 6.59%).
11CUSTODY AGREEMENTS
Pursuant to the Custodian Agreement dated 21 September 2001 the Company has
appointed Investors Trust and Custodial Services (Ireland) Limited as the
Custodian of the Company. With effect from 26 November 2008 the Custodian
changed its name to State Street Custodial Services (Ireland) Limited. The
Custodian fee is included in the management fee.
12 TAXATION STATUS
The Company is exempt from Guernsey income tax under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance 1989 and is charged an annual exemption fee of
GBP600 per annum (2007: GBP600).
13 NET ASSETS ATTRIBUTABLE TO PREFERENCE SHAREHOLDERS
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| At 30 September | | | | 2008 | | 2007 |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| | | | | US$'000 | | US$'000 |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| | | | | | | |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| US$ Class | | | | 75,977 | | 99,300 |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| Sterling Hedged Class | | | | 21,351 | | 36,965 |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| | | | | | | |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
| Total | | | | 97,328 | | 136,265 |
+-----------------------------------------------+-+-----------+------+----------+--+---------+
+----------------+--------------------+--+--------------------+--+------------+--+-----------+
| Net asset value |
+--------------------------------------------------------------------------------------------+
| The net asset value of each US$ and GBP share is determined by dividing the net assets of |
| the Company attributed to the US$ and GBP shares by the number of US$ and GBP shares in |
| issue at the year end as follows: |
+--------------------------------------------------------------------------------------------+
| | | | | | | |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| | | Net assets | | Shares in | | Net |
| | | attributable to | | issue | | Assets |
| | | each share class | | | | Per Share |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| | | | | | | |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| As at 30 September 2008 | | | | | | |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| US$ Share | | | US$ 75,976,280 | | 41,365,763 | | US$ |
| | | | | | | | 1.8367 |
+----------------+--------------------+--+--------------------+--+------------+--+-----------+
| GBP Share | | | GBP 11,806,607 | | 11,907,598 | | GBP |
| | | | | | | | 0.9915 |
+----------------+--------------------+--+--------------------+--+------------+--+-----------+
| | | | | | | |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| As at 30 September 2007 | | | | | | |
+-------------------------------------+--+--------------------+--+------------+--+-----------+
| US$ Share | | | US$ 99,299,485 | | 49,161,576 | | US$ |
| | | | | | | | 2.0199 |
+----------------+--------------------+--+--------------------+--+------------+--+-----------+
| GBP Share | | | GBP 18,218,152 | | 16,886,828 | | GBP |
| | | | | | | | 1.0789 |
+----------------+--------------------+--+--------------------+--+------------+--+-----------+
14 FINANCIAL RISK MANAGEMENT
The past performance of the Company and of other funds managed by the Manager
and/or the Investment Adviser is not necessarily indicative of the future
performance of the Company. There can be no guarantee that the Company's
investment objective will be achieved. The Company's ability to achieve its
returns may be adversely affected in the event of significant or sustained
changes in market returns or volatility. Investors should regard an investment
in the Company as long-term in nature and be aware that they may not recover the
full amount initially invested or any at all. The market price of the Shares can
fluctuate and there is no guarantee that the market price of Shares will
reflect fully their underlying Net Asset Value.
The Company's investment portfolio comprises investment in other quoted and
unquoted funds that it intends to hold for an indefinite period of time.
Asset allocations and the composition of the portfolio are monitored by the
Company's Investment Manager. In instances where the portfolio has diverged from
target asset allocations, the Company's Investment Manager will rebalance the
portfolio to fall in line with the target asset allocations.
The main risks arising from the Company's financial instruments are market risk,
interest rate risk, credit risk, currency risk and liquidity risk. The Company
uses derivative financial instruments to mediate certain risk exposure.
(a)Market Price Risk Management
Market risk arises mainly from uncertainty about future prices of the financial
instruments held. It represents the potential loss the Company might suffer
through holding market positions that fluctuate in market value. The Investment
Adviser considers the diversification of the portfolio in order to minimise the
risk associated with particular countries or industry sectors while continuing
to follow the Company's investment objective.
Market risk embodies the potential for both loss and gains and includes currency
risk, interest rate risk and price risk. The Company's strategy on the
management of investment risk is driven by its investment objective of providing
shareholders with an absolute total return and with a lower volatility than
equities in general. The Investment Adviser will seek to achieve this by
investing in a diversified portfolio of holdings in hedge funds and managed
accounts exposed to long/short strategies investing in global markets.
The profitability of the Company's investment programme depends to a great
extent on correct assessments of the future course of price movements of
securities and equities and other investments by managers of hedge funds
selected by the Investment Adviser. There can be no assurance that the hedge
fund managers will be able accurately to predict these price movements. The
securities markets have in recent years been characterised by great volatility
and unpredictability. With respect to the investment strategy utilised by hedge
funds into which the Investment Adviser has invested the Company's assets, there
is always some, and from time to time a significant, degree of market risk.
