Third Point
Offshore Investors Limited (the "Company")
(a closed-ended investment company
incorporated with limited liability under the laws of Guernsey with registered number 47161)
27 April 2018
FULL YEAR Results
for the TWELVE months ended 31 DECEMBER
2017
Third Point Offshore Investors Limited (“TPOIL” or the
“Company”), the closed-end, London
listed event-driven, value-oriented hedge fund managed by Daniel S.
Loeb’s Third Point LLC (the “Investment Manager”) announces its
full year results for the twelve months ended 31 December 2017.
Financial Highlights (as at 31
December 2017, unless otherwise stated)
§ Returns for USD class of 18.9% and GBP class of 18.1%
Ticker |
Tranche |
NAV
FY17 |
NAV
FY16 |
Return |
TPOU |
USD
Class $ |
$20.25 |
$17.63 |
18.9% |
TPOG |
GBP
Class £ |
£19.21 |
£16.84 |
18.1% |
§ The Company’s Net Asset Value (“NAV”) increased 15.4% to
$1,014.4 million (FY16:$879.2 million)
§ On 5 January 2018, an annual
distribution was declared equivalent to 4% of the NAV of the
Company in respect of the year to 31
December 2017, amounting to $0.81 per USD share and £0.77 per GBP share
Portfolio Performance of the Master
Fund
§ The Investment Manager’s strong, bottom up security selection
combined with a favourable economic backdrop due to factors
including synchronised global growth delivered positive returns for
the year.
§ The net investment results for the year were driven by
contributions from all investment strategies, with the majority of
returns attributable to equities investments across sectors and
geographies. Performance was due to strong stock selection in
event-driven situations, several large constructivist investments,
successful short selling efforts, and maintenance of a
well-balanced portfolio across sectors.
§ Within equities, core investments in Healthcare, Consumer,
Industrials, and Financials contributed meaningfully to positive
performance. Modest Corporate, Structured, and Sovereign Credit
portfolios also added to gains for the year.
Outlook
§ The Investment Manager capitalised on favourable equity market
conditions in 2017 by allocating an average of 65% of exposure to
the asset class.
§ The Investment Manager remains focused on macroeconomic and
market risks including the shifting dynamics between global growth
and inflation.
§ The Investment Manager will continue to invest in compelling
investment opportunities in both long and short equity positions,
expects credit exposure to remain modest in the current
environment, and will adjust portfolio exposures to changing market
conditions and macroeconomic data.
Marc Antoine Autheman, Chairman of Third Point Offshore
Investors Limited, commented: “I am pleased to report a strong
performance from Third Point Offshore Investors for 2017 with
significant NAV growth throughout the period. This was driven by
the Investment Manager’s ability to allocate flexibly across the
capital structure and among different strategies, to identify
optimal value and produce excellent returns.”
“The Board and Investment Manager recognise the Company’s
persistent share discount to NAV and believe that TPOIL’s transfer
to a premium listing and the potential for an opportunistic share
purchase programme will help to reduce this. We are fully committed
to ensuring that the Company is best-positioned to deliver
long-term value for all shareholders.”
Enquiries:
Third
Point Offshore investors
Investor Relations |
+1 212 715 6707 |
Greenbrook Communications |
+44 (0)20
7952 2000 |
|
|
Notes to Editors
TPOIL is a feeder fund that invests in Third Point Offshore Fund
Ltd. (the “Master Fund”), with the investment objective of
achieving uncorrelated, long term, attractive risk-adjusted
returns. The Company has two share classes which differ by
denomination (LSE: TPOU, TPOG).
Chairman’s Statement
I am pleased to present the Eleventh Annual Report for Third
Point Offshore Investors (“the Company”).
The Company was established as a closed-end investment company,
registered and incorporated in Guernsey on 19 July
2007. The Company invests its assets in Third Point Offshore
Master Fund L.P. (the “Master Partnership”) via Third Point
Offshore Fund, Ltd. (the “Master Fund”), which pursues an
opportunistic investment approach globally and across the capital
structure.
The Company’s net asset value (the “NAV”) appreciated
approximately 19% and 18% for the U.S. Dollar and Sterling share
classes, respectively, in 2017. Performance was driven primarily by
gains in Third Point LLC’s (the “Investment Manager”) equity
portfolio which accounted for the majority of the Master Fund’s
investment exposure during the year. The portfolio generated
positive returns globally in each sector covered by the Manager’s
investment team including Healthcare, Financials, Industrials,
Materials, Consumer, Energy, and Technology, Media, and
Telecommunications. Strong security selection paired with
favourable economic conditions due to synchronised global growth
led to returns of +29% on average exposure for equities in the
Master Fund. The Investment Manager also engaged in several new
constructivist equity investments in 2017 that generated positive
returns. Credit exposure remained modest for the Investment Manager
in an asset class that is currently richly valued. The ability to
allocate flexibly across the capital structure and among strategies
to identify optimal value is an important characteristic of Third
Point’s investment approach.
My fellow Directors and I remain fully committed to ensuring
that the Company is well positioned to deliver long-term value for
shareholders. To that end, we have worked with the Investment
Manager and several advisors to engage in new initiatives to
improve the Company’s rating whilst continuing to showcase the
Manager’s successful investment strategy. Following investor
feedback, we are seeking a transfer to The Premium Listing segment
of the Official List. We have also undertaken a review the
Company’s capital allocation policy and determined that the
existing dividend policy is not delivering an attractive value
proposition for existing or prospective investors. The Board plans
to stop dividend payments and instead pursue an alternative means
of future capital return, subject to Board guidance. We undertake
these initiatives in the hope and expectation that the trading
discount to NAV will shrink over time and will continue to monitor
the situation. The Board is committed to optimising the Company’s
structure in a way that maximises value for, and protects the
interests of, all Company shareholders.
We invite you to visit the recently launched Company website
(www.thirdpointoffshore.com) for additional details on the new
initiatives and enhanced communications related to the investment
portfolio of the Master Fund. We believe in the importance of
transparent communications and designed the new website to better
serve shareholders. The site will continue to publish monthly NAVs,
an improved monthly shareholder report, a narrative quarterly
letter from the Investment Manager, and other relevant information
about the Company.
With respect to corporate governance matters, the independent
Board of Directors and Audit Committee have met regularly.
My fellow Directors and I are honoured to serve our
shareholders.
Marc Antoine Autheman
25 April 2018
Directors’ Report
The Directors submit their Report together with the Company’s
Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets, Statements of Cash Flows and
the related notes for the year ended 31
December 2017, “Audited Financial Statements”. These Audited
Financial Statements have been properly prepared, in accordance
with accounting principles generally accepted in the United States of America, any relevant
enactment for the time being in force, and are in agreement with
the accounting records and have been properly prepared in all
material aspects.
The Company
The Company was incorporated in Guernsey on 19 June
2007 as an authorised closed-ended investment scheme and was
admitted to a secondary listing (Chapter 14) on the Official List
of the London Stock Exchange on 23 July
2007. The proceeds from the initial issue of shares on
listing amounted to approximately US$523
million. Following changes to the Listing Rules on
6 April 2010, the secondary listing
became a standard listing.
The Company is a member of the Association of Investment
Companies (“AIC”).
Investment Objective and Policy
The Company’s investment objective is to provide its
Shareholders with consistent long term capital appreciation
utilising the investment skills of Third Point LLC (the “Investment
Manager”) through investment of all of its capital (net of short
term working capital requirements) in Class E Shares of Third Point
Offshore Fund, Ltd (the “Master Fund”), an exempted company formed
under the laws of the Cayman
Islands on 21 October
1996.
The Master Fund is a limited partner of Third Point Offshore
Master Fund L.P. (the “Master Partnership”), an exempted limited
partnership organised under the laws of the Cayman Islands, of which Third Point Advisors
II L.L.C., an affiliate of the Investment Manager, is the general
partner. Third Point LLC is the Investment Manager to the Company,
the Master Fund and the Master Partnership. The Master Fund and the
Master Partnership have the same investment objectives, investment
strategies and investment restrictions.
The Master Fund and Master Partnership’s investment objective is
to seek to generate consistent long-term capital appreciation, by
using an event driven, bottom-up, fundamental approach to evaluate
various types of securities throughout companies’ capital
structures. The Investment Manager’s implementation of the Master
Fund and Master Partnership’s investment policy is the main driver
of the Company’s performance.
The Investment Manager’s fundamental approach to investing
begins with analysing a company’s financial performance, its
management and competitive advantages, its position within its
industry and the overall economy. This analysis is performed on
historical and current data with the ultimate goal of producing a
set of projected financial results for the company. Once the
projections are established, the Investment Manager compares the
current valuation of the company in question relative to its
historical valuation range, the valuation range of its peers and
the overall market in general to determine whether the markets are
mis-pricing the company. The Investment Manager ultimately invests
in situations where it believes mis-pricing exists because this
fundamental analysis indicates that such a disconnection will
correct itself over the long term.
The Investment Manager’s bottom-up approach attempts to identify
individual companies that would make attractive investment targets
based on their growth and profitability characteristics. This
approach differs from a top-down methodology which first evaluates
macro-economic, sector, industry or geographic factors to select
the best sectors or industries for investment.
The Investment Manager seeks to identify event driven situations
in which it can take either a long or short investment position
where it can identify a near or long-term catalyst that would
unlock value.
Results and Dividends
The results for the year are set out in the Statements of
Operations. On 5 January 2018, an
annual distribution was declared equivalent to 4% of the NAV of the
Company in respect of the year to 31
December 2017, amounting to $0.81 per USD Share and £0.77 per GBP Share (31
December 2016:$0.71 per USD Share and
£0.67 per GBP Share) and paid on 16 February
2018.
The Board is considering a cessation of all future dividend
payments in favour of electing an alternative preferred mode of
future capital returns.
Stated Capital
Share Capital Conversions took place during the year ended
31 December 2017. A summary and the
number of shares in issue at the year-end are disclosed in Note 6
to the Audited Financial Statements.
Key performance indicators
(“KPI’s”)
At each Board meeting, the Board considers a number of
performance measures to assess the Company’s success in achieving
its objectives. Below are the main KPI’s which have been identified
by the Board for determining the progress of the Company:
• Net asset value;
• Share price; and
• Ongoing charges.
Directors
The Directors of the Company during the year and to the date of
this report are as listed on these Audited Financial
Statements.
Directors’ Interests
Mr. Targoff holds the position of Chief Operating Officer,
Partner and General Counsel of Third Point LLC.
Pursuant to an instrument of indemnity entered into between the
Company and each Director, the Company has undertaken, subject to
certain limitations, to indemnify each Director out of the assets
and profits of the Company against all costs, charges, losses,
damages, expenses and liabilities arising out of any claims made
against them in connection with the performance of their duties as
a Director of the Company.
Christopher Legge and
Keith Dorrian held 4,500 and
2,500 U.S. Dollar shares respectively
as at 31 December 2017 (31 December 2016: Christopher Legge and Keith Dorrian held 4,500 and 2,500 U.S. Dollar shares respectively). No other
Directors held shares in the Company during the year.
Corporate Governance Policy
The Board has considered the principles and recommendations of
the Association of Investment Companies Code of Corporate
Governance (“AIC Code”) by reference to the Association of
Investment Companies Corporate Governance Guide for Investment
Companies (“AIC Guide”). The AIC Code, as explained by the AIC
Guide, addresses all the principles set out in the UK Corporate
Governance Code, as well as setting out additional principles and
recommendations on issues that are of specific relevance.
The Board has determined that reporting against the principles
and recommendations of the AIC Code, and by reference to the AIC
Guide (which incorporates the UK Corporate Governance Code), will
provide better information to Shareholders. The Company has
complied with all the recommendations of the AIC Code and the
relevant provisions of the UK Corporate Governance Code, except as
set out below.
The UK Corporate Governance Code includes provisions relating
to:
• the role of the chief executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
For the reasons set out in the AIC Guide, the Board considers
these provisions are not relevant to the position of the Company,
being an externally advised investment company with no executive
directors or employees. The Company has therefore not reported
further in respect of these provisions.
