TIDMACD
RNS Number : 1407Y
AcenciA Debt Strategies Limited
27 August 2009
?
ACENCIA DEBT STRATEGIES LIMITED
(Registered in Guernsey - Number 43787)
Registered Office:
2ND FLOOR, REGENCY COURT, GLATEGNY ESPLANADE, ST. PETER PORT,
GUERNSEY, GY1 3NQ
___________________________
TELEPHONE: + 44 1481 720321
FACSIMILE: + 44 1481 716117
e-mail: Funds@bfmgl.gg
+-------------------------------------------------------+------------------------------+
| For immediate release | 27 August 2009 |
+-------------------------------------------------------+------------------------------+
Interim Report 2009
AcenciA Debt Strategies Limited today announces it's Interim Results for the six
months ended 30 June 2009.
Please click on the PDF version to view the Report and a free text version is
shown below.
http://www.rns-pdf.londonstockexchange.com/rns/1407Y_-2009-8-27.pdf
ACENCIA DEBT STRATEGIES LIMITED
INTERIM REPORT 2009
ACENCIA DEBT STRATEGIES LIMITED
TABLE OF CONTENTS
Page No
Summary Information1
Responsibility Statement3
Chairman's Statement4
Independent Review Report7
Income Statement (unaudited)8
Statement of Changes in Shareholders' Equity (unaudited)9
Balance Sheet (unaudited)10
Cash Flow Statement (unaudited)11
Notes to the Condensed Unaudited Financial Statements12
Management and Administration23
ACENCIA DEBT STRATEGIES LIMITED
SUMMARY INFORMATION
Principal Activity
AcenciA Debt Strategies Limited ("the Company" or "AcenciA") is an authorised
closed-ended investment scheme domiciled in Guernsey.
Investment Objective and Policy
The Company's investment objective is to produce annual returns in excess of
3-month Sterling LIBOR plus 5 per cent over a rolling 3-year period, with annual
standard deviation of under 5 per cent.
The Company's investment policy is to invest in an actively managed portfolio of
predominantly debt-oriented hedge funds.
Asset Allocation by Hedge Fund Strategy
The estimated allocation to underlying hedge fund strategies as at 30 June 2009
was as follows:*
Analysis of Significant Investments
The ten largest direct holdings of the Company as at 30 June 2009 are set out in
the first table overleaf. Of these, five are fund of fund vehicles managed by
Sandalwood Securities, Inc., the Company's Investment Adviser. The top ten
holdings on a look-through basis (i.e. showing the effective exposure to
underlying single manager hedge funds, ignoring the fund of fund vehicles) are
set out in the second table overleaf.
*Estimate by Saltus Partners LLP based on interviews with a sample of underlying
managers.
ACENCIA DEBT STRATEGIES LIMITED
SUMMARY INFORMATION (continued)
+-------------------------------------+----------------+-------------+------------+
| The Company's top 10 Direct Holdings |
+---------------------------------------------------------------------------------+
| Name of investment | Strategy | Market | % of |
| | | Value | Company's |
| | | GBP | Net Assets |
+-------------------------------------+----------------+-------------+------------+
| Funds of Funds Managed by | | | |
| Sandalwood | | | |
+-------------------------------------+----------------+-------------+------------+
| Sandalwood Double S | Fund of funds | 31,422,201 | 20.32% |
+-------------------------------------+----------------+-------------+------------+
| Sandalwood Debt Fund A Limited | Fund of funds | 29,367,486 | 18.99% |
| Partnership | | | |
+-------------------------------------+----------------+-------------+------------+
| Bodleian Partners Class A Limited | Fund of funds | 24,528,608 | 15.86% |
| Partnership | | | |
+-------------------------------------+----------------+-------------+------------+
| Bodleian Partners Class B Limited | Fund of funds | 10,683,477 | 6.91% |
| Partnership | | | |
+-------------------------------------+----------------+-------------+------------+
| Oxbridge Associates Limited | Fund of funds | 4,395,161 | 2.84% |
| Partnership | | | |
+-------------------------------------+----------------+-------------+------------+
| Sub Total | | 100,396,933 | 64.92% |
+-------------------------------------+----------------+-------------+------------+
| | | | |
+-------------------------------------+----------------+-------------+------------+
| Single Manager Funds | | | |
+-------------------------------------+----------------+-------------+------------+
| Elliott International Limited | Multi-strategy | 10,400,956 | 6.72% |
+-------------------------------------+----------------+-------------+------------+
| Centerbridge Credit Partners | Multi-strategy | 9,085,286 | 5.87% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Marathon Special Opportunities Fund | Multi-strategy | 5,679,248 | 3.67% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| GSO Liquidity Overseas Partners | Multi-strategy | 4,015,753 | 2.60% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Cerberus Institution Overseas | Distressed | 3,808,857 | 2.46% |
| | securities | | |
+-------------------------------------+----------------+-------------+------------+
| Sub Total | | 32,990,100 | 21.32% |
+-------------------------------------+----------------+-------------+------------+
| Total | | 133,387,033 | 86.24% |
+-------------------------------------+----------------+-------------+------------+
| | | | |
+-------------------------------------+----------------+-------------+------------+
| The Company's top 10 Holdings on a Look-through | | |
| Basis | | |
+------------------------------------------------------+-------------+------------+
| Name of investment* | Strategy | Market | % of |
| | | Value | Company's |
| | | GBP | Net Assets |
+-------------------------------------+----------------+-------------+------------+
| Elliott International Limited | Multi-strategy | 18,381,771 | 11.89% |
+-------------------------------------+----------------+-------------+------------+
| Cerberus Institution Overseas | Distressed | 17,908,360 | 11.58% |
| | securities | | |
+-------------------------------------+----------------+-------------+------------+
| Centerbridge Credit Partners | Multi-strategy | 11,535,023 | 7.46% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Redwood | Multi-strategy | 7,727,576 | 5.00% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Marathon Special Opportunities Fund | Multi-strategy | 6,223,693 | 4.02% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| York Credit Opportunity Fund | Multi-strategy | 5,896,653 | 3.81% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Marathon Structured Finance Fund | Multi-strategy | 5,499,147 | 3.56% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| Silver Point Capital Offshore Fund | Multi-strategy | 4,572,871 | 2.96% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| King Street Capital | Multi-strategy | 4,453,151 | 2.88% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| GSO Liquidity Overseas Partners | Multi-strategy | 4,015,752 | 2.60% |
| | debt | | |
+-------------------------------------+----------------+-------------+------------+
| | | 86,213,997 | 55.76% |
+-------------------------------------+----------------+-------------+------------+
*In several cases the exposure to these funds is made up of a combination of an
indirect investment in the domestic funds and a direct investment in the
overseas sister fund, which has similar but not identical portfolio composition.
Whilst it is generally considered best practice to disclose the full portfolio
of an investment company, the composition of the Company's investment portfolio
is the subject of confidentiality provisions with the Investment Adviser. The
Board believes that such disclosure could be disadvantageous to the Company and
its shareholders, for instance by increasing competition for the limited
capacity in underlying hedge funds or diminishing a particular manager's
willingness to accept an investment from the Company or the Investment Adviser.
Accordingly, in common with several other funds of hedge funds and in compliance
with current UK Listing Authority Rules, the Company intends to disclose only
its ten largest investments.
ACENCIA DEBT STRATEGIES LIMITED
RESPONSIBILITY STATEMENT
To the best of our knowledge, and in accordance with the applicable reporting
principles for interim financial reporting, the interim condensed financial
statements give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company, and the interim management report of
the Company includes a fair review of the development and performance of the
business and the position of the Company, together with a description of the
principal opportunities and risks associated with the expected development of
the Company for the remaining months of the fiscal year.