Value at Risk (VaR)
VAR represents the potential losses from adverse changes in market factors for a
specified time period and confidence level, it is the maximum loss not exceeded
with a given probability defined as the confidence level, over a given period of
time.
The Investment Manager estimates VAR using historical simulation. This involves
running the current portfolio across a set of historical price changes to yield
a distribution of changes in portfolio value, and computing a percentile (the
VaR).
The table below shows the value at risk calculated using a 3 year historical
simulation of the portfolio, using the allocations as 30 September 2007 and
30 September 2008. The value at risk is measured as the potential 1 month loss
in value as a percentage of the investment portfolio with both a 95% and 99%
confidence interval.
+------------------+------------------------------+------------------------------+
| Year | 95% | 99% |
| | Confidence | Confidence |
+------------------+------------------------------+------------------------------+
| 2008 | 4.62% | 6.05% |
+------------------+------------------------------+------------------------------+
| 2007 | 2.16% | 3.49% |
+------------------+------------------------------+------------------------------+
14 FINANCIAL RISK MANAGEMENT - (CONTINUED)
(a)Market Price Risk Management (continued)
Details of the Company's investment portfolio at the balance sheet date are
disclosed in the schedule of investments included on page 34. All individual
investments in equity instruments are disclosed separately. Details of the
nature and terms of derivative financial instruments outstanding at the balance
sheet date are set out in note 5.
Other price risk
Price risk is the risk that the value of the investments will fluctuate as a
result of changes in market prices (other than those arising from interest rate
risk or currency risk), whether caused by factors specific to an individual
investment, its issuer or all factors affecting all investments traded in the
market.
As the majority of the Company's financial instruments are carried at fair value
with fair value changes recognised in the Income Statement, all changes in
market conditions will directly affect Net Investment Income.
The Company is required to comply with the standard investment and borrowing
restrictions as defined in the prospectus. The Company's investment restrictions
are monitored on a regular basis by the Custodian of the Company and reviewed
quarterly by the Board of Directors. There are specific guidelines in place for
monitoring and reporting breaches, and situations where holdings come close to
restriction levels.
Price risk is mitigated by the Company's Investment Manager by constructing a
diversified portfolio of instruments traded on various markets.
(b) Foreign currency risk
The majority of the financial assets of the Company are denominated in US$.
Through the Company's objective of investing through a manager of manager
approach, the Company is exposed to foreign currency risks of underlying
investments. Diversification of the underlying investments partially reduces the
Company's exposure to foreign currency risk.
The Company may invest in financial instruments and enter into transactions
denominated in currencies other than its functional currency. Consequently, the
Company is exposed to currency risk as the value of investments denominated in
currencies other than the US$ will fluctuate due to changes in exchange rates.
The Company's currency risk is managed on a ongoing basis by the Investment
Manager in accordance with policies and procedures in place. All currency
exposure at the portfolio level is hedged into the currency of the relevant
share class on a monthly basis, using standard monthly forwards. The Company's
overall currency positions and exposures are monitored on a monthly basis by the
Board of Directors.
The Company also offers redeemable participating preference shares denominated
in GBP exposing the Company to foreign currency risk. This risk is mitigated by
the Company entering into foreign exchange contracts as described further in
this note below. Details of open forward foreign exchange contracts at the year
end are disclosed in notes 5.
At the reporting date the Company had the following net exposure:
+-----------------------------------------------------+-----------------------------+-----------------------------+
| | 30 | 30 |
| | September | September |
| | 2008 | 2007 |
| | % of net | % of net |
| | Assets | Assets |
+-----------------------------------------------------+-----------------------------+-----------------------------+
| British Pound Sterling | 23.41% | 30.79% |
+-----------------------------------------------------+-----------------------------+-----------------------------+
| Euro | (0.03%) | 0.00% |
+-----------------------------------------------------+-----------------------------+-----------------------------+
| US Dollar | 76.62% | 69.21% |
+-----------------------------------------------------+-----------------------------+-----------------------------+
| | 100.00% | 100.00% |
+-----------------------------------------------------+-----------------------------+-----------------------------+
14 FINANCIAL RISK MANAGEMENT - (CONTINUED)
(b) Foreign currency risk (continued)
The following table sets out the Company's total exposure to foreign currency
risk and the net exposure to foreign currencies of the monetary assets and
liabilities.