The AIC Code provides a “comply or explain” code of corporate
governance designed especially for the needs of investment
companies. The AIC published the code of corporate governance and
the Company has reviewed its compliance with these standards. The
UK Financial Reporting Council (“FRC”) has confirmed that so far as
investment companies are concerned it considers that companies
which comply with the AIC Code will be treated as meeting their
obligations under the UK Corporate Governance Code (“The UK Code”)
and Section 9.8.6 of the Listing Rules. The AIC Code is publicly
available at:
https://www.theaic.co.uk/sites/default/files/hidden-files/AICCodeofCorporateGovernanceJUL16_0.pdf.
The Company does not have employees, hence no whistle-blowing
policy is necessary. However, the Directors have satisfied
themselves that the Company’s service providers have appropriate
whistleblowing policies and procedures and confirmation has been
sought from the service providers that nothing has arisen under
those policies and procedures which should be brought to the
attention of the Board. The UK Code is publicly available at:
https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-Corporate-Governance-Code-April-2016.pdf.
The Code of Corporate Governance (the “Guernsey Code”) provides
a framework that applies to all entities licensed by the Guernsey
Financial Services Commission (“GFSC”) or which are registered or
authorised as a collective investment scheme. Companies reporting
against the UK Code or the AIC Code are deemed to comply with the
Guernsey Code. It is the Company’s policy to comply with the AIC
Code.
The Board confirms that, throughout the period covered in the
financial statements, the Company complied with the Guernsey Code
issued by the GFSC, to the extent it was applicable based upon its
legal and operating structure and its nature, scale and
complexity.
Board Structure
The Board currently consists of five non-executive Directors. As
the Chairman of the Board is an independent non-executive, the
Board considers it unnecessary to appoint a senior independent
Director.
Name |
Position |
Independent |
Date
Appointed |
Marc Antoine
Autheman |
Non-Executive
Chairman |
Yes |
21 June
2007 |
Keith Dorrian |
Non-Executive
Director |
Yes |
19 June
2007 |
Christopher Legge |
Non-Executive
Director |
Yes |
19 June
2007 |
Joshua L Targoff |
Non-Executive
Director |
No |
29 May
2009 |
Claire Whittet |
Non-Executive
Director |
Yes |
27 April
2017 |
As required by the AIC Code, every Director that has completed
over nine years’ service on the Board must be subject to annual
re-election by the Shareholders. Marc Antoine Autheman,
Keith Dorrian and Christopher Legge who have served for over nine
years on the Board will be required to offer themselves for
election at the next Annual General Meeting (“AGM”). Directors may
retire by rotation at every Annual General Meeting (“AGM”) with the
exception of Mr. J Targoff, who as the Chief Operating Officer,
General Counsel and Partner of the Investment Manager, is not
considered independent and will therefore be subject to annual
re-election by Shareholders. All other Directors are considered by
the Board to be independent of the Company’s Investment Manager.
Christopher Fish retired from the
Board at the 2017 AGM, he was succeeded by Claire Whittet on 27
April 2017. Any Directors appointed to the Board since the
previous AGM also retire and stand for re-election. The Independent
Directors take the lead in any discussions relating to the
appointment or re-appointment of Directors.
The Board meets at least four times a year and in addition there
is regular contact between the Board, the Investment Manager and
Northern Trust International Fund Administration Services
(Guernsey) Limited (the
“Administrator” and “Company Secretary”). The Board requires to be
supplied in a timely manner with information by the Investment
Manager, the Administrator, the Company Secretary and other
advisors in a form and of a quality appropriate to enable it to
discharge its duties. The Board, excluding Mr. Targoff, regularly
reviews the performance of the Investment Manager and the Master
Fund to ensure that performance is satisfactory and in accordance
with the terms and conditions of the relative appointments and
Prospectus. It carries this review out through consideration of a
number of objective and subjective criteria and through a review of
the terms and conditions of the advisors’ appointment with the aim
of evaluating performance, identifying any weaknesses and ensuring
value for money for the Company’s Shareholders.
New Directors will receive an induction from the Investment
Manager on joining the Board, and all Directors undertake relevant
training as necessary.
The Company has no executive directors or employees. All
matters, including strategy, investment and dividend policies,
gearing and corporate governance procedures are reserved for
approval by the Board of Directors. The Board receives full
information on the Company’s investment performance, assets,
liabilities and other relevant information in advance of Board
meetings.
Board Tenure and Succession
Planning
The Board notes the AIC Code and UK Code suggest it would be
good practice for all Directors to be offered for re-election at
regular intervals subject to continued satisfactory performance. In
accordance with the Company’s articles of incorporation, the
Independent Directors and Mr. Targoff (treated for the purposes of
the AIC Code as a Non-Independent Director) may retire at each AGM
(Principle 3 - AIC Code).The Company considers that putting forward
all Independent Directors for re-election more frequently would not
be in the best interests of Shareholders. As required by the AIC
Code, every Director that has completed over nine years’ service on
the Board must be subject to annual re-election by the
Shareholders.
The Board believes that benefits to Shareholders arise from the
Directors’ long-term knowledge and experience of the Company and
its management including their ongoing ability to independently
review the performance of the Investment Manager. The Board have
implemented a policy whereby a predesignated Director puts
himself/herself up for re-election to the Board at each AGM. This
policy is intended to address the balance of views and experience
on the Board.
The Board takes the view that independence is not necessarily
compromised by the length of tenure on the Board and experience can
add significantly to the Board’s strength.
The Directors undertake an annual evaluation of the Board’s
performance and continuing independence and during this evaluation
(which includes a review of the diversity of experience within the
Board to ensure that it remains appropriate) all Directors are
asked to confirm their future intentions. The Board has robust
procedures for the identification of prospective Non-Executive
Director candidates, and as part of the selection process, due
regard is paid to the recommendations for Board diversity, however,
ability and experience will be the prime considerations.
Directors’ Biographies
Marc Antoine Autheman
Marc Antoine Autheman, is a resident of France. He has over 39 years of experience in
the public and private finance sectors. Mr. Autheman is currently
Chairman of Euroclear S.A. and Chairman of Cube Infrastructure
Fund. He worked in the French Treasury for ten years from 1978 to
1988, prior to joining the Minister of Finance’s private office,
Minister Beregovoy, as advisor for monetary and financial affairs
between 1988 and 1993. From 1993 to 1997, he worked as Executive
Director for France for the
International Monetary Fund and the World Bank and chaired the
audit committee of the World Bank during this time. From 1997 to
2004, he worked in a number of roles at Credit Agricole S.A.
(‘‘CASA’’), mainly as CEO of Credit Agricole Indosuez. He holds
Master’s degrees in Law and Economics from the University of
Paris.
Keith
Dorrian
Keith Dorrian, is a Guernsey resident and has over 44 years’
experience in the offshore finance industry. Joining Manufacturers
Hanover in 1973 he moved to First National Bank of Chicago in 1984 where he was appointed Vice
President and Company Secretary. In 1989 he joined ANZ Bank (Guernsey) where, as a Director of the Bank and
Fund Management company, he was closely involved in the banking and
fund management services of the Group. He took up the position of
Manager Corporate Clients in Bank of Bermuda Guernsey in 2000 and
was appointed local Head of Global Fund Services and Managing
Director of the Guernsey Bank’s Fund Administration company
Management International (Guernsey) Limited in Guernsey in 2001, retiring on 31 December 2003. He is currently a member of the
Guernsey Investment Fund Association, the Institute of Financial
Services, the Institute of Directors and is a Director of a number
of funds and fund management companies and holds the Institute of
Directors Diploma in Company Direction. Mr. Dorrian was elected a
Fellow of the Institute of Directors.
Christopher
Fish (retired 21 June
2017)
Christopher Fish, is Guernsey resident and is a director of a UK
listed fund as well as three Guernsey based financial companies. During the
past 43 years he has held executive positions as a director of the
Royal Bank of Canada (Channel Islands) Limited and as the Americas
Offshore Head of Coutts where he was responsible for the
Bahamas, Bermuda, Cayman and Uruguay offices. In 1997 he was appointed the
Senior Client Partner for Coutts Offshore before taking up the
position of Managing Director of Close International Private
Banking in 1999 from where he retired in 2005.
Christopher
Legge
Christopher Legge, is a
Guernsey resident and worked for
Ernst & Young in Guernsey from
1983 to 2003. Having joined the firm as an audit manager in 1983,
he was appointed a partner in 1986 and managing partner in 1998.
From 1990 to 1998, he was head of Audit and Accountancy and was
responsible for the audits of a number of insurance, banking,
investment fund and financial services clients. He also had
responsibility for the firm’s training, quality control and
compliance functions. He was appointed managing partner of Ernst
& Young for the Channel
Islands region in 2000. Since his retirement from Ernst
& Young in 2003, Mr. Legge has held a number of non-executive
directorships in the financial sector. He is an FCA and holds a BA
(Hons) in Economics from the University of Manchester.
Joshua L.
Targoff
Joshua L. Targoff has been the
Chief Operating Officer of the Investment Manager since
May 2009. He joined as General
Counsel in May 2008. Previously, Mr.
Targoff was the General Counsel of the Investment Banking Division
of Jefferies & Co. Mr. Targoff spent seven years doing M &
A transactional work at Debevoise & Plimpton LLP. Mr. Targoff
graduated with a J.D. from Yale Law School, and holds a B.A. from
Brown University. In 2012, Mr. Targoff
was made a Partner of the Investment Manager.
Claire
Whittet (appointed 27 April
2017)
Claire Whittet is a Guernsey resident and has 40 years’ experience
in the banking industry. After gaining an MA in Geography from
Edinburgh University, she joined the
Bank of Scotland where she
remained until moving to Guernsey
in 1996. In the intervening period she was involved in a wide
variety of credit transactions including commercial and corporate
finance. She joined Bank of Bermuda in Guernsey becoming Global Head of Private
Client Credit and moved to Rothschild Bank International as
Director of Lending in 2003. She was latterly Co-Head and Managing
Director and since May 2016 has been
a Non-Executive Director of the bank. She is a Non-Executive
Director of 5 other listed funds, is a Member of the Chartered
Institute of Bankers in Scotland,
the Insurance Institute and holds the Institute of Directors
Diploma in Company Direction.
Meeting Attendance Records
The table below lists Directors’ attendance at meetings during
the year, to the date of this report.
|
Scheduled
Board |
Audit
Committee |
|
Meetings |
Meetings |
|
Attended (max 5) |
Attended
(max 3) |
Marc Antoine
Autheman |
5 of
5 |
3 of
3 |
Christopher Legge |
5 of
5 |
3 of
3 |
Keith Dorrian |
5 of
5 |
3 of
3 |
Christopher
Fish1 |
2 of
3 |
1 of
1 |
Joshua L Targoff
2,3 |
5 of
5 |
N/A |
Claire
Whittet4 |
3 of
3 |
2 of
2 |
1 Mr. Fish resigned from the Board of Directors on
21 June 2017.
2 Mr. Targoff is not a member of the Audit
Committee.
3 Mr. Targoff does not attend Meetings as a Director
where recommendations from the Investment Manager are under
consideration.
4 Ms. Whittet was appointed to the Board of Directors
on 27 April 2017.
Committees of the Board
The AIC Code requires the Company to appoint nomination,
remuneration and management engagement committees. The Board has
not deemed this necessary as, being comprised wholly of
non-executive Directors, the whole Board considers these
matters.
Following the “Women on Boards” review conducted by Lord Davies’
of Abersoch in February 2011, the
Board has examined Lord Davies’ recommendations and noted that it
was consistently reviewing its policy and future appointments to
the Board would continue to be based on the individual’s skills and
experience regardless of gender. The Board now has a female
director and therefore 20% diversity.
The Investment Manager has wide experience in managing and
administering fund vehicles and has access to extensive investment
management resources. The Board considers that the continued
appointment of the Investment Manager on the terms agreed would be
in the interests of the Company’s Shareholders as a whole.
Audit Committee
The Company’s Audit Committee conducts formal meetings at least
three times a year for the purpose, amongst others, of considering
the appointment, independence, effectiveness of the audit and
remuneration of the auditors and to review and recommend the annual
statutory accounts and interim report to the Board of Directors.