J Le Pelley
Chairman Director
Date: 27 August 2009
ACENCIA DEBT STRATEGIES LIMITED
CHAIRMAN'S STATEMENT
I am pleased to present our shareholders with this set of interim condensed
unaudited financial statements for AcenciA Debt Strategies Limited covering the
period from 1 January 2009 to 30 June 2009.
Performance review
The net asset value per share of the Company increased 9.7% during the period to
80.90p at 30 June 2009 as the funds in which the Company is invested began to
benefit from the return of a degree of liquidity to credit markets and improved
trading conditions. The share price increased 20.9% as the discount to net asset
value contracted from 40.0% to 33.8%.
Whilst this performance is pleasing, the Board remains committed to taking
action to reduce the discount further. We were gratified by the high level of
support shown by shareholders to the reorganisation proposals put forward and
approved at an EGM in March which included committing to holding a winding-up
vote in August 2011 and giving the Board authority to conduct both a conversion
offer and a tender offer.
The conversion offer was duly made in April and resulted in shareholders owning
25,937,034 ordinary shares electing to convert their holdings into equivalent
ones in AcenciA Fundamental Credit, an open ended sister vehicle. The Board
anticipates that further conversion offers will be made in the future.
In July we announced that we expect to publish a full timetable for the Tender
Offer in December 2009 with proceeds expected as soon as is practicable in the
New Year. Following a series of redemption receipts post the balance sheet date,
the Company no longer has any borrowings and is modestly net cash positive.
However it does not currently have sufficient net cash to conduct the GBP30
million tender offer to which the Board is committed and will only be in such a
position after the next available liquidity point for the Company through
redemptions submitted for 31st December 2009. The Board does, however,
anticipate a resumption of the Company's share buyback programme in the
intervening period.
Investment review
The six month period to 30 June was the best in the 12 year history of the
Sandalwood Debt Fund, which translated into a strong performance by the Company.
In significant part it represented a recovery of mark-to-market losses sustained
in the last four months of 2008, as well as the fact that as capital leaves the
hedge fund space, remaining capital benefits from fewer buyers competing for the
same assets, thereby driving prices down and returns up. In addition, the
Company continues to exhibit a lack of correlation to the equity markets and low
volatility - albeit at higher levels than experienced in the past.
Portfolio positioning
The portfolio remains allocated to predominantly multi-strategy debt managers,
which provides a good diversity among bank debt, high yield and distressed debt.
As at 30 June, on a look-through basis, the Company's aggregated exposures were
101% long and 22% short for a gross exposure of 123% (long + short) and a net
long exposure of 79% (long - short), measured as a percentage of net asset
value. Approximately 83% of the Fund is invested in the U.S. with 12% in Europe
and 5% in other regions. During the quarter managers unwound some of their
hedges in order to take advantage of the rallying markets. Gross portfolio
exposure was reduced from 123% to approximately 120% and net exposure has
increased from 50% to 79%. Managers have also shifted their CDS hedges from high
yield to high grade names in order to maintain a hedged portfolio and minimize
downside risk. We made minimal manager changes during the period and we do not
anticipate any material changes during the remainder of the year.
ACENCIA DEBT STRATEGIES LIMITED
CHAIRMAN'S STATEMENT (continued)
The graph below shows exposure by asset type:
The pie chart below shows geographical exposure:
Performance of Underlying Managers
The Company has investments with 21 managers (having an allocation of 1% or
more). Top performers for the first half were Elliott, Redwood, Brigade and
Centerbridge. Detractors were Marathon, Cerberus and Silver Point.
Investment Outlook
During the period as a whole and the second quarter in particular, credit
performed strongly as the markets continued their sharp move upward as
institutional investors regained their appetite for credit risk. Since 2007, the
implosion phase of the corporate credit cycle has been running its course. Our
Managers for the most part believe we are nearing the end of the implosion phase
and will enter the restructuring phase over the next few quarters. As such, we
expect to see increasing gross exposures and reduced cash positions and CDS
hedges.
There continues to be a focus on value oriented distressed/stressed credits at
the top of the capital structure, primarily senior secured bank debt where
managers look to benefit from the restructuring or reorganisation of the
company. Many managers expect a primary catalyst of the current distressed cycle
to be the restructuring of the large number of aggressively financed leveraged
buy-outs ("LBOs") completed over the last several years. Given that much of the
LBO financing was through bank debt, the expectation is that the first lien
paper will likely be the fulcrum security in this cycle as opposed to more
junior securities in previous cycles. Examples where this has been the case
include Lyondell, Lear, Realogy and General Growth Properties. It is also
possible that the coming wave of defaults and downgrades will force some of the
weaker holders to liquidate at distressed prices, which may lead to further
pricing volatility in the short term. In addition to value oriented bank debt
positions, managers
ACENCIA DEBT STRATEGIES LIMITED
CHAIRMAN'S STATEMENT (continued)
hold first lien paper where they believe that the credits are "money good," but
due to technical pressures they present significant yield and/or trading
opportunities. Examples currently include TXU, Univision, Nuveen and Michaels
Stores.
The final area where we expect significant participation from our managers is in
bankruptcy and restructuring related transactions. To date our managers have
participated in a variety of deals including the purchase of Chrysler related
debt ahead of its bankruptcy, participating in the creditor committees for the
Delphi bankruptcy as well as providing financing to CIT. As the bankruptcy cycle
continues to accelerate we expect to see the distressed portion of the portfolio
expand.
J Le Pelley, Chairman
Date: 27 August 2009
ACENCIA DEBT STRATEGIES LIMITED
INDEPENDENT REVIEW REPORT
FOR THE PERIOD ENDED 30 JUNE 2009
Introduction
We have been engaged by the Company to review the condensed unaudited set of
financial statements in the half-yearly financial report for the six months
ended 30 June 2009 which comprises the Income Statement, the Statement of
Changes in Shareholders' Equity, Balance Sheet, Cash Flow Statement and related
notes. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Company are
prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, "Interim Financial Reporting", as
adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting its responsibilities in respect to half-yearly
financial reporting in accordance with the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority and for no other purpose. No
person is entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose of our terms
of engagement, or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
other person or for any other purpose and we hereby expressly disclaim any and
all such liability.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34, as adopted by
the European Union, and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
BDO Novus Limited
Chartered Accountants
Place du Pre, Rue du Pre, St Peter Port, Guernsey
Date: 27 August 2009
ACENCIA DEBT STRATEGIES LIMITED
INCOME STATEMENT (unaudited)
For the six month period ended 30 June 2009
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | 1 January | | 1 January | | 1 | |
| | | | | | | | | January | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | 2009 to | | 2008 to | | 2008 to | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | 30 June | | 31 December | | 30 June | |
| | | | | 2009 | | 2008 | | 2008 | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | (unaudited) | | (audited) | | (unaudited) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | Notes | | GBP | | GBP | | GBP | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Net losses on fair value | | 11 | | (3,401,409) | | (8,853,330) | | (4,869,803) | |
| through profit or loss | | | | | | | | | |
| investments | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Other gains and losses | | 5 | | 18,228,962 | | (66,782,112) | | 1,784,014 | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | 14,827,553 | | (75,635,442) | | (3,085,789) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Income | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Other operating income | | 6 | | 622,473 | | 1,942,420 | | 1,007 | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Expenses | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Management and performance | | 8 | | 100,396 | | 472,661 | | 229,712 | |
| fees | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Other expenses | | 8 | | (581,358) | | (891,543) | | (409,631) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | (480,962) | | (418,882) | | (179,919) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Net income/(expenses) | | | | 141,511 | | 1,523,538 | | (178,912) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Finance costs | | 7 | | (361,156) | | (846,172) | | (289,266) | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Profit/(loss) for the financial | | | 14,607,908 | | (74,958,076) | | (3,553,967) | |
| period / year | | | | | | | | |
+----------------------------------+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Basic and Diluted | | 10 | | 6.87p | | (34.28)p | | (1.62)p | |
| Earnings/(Loss) per Ordinary | | | | | | | | | |
| Share | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
| Weighted average number of | | 10 | | 212,531,460 | | 218,662,424 | | 219,070,909 | |
| Ordinary Shares outstanding | | | | | | | | | |
+--------------------------------+-+-------+-+-------------+-+--------------+--+-------------+-+
All items in the above statement derive from continuing operations.
