psg high growth gbp · 2016. 9. 2. · class fund 2016 2015 % increase psg konsult houghton global...

PSG Konsult Houghton High Growth (GBP) IC Limited

Audited Financial Statements for the year ended 29 February 2016

PSG KONS(JLT HOUGHTON

GLOBAL HIGH GROW1-H (GBp) IC LIMITED

Audited Annual

Financial Statements

Fortleyearefldd

29February2ol6

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDANNUAL FINANCIAL STATEMENTS

for the year ended 29 February 2016

Contents Pages

Directors, officers and other information 2

Directors’ Report 3 -4

Statement of Directors’ Responsibilities 5

Report of the Manager 6

Custodian’s Report 7

Independent Auditors’ Report 8

Statement of financial position 9

Statement of comprehensive income 10

Statement of changes in net assets attributable to holders of redeemableparticipating shares 11

Statement of cash flows 12

Notes to the financial statements 13 - 35

1

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDANNUAL FINANCIAL STATEMENTSfor the year ended 29 February 2016

DIRECTORS, OFFICERS AND OTHER INFORMATION

Directors A Ahern S Plaft-Ransom H Burger1st Floor, PSG House 11 New Street SmartCity MaltaAiphen Park St. Peter Port SCMOJ, Unit G02Constantia, 7806 Guernsey Ricasali MaltaSouth Africa GYI 2PF SCMI 001

Secretary, Administrator andRegistrar Vistra Fund Services (Guernsey) Limited

11 New StreetSt. Peter PortGuernseyGYI 2PF

Registered Office 11 New StreetSt Peter PortGuernseyGYI 2PF

Manager and GeneralInvestment Advisor PSG Fund Management (Cl) Limited V

11 NewStreet V

St Peter PortGuernsey

V

VV

GYI2PFV

Investment Advisor PSG Wealth Financial Planning (Pty) Limited4th Floor The Edge3 Howick Close, Tyger Waterfront V

V

Bellville, Cape TownV

V

7530

Custodian and Banker BNP Paribas Securities Services SCA - Guernsey BranchBNP Paribas HouseSt. Julian’s Avenue

V

St. Peter Port V

V

GuernseyGYI IWAChannel Islands

V

V

Legal Advisor Walkers (Guernsey) LLP12 14 New StreetSt. Peter Port V

V

GuernseyGYI 2PF

V

Channel Islands

Auditors PricewaterhouseCoopers Cl LLPRoyal Bank Place

V

1 Glategny EsplanadeSt. Peter Port

V

GuernseyGYI 4NDChannel Islands

2

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDDIRECTORS’ REPORTfor the year ended 29 February 2016

The Directors submit their Report and the audited financial statements for the year ended 29 February 2016.

Activities and Status

PSG Mutual Fund ICC Limited, the Incorporated Cell Company, was originally incorporated on 13 March 1998 as anopen-ended Protected Cell Company under The Protection Cell Companies Ordinance, 1997 as amended. TheCompany was authorised by The Guernsey Financial Services Commission as a Class B Collective InvestmentScheme under the provisions of The Protection of Investors (Bailiwick of Guernsey) Law, 1987 and is also nowsubject to The Companies (Guernsey) Law, 2008.

PSG Konsult Houghton Global High Growth (GBP) IC Limited (the “Fund”) is an open ended Incorporated Cell of PSGMutual Fund ICC Limited. The Incorporated Cell Company was a Protected Cell Company, PSG Mutual Fund PCCLimited, which was converted into an Incorporated Cell structure during the 2014 financial year.

Throughout these financial statements PSG Mutual Fund ICC Limited is referred to as (the “Company”) and PSGKonsult Houghton Global High Growth (GBP) IC Limited (the “Fund”).

Statement of Investment Objective

The Fund’s objective is to generate long-term capital appreciation through active asset allocation management of adiversified portfolio of collective investment schemes established, recognised or regulated in any country, and assetsin liquid form.

Net Asset Values per share at the last valuation date for the previous four years:

Comparative Table 2012 2013 2014 2015 2016PSG Konsult Houghton Global High Growth(GBP) IC Limited - Class A £1 .4018 £1 .5637 £1 .6257 £1 .8699 £1 .9032PSG Konsult Houghton Global High Growth(GBP) IC Limited - Class B £1 .3769 £1 .5252 £1 .5720 £1 .8000 £1 .8162

Distribution Policy

It is not the present intention of the Directors that the Fund will pay dividends. Income from the Fund will beaccumulated and reflected in the net asset value of the Fund.