Full details of its functions and activities are set out in the
Report of the Audit Committee of this Annual Report.
Directors’ Duties and
Responsibilities
The Directors have adopted a set of Reserved Powers, which
establish the key purpose of the Board and detail its major duties.
These duties cover the following areas of responsibility:
• Statutory obligations and public disclosure;
• Strategic matters and financial reporting;
• Board composition and accountability to Shareholders;
• Risk assessment and management, including reporting,
compliance, monitoring, governance and control; and
• Other matters having material effects on the Company.
These Reserved Powers of the Board have been adopted by the
Directors to clearly demonstrate the seriousness with which the
Board takes its fiduciary responsibilities and as an ongoing means
of measuring and monitoring the effectiveness of its actions.
The Directors are responsible for the overall management and
direction of the affairs of the Company. The Company has no
Executive Directors or employees. The Company invests all of its
assets in shares of the Master Fund and Third Point LLC acts as
Investment Manager to the Master Fund and is responsible for the
discretionary investment management of the Master Fund’s investment
portfolio under the terms of the Master Fund Prospectus.
Northern Trust International Fund Administration Services
(Guernsey) Limited (“NT”) acts as
Administrator and Company Secretary and is responsible to the Board
under the terms of the Administration Agreement. The Administrator
is also responsible to the Board for ensuring compliance with the
Rules and Regulations of The Companies (Guernsey) Law, London Stock Exchange listing
requirements and observation of the Reserved Powers of the Board
and in this respect the Board receives detailed quarterly
reports.
The Directors have access to the advice and services of the
Company Secretary who is responsible to the Board for ensuring that
Board procedures are followed and that it complies with applicable
rules and regulations of the Companies (Guernsey) Law, the GFSC and the London Stock
Exchange. Individual Directors may, at the expense of the Company,
seek independent professional advice on any matter that concerns
them in the furtherance of their duties. The Company maintains
appropriate Directors’ and Officers’ liability insurance in respect
of legal action against its Directors on an ongoing basis and the
Company has maintained appropriate Directors’ Liability Insurance
cover throughout the year.
The Board is also responsible for safeguarding the assets of the
Company and for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Internal Control and Financial
Reporting
The Directors acknowledge that they are responsible for
establishing and maintaining the Company’s system of internal
control and reviewing its effectiveness. Internal control systems
are designed to manage rather than eliminate the failure to achieve
business objectives and can only provide reasonable but not
absolute assurance against material misstatements or loss.
The Directors review all controls including operations,
compliance and risk management. The key procedures which have been
established to provide internal control are:
• Investment advisory services are provided by the Investment
Manager. The Board is responsible for setting the overall
investment policy, ensuring compliance with the Company’s
Investment Strategy and monitors the action of the Investment
Manager and Master Fund at regular Board meetings. The Board has
also delegated administration and company secretarial services to
NT; however it retains accountability for all functions it has
delegated.
• The Board considers the process for identifying, evaluating
and managing any significant risks faced by the Company on an
on-going basis. It ensures that effective controls are in place to
mitigate these risks and that a satisfactory compliance regime
exists to ensure all local and international laws and regulations
are upheld. Particular attention has been given to the
effectiveness of controls to monitor liquidity risk, asset values,
counterparty exposure and credit availability.
• The Board clearly define the duties and responsibilities of
their agents and advisors and appointments are made by the Board
after due and careful consideration. The Board monitors the ongoing
performance of such agents and advisors.
• The Investment Manager and NT maintain their own systems of
internal control, on which they report to the Board. The Company,
in common with other investment companies, does not have an
internal audit function. The Audit Committee has considered the
need for an internal audit function, but because of the internal
control systems in place at the Investment Manager and NT, has
decided it appropriate to place reliance on their systems and
internal control procedures.
• The systems are designed to ensure effectiveness and efficient
operation, internal control and compliance with laws and
regulations. In establishing the systems of internal control,
regard is paid to the materiality of relevant risks, the likelihood
of costs being incurred and costs of control. It follows therefore
that the systems of internal control can only provide reasonable
but not absolute assurance against the risk of material
misstatement or loss.
Board Performance
The Board and Audit Committee undertake a formal annual
evaluation of their own performance and that of their committees
and individual Directors. In order to review their effectiveness,
the Board and Audit Committee carry out a process of formal
self-appraisal. The Directors and Committee consider how the Board
and Audit Committee functions as a whole and also review the
individual performance of its members. This process is conducted by
the respective Chairman reviewing individually with each of the
Directors and members of the Committee their performance,
contribution and commitment to the Company. The performance of the
Chairman is evaluated by the other independent Directors.
Management of Principal Risks and
Uncertainties
As noted in the Statement of Directors’ Responsibilities in
respect of the Audited Financial Statements, the Directors are
required to provide a description of the principal risks and
uncertainties facing the Company. The Directors have considered the
risks and uncertainties facing the Company and have prepared and
review regularly a risk matrix which documents the significant
risks faced by the Company.
This process has been in place for the period under review and
up to the date of approval of the Audited Financial Statements and
is reviewed by the Board and is in accordance with the Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting.
This document considers the following information:
• Identifying and reporting changes in the risk environment;
• Identifying and reporting changes in the operational
controls;
• Identifying and reporting on the effectiveness of controls and
remediation of errors arising; and
• Reviewing the risks faced by the Company and the controls in
place to address those risks.
The Directors have acknowledged they are responsible for
establishing and maintaining the Company’s system of internal
control and reviewing its effectiveness by focusing on four key
areas:
• Consideration of the investment advisory services provided by
the Investment Manager;
• Consideration of the process for identifying, evaluating and
managing any significant risks faced by the Company on an ongoing
basis;
• Clarity around the duties and responsibilities of the agents
and advisors engaged by the Directors; and
• Reliance on the Investment Manager and Administrator
maintaining their own systems of internal controls.
Further discussion on Internal Control is documented in the
Directors’ Report under “Internal Control and Financial
Reporting”.
The main risks and uncertainties that the Directors consider to
apply to the Company are as follows:
• Underlying investment performance of the Master Fund. To
mitigate this risk the Directors receive regular updates from the
Investment Manager on the performance of the Master Fund. The Board
reviews quarterly performance updates on the Master Fund and has
access to the Investment Manager on any potential question
raised.
• Concentration of Investor Base. The Directors receive
quarterly investor reports from Jefferies International Limited
(the “Corporate Broker”) and there is regular communication between
the Directors and Corporate Broker to identify potential
significant changes in the Shareholder base.
• Discount/Premium to the NAV. The Investment Manager, Corporate
Broker and, when considered necessary, the Board of Directors,
maintain regular contact with the significant Shareholders in the
Company. As part of the ongoing process to seek to narrow the
discount to NAV per Share at which the Shares are traded, the
Directors introduced an annual dividend policy and a share
repurchase programme which is outlined in Note 6. Under the
dividend policy it was anticipated that the Company would pay a
cash dividend of 4-5% of NAV to the extent that the positive NAV
performance of the Company would support such a dividend and absent
other, exigent circumstances relating to the Investment Manager
and/or otherwise. An annual distribution equivalent to 4% of the
NAV of the Company in respect of the year to 31 December 2017 was declared on 5 January 2018 amounting to US$40,688,702 (31 December
2016: US$35,416,482) and paid
on 16 February 2018. The Board
monitors the discount/premium to the NAV on a regular basis and
continually maintains regular contact with the Investment Manager
when necessary. As mentioned, the Board is considering a cessation
of all future dividend payments and introducing an alternative
means of future capital return.
• Performance of the Investment Manager. The Directors review
the performance of the Investment Manager on an annual basis and
Board representatives conduct annual visits to the Investment
Manager.
• Failure of appointed service providers to the Company. The
Directors conduct a formal review of each service provider annually
in addition to receiving regular updates from each service provider
and ensuring that there is ongoing communication between the Board
and the various service providers to the Company.
• Financial Risk. The Board employs independent administrators
to prepare the Financial Statements of the Company and meets with
the independent auditors at least twice a year to discuss all
financial matters including the appropriateness of the accounting
policies.
• Liquidity Risk. Shares of the Master Fund may be redeemed
quarterly on 60 days’ prior written notice or at other times with
the consent of the Master Fund’s Board of Directors in order to pay
Company expenses. The majority of the investments held by the
Master Fund are held in cash and securities with quoted prices
available in active markets/exchanges.
• Cyber Security Risk. The Company is exposed to risk arising
from a successful cyber-attack through its service providers. The
Company requests of its service providers that they have
appropriate safeguards in place to mitigate the risk of
cyber-attacks (including minimising the adverse consequences
arising from any such attack), that they provide regular updates to
the Board on cyber security, and conduct ongoing monitoring of
industry developments in this area. The Board is satisfied that the
Company’s service providers have the relevant controls in place to
mitigate this risk.
Viability Statement
In accordance with provision C.2.2 of the UK Corporate
Governance Code, published by the Financial Reporting Council in
April 2016 (“The Code”), the
Directors have assessed the prospects of the Company over the three
year period to 31 December 2020. The
Directors consider that three years is an appropriate period based
on a review of the Company’s investment horizon, anticipated cash
flows, management arrangements as well as the liquidity of the
Company’s investment in the Master Fund.
The investment objective of the Company is to invest all of its
investable capital, net of short-term working capital requirements,
in Class E Shares of Master Fund. The Company’s performance and
operations therefore depend upon the performance of the Master Fund
and the Directors in assessing the viability of the Company pay
particular attention to the risks facing the Master Fund. The
Investment Manager’s Review sets out details of the Company’s
financial performance, and outlook.
In its assessment of the viability of the Company, the Directors
have considered each of the Company’s principal risks and
uncertainties as well as the internal control and financial
reporting processes detailed above and in particular the underlying
investment performance of the Master Fund and share price discount
to NAV.
The Directors acknowledge the two year notice period of the
Investment Manager serving notice under the Management Agreement.
To mitigate against this risk, the Directors meet regularly with
the Investment Manager to review the Company’s performance, and
closely monitor the relationship with the Investment Manager. The
Directors confirm their belief that the Company will remain viable
for the period to 31 December
2020.
Going Concern
During 2017, the Directors have carried out a robust assessment
of the principal risks facing the Company, including those that
would threaten its business model, future performance, solvency or
liquidity. The Directors believe that the Company is well placed to
manage its business risks successfully, having taken into account
the current economic outlook.
The Directors, having considered the above risks and reviewed
ongoing budgeted expenses, have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due.
After making enquiries and given the nature of the Company and
its investment, the Directors are satisfied that it is appropriate
to continue to adopt the going concern basis in preparing these
Audited Financial Statements. The Master Fund Shares are liquid and
can be converted to cash to meet liabilities as they fall due.
After due consideration, the Directors consider that the Company is
able to continue for the foreseeable future.
Significant Events During The Year
There were no significant events during the year.
Relations with Shareholders
The Board welcomes Shareholders’ views and places great
importance on communication with its Shareholders. The Board
receives regular reports on the views of Shareholders and the
Chairman and other Directors are available to meet Shareholders if
required. Shareholders who wish to communicate with the Board
should, in the first instance contact the Administrator, whose
contact details can be found on the Company’s website. At the AGM
the Company provides a forum for shareholders to meet and discuss
issues with the Directors of the Company. The tenth AGM was held on
21 June 2017 with all proposed
resolutions being passed by the Shareholders.
International Tax Reporting
For the purposes of the US Foreign Account Tax Compliance Act,
the Company is registered with the US Internal Revenue Services
(“IRS”) as a Guernsey reporting
Foreign Financial Institution (“FFI”), received a Global
Intermediary Identification Number and can be found on the IRS FFI
list.
The Common Reporting Standard (“CRS”) is a global standard for
the automatic exchange of financial account information developed
by the Organisation for Economic Co-operation and Development
(“OECD”), which has been adopted by Guernsey and which came into effect on
1 January 2016.
The Board has taken the necessary action to ensure that the
company is compliant with Guernsey
regulations and guidance in this regard.