All income is attributable to the Ordinary Shares of the Company.
The accompanying notes on pages 12 to 22 form an integral part of the condensed
unaudited Financial Statements.
ACENCIA DEBT STRATEGIES LIMITED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
For the six month period ended 30 June 2009
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | Share | | Distributable | | Accumulated | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | Premium | | Reserve | | Profits/(losses) | | Total | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | Notes | | GBP | | GBP | | GBP | | GBP | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| For the six month period | | | | | | | | | | | |
| ended 30 June 2009 | | | | | | | | | | | |
| (unaudited) | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| At 31 December 2008 | | | | 44,452,525 | | 185,709,109 | | (70,068,454) | | 160,093,180 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Profit retained for the | | | | - | | - | | 14,607,908 | | 14,607,908 | |
| financial period | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Total recognised income and | | | | - | | - | | 14,607,908 | | 14,607,908 | |
| expense for the period | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Ordinary Shares redeemed | |16(a) | | (20,041,546) | | - | | - | | (20,041,546) | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Additional funds | |16(a) | | 1,834 | | - | | - | | 1,834 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| At 30 June 2009 | | | | 24,412,813 | | 185,709,109 | | (55,460,546) | | 154,661,376 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | Share | | Distributable | | Accumulated | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | Premium | | Reserve | | Profits/(losses) | | Total | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | |Notes | | GBP | | GBP | | GBP | | GBP | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| For the year ended 31 | | | | | | | | | | | |
| December 2008(audited) | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| At 31 December 2007 | | | | 43,999,792 | | 188,882,998 | | 13,477,422 | | 246,360,212 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Loss for the financial year | | | | - | | - | | (74,958,076) | | (74,958,076) | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Total recognised income and | | | | - | | - | | (74,958,076) | | (74,958,076) | |
| expense for the year | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Ordinary Shares acquired for | |16(b) | | - | | (4,642,220) | | - | | (4,642,220) | |
| Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Ordinary Shares sold from | |16(b) | | - | | 1,468,331 | | - | | 1,468,331 | |
| Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Gain on Ordinary Shares sold | |16(a) | | 130,255 | | - | | - | | 130,255 | |
| from Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Dividend paid | | | | - | | - | | (8,587,800) | | (8,587,800) | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| Scrip dividend | |16(a) | | 322,478 | | - | | - | | 322,478 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
| At 31 December 2008 | | | | 44,452,525 | | 185,709,109 | | (70,068,454) | | 160,093,180 | |
+------------------------------+-+-------+-+--------------+-+---------------+-+------------------+-+--------------+-+
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| | | | | Share | | Distributable | | Accumulated | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| | | | | Premium | | Reserve | | Profits/(losses) | | Total | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| | |Notes | | GBP | | GBP | | GBP | | GBP | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| For the six month period | | | | | | | | | | | |
| ended 30 June 2008 | | | | | | | | | | | |
| (unaudited) | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| At 31 December 2007 | | | | 43,999,792 | | 188,882,998 | | 13,477,422 | | 246,360,212 | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Loss for the financial | | | | - | | - | | (3,553,967) | | (3,553,967) | |
| period | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Total recognised income and | | | | - | | - | | (3,553,967) | | (3,553,967) | |
| expense for the period | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Ordinary Shares acquired for | |16(b) | | - | | (2,412,746) | | - | | (2,412,746) | |
| Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Ordinary Shares sold from | |16(b) | | - | | 1,349,293 | | - | | 1,349,293 | |
| Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Gain on Ordinary Shares sold | |16(a) | | 120,885 | | - | | - | | 120,885 | |
| from Treasury | | | | | | | | | | | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Dividend paid | | | | - | | - | | (8,587,800) | | (8,587,800) | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| Scrip dividend | |16(a) | | 322,486 | | - | | - | | 322,486 | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
| At 30 June 2008 | | | | 44,443,163 | | 187,819,545 | | 1,335,655 | | 233,598,363 | |
+------------------------------+-+-------+-+------------+-+---------------+-+------------------+-+-------------+-+
The accompanying notes on pages 12 to 22 form an integral part of the condensed
unaudited Financial Statements.
ACENCIA DEBT STRATEGIES LIMITED
BALANCE SHEET (unaudited)
At 30 June 2009
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | 30 June | | 31 December | | 30 June | |
| | | | | 2009 | | 2008 | | 2008 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | (unaudited) | | (audited) | | (unaudited) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | |Notes | | GBP | | GBP | | GBP | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Non-current assets | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Investments at fair value | | 11 | | 156,479,119 | | 232,264,586 | | 254,362,657 | |
| through profit or loss | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Current assets | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Prepayments | | | | 77,704 | | 173,869 | | 63,975 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Other receivables | | | | 1,568,891 | | 585,800 | | 1,689,118 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Forward currency deals | | 20 | | 12,935,765 | | 759,265 | | 491,628 | |
| awaiting settlement | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Cash and cash equivalents | | 12 | | 619,250 | | - | | - | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Total current assets | | | | 15,201,610 | | 1,518,934 | | 2,244,721 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Current liabilities | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Forward currency deals | | 20 | | 126,471 | | 19,141,875 | | 389,534 | |
| awaiting settlement | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Accrued expenses | | 14 | | 898,433 | | 551,976 | | 490,305 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Other payables | | | | - | | 411,664 | | - | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Bank debt | |12&22 | | 15,994,449 | | 53,584,825 | | 22,129,176 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Total liabilities | | | | 17,019,353 | | 73,690,340 | | 23,009,015 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net current liabilities | | | | (1,817,743) | | (72,171,406) | | (20,764,294) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net assets | | | | 154,661,376 | | 160,093,180 | | 233,598,363 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Equity attributable to equity | | | | | | | | | |
| holders | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Share capital | | 15 | | - | | - | | - | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Share premium | | 16 | | 24,412,813 | | 44,452,525 | | 44,443,163 | |
| | | (a) | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Other distributable reserve | | 16 | | 185,709,109 | | 185,709,109 | | 187,819,545 | |
| | | (b) | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Accumulated (losses)/profits | | | | (55,460,546) | | (70,068,454) | | 1,335,655 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Total shareholder's equity | | | | 154,661,376 | | 160,093,180 | | 233,598,363 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net asset value per Ordinary | |17&19 | | 80.90p | | 73.74p | | 106.46p | |
| Share | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
The condensed unaudited Financial Statements on pages 8 to 22 were approved by
the Board of Directors and authorised for issue on 27 August 2009. They were
signed on its behalf by:-
Chairman Director
The accompanying notes on pages 12 to 22 form an integral part of the condensed
unaudited Financial Statements.