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| 30 September 2008 | Monetary | Monetary | Total | Net |
| | Assets | Liabilities | Forward FX | |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| Currency | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| | | | | |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| British Pound Sterling | 1,736 | (46) | 23,355 | 25,045 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| Euro | 15,808 | - | (15,837) | (29) |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| US Dollar | 113,235 | (31,503) | (7,684) | 74,048 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| Total | 130,779 | (31,549) | (166) | 99,064 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| 30 September 2007 | Monetary | Monetary | Total | Net |
| | Assets | Liabilities | Forward FX | |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| Currency | US$'000 | | US$'000 | US$'000 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| | | | | |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| British Pound Sterling | 1,689 | (275) | 42,745 | 44,159 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| US Dollar | 144,405 | (8,122) | (42,487) | 93,796 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
| Total | 146,094 | (8,397) | 258 | 137,955 |
+----------------------------------+-------------+-------------------------------+-------------+-----------------------+
Amounts in the above table are based on the carrying value of monetary assets
and liabilities and the underlying principle amount of forward foreign exchange
contracts.
(c) Interest rate risk
The majority of the Company's financial assets are investments in investment
funds which neither pay interest nor have a maturity date. The Company is
exposed to risks associated with the effects of fluctuations in the prevailing
level of market interest rates on the fair value of underlying investments which
the Company has invested in.
The Company minimises interest rate risk by only entering into short term loans
bearing interest rates based on current market interest rates.
The Company has borrowed US$15,682,924 at year end which bears interest rate at
an average floating rate of 4.89% (2007: US$7,130,954 bearing interest at
6.54%). To minimise interest rate risk the Company enters into floating rate
loan agreements.
The Company had a cash deposit of EUR10.9m to cover the share dealings at the
year end. The interest rate risk was minimal in relation to this deposit.
(d) Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation or commitment that it has entered into with the
Company.
The carrying amounts of financial assets best represent the maximum credit risk
exposure at the balance sheet date.
At 30 September the following financial assets were exposed to credit risk:
+------------------------------------------------+------------------+------------------+
| | 30 September | 30 September |
| | 2008 | 2007 |
+------------------------------------------------+------------------+------------------+
| | US$ '000 | US$ '000 |
+------------------------------------------------+------------------+------------------+
| | | |
+------------------------------------------------+------------------+------------------+
| Financial assets at fair value through profit | 108,224 | 133,816 |
| or loss | | |
+------------------------------------------------+------------------+------------------+
| Cash and cash equivalents | 2,192 | 4 |
+------------------------------------------------+------------------+------------------+
| Other receivables | 6,747 | 12,257 |
+------------------------------------------------+------------------+------------------+
| Total | 117,163 | 146,077 |
+------------------------------------------------+------------------+------------------+
Amounts in the above table are based on carrying value of all accounts.
14 FINANCIAL RISK MANAGEMENT - (CONTINUED)
(d) Credit risk (continued)
Transactions involving derivative financial instruments are usually with
counterparties with whom the Company signed master netting agreements. Master
netting agreements provide for the net settlement of contracts with the same
party in the event of default. The impact of the master netting agreements is to
reduce credit risk from the amounts shown as Held for Trading: Derivatives in
Note 3. The credit risk associated with derivative financial assets subject to a
master netting agreement is eliminated only to the extent that financial
liabilities due to the same counterparty will be settled after the assets are
realised. The exposure to credit risk reduced by the master netting agreements
may change significantly within a short period of time as a result of
transactions subject to the arrangement. The corresponding assets and
liabilities have not been offset on the balance sheet.
Credit risk arising on financial assets at fair value through profit or loss is
mitigated by constructing a diversified portfolio to minimise asset
concentration with same/related asset managers or funds and in compliance with
the company's investment restrictions as defined in the prospectus.
The Company is indirectly exposed to credit risk through the credit risk arising
on the underlying investee funds held by the Company. As disclosed below in the
Liquidity Risk note to the financial statements, a number of investee funds were
adversely affected by the bankruptcy of Lehman Brothers.
The manager and investment adviser meet on a regular basis with the underlying
investment managers to review the performance and financial viability of the
investments and will take necessary corrective remedial action to correct any
instances of credit risk exposure.
Substantially all of the assets and cash of the Company are held by the
Custodian - State Street Custodial Services (Ireland) Limited. Bankruptcy or
insolvency of the Custodian may cause the Company's rights with respect to
securities held by the Custodian to be delayed or limited. The company monitors
its risk by monitoring the credit quality of the Custodian of the Company.
The Company minimises concentrations of credit risk by undertaking transactions
with a majority of customers and counterparties on recognised and reputable
exchanges.
There was no significant concentration of credit risk to counterparties as no
individual investment exceeded 10% of the net asset attributable to the holders
of redeemable shares either at 30 September 2008 or 30 September 2007.
(e) Liquidity risk
The Company's constitution provides for the bi-annual redemption of shares
facility which is subject to the discretion of the Directors.
The Company's financial instruments included investments which are in unlisted
hedge funds and managed accounts which are not traded in an organised public
market and which generally may be illiquid. As a result, the Company may not be
able to liquidate quickly some of its investments in these instruments at an
amount close to their fair value in order to meet its liquidity requirements.