Criminal Finances Act 2017
In respect of the UK Criminal Finances Act 2017 which has
introduced a new corporate criminal offence (“CCO”) of ‘failing to
take reasonable steps to prevent the facilitation of tax evasion’,
the Board confirms that it is committed to zero tolerance towards
the criminal facilitation of tax evasion.
The Board also keeps under review developments involving other
social and environmental issues, such as Modern and General Data
Protection Regulation (“GDPR”), and will report on those to the
extent they are considered relevant to the Company’s
operations.
Significant Shareholdings
As at 17 April 2018, the Company
have been notified that the following had significant shareholdings
in excess of 5% in the Company:
|
Total Shares
Held |
% Holdings in
Class |
Significant Shareholders |
|
|
US Dollar
Shares |
|
|
Vidacos Nominees Limited |
10,840,054 |
22.85% |
Goldman Sachs Securities (Nominees)
Limited |
6,934,840 |
14.62% |
Chase Nominees Limited |
4,897,347 |
10.32% |
Smith & Willamson Nominees
Limited |
2,425,991 |
5.11% |
Sterling
Shares |
|
|
Vidacos Nominees Limited |
391,468 |
18.98% |
Nortrust Nominees Limited |
250,430 |
12.14% |
Alliance Trust Savings Nominees |
194,677 |
9.44% |
Hargreaves Lansdown (Nominees) |
133,321 |
6.75% |
HSBC Global Custody Nominee
(UK) |
115,705 |
5.61% |
The Bank of New York (OCS) Nominees
Limited |
107,586 |
5.22% |
The Directors confirm to the best of their knowledge:
• there is no relevant audit information of which the Company’s
Auditor is unaware of, and each Director has taken steps he/she
ought to have taken as a Director to make himself/herself aware of
any relevant information and to establish that the Company’s
Auditor is aware of that Information;
• these Annual Report and Audited Financial Statements have been
prepared in accordance with accounting principles generally
accepted in the United States of
America and give a true and fair view of the financial
position of the Company;
• these Annual Report and Audited Financial Statements, taken as
a whole, are fair, balanced and understandable and provide the
information necessary for the Shareholder to assess the Company’s
performance, business model and strategy; and
• these Annual Report and Audited Financial Statements
include information detailed in the Directors’ Report, the
Investment Manager’s Review and Notes to the Audited Financial
Statements, which provide a fair review of the information required
by:
a) DTR 4.1.8 of the Disclosure and Transparency Rules (“DTR”),
being a fair review of the Company business and a description of
the principal risks and uncertainties facing the Company; and
b) DTR 4.1.11 of the DTR, being an
indication of important events that have occurred since the ending
of the financial year and the likely future development of the
Company.
Signed on behalf of the Board by:
Marc Antoine Autheman
Chairman
Christopher Legge
Director
25 April 2018
Disclosure of Directorships in Public
Listed Companies
The following summarises the Directors’ directorships in public
companies
Company Name
Exchange
Christopher
Legge
Ashmore Global Opportunities Limited
London
John Laing Environmental Assets Group Limited
London
NB Distressed Debt Investment Fund Limited
London
Sherborne Investors (Guernsey)
B Limited
London
Sherborne Investors (Guernsey)
C Limited
London
TwentyFour Select Monthly Income Fund Limited
London
Keith
Dorrian
AB Alternative Strategies PCC Limited
Channel Islands
AB International Fund PCC Limited
Channel Islands
IIAB PCC Limited
Channel Islands
MasterCapital Fund Limited
Ireland
Claire
Whittet
BH Macro Limited
London
Eurocastle Investment Limited
Euronext
International Public Partners Limited
London
Riverstone Energy
Limited
London
TwentyFour Select Monthly Income Fund Limited
London
Statement of Directors’
Responsibilities in Respect of the Audited Financial Statements
The Directors are responsible for preparing the Audited
Financial Statements in accordance with applicable Guernsey Law and
accounting principles generally accepted in the United States of America. Guernsey Company
Law requires the Directors to prepare Financial Statements for each
financial period which give a true and fair view of the state of
affairs of the Company and of the net income or expense of the
Company for that year.
In preparing these Audited Financial Statements the Directors
should:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether the applicable accounting standards have been
followed subject to any material departures disclosed and explained
in the Audited Financial Statements; and
• prepare the Audited Financial Statements on a going concern
basis unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that
the Audited Financial Statements comply with the Companies
(Guernsey) Law, 2008. They are
also responsible for the system of internal controls, safeguarding
the assets of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors have responsibility to confirm that:
• there is no relevant audit information of which the Company’s
Auditor is unaware of, and each Director has taken all the steps he
ought to have taken as a Director to make himself aware of any
relevant information and to establish that the Company’s Auditor is
aware of that information;
• these Annual Report and Audited Financial Statements have been
prepared in accordance with accounting principles generally
accepted in the United States of
America and give a true and fair view of the financial
position of the Company;
• these Annual Report and Audited Financial Statements, taken as
a whole, are fair, balanced and understandable and provide
information necessary for the Shareholder to assess the Company’s
performance, business model and strategy; and
• these Annual Report and Audited Financial Statements include
information detailed in the Directors’ Report, the Investment
Manager’s Review and Notes to the Audited Financial Statements,
which provide a fair review of the information required by:
a) DTR 4.1.8 of the Disclosure and Transparency Rules (“DTR”),
being a fair review of the Company business and a description of
the principal risks and uncertainties facing the Company;
and
b) DTR 4.1.11 of the DTR, being an
indication of important events that have occurred since the ending
of the financial year and the likely future development of the
Company.
Marc Antoine Autheman
Chairman
Christopher Legge
Director
25 April 2018
Directors’ Remuneration Report
Introduction
The Board has prepared this report as part of its framework for
corporate governance which, as described in the Directors’ Report,
enables the Company to comply with the main requirements of the UK
Corporate Governance Code published by the Financial Reporting
Council.
An ordinary resolution for the approval of this report will be
put to the Shareholders at the forthcoming AGM.
Remuneration policy
All Directors are non-executive and a Remuneration Committee has
not been established. The Board as a whole considers matters
relating to the Directors’ remuneration. No advice or services were
provided by any external person in respect of its consideration of
the Directors’ remuneration.
The Company’s policy is that the fees payable to the Directors
should reflect the time spent by the Directors on the Company’s
affairs and the responsibilities borne by the Directors and be
sufficient to attract, retain and motivate Directors of a quality
required to run the Company successfully. The Chairman of the Board
is paid a higher fee in recognition of his additional
responsibilities, as is the Chairman of the Audit Committee. The
policy is to review fee rates periodically, although such a review
will not necessarily result in any changes to the rates, and
account is taken of fees paid to Directors of comparable
companies.
There are no long term incentive schemes provided by the Company
and no performance fees are paid to Directors.
No Director has a service contract with the Company but each of
the Directors is appointed by a letter of appointment which sets
out the main terms of their appointment. Director appointments can
also be terminated in accordance with the Articles. Should
Shareholders vote against a Director standing for re-election, the
Director affected will not be entitled to any compensation.
Directors are remunerated in the form of fees, to the Director
personally. No other remuneration or compensation was paid or
payable by the Company during the year to any of the Directors
apart from the reimbursement of allowable expenses.
Directors’ fees
The fees payable by the Company in respect of each of the
Directors who served during 2017 and 2016, were as follows:
|
2017* |
2016 |
|
£ |
£ |
Marc Antoine Autheman
(Chairman) |
63,000 |
60,000 |
Christopher F L Legge (Audit
Committee Chairman) |
46,000 |
44,000 |
Keith Dorrian |
38,000 |
36,000 |
Christopher N Fish
** |
19,000 |
36,000 |
Claire Whittet *** |
25,806 |
– |
Joshua L Targoff
**** |
– |
– |
Total |
191,806 |
176,000 |
|
|
|
USD equivalent |
US$276,211 |
US$228,783 |
* Due to the inflationary rise since the last directory fee
increase on 6 June 2014, director
fees increased with effect from 1 January
2017.
** Mr. Fish resigned from the Board
of Directors on 21 June 2017.
*** Ms. Whittet was appointed to the
Board of Directors on 27 April
2017.
**** As a non-independent Director
and as a Partner of the Investment Manager Joshua L Targoff waived
his Directors’ fee.
Performance table
The table details the share price returns over the year.
Signed on behalf of the Board by:
Marc Antoine Autheman
Chairman
Christopher F L Legge
Director
25 April 2018
Report of the Audit Committee
We present the Audit Committee (the “Committee”) Report for the
year ended 31 December 2017, setting
out the Committee’s structure and composition, principal duties and
key activities during the year. As in previous years, the Committee
has reviewed the Company’s financial reporting, the independence
and effectiveness of the independent auditor and the internal
control and risk management systems of service providers.
The Board is satisfied that for the year under review and
thereafter the Committee has recent and relevant commercial and
financial knowledge sufficient to satisfy the provisions of The
Code.
Structure and Composition
The Committee is chaired by Christopher
Legge and its other members are Marc Antoine Autheman,
Keith Dorrian and Claire Whittet. The Committee operates within
clearly defined terms of reference and comprises all the Directors
except the Investment Manager’s representative.
The Committee Terms of Reference indicates that appointments to
the Committee shall be for a period of up to three years, which may
be extended for two further three year periods, and thereafter
annually, provided that the Director whose appointment is being
considered remains an Independent Director for the period of
extension.
Name of Audit Committee
Member |
Date of Appointment
to Audit
Committee |
Next Date for
Review |
Chris Legge |
19 June 2007 |
– 17 April 2013 *
– 18 April 2016
– April 2019 |
Marc-Antoine Autheman |
21 June 2007 |
– 17 April 2013 *
– 18 April 2016
– April 2019 |
Keith Dorrian |
19 June 2007 |
– 17 April 2013 *
– 18 April 2016
– April 2018 |
Claire Whittet
** |
27 April 2017 |
– April 2020 |
* Date specific tenure introduced on
17 April 2013.
** Ms. Whittet was appointed to the
Board of Directors on 27 April
2017.
The Committee conducts formal meetings at least three times a
year. The table above sets out the number of Committee meetings
held during the year ended 31 December
2017 and the number of such meetings attended by each
Committee member. The independent auditor is invited to attend
those meetings at which the annual and interim reports are
considered. The independent auditor and the Committee will meet
together without representatives of either the Administrator or
Investment Manager being present if either considers this to be
necessary.
Principal Duties
The role of the Committee includes:
• monitoring the integrity of the published financial statements
of the Company;
• keeping under review the consistency and appropriateness of
accounting policies on a year to year basis. Satisfying itself that
the annual accounts, the interim statement of financial results and
any other major financial statements issued by the Company follow
generally accounting principles generally accepted in the United States of America and give a true
and fair view of the Company and any associated undertakings’
affairs; matters raised by the external auditors about any aspect
of the accounts or, of the Company’s control and audit procedures,
are appropriately considered and, if necessary, brought to the
attention of the Board, for resolution;
• monitoring and reviewing the quality and effectiveness of the
independent auditors and their independence;
• considering and making recommendations to the Board on the
appointment, reappointment, replacement and remuneration of the
Company’s independent auditor;
• monitoring and reviewing the internal control and risk
management systems of the service providers;
and
• considering at least once a year whether there is a need for
an internal audit function.
The complete details of the Committee’s formal duties and
responsibilities are set out in the Committee’s terms of reference,
which can be obtained from the Company’s website.
Independent Auditor
The Committee is also the forum through which the independent
auditor (the “auditor”) reports to the Board of Directors. The
objectivity of the auditor is reviewed by the Committee which also
reviews the terms under which the auditor is appointed to perform
non-audit services. The Committee reviews the scope and results of
the audit, its cost effectiveness and the independence and
objectivity of the auditor, with particular regard to non-audit
fees. The Committee has established pre-approval policies and
procedures for the engagement of Ernst & Young LLP to provide
non-audit services.
Ernst & Young LLP has been the independent auditor from the
date of the initial listing on the London Stock Exchange.
The audit fees proposed by the auditors each year are reviewed
by the Committee taking into account the
Company’s structure, operations and other requirements during
the year and the Committee makes recommendations to the Board.