ACENCIA DEBT STRATEGIES LIMITED
CASH FLOW STATEMENT (unaudited)
For the six month period ended 30 June 2009
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | 1 January | | 1 January | | 1 | |
| | | | | 2009 | | 2008 | | January | |
| | | | | | | | | 2008 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | to | | to | | to | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | 30 June | | 31 December | | 30 June | |
| | | | | 2009 | | 2008 | | 2008 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | (unaudited) | | (audited) | | (unaudited) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | |Notes | | GBP | | GBP | | GBP | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Cash flows from operating | | | | | | | | | |
| activities | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Profit / (loss) for the period | | | | 14,607,908 | | (74,958,076) | | (3,553,967) | |
| / year | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| (Increase)/decrease in | | | | (886,926) | | 58,290 | | (935,134) | |
| prepayments and other | | | | | | | | | |
| receivables | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Increase/(decrease) in accrued | | | | 346,457 | | (1,543,965) | | (1,605,636) | |
| expenses and other payables | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | 14,067,439 | | (76,443,751) | | (6,094,737) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Purchase of investments | | 11 & | | (37,324,327) | | (38,424,145) | | (25,575,025) | |
| | | 18 | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Sales of investments | | 11 & | | 109,296,721 | | 46,684,990 | | 15,309,662 | |
| | | 18 | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | 86,039,833 | | (68,182,906) | | (16,360,100) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Adjustment for: | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Realised gains on investments | | 11 | | (8,346,898) | | (619,913) | | (474,585) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Movement in unrealised losses | | 11 | | 11,748,307 | | 9,473,243 | | 5,344,388 | |
| on investments | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Movement in unrealised | | 20 | | (31,191,904) | | 16,039,138 | | (2,445,566) | |
| (gains)/losses on forward | | | | | | | | | |
| foreign exchange contracts | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net cash inflow/(outflow) from | | | | 58,249,338 | | (43,290,438) | | (13,935,863) | |
| operating activities | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Cash flows from financing | | | | | | | | | |
| activities | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Issue of Shares | | | | - | | - | | 1,470,186 | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Redemptions of Shares | |16(a) | | (20,041,546) | | - | | - | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Additional funds | |16(a) | | 1,834 | | - | | - | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Buy back of Shares | |16(b) | | - | | (4,642,220) | | (2,412,746) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Sale of Treasury Shares | |16(a) | | - | | 1,598,586 | | - | |
| | | &(b) | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Dividends paid | | | | - | | (8,265,322) | | (8,265,322) | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net cash outflow from | | | | (20,039,712) | | (11,308,956) | | (9,207,882) | |
| financing activities | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Net increase/(decrease) in | | | | 38,209,626 | | (54,599,394) | | (23,143,745) | |
| cash and cash equivalents | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Cash and cash equivalents at | | | | (53,584,825) | | 1,014,569 | | 1,014,569 | |
| beginning of period/year | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
| Cash and cash equivalents at | | 12 & | | (15,375,199) | | (53,584,825) | | (22,129,176) | |
| end of period/year | | 18 | | | | | | | |
+--------------------------------+-+-------+-+--------------+-+--------------+--+--------------+-+
The accompanying notes on pages 12 to 22 form an integral part of the condensed
unaudited Financial Statements.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
1. GENERAL INFORMATION
The Company was incorporated as a company with limited liability in Guernsey
on 13 October 2005 and is an authorised closed-ended investment scheme domiciled
in Guernsey. As an existing closed-ended collective investment scheme the
Company is deemed to have been granted an authorisation declaration in
accordance with section 8 of the Protection of Investors (Bailiwick of Guernsey)
Law 1987, as amended and rule 6.02 of the Authorised Closed-ended Investment
Schemes Rules 2008 on the date when the Company obtained consent under the
Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 to 1989. No election
has been made to treat the Company as a Registered closed-ended collective
investment scheme. The Ordinary Shares have a Chapter 14 listing on the London
Stock Exchange.
The financial information for the year 1 January 2008 to 31 December 2008 is
derived from the financial statements delivered to the UK Listing Authority. The
Auditors reported on these financial statements, their report was unqualified
and did not contain a statement under Section 65 (3) of the Companies (Guernsey)
Law, 1994 (subsequently replaced by the Companies (Guernsey) Law, 2008 on 1 July
2008).
These condensed financial statements have been reviewed, not audited.
The Company invests in a portfolio consisting primarily of debt-oriented
hedge funds. The Company's investment strategy is to provide annual returns in
excess of 3-month LIBOR plus 5 per cent over a rolling 3 year period, and annual
standard deviation of under 5 per cent.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The condensed unaudited financial statements of the Company have been prepared
in accordance with International Accounting Standard ("IAS") 34, Interim
Financial Reporting and should be read in conjunction with the annual financial
statements for the year ended 31 December 2008, which have been prepared in
accordance with International Financial Reporting Standards ("IFRS").
Accounting Convention
The interim condensed unaudited Financial Statements have been prepared under
the historical cost or amortised cost basis, modified by the revaluation of
certain financial instruments. The principal accounting policies adopted are set
out below. The preparation of financial statements in conformity with
International Financial Reporting Standards requires the Company to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the Financial Statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The interim condensed unaudited Financial Statements are presented in
Sterling because that is the currency of the primary economic environment in
which the Company operates and the currency in which capital is raised. The
functional currency of the Company is also considered to be Sterling.
Investments
The Directors value all investments in funds at the net asset value of that fund
as at the relevant valuation date, as determined in accordance with the terms of
the funds and as notified to the Company by the relevant fund manager or the
relevant administrator. The valuation date of each fund may not always be
coterminous with the valuation date of the Company and in such cases the
valuation of the fund at the last valuation date is used.
The net asset values reported by the relevant fund managers and/or fund
administrators and used by the Directors as at 30 June 2009 may be unaudited as
at that date and may differ from the amounts which would have been realised from
a redemption of the investment in the relevant fund as at 30 June 2009.
Investments are recognised and derecognised on the trade date where a
purchase or sale is under a contract whose terms require delivery within the
timeframe established by the market concerned, and are initially measured at
fair value.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Investments (continued)
Investments are classified as fair value through profit or loss. As the
Company's business is investing in financial assets with a view to profiting
from their total return in the form of interest, dividends or increases in fair
value, listed equities and fixed income securities are designated as fair value
through profit or loss on initial recognition. The Company manages and evaluates
the performance of these investments on a fair value basis in accordance with
its investment strategy, and information about the Company is provided
internally on this basis to the Company's key management personnel.
Financial assets designated as at fair value through profit or loss are
measured at subsequent reporting dates at fair value, which is either the bid
price or the last traded price, depending on the convention of the exchange on
which the investment is quoted. Investments in units of unit trusts or shares in
Open Ended Investment Companies ("OEICs") are valued at the closing price
released by the relevant investment manager.
Gains and losses arising from changes in the fair value of investments
classified as fair value through profit or loss are recognised in the Income
Statement.
Foreign Exchange
Foreign currency assets and liabilities are translated into Sterling at the
rate of exchange ruling at the balance sheet date (30 June 2009: GBP1:
US$1.6464; 31 December 2008: GBP1: US$1.4575; 30 June 2008: GBP1: US$1.9908).
Transactions in foreign currencies are translated at the rate of exchange ruling
on the transaction date. Differences thus arising are dealt with in the Income
Statement.
Forward Currency Contracts
A forward currency contract obligates the Company to receive or deliver a
fixed quantity of foreign currency at a specified price on an agreed future
date. These contracts are accounted for when any contract becomes binding and
are valued in the Balance Sheet at the period end present value of the quoted
forward price. Realised and unrealised gains and losses are included in the
Income Statement.
Income
Dividend income from investments is recognised when the Shareholders' rights to
receive payment has been established, normally the ex-dividend date.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to the asset's net carrying amount.
Expenses
All expenses are accounted for on an accruals basis and are presented as revenue
items except for expenses that are incidental to the disposal of an investment
which are deducted from the disposal proceeds.