At the year end the following investee funds had put in place restrictions which
limit the Company's ability to redeem its investment holdings:
+---------------------------------------------------------------+---------------------+
| | Market Value |
+---------------------------------------------------------------+---------------------+
| | 30 September 2008 |
+---------------------------------------------------------------+---------------------+
| | US$ |
+---------------------------------------------------------------+---------------------+
| | |
+---------------------------------------------------------------+---------------------+
| GLG Emerging Markets Fund * | 4,453,000 |
+---------------------------------------------------------------+---------------------+
| Plexus Fund ** | 1,005,000 |
+---------------------------------------------------------------+---------------------+
* Subsequent to the year end, US$2.6m was redeemed from the GLG Emerging Markets
Fund. A redemption gate was imposed on the remaining investment balance held by
the Company.
** Subsequent to the year end, US$200k was redeemed in cash from the Plexus
Fund. A redemption gate was imposed on the remaining investment balance.
14 FINANCIAL RISK MANAGEMENT - (CONTINUED)
(e) Liquidity risk - (continued)
In addition, as outlined in Note 20, a number of investment funds have put
restrictions on redemptions post year end.
The Company's listed securities are considered to be readily realisable as they
are all listed on major Global Exchanges.
The Company's liquidity risk is managed on an ongoing by the Investment Manager
in accordance with policies and procedures in place. The Manager seeks to ensure
that holdings which are deemed illiquid are normally not more than 10 per cent
of the Net Asset Value of the Company. It is not the normal policy of the
Company to invest directly in funds, limited partnerships or other vehicles that
have no liquidity. The Company's overall liquidity risks are monitored on a
quarterly by the Board of Directors.
The Company's investment restrictions, as defined in the prospectus, some of
which pertain to the management of liquidity risk and concentrations thereof are
monitored on a monthly basis by the custodian of the Company. There are specific
guidelines in place for monitoring and reporting breaches, and situations where
holdings come close to restriction levels.
There are no known significant concentrations of liquidity risk.
The Company's redemption policy only allows for redemptions, subject to certain
limitations and the Directors discretion to operate this facility, on a twice
yearly basis and shareholders must provide six months notice.
Residual Contractual maturities of financial liabilities
The table below summaries the maturity profile of the Company's financial
liabilities at 30 September 2008:
+------------------------------------+----------+----------+----------+----------+----------+
| | Less | 1-3 | 3 Months | No | Total |
| | than 1 | Months | to 1 | Stated | |
| | month | | Year | Maturity | |
+------------------------------------+----------+----------+----------+----------+----------+
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
+------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Liabilities | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Financial liabilities at fair | (167) | - | - | - | (167) |
| value through profit or loss | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Loan payable | (15,683) | - | - | - | (15,683) |
+------------------------------------+----------+----------+----------+----------+----------+
| Accounts payable and accrued | (2,249) | - | - | - | (2,249) |
| expenses | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Total | (18,099) | - | - | - | (18,099) |
+------------------------------------+----------+----------+----------+----------+----------+
The table below summaries the maturity profile of the Company's financial
liabilities at 30 September 2007:
+------------------------------------+----------+----------+----------+----------+----------+
| | Less | 1-3 | 3 Months | No | Total |
| | than 1 | Months | to 1 | Stated | |
| | month | | Year | Maturity | |
+------------------------------------+----------+----------+----------+----------+----------+
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
+------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Liabilities | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Loan payable | (7,131) | - | - | - | (7,131) |
+------------------------------------+----------+----------+----------+----------+----------+
| Creditors amounts falling due | (991) | - | - | - | (991) |
| within one year | | | | | |
+------------------------------------+----------+----------+----------+----------+----------+
| Total | (8,122) | - | - | - | (8,122) |
+------------------------------------+----------+----------+----------+----------+----------+
The Company can borrow funds on a short-term or temporary basis up to 20% of its
adjusted total of capital and reserves. At no point during the year ended
30 September 2008 did the loan payable exceed 20% of its adjusted total of
capital and reserves of the Company.
15 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Many of the Company's financial instruments are carried at fair value on the
balance sheet. Usually the fair value of the financial instruments can be
reliably determined within a reasonable range of estimates. For certain other
financial instruments including sales amounts due from/to brokers, accounts
payable and accrued expenses, the carrying amounts approximate the fair value
due to the immediate or short-term nature of these financial instruments.
At 30 September 2008, the carrying amounts of hedge funds which fair values are
valued at the net asset values provided by underlying managers or their
administrators amounted to US$ 108,755,923 (2007: US$ 133,558,056).
As disclosed in note 14(e), a number of the Company's investee funds have put in
place a number of restrictions on the redemption of investments which limits the
Company's ability to redeem their investments. The imposition of such
restrictions increases the uncertainty and judgement involved in valuing assets.
At 30 September 2008, the carrying amounts of derivative financial assets US$
Nil (2007: US$ 257,799) and derivative financial liabilities US$ 166,628 (2007:
US$ Nil) which fair values are valued using valuation techniques based on
observable market inputs.