There were no non-audit fees paid to Ernst and Young LLP during
the year other than in respect of the interim review of the
Company’s condensed accounts to 30 June
2017. The Committee considers Ernst & Young LLP to be
independent of the Company. The Committee also met with the
external auditors without the Investment Manager or Administrator
being present so as to provide a forum to raise any matters of
concern in confidence.
Evaluations or Assessments Made During
the Year
The following sections discuss the assessments made by the
Committee during the year:
Significant Areas of Focus for the
Financial Statements’
The Committee’s review of the interim and annual financial
statements focused on the following area:
The Company’s investment in the Master Fund represents
substantially all the net assets of the Company and as such is the
biggest factor in relation to the accuracy of the Financial
Statements. The holding in the Master Fund has been confirmed with
the Company’s Administrator and the Master Fund. This investment
has been valued in accordance with the Accounting Policies set out
in Note 3 to the Audited Financial Statements. The Committee has
reviewed the Financial Statements of the Master Fund and their
Accounting Policies and determined the fair value of the investment
as at 31 December 2017 is reasonable.
The Financial Statements of the Master Fund for the year ended
31 December 2017 were audited by
Ernst & Young who issued an unmodified audit opinion dated
16 March 2018.
Effectiveness of the Audit
The Committee had formal meetings with Ernst & Young LLP
during the course of the year: 1) before the start of the audit to
discuss formal planning, discuss any potential issues and agree the
scope that will be covered and 2) after the audit work was
concluded to discuss any significant matters such as those stated
previously.
The Board considered the effectiveness and independence of Ernst
& Young LLP by using a number of measures, including but not
limited to:
• the audit plan presented to them before the start of the
audit;
• the audit results report including where appropriate,
explanation for any variations from the original
plan;
• changes to audit personnel;
• the auditor’s own internal procedures to identify threats to
independence;
• feedback from both the Investment Manager and the
Administrator; and
• the Committee obtains confirmation from Ernst & Young LLP
on their independence as additional comfort for the Committee.
Further to the above, at the point of substantial conclusion of
the 2017 audit, the Committee performed a specific evaluation of
the performance of the independent auditor. This is supported by
the results of questionnaires completed by the Committee covering
areas such as quality of audit team, business understanding, audit
approach and management. This questionnaire was part of the process
by which the Committee assessed the effectiveness of the audit.
There were no adverse findings from this evaluation.
The outsourcing of any non-audit services such as interim
review, tax compliance, tax structuring, private letter rulings,
accounting advice, quarterly reviews and disclosure are normally
permitted but should be pre-approved by the Committee, or two
non-executive Directors.
The annual budget for both the audit and non-audit related
services was presented to the Committee for pre-approval.
Audit fees and Safeguards on
Non-Audit Services
The tables below summarise the remuneration payable by the
Company to Ernst & Young LLP during the years ended
31 December 2017 and 31 December 2016.
|
31 December
2017 |
31 December
2016 |
|
US$ |
US$ |
Interim review |
|
|
Ernst & Young LLP |
51,639 |
51,008 |
|
|
|
Annual audit – the
Company |
|
|
Ernst & Young LLP |
40,583 |
39,045 |
Total Fees |
92,222 |
90,053 |
Annual Audit – Third Point
Offshore Independent Voting Company Limited |
|
|
Ernst & Young LLP |
8,928 |
8,590 |
The independence of Ernst & Young LLP is in the Committee’s
opinion not compromised by Ernst & Young performing the interim
review.
Internal Control
The Committee has examined the need for an internal audit
function. The Committee considered that the systems and procedures
employed by the Investment Manager and the Administrator, including
their internal audit functions, provided sufficient assurance that
a sound system of internal control, which safeguards the Company’s
assets, has been maintained. An internal audit function specific to
the Company is therefore considered unnecessary.
The Committee has requested and received SOC1 or equivalent
reports such as service provider assessment reports from the
Investment Manager, the Company’s Administrator and Master Fund’s
Administrators to enable it to fulfil its duties under its terms of
reference. Representatives of the auditors, Investment Manager and
the Administrator attend the meetings as a matter of practice and
presentations are made by those attendees as and when required.
The Committee also attended the Investment Manager’s operational
due diligence presentation in February
2018.
Conclusion and Recommendation
After reviewing various reports such as the operational and risk
management framework and performance reports from management,
liaising where necessary with Ernst & Young LLP, and assessing
the significant areas of focus for financial statement issues
listed, the Committee is satisfied that the financial statements
appropriately address the critical judgements and key estimates
(both in respect to the amounts reported and the disclosures).
The Committee is also satisfied that the significant assumptions
used for determining the value of assets and liabilities have been
appropriately scrutinised, challenged and are sufficiently
robust.
The Independent Auditor reported to the Committee that no
material misstatements were found in the course of its work.
Furthermore, both the Investment Manager and the Administrator
confirmed to the Committee that they were not aware of any material
misstatements including matters relating to presentation. The
Committee confirms that it is satisfied that the Independent
Auditor has fulfilled its responsibilities with diligence and
professional scepticism.
Consequent to the review process on the effectiveness of the
independent audit and the review of audit services, the Committee
has recommended that Ernst & Young LLP be reappointed for the
coming financial year.
For any questions on the activities of the Committee not
addressed in the foregoing, a member of the Committee remains
available to attend each AGM to respond to such questions.
The Company is not required to apply this EU Directive as they
are not an EU Public Interest Entity (“PIE”), due to being
incorporated in Guernsey. However,
the Audit Partner rotates every 5 years and the Company will
consider putting the audit out to tender every ten years. This will
be considered further when the audit partner rotates off the
engagement at the conclusion of the 31
December 2017 audit. The Committee will formulate a policy
in respect to audit tendering and rotation at the appropriate
time.
Christopher
Legge
Audit Committee Chairman
Investment Manager’s Review
Performance Summary¹
USD Class |
31-Dec-17 |
31-Dec-16 |
%
Return |
Share Price |
17.29 |
14.38 |
25.1% |
Net asset value per
share |
20.25 |
17.63 |
18.9% |
Premium/(discount) |
(14.6%) |
(18.4%) |
|
GBP Class |
31-Dec-17 |
31-Dec-16 |
%
Return |
Share Price |
15.80 |
14.15 |
16.4% |
Net asset value per
share |
19.21 |
16.84 |
18.1% |
Premium/(discount) |
(17.8%) |
(16.0%) |
|
1 For the period 1 January
2017 to 31 December
2017.
2 Calculation includes dividends paid up to the year
ended 31 December 2017.
Strategy Performance
For the twelve months ended 31 December
2017, the net asset value per share performance was 18.9%
and 18.1% in the U.S. Dollar and Sterling share classes,
respectively.
Third Point capitalised on favourable equity market conditions
in 2017 by allocating an average of 65% of exposure to the asset
class. While gains were generated by all investment strategies, the
majority of returns were attributable to equities investments
across sectors and geographies. Returns were driven by strong stock
selection in event-driven situations, several constructivist
investments, successful short selling efforts, and maintaining a
well-balanced portfolio across sectors. Within equities, core
investments in Healthcare, Consumer, Industrials, and Financials
contributed meaningfully to positive performance. Modest Corporate,
Structured, and Sovereign Credit portfolios also added to gains for
the year.
Risk Outlook
Risk management remains a key consideration in Third Point LLC’s
(“the Investment Manager”) investment decision process. Investment
analysis is augmented by a robust proprietary risk management tools
and procedures. The Investment Manager entered 2018 with a
constructive view on the investment portfolio and market
environment. However, the Investment Manager remains focused on
macroeconomic and market risks including the shifting dynamics
between global growth and inflation. The Investment Manager will
continue to invest in compelling investment opportunities in both
long and short equity positions and expects credit exposure to
remain modest in the current environment. The Investment Manager
will adjust portfolio exposures to changing market conditions and
macroeconomic data.
At 31 December 2017, exposure in
the Investment Manager’s portfolio across four funds and three
managed accounts was as follows Relates to the Third Point Offshore
Master Fund L.P1:
|
Long |
Short |
Net |
Equities |
102.4% |
(26.1%) |
76.3% |
Credit |
16.1% |
(3.7%) |
12.4% |
Other |
14.7% |
(1.7%) |
13.0% |
Net equity exposure is defined as the long exposure minus the
short exposure of all equity positions (including long/short,
arbitrage, and other strategies), and can serve as a rough measure
of the exposure to fluctuations in overall market levels. The
Investment Manager continues to closely monitor the liquidity of
the portfolio, and is comfortable that the current composition is
aligned with the redemption terms of the Fund.
Third Point LLC
25 April 2018
(1)
Relates to the Third Point Offshore Master Fund L.P.
Independent Auditor’s Report
to the members of Third Point Offshore
Investors Limited
Opinion
We have audited the financial
statements of Third Point Offshore Investors Limited (the
‘Company’) for the year ended 31 December
2017, which comprise the Statement of Assets and
Liabilities, the Statement of Operations, the Statement of Changes
in Net Assets, the Statement of Cash Flows and the related notes 1
to 13, including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and accounting principles generally
accepted in the United States of
America.
In our opinion, the financial
statements:
· give a true and fair
view of the state of the Company’s affairs as at 31 December 2017 and of its results for the year
then ended;
· have been properly
prepared in accordance with accounting principles generally
accepted in the United States of
America; and
· have been properly
prepared in accordance with the requirements of the Companies
(Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing (UK) (‘ISAs (UK)’) and
applicable law. Our responsibilities under those standards are
further described in the “Auditor’s responsibilities for the audit
of the financial statements” section of our report below. We are
independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Use of report
This report is made solely to the
Company’s members, as a body, in accordance with Section 262 of the
Companies (Guernsey) Law, 2008.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Conclusions relating to principal
risks, going concern and viability statement
We have nothing to report in respect
of the following information in the annual report, in relation to
which the ISAs(UK) require us to report to you whether we have
anything material to add or draw attention to:
· the disclosures in the
annual report set out that describe the principal risks and explain
how they are being managed or mitigated;
· the directors’
confirmation set out in the annual report that they have carried
out a robust assessment of the principal risks facing the entity,
including those that would threaten its business model, future
performance, solvency or liquidity;
· the directors’
statement set out in the annual report about whether they
considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any
material uncertainties to the entity’s ability to continue to do so
over a period of at least twelve months from the date of approval
of the financial statements;
· whether the directors’
statement in relation to going concern required under the Listing
Rules is materially inconsistent with our knowledge obtained in the
audit; or
· the directors’
explanation set out in the annual report as to how they have
assessed the prospects of the entity, over what period they have
done so and why they consider that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the entity will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Overview of our audit approach
Key audit matters |
- Investment
Valuation
- Investment Existence and Ownership |
Audit scope |
- We performed an audit
of the complete financial information of the Company for the year
ended 31 December 2017.
- Procedures were performed on the audit team’s behalf by EY New
York, under our instruction and supervision, in respect of the
Company’s share of the Master Fund’s income and expenses as
reported in the Statement of Operations. |
Materiality |
- Overall materiality of US$20.3
million which represents 2% of net assets. |
Key audit
matters
Key audit matters are those matters
that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not
provide a separate opinion on these matters.
Risk |
Our response to
the risk |
Key observations
communicated to the Audit Committee |
Valuation of investments (US$1,014m, PY comparative
US$879m)
Refer to the Report of the Audit Committee ; Accounting
policies
The investments held are measured at fair value through profit or
loss, and their fair value is determined by reference to the
published NAV per share of the investee fund, as calculated by its
independent Administrator. The valuation risk considers the risk of
an error in the application of the published NAV per share,
obtained from the independent Administrator of the investee fund,
when calculating the fair value of the Company’s investments, as
well as the effect on valuation of any gating/suspension of
redemptions by the investee fund. |
Our
response comprised of substantive audit testing of investment
valuation, including:
- Agreeing the valuation per share of the Company’s investments in
the investee fund to the NAV per share of the investee fund
published by its independent Administrator; and
- Agreeing the valuation per share of the Company’s investments in
the investee fund to the NAV per share of the investee fund per its
audited financial statements for the year ended 31 December 2017,
which were approved on 16 March 2018.