Finance costs
Finance costs are accounted for on an accruals basis and relate to bank interest
resulting from the Company drawing down on the facility with Bank Julius Baer &
Co Limited. All finance costs are expensed through the Income Statement as
incurred.
Financial Instruments
Financial assets and financial liabilities are recognised on the Company's
Balance Sheet when the Company becomes a party to the contractual provisions of
the instrument. The Company shall offset financial assets and financial
liabilities if the Company has a legally enforceable right to set off the
recognised amounts and interests and intends to settle on a net basis.
Other Receivables
Other receivables do not carry any interest and are short-term in nature and are
accordingly stated at their nominal value as reduced by appropriate allowances
for estimated irrecoverable amounts.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
Cash includes amounts held in interest bearing overnight accounts and debt
balances. Cash and cash equivalents comprise bank balances and cash held by the
Company including short-term bank deposits with an original maturity of three
months or less. The carrying value of these assets approximates their fair
value.
Financial Liabilities and Equity
Financial liabilities and equity are classified according to the substance of
the contractual arrangements entered into. An equity instrument is any contract
that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. Financial liabilities and equity are recorded as the
proceeds received, net of issue costs.
Other Accruals and Payables
Other accruals and payables are not interest-bearing and are stated at their
nominal value.
Derivative Financial Instruments
The Company's activities expose it primarily to the financial risks of changes
in foreign exchange rates. The Company uses forward foreign exchange contracts
to hedge these exposures. The Company does not use derivative financial
instruments for speculative purposes.
The use of financial derivatives is governed by the Company's policies
approved by the Board of Directors, which provide written principles on the use
of financial derivatives. The Company does not use hedge accounting and all
gains or losses on forward foreign exchange contracts are taken to the Income
Statement.
Interest-bearing Loans and Borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, interest
bearing borrowings are stated at amortised cost with any difference between cost
and redemption value being recognised in the Income Statement over the period of
the borrowings on an effective interest basis.
Business and Geographical Segments
The Directors are of the opinion that the Company is engaged in a single segment
of business of investing in hedge funds, issued by companies operating and
generating revenue in the United States and the Caribbean, and therefore no
segmental reporting is provided.
3. GOING CONCERN AND OTHER CRITICAL ACCOUNTING JUDGEMENTS
The Directors have presented the Financial Statements on the basis that the
Company will continue as a going concern. Whilst the Company's Balance Sheet as
at 30 June 2009 continues to show net current liabilities, the position has
improved considerably since the previous year end, 31 December 2008. The notes
to the financial statements at that date disclosed that the Company was facing a
liquidity gap in the short term created, in part, by the liabilities in respect
of forward foreign exchange contracts and the lack of liquidity and delayed
redemptions of several of the Company's investments. The notes set-out actions
which had been taken by the Company in order to clear its borrowings completely
and to provide additional cash reserves. These actions included serving
redemption notices on a number of the Company's investments. As planned, the
Company is now operating within its facility limits and further redemptions are
ongoing in order to clear the Company's borrowings and generate positive cash
balances. As disclosed in the Chairman's Statement the Company no longer has any
borrowings and is modestly net cash positive.
In view of the above, the Directors consider the going concern basis of
accounting to be appropriate in the preparation of these Financial Statements.
In the application of the Company's accounting policies, which are described
in note 2, management is required to make judgements, estimates and assumptions
about the carrying amount of assets and liabilities that are not readily
apparent from their sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
3. GOING CONCERN AND OTHER CRITICAL ACCOUNTING JUDGEMENTS (continued)
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimate was 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.
Critical Judgements in Applying Accounting Policies
The most critical judgement, apart from those involving estimates (see below),
that management has made in the process of applying the Company's accounting
policies and that have the most significant effect on the amounts recognised in
the Financial Statements is in respect of functional currency.
Functional Currency
The Board of Directors considers Sterling the currency that most faithfully
represents the economic environment in which the Company operates. Sterling is
the currency in which the Company measures its performance and reports its
results, as well as the currency in which capital is raised.
Key Sources of estimation uncertainty
The following are the key assumptions and other key sources of estimation
uncertainty at the Balance Sheet date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year.
Fair Value of Investments at fair value through profit or loss
As disclosed in note 2, the Company invests in debt oriented hedge funds
which are valued at the net asset value of that fund as at the relevant
valuation date in accordance with the terms of the funds and as notified by the
relevant fund manager / administrator. However the valuation date may be
non-coterminous with the valuation date of the Company and hence in such cases
the latest valuation is used.
The values used in the financial statements may be unaudited as at that date
and hence may differ from the amount which may have been realised on redemption
of the investment at the balance sheet date.
4. DIVIDENDS
The Company's dividend policy is to pay an annual dividend of two-thirds of the
total returns, capped at 3.5% of period end Net Asset Value, available as cash
or scrip.
In view of the loss incurred for the year ended 31 December 2008, no
dividend was declared during the current period.
5. OTHER GAINS AND LOSSES
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | 1 January | | 1 January | | 1 | |
| | | 2009 | | 2008 | | January | |
| | | | | | | 2008 | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | to | | to | | to | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Held for trading: Derivative | | | | | | | |
| financial instruments: | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Net realised foreign exchange | | (18,237,595) | | (45,127,311) | | (490,630) | |
| losses on forward foreign | | | | | | | |
| exchange contracts and currency | | | | | | | |
| transactions | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Net movement in unrealised | | 31,191,904 | | (16,039,138) | | 2,445,566 | |
| foreign exchange gains /(losses) | | | | | | | |
| on forward foreign exchange | | | | | | | |
| contracts | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Other: | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Net gain/(loss) on currency | | 5,274,653 | | (5,615,663) | | (170,922) | |
| translations | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | 18,228,962 | | (66,782,112) | | 1,784,014 | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
6. OTHER OPERATING INCOME
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 1 January | | 1 January | | 1 | |
| | | 2009 | | 2008 | | January | |
| | | | | | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | to | | to | | to | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Other operating income arising | | | | | | | |
| on financial assets not at fair | | | | | | | |
| value through profit or loss: | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Bank interest | | 37,250 | | 1,656 | | 1,007 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Investment income | | 585,223 | | 1,940,764 | | - | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 622,473 | | 1,942,420 | | 1,007 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
7. FINANCE COSTS
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 1 January | | 1 January | | 1 | |
| | | 2009 | | 2008 | | January | |
| | | | | | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | to | | to | | to | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Finance costs arising on | | | | | | | |
| financial liabilities not at | | | | | | | |
| fair value through profit or | | | | | | | |
| loss: | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Bank debt interest | | 361,156 | | 846,172 | | 289,266 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
The bank interest resulted from the Company's debt facility with Bank Julius
Baer & Co Limited to fund the purchase of investments in the short term.
8. EXPENSES
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 1 January | | 1 January | | 1 | |
| | | 2009 | | 2008 | | January | |
| | | | | | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | to | | to | | to | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Management fees | | 794,742 | | 2,165,918 | | 1,164,784 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Performance fees | | - | | (15,039) | | (15,039) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Sandalwood management fee rebate | | (895,138) | | (2,623,540) | | (1,379,457) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (100,396) | | (472,661) | | (229,712) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Other expenses: | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Other expenses | | 327,555 | | 311,216 | | 201,402 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Accounting, secretarial and | | 85,866 | | 206,925 | | 96,240 | |
| administration fees | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Loan commission fees | | 75,000 | | 152,500 | | - | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Directors' remuneration | | 43,750 | | 87,500 | | 43,750 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Custodian fees | | 39,774 | | 108,404 | | 58,295 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Auditors' remuneration for | | 9,413 | | 24,998 | | 9,944 | |
| audit services | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 581,358 | | 891,543 | | 409,631 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Total expenses | | 480,962 | | 418,882 | | 179,919 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
The Sandalwood Securities, Inc. ("Sandalwood") management fee rebate is the
management fee levied by Sandalwood in relation to the net asset value of
Sandalwood funds invested in by AcenciA. This management fee is treated as a
reduction to the AcenciA management fee, so as to avoid duplication in fees paid
to Sandalwood. The management fee charged by Sandalwood in relation to its funds
is 1.5% of the net asset value of each fund.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
8. EXPENSES (continued)
The Company has no employees. The Directors are the only personnel of the
Company.