The major methods and assumptions used in estimating fair values are disclosed
in note 1(d) of the significant accounting policies section.
16 SHAREHOLDERS' INTERESTS
The following Shareholders had significant holdings in the Company at 30
September 2008:
+--------------------------------------------+--------------------+---------------------+
| | Redeemable | Redeemable |
| | Participating | Participating |
+--------------------------------------------+--------------------+---------------------+
| | Preference Shares | Preference Shares |
+--------------------------------------------+--------------------+---------------------+
| Shareholder | US Dollar Class | Sterling Hedged |
| | | Class |
+--------------------------------------------+--------------------+---------------------+
| | | |
+--------------------------------------------+--------------------+---------------------+
| Euroclear Nominees Limited | 40.99% | - |
+--------------------------------------------+--------------------+---------------------+
| HSBC Global Custody Nominee (UK) | 22.25% | 17.20% |
+--------------------------------------------+--------------------+---------------------+
| BNY (OCS) Nominees Limited | 19.28% | 28.29% |
+--------------------------------------------+--------------------+---------------------+
| The Bank Of New York (Nominees) | 5.25% | 4.51% |
+--------------------------------------------+--------------------+---------------------+
| James Capel (Channel Islands) | 3.64% | 4.90% |
+--------------------------------------------+--------------------+---------------------+
| Chase Nominess Limited | 3.60% | - |
+--------------------------------------------+--------------------+---------------------+
| James Capel (Nominees) Limited | 0.05% | 5.14% |
+--------------------------------------------+--------------------+---------------------+
| Rathbone Nominees Limited | - | 16.48% |
+--------------------------------------------+--------------------+---------------------+
| Transact Nominees Limited | - | 4.89% |
+--------------------------------------------+--------------------+---------------------+
| Vidacos Nominees Limited | - | 2.93% |
+--------------------------------------------+--------------------+---------------------+
| Forest Nominees Limited | - | 2.25% |
+--------------------------------------------+--------------------+---------------------+
The following Shareholders had significant holdings in the Company at 30
September 2007:
+--------------------------------------+----------------------+------------------------+
| Shareholder | US Dollar Shares | Sterling Hedged Shares |
+--------------------------------------+----------------------+------------------------+
| | | |
+--------------------------------------+----------------------+------------------------+
| Euroclear Nominees Limited | 39.58% | 0.30% |
+--------------------------------------+----------------------+------------------------+
| HSBC Global Custody Nominee (UK) | 39.42% | 17.40% |
| Limited | | |
+--------------------------------------+----------------------+------------------------+
| Capita Registrars Limited | 6.62% | 0.06% |
+--------------------------------------+----------------------+------------------------+
| The Bank of New York Nominees | 6.01% | 6.31% |
| Limited | | |
+--------------------------------------+----------------------+------------------------+
| James Capel (Nominees) Limited | 1.73% | 3.41% |
+--------------------------------------+----------------------+------------------------+
| BNY (OCS) Nominees Limited | 0.33% | 37.40% |
+--------------------------------------+----------------------+------------------------+
| Pershing Keen Nominees Limited | 0.19% | 11.11% |
+--------------------------------------+----------------------+------------------------+
| Rathbone Nominees Limited | 0.05% | 11.93% |
+--------------------------------------+----------------------+------------------------+
| Transact Nominees Limited | - | 3.36% |
+--------------------------------------+----------------------+------------------------+
17 ULTIMATE CONTROLLING PARTY
In the opinion of Directors on the basis of shareholding advised to them,
the Company has no ultimate controlling party.
18 EXCHANGE RATES
The exchange rates to USD at 30 September 2008 and 30 September 2007 were as
follows:
+--------------------------------------+----------------------+-------------------------+
| | 30 September 2008 | 30 September 2007 |
+--------------------------------------+----------------------+-------------------------+
| EUR | 1.4377 | 1.4178 |
+--------------------------------------+----------------------+-------------------------+
| GBP | 1.8084 | 2.029 |
+--------------------------------------+----------------------+-------------------------+
19 RECONCILIATION OF PUBLISHED NET ASSET VALUE TO NET ASSET VALUE AS REPORTED
IN THE FINANCIAL
STATEMENTS
Subsequent to the calculation of the published net asset value of Redeemable
Participating Preference Shares at 30 September 2008, the Company was advised
that the following underlying investee funds had exposure to the bankruptcy of
Lehman Brothers;
* Harbinger Capital Partners
* Diamondback Offshore Funds
* Jandakot Fund
As the updated valuations provided by the underlying administrator relate to
information arising post year end which existed at the year end, they are
considered to be adjusting post balance sheet events and accordingly, the
financial statements have been adjusted for these updated valuations.
The table below shows the reconciliation of the published net asset value per
Redeemable Participating Preference Share at 30 September 2008 to the net asset
value per the financial statements.