- Reviewing the subscriptions and redemptions schedule of the
investee fund around the year-end date to assess the liquidity of
the Company’s investments in the investee fund |
We
confirmed there were no matters identified during our audit work on
valuation of investments that we wanted to bring to the attention
of the Audit Committee. |
Investment existence and ownership
(US$1,014m, PY comparative US$879m)
Refer to the Report of the Audit Committee; Accounting policies
Risk that the investments presented in the financial statements do
not exist or the Company does not have the rights to cash flows
derived from them. Failure to obtain good title exposes the
Company to significant risk of loss. |
Our
response comprised performance of substantive audit testing of
investment existence and ownership including:
- Obtaining a confirmation, as at 31 December 2017, of the
Company’s holdings in the investee fund into which the Company
invests, from the independent Administrator of the investee fund,
and agreeing it to the accounting records of the Company; and
- Obtaining contracts/supporting documentation for additions and
disposals of holdings in the investee fund that took place during
the year ended 31 December 2017, and agreeing the details to the
accounting records of the Company. |
We
confirmed there were no matters identified during our audit work on
existence and ownership of investments that we wanted to bring to
the attention of the Audit Committee. |
An overview of
the scope of our audit
Tailoring the
scope
Our assessment of audit risk, our
evaluation of materiality and our allocation of performance
materiality determine our audit scope. Taken together, this
enables us to form an opinion on the financial statements.
Our application
of materiality
We apply the concept of materiality
in planning and performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming our audit
opinion.
Materiality
“Materiality” is the magnitude of
omissions or misstatements that, individually or in the aggregate,
could reasonably be expected to influence the economic decisions of
the users of the financial statements. Materiality provides a basis
for determining the nature and extent of our audit procedures.
We determined materiality for the
Company to be US$20.3 million (2016:
US$17.6 million), which is
approximately 2% (2016: 2%) of net assets. We believe that net
assets provides us with an appropriate basis for audit materiality
as it is a key published performance measure and is a key metric
used by management in assessing and reporting on overall
performance.
During the course of our audit, we
reassessed initial materiality and noted no matters leading us to
amend the basis of materiality (2% of net assets).
Performance
materiality
“Performance materiality” is the
application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk
assessments, together with our assessment of the Company’s overall
control environment, our judgement was that performance materiality
was 75% (2016: 75%) of our planning materiality, namely
US$15.2 million (2016: US$13.2 million). We have set performance
materiality at this percentage because we have considered the
likelihood of misstatements to be low. We have considered both
quantitative and qualitative factors when determining the expected
level of detected misstatements and setting the performance
materiality at this level.
Reporting
threshold
The reporting threshold is an amount
below which identified misstatements are considered as being
clearly trivial.
We agreed with the Audit Committee
that we would report to them all uncorrected audit differences in
excess of US$1.02 million (2016:
US$0.88 million), which is set at 5%
of planning materiality, as well as differences below that
threshold that, in our view, warranted reporting on qualitative
grounds.
We evaluate any uncorrected
misstatements against both the quantitative measures of materiality
discussed above and in light of other relevant qualitative
considerations in forming our opinion.
Other
information
The other information comprises the
information included in the annual report set out, other than the
financial statements and our auditor’s report thereon. The
directors are responsible for the other information.
Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in this report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the
financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of the other information, we
are required to report that fact.
We have nothing to report in this
regard.
In this context, we also have
nothing to report in regard to our responsibility to specifically
address the following items in the other information and to report
as uncorrected material misstatements of the other information
where we conclude that those items meet the following
conditions:
· Fair, balanced and
understandable – the statement given by the directors that they
consider the annual report and financial statements taken as a
whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s
performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
· Audit committee
reporting – the section describing the work of the audit
committee does not appropriately address matters communicated by us
to the audit committee is materially inconsistent with our
knowledge obtained in the audit; or
· Directors’
statement of compliance with the UK Corporate Governance Code –
the parts of the directors’ statement relating to the Company’s
compliance with the UK Corporate Governance Code containing
provisions specified for review by the auditor in accordance with
Listing Rule 9.8.10R(2) do not properly disclose a departure from a
relevant provision of the UK Corporate Governance Code.
Matters on which we are required to
report by exception
We have nothing to report in respect
of the following matters in relation to which the Companies
(Guernsey) Law, 2008 requires us
to report to you if, in our opinion:
· proper accounting
records have not been kept by the Company; or
· the financial
statements are not in agreement with the Company’s accounting
records and returns; or
· we have not received
all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the
directors’ responsibilities statement set out, the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial
statements, the directors are responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain
reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our
responsibilities for the audit of the financial statements is
located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Christopher James Matthews FCA
for and on behalf of Ernst & Young LLP
Guernsey, Channel Islands
25 April 2018
Notes:
1. The maintenance and integrity of Third Point
Offshore Investors Limited’s web site is the responsibility of the
directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to
the financial statements since they were initially presented on the
web site.
2. Legislation in the Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Statements of Assets and
Liabilities
|
As at |
As at |
|
31 December
2017 |
31 December
2016 |
(Stated in United States
Dollars) |
US$ |
US$ |
Assets |
|
|
Investment in Third
Point Offshore Fund Ltd at fair value
(Cost: US$435,246,919 31 December 2016: US$451,424,093) |
1,014,421,855 |
879,180,943 |
Cash |
16,816 |
88,845 |
Redemption receivable |
156,500 |
132,000 |
Other assets |
19,171 |
16,782 |
Total assets |
1,014,614,342 |
879,418,570 |
|
|
|
|
|
|
Liabilities |
|
|
Accrued expenses and other
liabilities |
171,480 |
118,217 |
Directors’ fees payable (Note
5) |
- |
70,549 |
Administration fee payable (Note
4) |
50,261 |
43,858 |
Total liabilities |
221,741 |
232,624 |
|
|
|
Net assets |
1,014,392,601 |
879,185,946 |
|
|
|
Number of Ordinary Shares in
issue (Note 6) |
|
|
US Dollar Shares |
47,403,915 |
47,500,847 |
Sterling Shares |
2,093,352 |
2,014,842 |
|
|
|
Net asset value per Ordinary
Share (Notes 8 and 11) |
|
|
US Dollar Shares |
$20.25 |
$17.63 |
Sterling Shares |
£19.21 |
£16.84 |
|
|
|
Number of Ordinary B Shares in
issue (Note 6) |
|
|
US Dollar Shares |
31,602,630 |
31,667,254 |
Sterling Shares |
1,395,582 |
1,343,242 |
The financial statements were approved by the Board of Directors
on 25 April 2018 and signed on its
behalf by:
Marc Antoine Autheman
Chairman
Christopher
Legge
Director
See accompanying notes and Audited
Financial Statements of Third Point Offshore Fund Ltd. and Third
Point Offshore Master Fund L.P.
Statements of Operations
|
For the year
ended |
For the year
ended |
|
31 December
2017 |
31 December
2016 |
(Stated in United States
Dollars) |
US$ |
US$ |
Realised and unrealised gain from
investment transactions allocated from Master Fund |
|
|
Net realised gain from
securities, derivative contracts and foreign
currency translations |
111,085,131 |
18,699,871 |
Net change in unrealised gain on
securities, derivative contracts and foreign currency
translations |
107,642,579 |
29,019,101 |
Net (loss)/gain from currencies
allocated from Master Fund |
(45,804) |
879,489 |
Total net realised
and unrealised gain from investment
transactions allocated from Master Fund |
218,681,906 |
48,598,461 |
|
|
|
|
|
|
Net investment loss allocated
from Master Fund |
|
|
Interest income |
18,377,507 |
19,186,554 |
Dividends, net of
withholding taxes of US$1,919,445
(31 December 2016 : US$2,264,844) |
5,327,309 |
6,307,813 |
Other income |
566,339 |
333,666 |
Incentive allocation (Note 2) |
(41,956,498) |
(6,384,420) |
Stock borrow fees |
(126,485) |
(419,877) |
Investment Management fee |
(19,197,634) |
(16,996,235) |
Dividends on securities sold, not
yet purchased |
(2,227,379) |
(768,064) |
Interest expense |
(1,255,149) |
(2,500,010) |
Other expenses |
(6,276,501) |
(2,896,563) |
Total net investment loss
allocated from Master Fund |
(46,768,491) |
(4,137,136) |
|
|
|
|
|
|
Company expenses |
|
|
Administration fee (Note 4) |
(178,848) |
(159,895) |
Directors’ fees (Note 5) |
(276,211) |
(228,783) |
Other fees |
(746,242) |
(700,217) |
Expenses paid on behalf of Third
Point Offshore Independent Voting Company Limited 1
(Note 4) |
(88,977) |
(97,229) |
Total Company expenses |
(1,290,278) |
(1,186,124) |
Net loss |
(48,058,769) |
(5,323,260) |
Net increase in net assets
resulting from operations |
170,623,137 |
43,275,201 |
¹ Third Point Offshore Independent
Voting Company Limited consists of Director Fees, Audit Fee and
General Expenses.
See accompanying notes and Audited
Financial Statements of Third Point Offshore Fund Ltd. and Third
Point Offshore Master Fund L.P.
Statements of Changes in Net
Assets
|
For the year
ended |
For the year
ended |
|
31 December
2017 |
31 December
2016 |
(Stated in United States
Dollars) |
US$ |
US$ |
Increase in net assets resulting
from operations |
|
|
Net realised gain from securities,
commodities, derivative contracts and foreign currency translations
allocated from Master Fund |
111,085,131 |
18,699,871 |
Net change in unrealised gain on
securities, derivative contracts and foreign currency translations
allocated from Master Fund |
107,642,579 |
29,019,101 |
Net (loss)/gain from currencies
allocated from Master Fund |
(45,804) |
879,489 |
Total net investment (loss)/gain
allocated from Master Fund |
(46,768,491) |
(4,137,136) |
Total Company expenses |
(1,290,278) |
(1,186,124) |
Net increase in net assets
resulting from operations |
170,623,137 |
43,275,201 |
Decrease in net assets resulting
from capital share transactions |
|
|
Dividend distribution |
(35,416,482) |
- |
Net assets at the beginning of
the year |
879,185,946 |
835,910,745 |
Net assets at the end of the
year |
1,014,392,601 |
879,185,946 |
See accompanying notes and Audited
Financial Statements of Third Point Offshore Fund Ltd. and Third
Point Offshore Master Fund L.P.
Statements of Cash Flows
|
For the year
ended |
For the year
ended |
|
31 December
2017 |
31 December
2016 |
(Stated in United States
Dollars) |
US$ |
US$ |
Cash flows from operating
activities |
|
|
Operating expenses |
(719,865) |
(682,827) |
Directors’ fees |
(346,760) |
(224,883) |
Administration fee |
(172,445) |
(156,931) |
Third Point Offshore Independent
Voting Company Limited¹ |
(88,977) |
(97,229) |
Redemption from Master Fund |
36,672,500 |
1,151,700 |
|
|
|
Cash inflow/(outflow) from
operating activities |
35,344,453 |
(10,170) |
|
|
|
Cash flows from financing
activities |
|
|
Dividend distribution |
(35,416,482) |
– |
|
|
|
Net (decrease) in cash |
(72,029) |
(10,170) |
Cash at the beginning of the
year |
88,845 |
99,015 |
Cash at the end of the
year |
16,816 |
88,845 |
¹ Third Point Offshore Independent
Voting Company Limited consists of Director Fees, Audit Fee and
General Expenses.
See accompanying notes and Audited
Financial Statements of Third Point Offshore Fund Ltd. and Third
Point Offshore Master Fund L.P.
Notes to the Audited Financial
Statements
For the year ended 31 December
2017
1. The Company
Third Point Offshore Investors Limited (the “Company”) is an
authorised closed-ended investment company incorporated in
Guernsey on 19 June 2007 for an unlimited period, with
registration number 47161.
2. Organisation
Investment Objective and Policy
The Company’s investment objective is to provide its
Shareholders with consistent long term capital appreciation,
utilising the investment skills of the Investment Manager, through
investment of all of its capital (net of short-term working capital
requirements) in Class E shares of Third Point Offshore Fund Ltd.