Results and Dividend

As at 29 February 2016 the net asset values and shares in issue in respect of each Class Fund were as follows:

NAV per Unit

Class Fund 2016 2015 % Increase

PSG Konsult Houghton Global High Growth (GBP) IC Limited-ClassA £19032 £1.8699 1.78% .::PSG Konsult Houghton Global High Growth (GBP) IC Limited- Class B £1 .8162 £1 .8000 0.90%

The price history for the period 29 February 2016 is as follows:

Class Fund Highest NAV per Unit Lowest NAV per UnitPSG Konsult Houghton Global High Growth (GBP) IC Limited- Class A £1 .9483 £1 .7281PSG Konsult Houghton Global High Growth (GBP) IC Limited- Class B £1 .8760 £1 .6480

3

PSG KONSULT HOUGHTON GLOBAL HIGH GROWtH (GBP) IC LIMITEDDIRECTORS REPORTfor the year ended 29 February 2016 (continued)

At 29 February 2016 the net assets of the Fund applicable to the participating redeemable shares are as statedabove. The financial statements are based on the final/last valuation day in the year.

The statement of comprehensive income is shown on page 10.

Events subsequent to statement of net assets date

The Board of Directors resolved to change the name of the Fund from PSG Konsult Houghton Global High GrowthfGBP) IC Limited to PSG Wealth Global Flexible FoF (GBP) IC Limited and appoint PSG Multi-Management (Pty)limited to replace PSG Wealth Financial Planning (Pty) Limited as Investment Advisor to the Fund with efct from15th July 2016.

Approved by toard of Directors and signed on I 2016.

/_/

___

Director

4

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITED

STATEMENT OF DIRECTORS’ RESPONSIBILITYfor the year ended 29 February 2016

The Directors are responsible for preparing financial statements in accordance with International FinancialReporting Standards which give a true and fair view of the state of affairs of the Fund at the end of each financialyear and of the profit or loss for the year then ended. In preparing the 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 applicable accounting standards have been followed, subject to any material departures disclosed

and explained in the financial statements; and• prepare the financial statements on the going concem basis unless it is inappropriate to presume that the Fund

will continue in business as a going concern.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy atany time the financial position of the Fund and to enable them to ensure that the financial statements comply withThe Companies (Guernesy) Law, 2008 and the Protection of Investors (Bailiwick of Guernsey) Law, 1987. They arealso responsible for safeguarding the assets of the Fund and hence for taking reasonable steps for the preventionand detection of fraud, error and other irregularities.

So far as the Directors are aware, there is no relevant audit information of which the Fund’s auditors are unaware,and each Director has taken all the steps that he or she ought to have taken as a Director in order to make himselfor herself aware of any relevant audit information and to establish that the Fund’s auditors are aware of theinformation.

Independent Auditors

During the year PricewaterhouseCoopers Cl LLP were the independent auditors of the Fund and the Directorsintend to reappoint them as independent auditors to the Fund.

5

REPORT OF THE MANAGER

to the members ofPSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDfor the year ended 29 February 2016

There was no scarcity of memorable moments for global markets in 2015 with the likes of China’s devaluation, the bust incommodity prices, the Greece saga, negative rates in parts of Europe and of course the first Fed rate hike since 2006 allplaying their part.

Whilst asset class returns were generally poor over the last year, the MSCI World Index declined 0.3% in 2015, globalstock markets witnessed higher levels of volatility and were characterized by very divergent performances betweenvarious sectors, regions and currencies.

The big winner in 2015 was the Nikkei, up 10.4%, boosted by accommodative monetary policy and a stable Yen followingthree years of currency weakness, while in China the Shanghai Composite (+6.2%) finished the year up even though itfound itself 63% higher during June before suffering severe declines.

Whilst the S&P 500 index delivered a positive return of 1.4% it does not paint an accurate picture of market developmentsover the year. If it wasn’t for the “FANG” stocks (Facebook, Apple, Netflix and Google), the index return would have beennegative as market breadth was extremely poor and was significantly weighed down by the weak performance of theenergy complex driven by substantially lower oil prices (Brent -44.1%, WTI -30.5%).

European equities experienced a strong start to the year but could not escape the sell-off in the second half of the yearwith the DAX 30 ending the year negative 1.6%, the CAC 40 up 0.5% and the FTSE 100 down 6.7%, in US dollar terms.

The prospect of rising US rates coupled with declining commodity prices were amongst the factors causing emergingmarket assets to be the clear losers over the past year with the MSCI Emerging Markets index declining 14.6% in USdollars. Political and economic fragility saw South African (-25.1 %), Turkish (-31.6%) and Brazilian (-41.8%) indices recordsignificant declines.