+---------------------------------------------------+----------------+------------------+
| Redeemable Participating Preference Shares | US Dollar | Sterling Hedged |
| | Class | Class |
+---------------------------------------------------+----------------+------------------+
| | US$ | GBP |
+---------------------------------------------------+----------------+------------------+
| Published net asset value per share at 30 | 1.8467 | 0.9971 |
| September 2008 | | |
+---------------------------------------------------+----------------+------------------+
| | | |
+---------------------------------------------------+----------------+------------------+
| Adjustment per updated valuations | (0.01) | (0.0056) |
+---------------------------------------------------+----------------+------------------+
| | | |
+---------------------------------------------------+----------------+------------------+
| Net asset value per Financial Statements | 1.8367 | 0.9915 |
+---------------------------------------------------+----------------+------------------+
The published net asset value per share was calculated in good faith using
information available at that time.
20SUBSEQUENT EVENTS
(i) Shareholder Activity
On 21 October 2008 HSBC Global Absolute Limited purchased 100,000 US Dollar
Shares at USD1.27 per US Dollar Share and purchased 100,000 Sterling Hedged
Shares at GBP 0.75 per Sterling Hedge Share. After purchase, such US Dollar
Shares and Sterling Hedged Shares will be cancelled and the Company will have
41,265,763 US Dollar Shares in issue and 11,807,598 Sterling Hedged Shares in
issue. The Company holds 4,126,576 US Dollar Shares and 1,180,759 Sterling
Hedged Shares in treasury.
The Company also announced that valid conversion notices were received in
respect of the September 2008 Conversion Date relating to 12,000 US Dollar
Shares to be converted to Sterling Hedged Shares.
The conversion calculations were based on the net asset values per share of the
Sterling Hedged Shares and US Dollar Shares as at 30 September 2008, which were
GBP 0.9971 and USD 1.8467 respectively. On 21 October 2008 the above shares were
converted to 12,289 Sterling Hedged Shares. The conversion ratio was 1.024083
Sterling Hedged Shares for each US Dollar Share.
The Company made an application to admit 12,289 Sterling Hedged Shares to the
official list of the UK Listing Authority and to trading on the London Stock
Exchange and made an application for admission of such Sterling Hedged Shares to
the official list of the Channel Islands Stock Exchange and to trading on the
Channel Islands Stock Exchange. Dealings commenced on 28 October 2008.
Following the conversion, there will be 11,807,598 Sterling Hedged Shares
(excluding treasury shares) and 41,265,763 US Dollar Shares (excluding treasury
shares) in issue.
20SUBSEQUENT EVENTS - (CONTINUED)
(i) Shareholder Activity - (continued)
On 3 November 2008 following the liquidation of HSBC European Absolute Limited
'HEAL' under the scheme of reconstruction, the Company issued the following
shares in cash to the shareholders of HEAL who elected to receive securities in
HSBC Global Absolute Limited;
- 6,987,462 Redeemable Participating Preference Shares of 1 pence each
designated as Sterling Hedged shares (the "new Sterling Shares") issued for cash
at GBP0.9971 each;
- 11,517,819 Redeemable Participating Preference Shares of 1 pence each
designated as Euro Hedged shares (the "new Euro Shares") issued for cash
at EUR1.44703 each, and;
- 114,066 Redeemable Participating Preference Shares of 1 pence each designated
as US Dollar shares (the "new US Dollar Shares") issued for cash at $1.8467
each.
All new Shares rank pari passu with the existing Shares in issue.
Following the issue, the Company has 41,367,829 US Dollar Shares (excluding
treasury shares), 18,807,349 Sterling Hedged Shares (excluding treasury shares)
and 11,517,819 Euro Hedged Shares (excluding treasury shares) in issue in total.
(ii) Investments
Subsequent to the year end, a number of underlying investee funds put in place
restrictions on the Company's ability to redeem its investment holdings.
The set-up of these restrictions was considered to be an adjusting post balance
sheet event for the following investee funds as they related to circumstances
which existed at the year end (i.e. the bankruptcy of Lehman Brothers);
+-------------------------------------------------------------------+-----------------+
| | Adjustment to |
| | the Financial |
| | Statements in |
| | relation to |
| | updated Net |
| | Asset Value |
+-------------------------------------------------------------------+-----------------+
| | US$'000 |
+-------------------------------------------------------------------+-----------------+
| | |
+-------------------------------------------------------------------+-----------------+
| Harbinger Capital Partners | 117 |
+-------------------------------------------------------------------+-----------------+
| Diamondback Offshore Fund | 294 |
+-------------------------------------------------------------------+-----------------+
| Jandakot Fund | 121 |
+-------------------------------------------------------------------+-----------------+
| | 532 |
+-------------------------------------------------------------------+-----------------+
The set up of the restrictions on redemptions for the following funds is not
considered to be an adjusting post balance sheet event;
+-------------------------------------------------------------------+-----------------+
| | Market Value at |
| | 30 September |
| | 2008 |
+-------------------------------------------------------------------+-----------------+
| | US$'000 |
+-------------------------------------------------------------------+-----------------+
| | |
+-------------------------------------------------------------------+-----------------+
| Tudor BVI Global Funds * | 4,527 |
+-------------------------------------------------------------------+-----------------+
| Farallon Offshore Funds | 4,014 |
+-------------------------------------------------------------------+-----------------+
| Pentwater Fund | 2,443 |
+-------------------------------------------------------------------+-----------------+
| | 10,984 |
+-------------------------------------------------------------------+-----------------+
* Subsequent to the year end, US$2m was redeemed in cash from Tudor BVI Global
Funds. Restrictions on redemptions have been imposed on the remaining investment
balance.