No amounts were paid to the auditors during the period in respect of non-audit
services.
Management and Performance fees
The Company is responsible for the fees of the Manager in accordance with the
Management Agreement between the Company and the Manager dated 2 November 2005.
For the services performed under the Management Agreement, the Company pays the
Manager a management fee equal to 1% per annum of total assets.
The Manager compensates the Investment Adviser and the Sub-Manager for their
services to the Company under the terms of the Investment Advisory Agreement and
Sub-Management Agreement.
In addition to the management fee, subject to satisfaction of the High Water
Mark Provision and the Performance Hurdle Provision, the Manager will be
entitled to a performance fee equivalent to 10 per cent of the amount by which
the value of the Net Asset Value per share at the end of each Accounting Period
exceeds the value of the Net Asset Value per share at the end of the previous
Accounting Period. Under the High Water Mark Provision, the Net Asset Value per
share at the end of each Accounting Period must be greater than the value of the
Net Asset Value per share at the end of any previous Accounting Period after
taking account of any dividend paid. Under the Performance Hurdle Provision the
Net Assets must have increased by at least 3% during the relevant Accounting
Period after taking account of any dividend paid.
The Investment Management Agreement may be terminated by either party giving the
other not less than six months' written notice. The Sub-Management Agreement
will terminate at the same time as the Investment Management Agreement
terminates or otherwise on either party giving twelve months' written notice.
The Investment Advisory Agreement may not be terminated prior to the expiry of
the initial period, which currently runs until 31 December 2010. Thereafter it
may be terminated on six months' written notice. In the event that the
Investment Advisory Agreement is terminated, the Investment Adviser will remain
entitled to a pro rata share of its fees to the extent that and for so long as
the Company's assets remain invested in funds which were recommended by the
Investment Adviser, including any funds managed or advised by the Investment
Adviser.
Administration fees
In respect of the services provided under the Administration Agreement dated 1
October 2007, the Company pays Butterfield Fulcrum Group (Guernsey) Limited
("BFG") a fee which shall not exceed 0.085% per annum of the net asset value of
the Company, subject to a minimum annual payment of GBP10,000. In addition, BFG
is entitled to receive fees for any extraordinary duties performed to be charged
on a time spent basis. The Administration Agreement is terminable by either side
on three months' notice.
Custodian fees
The Company is responsible for the fees of the Custodian (Bank Julius Baer & Co
Limited) in accordance with the Custodian Agreement made between the Company and
the Custodian dated 2 November 2005.
In respect of services provided under the Custodian Agreement, the Company pays
the Custodian a quarterly fee at the rate of 0.05% of the Net Asset Value of the
Company per annum subject to a minimum fee of GBP3,325 per quarter. The
Custodian Agreement is terminable by either side on three months' notice. The
Custodian does not have any decision-making discretion relating to the
investment of the assets of the fund.
9.TAX 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.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
10.BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE
Basic and diluted earnings/(loss) per Share are calculated by dividing net
income available by the weighted average number of Ordinary Shares outstanding
during the period.
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 1 January | | 1 January | | 1 | |
| | | 2009 | | 2008 | | January | |
| | | | | | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | to | | to | | to | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | Number of | | Number of | | Number | |
| | | | | | | of | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | Ordinary | | Ordinary | | Ordinary | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | Shares | | Shares | | Shares | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Weighted average number of | | 212,531,460 | | 218,662,424 | | 219,070,909 | |
| Ordinary Shares | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
The weighted average number of Ordinary Shares during the period to 30 June 2009
is based on the number of Ordinary Shares in issue during the period under
review, as detailed in note 15.
11. INVESTMENTS
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Fair value through profit or | | | | | | | |
| loss investments | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Opening fair value as at | | 232,264,586 | | 248,967,097 | | 248,967,097 | |
| beginning of period / year | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Purchases at cost | | 36,912,663 | | 38,835,809 | | 25,575,025 | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Sales - proceeds | | (109,296,721) | | (46,684,990) | | (15,309,662) | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| - realised gains on sales | | 8,346,898 | | 619,913 | | 474,585 | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Movement in unrealised losses on | | (11,748,307) | | (9,473,243) | | (5,344,388) | |
| investments for the period / | | | | | | | |
| year | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | (3,401,409) | | (8,853,330) | | (4,869,803) | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Closing fair value at end of | | 156,479,119 | | 232,264,586 | | 254,362,657 | |
| period / year | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Closing cost | | 165,242,078 | | 229,279,238 | | 247,248,454 | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Unrealised (losses)/gains on | | (8,762,959) | | 2,985,348 | | 7,114,203 | |
| investments | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
| Closing fair value at end of | | 156,479,119 | | 232,264,586 | | 254,362,657 | |
| period / year | | | | | | | |
+----------------------------------+-+---------------+-+--------------+--+---------------+-+
12. CASH AND CASH EQUIVALENTS
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| Opening cash and cash | | (53,584,825) | | 1,014,569 | | 1,014,569 | |
| equivalents | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| Net movement in the period/year | | 38,209,626 | | (54,599,394) | | (23,143,745) | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| Closing cash and cash | | (15,375,199) | | (53,584,825) | | (22,129,176) | |
| equivalents | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| Cash at bank | | 619,250 | | - | | - | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| Debt | | (15,994,449) | | (53,584,825) | | (22,129,176) | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
| | | (15,375,199) | | (53,584,825) | | (22,129,176) | |
+----------------------------------+-+--------------+-+--------------+--+--------------+-+
Cash and cash equivalents comprise bank balances, bank debt (refer to note
22) and cash held by the Company including short-term bank deposits with an
original maturity of three months or less. The carrying value of these assets
approximates to their fair value.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
13. CURRENT ASSETS AND LIABILITIES
The Directors consider that the carrying amount of other receivables and
other payables approximates to their fair value.
14. ACCRUED EXPENSES
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Management fee | | 794,686 | | 441,381 | | 197,679 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Directors' remuneration | | 21,875 | | 21,875 | | 21,875 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Accounting, secretarial and | | 21,792 | | 12,284 | | 16,819 | |
| administration fees | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Sundry expenses | | 18,654 | | 18,653 | | 217,823 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Printing costs | | 14,390 | | 24,459 | | 14,406 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Trustee fee | | 12,819 | | 7,226 | | 9,893 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Auditors' remuneration | | 10,311 | | 19,998 | | 9,945 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Registrar fee | | 3,906 | | 6,100 | | 1,865 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 898,433 | | 551,976 | | 490,305 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
15. SHARE CAPITAL
Authorised Capital
The Company has the power to issue an unlimited number of Shares of no par value
which may be issued as Ordinary Shares or C Shares or otherwise and which may be
denominated in Sterling, Euros, US Dollars or any other currency.