(the “Master Fund”), an exempted company formed under the laws of
the Cayman Islands on 21 October 1996. The Master Fund’s investment
objective is to seek to generate consistent long-term capital
appreciation, by using an event driven, bottom-up, fundamental
approach to evaluate various types of securities throughout
companies’ capital structures. The Master Fund is managed by the
Investment Manager and the Investment Manager’s implementation of
the Master Fund’s investment policy is the main driver of the
Company’s performance. Third Point Offshore Master Fund L.P. (the
“Master Partnership”) invests all of its investable assets in a
corresponding open-end investment company having the same
investment objective as the Master Partnership.
The Master Fund is a limited partner of the Master Partnership,
an exempted limited partnership organised under the laws of the
Cayman Islands, of which Third
Point Advisors II L.L.C., an affiliate of the Investment Manager,
is the general partner. Third Point LLC is the Investment Manager
to the Company, the Master Fund and the Master Partnership. The
Master Fund and the Master Partnership share the same investment
objective, strategies and restrictions as described above.
The Audited Financial Statements of the Master Fund and the
Audited Financial Statements of the Master Partnership should be
read alongside the Company’s Audited Annual Report and Audited
Financial Statements.
Investment Manager
The Investment Manager is a Limited Liability Company formed on
28 October 1996 under the laws of the
State of Delaware. The Investment
Manager was appointed on 27 June 2007
and is responsible for the management and investment of the
Company’s assets on a discretionary basis in pursuit of the
Company’s investment objective, subject to the control of the
Company’s Board and certain borrowing and leveraging
restrictions.
The Company does not pay the Investment Manager for its services
as the Investment Manager is paid a management fee of 2% per annum
of the Company’s share of the Master Fund’s NAV (the “NAV”) and a
general partner incentive allocation of 20% of the Master Fund’s
NAV growth (“Full Incentive Fee”) invested in the Master
Partnership, subject to certain conditions and related adjustments,
by the Master Fund. If a particular series invested in the Master
Fund depreciates during any fiscal year and during subsequent years
there is a profit attributable to such series, the series must
recover an amount equal to 2.5 times the amount of depreciation in
the prior years before the Investment Manager is entitled to the
Full Incentive Fee. Until this occurs, the series will be subject
to a reduced incentive fee equal to half of the Full Incentive Fee.
The Company was allocated US$41,956,498 (31 December
2016: US$6,384,420) of
incentive fees for the year ended 31
December 2017.
3. Significant Accounting Policies
Basis of Presentation
These Audited Financial Statements have been prepared in
accordance with relevant accounting principles generally accepted
in the United States of America
(“US GAAP”). The functional and presentation currency of the
Company is United States Dollars.
Management has determined that the Company is an investment
company in conformity with US GAAP. Therefore the Company follows
the accounting and reporting guidance for investment companies in
the Financial Accounting Standards Board (‘‘FASB’’) Accounting
Standards Codification (‘‘ASC’’) 946, Financial Services –
Investment Companies (‘‘ASC 946’’).
The following are the significant accounting policies adopted by
the Company:
Cash and Cash Equivalents
Cash in the Statements of Assets and Liabilities and for the
Statement of Cash Flows comprises cash at bank and on hand. Usually
this is short term cash that settles between 0-3 months.
Valuation of Investments
The Company records its investment in the Master Fund at fair
value. Fair values are generally determined utilising the NAV
provided by, or on behalf of, the underlying Investment Managers of
each investment fund. In accordance with Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Topic 820 “Fair Value Measurement”, fair value is defined as the
price the Company would receive upon selling a security in a timely
transaction to an independent buyer in the principal or most
advantageous market of the security. For further information refer
to the Master Partnership’s Audited Financial Statements.
The valuation of securities held by the Master Partnership,
which the Master Fund directly invests in, is discussed in the
notes to the Master Partnership’s Audited Financial Statements. The
NAV of the Company’s investment in the Master Fund reflects its
fair value. At 31 December 2017, the
Company’s US Dollar and Sterling shares represented 12.83% and
0.73% (31 December 2016: 12.26% and
0.61%) respectively of the Master Fund’s NAV.
The Company has adopted ASU 2015-07, Disclosures for Investments
in Certain Entities that calculate NAV per Share (or its
equivalent) (“ASU 201-07”), in which certain investments measured
at fair value using the NAV per share method (or its equivalent) as
a practical expedient are not required to be categorised in the
fair value hierarchy. Accordingly the Company has not levelled
applicable positions.
Uncertainty in Income Tax
ASC Topic 740 “Income Taxes” requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Company’s tax returns to determine whether the tax positions
are “more-likely-
than-not” of being sustained by the applicable tax authority
based on the technical merits of the position. Tax positions deemed
to meet the more-likely-than-not threshold would be recorded as a
tax benefit or expense in the year of determination. Management has
evaluated the implications of ASC 740 and has determined that it
has not had a material impact on these Audited Financial
Statements.
Income and Expenses
The Company records its proportionate share of the Master Fund’s
income, expenses and realised and unrealised gains and losses on a
monthly basis. In addition, the Company accrues interest income, to
the extent it is expected to be collected, and other expenses.
Use of Estimates
The preparation of Audited Financial Statements in conformity
with US GAAP may require management to make estimates and
assumptions that affect the amounts and disclosures in the
financial statements and accompanying notes. Actual results could
differ from those estimates. Other than what is underlying in the
Master Fund and the Master Partnership, the Company does not use
any material estimates in respect of the Audited Financial
Statements.
Foreign Exchange
Investment securities and other assets and liabilities
denominated in foreign currencies are translated into United States
Dollars using exchange rates at the reporting date. Purchases and
sales of investments and income and expense items denominated in
foreign currencies are translated into United States Dollars at the
date of such transaction. All foreign currency translation gains
and losses are included in the Statements of Operations.
Recent accounting pronouncements
In January 2016, the FASB issued
Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial
Instruments – Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities.” ASU
2016-01 amends various aspects of the recognition, measurement,
presentation, and disclosure for financial instruments. ASU 2016-01
is effective for annual reporting periods, and interim periods
within those years beginning after 15
December 2017. We do not expect that this standard will have
a material effect on our financial statements.
4. Material Agreements
Management and Incentive fees
The Investment Manager was appointed by the Company to invest
its assets in pursuit of the Company’s investment objectives and
policies. As disclosed in Note 2, the Investment Manager is
remunerated by the Master Fund by way of management fees and
incentive fees.
Administration fees
Under the terms of an Administration Agreement dated
29 June 2007, the Company appointed
Northern Trust International Fund Administration Services
(Guernsey) Limited as
Administrator (the “Administrator”) and Corporate Secretary.
The Administrator is paid fees based on the NAV of the Company,
payable quarterly in arrears. The fee is at a rate of 0.02% of the
NAV of the Company for the first £500 million of NAV and a rate of
0.015% for any NAV above £500 million. This fee is subject to a
minimum of £4,250 per month.
The Administrator is also entitled to an annual corporate
governance fee of £30,000 for its company secretarial and
compliance activities.
In addition, the Administrator is entitled to be reimbursed
out-of-pocket expenses incurred in the course of carrying out its
duties, and may charge additional fees for certain other
services.
Total Administrator expenses during the year amounted to
US$178,848 with US$50,261 outstanding (31
December 2016: US$159,895 with
US$43,858 outstanding).
Related Party
The Company has entered into a support and custody agreement
with Third Point Offshore Independent Voting Company Limited
(“VoteCo”) whereby, in return for the services provided by VoteCo,
the Company will provide VoteCo with funds from time to time in
order to enable VoteCo to meet its obligations as they fall due.
Under this agreement, the Company has also agreed to pay all the
expenses of VoteCo, including the fees of the directors of VoteCo,
the fees of all advisors engaged by the directors of VoteCo and
premiums for directors and officers insurance. The Company has also
agreed to indemnify the directors of VoteCo in respect of all
liabilities that they may incur in their capacity as directors of
VoteCo. The expense paid by the Company on behalf of VoteCo during
the year is outlined in the Statement of Operations and amounted to
US$88,977 (31
December 2016: US$97,229). As
at 31 December 2017 expenses accrued
by the Company on behalf of VoteCo amounted to US$16,679 (31 December
2016: US$24,243).
5. Directors’ Fees
The Chairman is entitled to a fee of £63,000 per annum. All
other independent Directors are entitled to receive £38,000 per
annum with the exception of Mr. Legge who receives £46,000 per
annum as the audit committee chairman. Mr. Targoff has waived his
fees. The Directors are also entitled to be reimbursed for expenses
properly incurred in the performance of their duties as
Director. The Directors’ fees during the year amounted to
US$276,211 with US$nil outstanding
(31 December 2016: US$228,783 with US$70,549 outstanding).
6. Stated Capital
The Company was incorporated with the authority to issue an
unlimited number of Ordinary Shares (the “Shares”) with no par
value and an unlimited number of Ordinary B Shares (“B Shares”) of
no par value. The Shares may be divided into at least two classes
denominated in US Dollar and Sterling.
The Company has issued approximately 40% of the aggregate voting
rights of the Company to VoteCo in the form of B Shares. The B
Shares are unlisted and except for an entitlement to receive a
fixed annual dividend at a rate of 0.0000001
pence (Sterling) do not carry any other economic interests
and at all times will represent approximately 40% of the aggregate
issued capital of the Company. The Articles of Incorporation
provide that the ratio of issued US Dollar B Shares to Sterling B
Shares shall at all times approximate as closely as possible the
ratio of issued US Dollar Shares to Sterling Shares in the
Company.
|
US Dollar
Shares |
Sterling
Shares |
Number of Ordinary
Shares |
|
|
Shares issued 1 January 2017 |
47,500,847 |
2,014,842 |
Shares Converted |
|
|
Total shares transferred to share
class during the year |
117,861 |
173,879 |
Total shares transferred out of
share class during the year |
(214,793) |
(95,369) |
Shares in issue at end of
year |
47,403,915 |
2,093,352 |
|
US Dollar |
Sterling
Shares |
|
Shares US$ |
US$ |
Stated Capital Account |
|
|
Stated capital account at 1 January
2017 |
366,489,735 |
36,253,516 |
Shares Converted |
|
|
Total share value transferred to
share class during the year |
2,237,077 |
4,006,744 |
Total share value transferred out of
share class during the year |
(4,027,503) |
(2,257,836) |
Stated Capital Account at end of
year |
364,699,309 |
38,002,424 |
|
US Dollar
Shares |
Sterling
Shares |
Number of Ordinary B
Shares |
|
|
Shares in issue as at 1 January
2017 |
31,667,254 |
1,343,242 |
Shares Converted |
|
|
Total shares transferred to share
class during the year |
78,572 |
115,920 |
Total shares transferred out of
share class during the year |
(143,196) |
(63,580) |
Shares in issue at end of
year |
31,602,630 |
1,395,582 |
In respect of each class of Shares a separate class account has
been established in the books of the Company. An amount equal to
the aggregate proceeds of issue of each Share Class has been
credited to the relevant class account. Any increase or decrease in
the NAV of the Master Fund, as calculated by the Master Fund, is
allocated to the relevant class account in the Company according to
the number of shares held by each class.
Each class account is allocated those costs, expenses, losses,
dividends, profits, gains and income which the Directors determine
in their sole discretion relate to a particular class. Expenses
which relate to the Company as whole rather than specific
classes are allocated to each class in the proportion that its NAV
bears to the Company as a whole.
Voting Rights
Ordinary Shares carry the right to vote at general meetings of
the Company and to receive any dividends, attributable to the
Ordinary Shares as a class, declared by the Company and, in a
winding-up will be entitled to receive, by way of capital, any
surplus assets of the Company attributable to the Ordinary Shares
as a class in proportion to their holdings remaining after
settlement of any outstanding liabilities of the Company. B Shares
also carry the right to vote at general meetings of the Company but
carry no rights to distribution of profits or in the winding-up of
the Company.