21 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the directors on 26 January 2009.
The following pages are not an integral part of these financial statements and
are presented for information purposes only.
HSBC GLOBAL ABSOLUTE LIMITED
SCHEDULE OF INVESTMENTS AS AT 30 SEPTEMBER 2008 (UNAUDITED)
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Security | | | | Market | | % of | |
| Description | | | | value | | total | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | Holding | | US$'000 | | net | |
| | | | | | | assets | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Investment | | | | | | | |
| Funds | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| U.S. | | | | | | | |
| Dollar | | | | | | | |
| (2007: | | | | | | | |
| 98.01%) | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| AG | | 3,247 | | 3,479 | | 3.51 | % |
| Super | | | | | | | |
| Fund | | | | | | | |
| International, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Brevan | | 27,205 | | 4,282 | | 4.32 | % |
| Howard | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Caxton | | 2,015 | | 3,852 | | 3.89 | % |
| Equity | | | | | | | |
| Growth | | | | | | | |
| (BVI), | | | | | | | |
| Ltd. - | | | | | | | |
| Class | | | | | | | |
| B, | | | | | | | |
| Series | | | | | | | |
| 29 | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| CSFB | | 467 | | 1,099 | | 1.11 | % |
| Convertible | | | | | | | |
| & | | | | | | | |
| Quantitative | | | | | | | |
| Strategies | | | | | | | |
| Feeder Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| CQS | | 934 | | 2,198 | | 2.22 | % |
| Convertible | | | | | | | |
| & | | | | | | | |
| Quantitative | | | | | | | |
| - Class 1B | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Delta | | 17,000 | | 1,123 | | 1.13 | % |
| US | | | | | | | |
| Partners | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Diamondback | | 3,001 | | 3,750 | | 3.79 | % |
| Offshore | | | | | | | |
| Fund, Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Eminence | | 6,432 | | 2,709 | | 2.73 | % |
| Fund, | | | | | | | |
| Ltd. - | | | | | | | |
| Class B | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Episode | | 30,000 | | 2,582 | | 2.61 | % |
| Inc. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Farallon | | 367,218 | | 4,014 | | 4.05 | % |
| Capital | | | | | | | |
| Offshore | | | | | | | |
| Investors, | | | | | | | |
| Inc. - | | | | | | | |
| Class E, | | | | | | | |
| Series D | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Forden | | 217 | | 308 | | 0.31 | % |
| Fund, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Gamut | | 384 | | 2,594 | | 2.62 | % |
| Investments, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| GLG | | 19,817 | | 4,453 | | 4.50 | % |
| Emerging | | | | | | | |
| Markets | | | | | | | |
| Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Harbinger | | 14,881 | | 6,035 | | 6.09 | % |
| Capital | | | | | | | |
| Partners | | | | | | | |
| - Class | | | | | | | |
| B, Series | | | | | | | |
| 1 | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Highbridge | | 55 | | 3,625 | | 3.66 | % |
| Capital | | | | | | | |
| Corp. - | | | | | | | |
| Class A | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Jandakot | | 20,656 | | 2,493 | | 2.52 | % |
| Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Lansdowne | | 13,206 | | 4,172 | | 4.21 | % |
| UK Equity | | | | | | | |
| Fund, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Marathon | | 1,649 | | 3,117 | | 3.15 | % |
| Vertex | | | | | | | |
| Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Marathon | | 1 | | - | | 0.00 | % |
| Vertex | | | | | | | |
| Japan | | | | | | | |
| Fund, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Meditor | | 6,488 | | 2,847 | | 2.87 | % |
| European | | | | | | | |
| Hedge - | | | | | | | |
| Class B | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Oz | | 3,166 | | 3,421 | | 3.45 | % |
| Europe | | | | | | | |
| Overseas | | | | | | | |
| Fund II, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Oz | | 1,327 | | 1,331 | | 1.34 | % |
| Europe | | | | | | | |
| Overseas | | | | | | | |
| Accumulation | | | | | | | |
| Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Paulson | | 16,503 | | 4,861 | | 4.91 | % |
| Advantage, | | | | | | | |
| Ltd. - | | | | | | | |
| Class A | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Penwater | | 3,000 | | 2,443 | | 2.47 | % |
| Event | | | | | | | |
| Fund, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Plexus | | 12,065 | | 1,008 | | 1.02 | % |
| Fund, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Raptor | | 1,181 | | 4,449 | | 4.49 | % |
| Global | | | | | | | |
| Fund, | | | | | | | |
| Ltd. - | | | | | | | |