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Issued Capital | | Treasury | | Ordinary | | Total | |
| | | | | Shares | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| 30 June 2009 (unaudited) | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 1 January 2009 | | 3,369,379 | | 217,117,013 | | 220,486,392 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares redeemed during the | | - | | (25,937,034) | | (25,937,034) | |
| period | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 30 June 2009 | | 3,369,379 | | 191,179,979 | | 194,549,358 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| 31 December 2008 (audited) | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 1 January 2008 | | - | | 220,200,000 | | 220,200,000 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares issued during the year | | - | | 286,392 | | 286,392 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares sold from Treasury during | | (1,480,174) | | 1,480,174 | | - | |
| the year | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares transferred to Treasury | | 4,849,553 | | (4,849,553) | | - | |
| during the year | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 31 December 2008 | | 3,369,379 | | 217,117,013 | | 220,486,392 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| 30 June 2008 (unaudited) | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 1 January 2008 | | - | | 220,200,000 | | 220,200,000 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares issued during the period | | - | | 286,392 | | 286,392 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares sold from Treasury during | | (1,360,174) | | 1,360,174 | | - | |
| the period | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| Shares transferred to Treasury | | 2,432,204 | | (2,432,204) | | - | |
| during the period | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
| At 30 June 2008 | | 1,072,030 | | 219,414,362 | | 220,486,392 | |
+----------------------------------+-+-------------+-+--------------+--+--------------+-+
The Company's Articles of Association provide the Directors with wide powers
to issue further Shares (of one or more currency classes and whether as C Shares
or Ordinary Shares) on a non-pre-emptive basis and without seeking further
Shareholder approval. Neither the Ordinary or C Shares have any right to fixed
income.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
15.SHARE CAPITAL (continued)
Buy Back of Ordinary Shares and Authority to Buy Back Shares
By way of an ordinary resolution passed by a written resolution dated 2 November
2005 the Company took authority, in accordance with Clause 5 of The Companies
(Purchase of Own Shares) Ordinance 1998, to make market purchases of fully paid
Ordinary Shares, provided that the maximum number of Ordinary Shares authorised
to be purchased shall be 14.99% of the issued Ordinary Share Capital of the
Company issued pursuant to the Initial Public Offering. The minimum price which
may be paid for a Share pursuant to such authority is one penny and the maximum
price which may be paid for a Share is an amount equal to the higher of 105% of
the average of the middle market quotations for a Share taken from the Official
List for the five business days immediately preceding the date on which the
Share is purchased or the higher of the price of the last independent trade and
the highest current independent bid at the time of purchase.
By way of a special resolution at the last Annual General Meeting held on 18
March 2009, shareholders approved the renewed authority that the Company be
authorised to purchase its own shares. Such authority will expire at the Annual
General Meeting of the Company in 2010 unless such authority is varied, revoked
or renewed prior to such date by a special resolution of the Company in general
meeting.
16. RESERVES
a) Share Premium Account
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Share Premium Account as at | | 44,452,525 | | 43,999,792 | | 43,999,792 | |
| beginning of period/year | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Ordinary Shares redeemed during | | (20,041,546) | | - | | - | |
| the period/year | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Additional funds | | 1,834 | | - | | - | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Gain on Ordinary Shares sold | | - | | 130,255 | | 120,885 | |
| from Treasury | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Scrip dividend | | - | | 322,478 | | 322,486 | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
| Share Premium Account as at end | | 24,412,813 | | 44,452,525 | | 44,443,163 | |
| of period/year | | | | | | | |
+----------------------------------+-+--------------+-+--------------+--+-------------+-+
b) Distributable Reserve
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | 30 June | | 31 December | | 30 June | |
| | | 2009 | | 2008 | | 2008 | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | (unaudited) | | (audited) | | (unaudited) | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| | | GBP | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Distributable Reserve as at | | 185,709,109 | | 188,882,998 | | 188,882,998 | |
| beginning of period/year | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Ordinary Shares acquired for | | - | | (4,642,220) | | (2,412,746) | |
| Treasury | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Cost of Ordinary Shares sold | | - | | 1,468,331 | | 1,349,293 | |
| from Treasury | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Transfer from Share Premium | | - | | - | | - | |
| Account | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
| Distributable Reserve as at end | | 185,709,109 | | 185,709,109 | | 187,819,545 | |
| of period/year | | | | | | | |
+----------------------------------+-+-------------+-+--------------+--+-------------+-+
17. NET ASSET VALUE PER SHARE
The net asset value per Ordinary Share of GBP0.8090 (31 December 2008:
GBP0.7374; 30 June 2008: GBP1.0646) is based on the net assets at the period end
of GBP154,661,376 (31 December 2008: GBP160,093,180; 30 June 2008:
GBP233,598,363) and on 191,179,979 (31 December 2008: 217,117,013; 30 June 2008:
219,414,362) Ordinary Shares, being the number of Ordinary Shares in issue at
the period end.
18. NOTES TO THE CASH FLOW STATEMENT
Purchases and sales of investments are considered to be operating activities
of the Company, given its purpose, rather than investing activities. The cash
flows arising from these activities are shown in the Cash Flow Statement.
Cash and cash equivalents (which are presented separately on the face of the
Balance Sheet) comprise cash at bank and bank debt.
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
19. RECONCILIATION OF ACCOUNTING NAV AND PUBLISHED NAV PER SHARE
+----------------------------------+-+-------------+-+--------------+--+
| | | Net Asset | | NAV per | |
| | | Value | | share | |
+----------------------------------+-+-------------+-+--------------+--+
| 30 June 2009 (unaudited) | | GBP | | GBP | |
+----------------------------------+-+-------------+-+--------------+--+
| Published Net Asset Value | | 154,624,108 | | 0.8088 | |
+----------------------------------+-+-------------+-+--------------+--+
| Adjustments to expense accruals | | 37,268 | | 0.0002 | |
+----------------------------------+-+-------------+-+--------------+--+
| Net Asset Value | | 154,661,376 | | 0.8090 | |
+----------------------------------+-+-------------+-+--------------+--+
| | | | | | |
+----------------------------------+-+-------------+-+--------------+--+
| 31 December 2008 (audited) | | | | | |
+----------------------------------+-+-------------+-+--------------+--+
| Published Net Asset Value | | 160,113,108 | | 0.7375 | |
+----------------------------------+-+-------------+-+--------------+--+
| Adjustments to expense accruals | | (19,928) | | (0.0001) | |
+----------------------------------+-+-------------+-+--------------+--+
| Net Asset Value | | 160,093,180 | | 0.7374 | |
+----------------------------------+-+-------------+-+--------------+--+
| | | | | | |
+----------------------------------+-+-------------+-+--------------+--+
| 30 June 2008 (unaudited) | | | | | |
+----------------------------------+-+-------------+-+--------------+--+
| Published Net Asset Value | | 233,386,628 | | 1.0637 | |
+----------------------------------+-+-------------+-+--------------+--+
| Write back of provisions | | 211,735 | | 0.0009 | |
+----------------------------------+-+-------------+-+--------------+--+
| Net Asset Value | | 233,598,363 | | 1.0646 | |
+----------------------------------+-+-------------+-+--------------+--+
20. COMMITMENTS AND CONTINGENT LIABILITIES