As prescribed in the Company’s Articles, each Shareholder
present at general meetings of the Company shall, upon a show of
hands, have one vote. Upon a poll, each Shareholder shall, in the
case of a separate class meeting, have one vote in respect of each
Share or B Share held and, in the case of a general meeting of all
Shareholders, have one vote in respect of each US Dollar Share or
US Dollar B Share held, and two votes in respect of each
Sterling Share or Sterling B Share
held. Fluctuations in currency rates will not affect the relative
voting rights applicable to the Shares and B Shares. In addition
all of the Company’s Shareholders have the right to vote on all
material changes to the Company’s investment policy.
Repurchase of Shares and Discount
Control
The Directors of the Company were granted authority to purchase
in the market up to 14.99% of each class of Shares in issue at the
AGM on 21 June 2017, and they intend
to seek annual renewal of this authority from Shareholders. The
Directors propose to utilise this share repurchase authority by
introducing a new mechanism that will enhance future capital
return. Pursuant to the Director’s share repurchase authority, the
Company, through the Master Fund, commenced a share repurchase
program in December 2007. The Shares
are being held by the Master Partnership. The Master Partnership’s
gains or losses and implied financing costs related to the shares
purchased through the share purchase programme are entirely
allocated to the Company’s investment in the Master Fund. The
Master Partnership has an ownership of 11.88% of the USD
shares outstanding at 30 December
2017 (31 December 2016:
11.87%). In addition, the Company, the Master Fund, the Investment
Manager and its affiliates have the ability to purchase Shares in
the after-market at any time the Shares trade at a
discount to NAV.
At 31 December 2017 and
31 December 2016 the Master
Partnership held the following Shares in the Company in the
after-market:
|
|
Number |
|
Average
Cost |
31 December 2017 |
Currency |
of Shares |
Cost |
per Share |
US Dollar Shares |
USD |
5,879,753 |
US$65,025,532 |
US$11.06 |
|
|
Number |
|
Average
Cost |
31 December 2016 |
Currency |
of Shares |
Cost |
per
Share |
US Dollar Shares |
USD |
5,879,753 |
US$65,025,532 |
US$11.06 |
Further issue of Shares
Under the Articles, the Directors have the power to issue
further shares on a non-pre-emptive basis. If the Directors issue
further Shares, the issue price will not be less than the
then-prevailing estimated weekly NAV per Share of the relevant
class of Shares.
Share Conversion Scheme
The Company’s Articles incorporate provisions to enable
Shareholders of any one Class of Ordinary Shares to convert all or
part of their holding into any other Currency Class of Ordinary
Share on a monthly basis on the following terms:
(1) the right of conversion is exercisable by the said holder
giving to the Company or its authorised agent at least 10 business
days notice;
(2) the notice shall specify the number and Currency Class to be
converted from and the Currency Class of Ordinary Shares into which
they are to be converted; and
(3) the notice shall be submitted either through submission of
the relevant instruction mechanism or through the return of the
relevant Ordinary Share Certificate.
Upon conversion a corresponding number of B Shares will be
converted in a similar manner.
If the aggregate NAV of any Currency Class at any month-end
falls below the equivalent of US$50
million, the Shares of that Class may be converted
compulsorily into Shares of the Currency Class with the greatest
aggregate value in US Dollar terms at the time. Each conversion
will be based on NAV (Note 8) of the share classes to be
converted.
7. Taxation
The Fund is exempt from taxation in Guernsey under the provisions of the Income
Tax (Exempt Bodies) (Guernsey)
Ordinance 1989.
8. Calculation of Net Asset Value
The NAV of the Company is equal to the value of its total assets
less its total liabilities. The NAV per Share of each class is
calculated by dividing the NAV of the relevant class account by the
number of Ordinary Shares of the relevant class in issue on that
day.
9. Related Party Transactions
At 31 December 2017 other
investment funds owned by or affiliated with the Investment Manager
owned 5,630,444 (31 December 2016:
5,630,444) US Dollar Shares in the Company. Refer to Note 4 and
Note 5 for additional Related Party Transaction disclosures.
10. Significant Events
There were no significant events during the year.
11. Financial Highlights
The following tables include selected data for a single Ordinary
Share of each of the Ordinary Share classes in issue at the year
end and other performance information derived from the Audited
Financial Statements.
|
US Dollar
Shares |
Sterling
Shares |
|
31 December
2017 |
31 December
2017 |
|
US$ |
£ |
Per Share Operating
Performance |
|
|
Net Asset Value beginning of the
year |
17.63 |
16.84 |
Income from Operations |
|
|
Net realised and
unrealised gain from investment
transactions allocated from Master Fund¹ |
4.29 |
3.91 |
Net loss |
(0.96) |
(0.87) |
Total Return from
Operations |
3.33 |
3.04 |
Distribution Paid |
(0.71) |
(0.67) |
Net Asset Value, end of the
year |
20.25 |
19.21 |
Total return before incentive fee
allocated from Master Fund |
23.65% |
22.92% |
Incentive allocation from Master
Fund |
(4.76%) |
(4.87%) |
Total return after incentive fee
allocated from Master Fund |
18.89% |
18.05% |
1 Includes foreign currency translation of
profit/(loss) with respect to Sterling share class.
Total return from operations reflects the net return for an
investment made at the beginning of the year and is calculated as
the change in the NAV per Ordinary Share during the year ended
31 December 2017 and is not
annualised. An individual Shareholder’s return may vary from these
returns based on the timing of their purchases and sales of shares
on the market.
|
US Dollar
Shares |
Sterling
Shares |
|
31 December
2016 |
31 December
2016 |
|
US$ |
£ |
Per Share Operating
Performance |
|
|
Net Asset Value beginning of the
year |
16.62 |
15.95 |
Income from Operations |
|
|
Net realised and
unrealised gain from investment
transactions allocated from Master Fund¹ |
1.12 |
0.98 |
Net loss |
(0.11) |
(0.09) |
Total Return from
Operations |
1.01 |
0.89 |
Net Asset Value, end of the
year |
17.63 |
16.84 |
Total return before incentive fee
allocation from Master Fund |
6.81% |
6.29% |
Incentive fee allocation from Master
Fund |
(0.73%) |
(0.71%) |
Total return after incentive fee
allocated from Master Fund |
6.08% |
5.58% |
Total return from operations reflects the net return for an
investment made at the beginning of the year and is calculated as
the change in the NAV per Ordinary Share during the year ended
31 December 2016 and is not
annualised. An individual Shareholder’s return may vary from these
returns based on the timing of their purchases and sales of shares
on the market.
|
US Dollar
Shares |
Sterling
Shares |
|
31 December
2017 |
31 December
2017 |
|
US$ |
£ |
Supplemental data |
|
|
Net Asset Value, end of the
year |
960,047,757 |
40,204,316 |
Average Net Asset Value, for the
year ² |
896,450,229 |
39,106,196 |
Ratio to average net
assets |
|
|
Operating expenses ³ |
(3.21%) |
(3.22%) |
Incentive fee allocated from Master
Fund |
(4.45%) |
(4.33%) |
Total operating expense ³ |
(7.66%) |
(7.55%) |
Net loss |
(5.09%) |
(5.00%) |
|
US Dollar
Shares |
Sterling
Shares |
|
31 December
2016 |
31 December
2016 |
|
US$ |
£ |
Supplemental data |
|
|
Net Asset Value, end of the
year |
837,302,043 |
33,930,578 |
Average Net Asset Value, for the
year ² |
809,147,678 |
29,903,025 |
Ratio to average net
assets |
|
|
Operating expenses ³ |
(2.91%) |
(2.93%) |
Incentive fee allocated from Master
Fund |
(0.76%) |
(0.64%) |
Total operating expense ³ |
(3.67%) |
(3.57%) |
Net loss |
(0.63%) |
(0.51%) |
1 Includes foreign currency translation of
profit/(loss) with respect to Sterling share class.
2 Average Net Asset Value for the year is
calculated based on published monthly estimates of NAV.
3 Operating expenses are Company expenses together
with operating expenses allocated from the Master Fund.
12. Ongoing Charge Calculation
Ongoing charges for the year ended 31
December 2017 and 31 December
2016 have been prepared in accordance with the AIC
recommended methodology. Performance fees were charged to the
Master Fund. In line with AIC guidance, an Ongoing Charge has been
disclosed both including and excluding performance fees. The
Ongoing charges for year ended 31 December
2017 and 31 December 2016
excluding performance fees and including performance fees are based
on Company expenses and allocated Master Fund expenses outlined
below.
(excluding performance
fees) |
31 December
2017 |
31 December
2016 |
US Dollar Shares |
2.85% |
2.30% |
Sterling Shares |
2.94% |
2.32% |
(including performance
fees) |
31 December
2017 |
31 December
2016 |
US Dollar Shares |
7.30% |
3.05% |
Sterling Shares |
7.27% |
2.95% |
13. Subsequent Events
On 5 January 2018, an annual
distribution was declared, equivalent to 4% of the NAV of the
Company in respect of the year to 31
December 2017, amounting to $0.81 per USD Share and £0.77 per GBP Share
(31 December 2016: $0.71 per USD Share and £0.67 per GBP Share) and
paid on 16 February 2018.
Following investor feedback, we are seeking a transfer to The
Premium Listing segment of the Official List.
Management and Administration
Directors
Christopher
Legge*
Marc Antoine Autheman (Chairman)*
PO Box 255, Trafalgar Court, Les
Banques,
PO Box 255, Trafalgar Court, Les Banques,
St Peter Port, Guernsey,
St Peter Port, Guernsey,
Channel Islands, GY1 3QL.
Channel Islands, GY1 3QL.
Keith Dorrian* `
Joshua L Targoff
PO Box 255, Trafalgar Court, Les Banques,
PO Box 255, Trafalgar Court, Les Banques,
St Peter Port, Guernsey,
St Peter
Port, Guernsey,
Channel Islands, GY1 3QL.
Channel Islands, GY1 3QL.
Christopher
Fish*1
Claire Whittet*2
PO Box 255, Trafalgar Court, Les Banques,
PO
Box 255, Trafalgar Court, Les Banques,
St Peter Port,
Guernsey,
St Peter Port, Guernsey,
Channel Islands, GY1
3QL.
Channel Islands, GY1 3QL.
* These Directors are independent
1 Retired 21 June
2017
2 Appointed 27 April 2017
Investment Manager
Registered Office
Third Point LLC
PO Box 255, Trafalgar Court, Les Banques,
18th Floor, 390 Park Avenue,
St Peter Port, Guernsey,
New York, NY 10022,
Channel Islands, GY1 3QL.
United States of America.
Auditors
Administrator and Secretary
Ernst & Young LLP
Northern Trust International Fund
PO Box 9, Royal Chambers
Administration Services (Guernsey)
Limited,
St Julian’s Avenue,
PO Box 255, Trafalgar Court, Les Banques,
St Peter Port, Guernsey,
St Peter Port, Guernsey,
Channel Islands, GY1 4AF.
Channel Islands, GY1 3QL.
Legal Advisors (UK Law)
Legal Advisors (Guernsey Law)
Herbert Smith Freehills LLP
Mourant Ozannes
Exchange House, Primrose Street,
PO Box 186, Le Marchant Street,
London, EC2A 2HS,
St Peter Port, Guernsey,
United Kingdom.
Channel Islands, GY1 4HP.
Legal Advisors (US Law)
Receiving Agent
Cravath, Swaine & Moore, LLP
Link Market Services Limited
825 Eighth Avenue,
(formerly Capita Registrars)
New York, NY 10019-7475,
The Registry, United States of America. 34 Beckenham
Road,
Beckenham, Kent BR3 4TU,
United Kingdom.
Registrar and CREST Service Provider
Corporate Brokers
Link Market Services (Guernsey)
Limited
Jefferies International Limited
(formerly Capita Registrars (Guernsey) Limited),
Vintners Place,
2nd Floor, No.1 Le Truchot,
68 Upper Thames Street,
St Peter Port, Guernsey,
London EC4V 3BJ,
Channel Islands, GY1 IWO.
United Kingdom.
Kepler Partners LLP
9/10 Savile Row,
London W1S 3PF,
United Kingdom.