| Class | | | | | | | |
| A | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Renaissance | | 1,000,000 | | 916 | | 0.92 | % |
| Institutional | | | | | | | |
| Equity Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Samsara | | 29,848 | | 2,835 | | 2.86 | % |
| Fund - | | | | | | | |
| Class B | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| SR | | 3,822 | | 3,741 | | 3.78 | % |
| Global | | | | | | | |
| Fund | | | | | | | |
| Emerging | | | | | | | |
| Markets | | | | | | | |
| Portfolio | | | | | | | |
| - Class G | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Steel | | 1,909 | | 1,545 | | 1.56 | % |
| Partners | | | | | | | |
| Japan | | | | | | | |
| Strategic | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Strategic | | 40,000 | | 3,699 | | 3.73 | % |
| Value | | | | | | | |
| Cred | | | | | | | |
| Restr | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Third | | 24,910 | | 3,260 | | 3.29 | % |
| Point | | | | | | | |
| Offshore | | | | | | | |
| Fund, | | | | | | | |
| Ltd. - | | | | | | | |
| Class E, | | | | | | | |
| Series 2 | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Third | | 3,802 | | 372 | | 0.38 | % |
| Point | | | | | | | |
| Offshore | | | | | | | |
| Fund, | | | | | | | |
| Ltd. - | | | | | | | |
| Class S, | | | | | | | |
| Series 3 | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Tewksbury | | 495 | | 5,596 | | 5.65 | % |
| Investment | | | | | | | |
| Fund | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Tudor | | 54 | | 4,527 | | 4.57 | % |
| BVI | | | | | | | |
| Global | | | | | | | |
| Fund - | | | | | | | |
| Class | | | | | | | |
| B | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Two | | 2,222 | | 3,086 | | 3.12 | % |
| Sigma | | | | | | | |
| Cayman | | | | | | | |
| Partners, | | | | | | | |
| Ltd. | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Two | | 1,145 | | 2,402 | | 2.42 | % |
| Sigma | | | | | | | |
| Eclipse | | | | | | | |
| Cayman | | | | | | | |
| Fund - | | | | | | | |
| Class | | | | | | | |
| A2 | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | 108,224 | | 109.25 | % |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Total | | | | 108,224 | | 109.25 | % |
| value | | | | | | | |
| of | | | | | | | |
| financial | | | | | | | |
| assets at | | | | | | | |
| fair | | | | | | | |
| value | | | | | | | |
| through | | | | | | | |
| profit | | | | | | | |
| and loss | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Net | | | | (9,160) | | (9.25) | % |
| current | | | | | | | |
| liabilities | | | | | | | |
| (2007: | | | | | | | |
| 1.99%) | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| Total | | | | 99,064 | | 100 | % |
| net | | | | | | | |
| assets | | | | | | | |
| attributable | | | | | | | |
| to the | | | | | | | |
| holders of | | | | | | | |
| redeemable | | | | | | | |
| participating | | | | | | | |
| preference | | | | | | | |
| shares | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
| |
+----------------+
| | | | | | | | |
+----------------+--------+-----------+--------+---------+--------+---------+--------+
+----------------+--------+--------+-----------+--------+-----------+--------+
| Net | | | 30 September | 30 September |
| asset | | | 2008 | 2007 |
| value | | | | |
| per | | | | |
| share: | | | | |
+----------------+--------+--------+--------------------+--------------------+
| | | | | |
+----------------+--------+--------+--------------------+--------------------+
| HSBC | | | US$1.8367 | | US$2.0199 | |
| Global | | | | | | |
| Absolute | | | | | | |
| Limited | | | | | | |
| - US | | | | | | |
| Dollar | | | | | | |
| Share | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| HSBC | | | GBP0.9915 | | GBP1.0789 | |
| Global | | | | | | |
| Absolute | | | | | | |
| Limited | | | | | | |
| - | | | | | | |
| Sterling | | | | | | |
| Hedged | | | | | | |
| Share | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| Portfolio | | | 2008 | | 2007 | |
| Classification | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| | | | % of | | % of | |
| | | | Portfolio | | Portfolio | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| Securities | | | 26.56% | | 33.74% | |
| with an | | | | | | |
| official | | | | | | |
| stock | | | | | | |
| exchange | | | | | | |
| listing | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| Unlisted | | | 73.44% | | 66.26% | |
| securities | | | | | | |
+----------------+--------+--------+-----------+--------+-----------+--------+
| | | | 100.00% | | 100.00% | |
+----------------+--------+--------+-----------+--------+-----------+--------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR WUUACGUPBGCU
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