At the balance sheet date the following commitments in respect of forward
foreign exchange contracts existed with the Custodian:
+-------------+----------------------+----------+---------+---------------------+
| As at 30 June 2009: | | | |
+------------------------------------+----------+---------+---------------------+
| Maturity | Contract amount | Buy | Sell | Unrealised |
| Date | | | | Profit/(Loss) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | (unaudited) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | GBP |
+-------------+----------------------+----------+---------+---------------------+
| 14 August | USD (6,000,000) | GBP | USD | 24,216 |
| 2009 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 14 August | USD 6,300,000 | USD | GBP | (126,471) |
| 2009 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 14 August | USD (223,300,000) | GBP | USD | 12,911,549 |
| 2009 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| | | | | 12,809,294 |
+-------------+----------------------+----------+---------+---------------------+
| (Forward rate for 14 August 2009 | | | |
| GBP1: US$1.6463). | | | |
+------------------------------------+----------+---------+---------------------+
| | | | | |
+-------------+----------------------+----------+---------+---------------------+
| As at 31 December 2008: | | | |
+------------------------------------+----------+---------+---------------------+
| Maturity | Contract amount | Buy | Sell | Unrealised |
| Date | | | | Profit/(Loss) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | (audited) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | GBP |
+-------------+----------------------+----------+---------+---------------------+
| 17 February | USD 52,900,000 | USD | GBP | 759,265 |
| 2009 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 17 February | USD (348,000,000) | GBP | USD | (19,141,875) |
| 2009 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| | | | | (18,382,610) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | |
+-------------+----------------------+----------+---------+---------------------+
| (Forward rate for 17 February 2009: GBP1: | | |
| US$1.4557). | | |
+-----------------------------------------------+---------+---------------------+
| | | | | |
+-------------+----------------------+----------+---------+---------------------+
| As at 30 June 2008: | | | |
+------------------------------------+----------+---------+---------------------+
| Maturity | Contract amount | Buy | Sell | Unrealised |
| Date | | | | Profit/(Loss) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | (unaudited) |
+-------------+----------------------+----------+---------+---------------------+
| | | | | GBP |
+-------------+----------------------+----------+---------+---------------------+
| 29 August | USD (340,000,000) | GBP | USD | (346,077) |
| 2008 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 29 August | USD (68,000,000) | GBP | USD | 480,778 |
| 2008 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 29 August | USD 6,800,000 | USD | GBP | (43,457) |
| 2008 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| 29 August | USD (2,100,000) | GBP | USD | 10,850 |
| 2008 | | | | |
+-------------+----------------------+----------+---------+---------------------+
| | | | | 102,094 |
+-------------+----------------------+----------+---------+---------------------+
(Forward rate for 29 August 2008: GBP1: US$1.9821)
ACENCIA DEBT STRATEGIES LIMITED
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
20. COMMITMENTS AND CONTINGENT LIABILITIES (continued)
The movement in the unrealised gain/loss on the forward foreign exchange
contracts is a gain of GBP31,191,904 as at 30 June 2009 (31 December 2008: loss
of GBP16,039,138; 30 June 2008: gain of GBP2,445,566).
The Company has no other financial commitments as at 30 June 2009.
The Company has no contingent liabilities at the balance sheet date.
21. RELATED PARTY TRANSACTIONS
Saltus (Channel Islands) Limited (the "Manager"), Saltus Partners LLP (the
"Sub-Manager"), Sandalwood Securities, Inc. (the "Investment Adviser") and the
Directors are regarded as related parties. The only related party transactions
are described below:
The fees and expenses payable to the Manager are explained in Note 8. The
management and performance fee balances due at the end of the period were
GBP794,686 (31 December 2008: GBP441,381; 30 June 2008: GBP197,679) and GBPnil
(31 December 2008: GBPnil; 30 June 2008: GBPnil) respectively;
There were no direct transactions with the Investment Adviser during the
period.
Mr J Macintosh is a director of the Manager and a partner in the Sub-Manager
and as such he has waived his right to remuneration as a director of the
Company.
The basic fee paid to each independent non-executive director for the period
ended 30 June 2009 was GBP17,500 (2008: GBP17,500), except for the Chairman who
received GBP30,000 (2008: GBP30,000) and Mr R Battey who receives an additional
GBP5,000 per annum for being Chairman of the Audit Committee.
At an extraordinary general meeting of the Company on 18 March 2009 shareholders
approved a resolution to enable the conversion of ordinary shares in to shares
of AcenciA Fundamental Credit, a cell of Guernsey Portfolios PCC Limited, which
is an open ended sister fund of AcenciA to which the Manager, the Sub-Manager
and the Investment Adviser act in the same roles. Mr J Macintosh is a director
of Guernsey Portfolios PCC Limited. A conversion offer was subsequently made to
qualifying shareholders on 23 April 2009 which resulted in 25,937,034 ordinary
shares in the Company (see note 15) with a net asset value of GBP20,041,546 (see
note 16) being redeemed with effect from 1 May 2009 and converted in to an
equivalent number of shares in AcenciA Fundamental Credit.
22.BANK FACILITIES
The Company has a multi-purpose multi-currency revolving overdraft and foreign
exchange credit facility with Bank Julius Baer & Co Limited (the "Bank"). The
Bank has agreed to provide the Company with a loan facility in the aggregate
principal amount of up to the lower of GBP50,000,000 or 20% of the market value
of the Company's assets deposited with the Custodian. This facility is secured
by a charge over all of the Company's underlying assets and is in accordance
with the conditions of the Security Interest Agreement dated 2 November 2005
between the Company, the Bank and the Custodian. The interest rate chargeable is
the Bank's floating lending rate plus a margin of 1% per annum payable quarterly
in arrears.
The facility is available for drawdown throughout the period from the date of
the agreement which is renewed annually on 25 January until such time as the
Bank serves a repayment notice or the agreement is terminated. The repayment
notice period is 120 days from the date of the notice.
At 30 June 2009 the Company had drawn down GBP15,994,449 (31 December 2008:
GBP53,584,825; 30 June 2008: GBP22,129,176) on this facility.
ACENCIA DEBT STRATEGIES LIMITED
MANAGEMENT AND ADMINISTRATION
Directors
J Le Pelley (Chairman)*
R Battey *
R Dorey*
J Macintosh +
W Scott*
Registered Office and Directors' Address Administrator and Secretary
2nd Floor Butterfield Fulcrum Group (Guernsey) Limited
Regency Court 2nd Floor
Glategny Esplanade Regency Court
St Peter Port Glategny Esplanade
Guernsey GY1 3NQ St Peter Port
Guernsey GY1 3NQ
Manager Registrar
Saltus (Channel Islands) Limited Capita IRG Registrars (Guernsey) Limited
2nd Floor 2nd Floor
Regency Court 1 Le Truchot
Glategny Esplanade St Peter Port
St Peter PortGuernsey GY1 4AE
Guernsey GY1 3NQ
Sub-Manager Legal Advisers in Guernsey
Saltus Partners LLP Carey Olsen
18 Dering Street Carey House
London W1S 1AQ Les Banques
St Peter Port
Guernsey GY1 4BZ
Investment Adviser Legal Advisers in United Kingdom
Sandalwood Securities, Inc. Macfarlanes LLP
101 Eisenhower Parkway20 Cursitor Street
RoselandLondon EC4A 1LT
NJ 07068
USA
Custodian Financial Adviser / Corporate Broker
Bank Julius Baer & Co Limited Cenkos Securities Plc
(Guernsey Branch) 6.7.8 Tokenhouse Yard
PO Box 87London
Lefebvre Court EC2R 7AS
Lefebvre Street
St Peter Port
Guernsey GY1 4BS
Independent Auditors Investor Relations
BDO Novus Limited Kepler Partners LLP
P O Box 180 Heathcoate House
Place du Pre 20 Savile Row
Rue du PreLondon W1S 3PR
St Peter Port
Guernsey GY1 3LL
* Independent Non-Executive Directors
+ Representative of the Manager and Sub-Manager
All Enquiries:
The Company Secretary
Butterfield Fulcrum Group (Guernsey) Limited
2nd Floor, Regency Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 3NQ
Tel: 01481 720321
Fax: 01481 716117
This information is provided by RNS
The company news service from the London Stock Exchange
END
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