US Dollar strength was a dominant theme over the past year with the Dollar index returning a hefty +9.3% in 2015, beforegiving back some of its gains in early 2016.

For the year ahead market participants will need to manoeuvre around themes such as the US rate hiking cycle, a Brexit,negative rates in a large parts of the developed world including Japan and the ripple effects of China’s slowing economicgrowth.

PSG Konsult Houghton Global High Growth (GBP) IC Limited

The objective of the Fund is to provide long term capital appreciation through active asset allocation management of adiversified portfolio of collective investment schemes established, recognised or regulated in any approved country, andassets in liquid form. The emphasis of the Manager’s investment approach will be on equities but there will be no specificlimit on the asset classes in which the Manager may invest with the proviso that there will be a minimum exposure of 50%net equity holdings (although market conditions may be adverse from time to time and at the discretion of the Directors theFund may hold up to 100% cash). The Fund may invest in collective investment schemes that use derivative instrumentsfor efficient portfolio management only. If these collective investment schemes include unlisted derivative instruments,such collective investment schemes may include unlisted forward currency, interest rate or exchange rate swaptransactions, the inclusion of such transactions will only be utilised for efficient portfolio management. Uncovered positionswill not be allowed. The shares or units in the underlying collective investment schemes must have a risk profile which isnot significantly higher than the risk profile of other underlying securities which may be included as permitted under SouthAfrican legislation. The Fund will be invested in a least two underlying collective investment schemes and no more than75% of the Fund will be invested in any one underlying unit trust or collective investment scheme. The Fund may notinvest in a collective investment scheme where such a fund’s constitution allows it to accept physical delivery of acommodity, or allows it to invest in instruments that compels the acceptance of physical delivery of a commodity. TheFund may not invest in a collective investment scheme whose constitution permits the use of leverage or alternativestrategies as an investment chnique.

JQ’1&For and on behalf ofPSG Fund Management (CI) Limited

6

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITED

CUSTODIAN’S REPORTfor the year ended 29 February 2016

In respect of the year ended 29th February 2016, we state that in our opinion, PSG Fund Management (Cl)

Limited, (the Manager), has managed PSG Konsult Houghton Global High Growth (GBP) IC Limited:

a) in accordance with the limitations imposed upon the investment and borrowing powers of the Fund by the

principal documents, by the scheme particulars and by the Protection of Investors (Bailiwick of Guernsey)

Law, 1987; and

b) in accordance with the provisions of the principal documents and the Authorised Collective Investment

Schemes (Class B) Rules 2013.

For and on behalf ofBNP Paribas Securities

7

- Guernsey Branch

•••!

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFPSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITED

Report on the financial statementsWe have audited the accompanying financial statements of PSG Konsult Houghton Global High Growth (GBP) ICLimited (“the Fund’) which comprise the statement of financial position as at 29 February 2016 and the statement ofcomprehensive income, the statement of changes in net assets attributable to holders of redeemable participatingshares and the statement of cash flows for the year then ended and a summary of significant accounting policiesand other explanatory information.

Directors’ responsibility for the financial statementsThe directors are responsible for the preparation of financial statements that give a true and fair view in accordancewith International Financial Reporting Standards and with the requirements of Guernsey law. The directors are alsoresponsible for such internal control as they determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with International Standards on Auditing. Those Standards requite that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of the Fund as 29 February2016, and of its financial performance and its cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards and have been properly prepared in accordance with the requirements of TheCompanies (Guernsey) Law, 2008.

Report on other legal and regulatory requirementsWe read the other information contained in the Annual Report and consider the implications for our report if webecome aware of any apparent misstatements or material inconsistencies with the financial statements. The otherinformation comprises the directors’ report, the statement of directors’ responsibilities, the report of the managerand the custodian’s report.

In our opinion the information given in the directors’ report is consistent with the financial statements.

This report, including the opinion, has been prepared for and only for the Fund’s members as a body in accordancewith Section 262 of The Companies (Guernsey) Law, 2008 and for no other purpose. We do not, in giving thisopinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shownor into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers CI LLPChartered AccountantsGuernsey, Channel Islands

2016

8

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDSTATEMENT OF FINANCIAL POSITIONas at 29 FebruaryAll amounts are stated in GBP

Notes 2016 2015 2014AssetsCurrent assetsFinancial assets at fair value throughprofit or loss 5 73,335,955 60,872,738 52,171,270Prepayments 3,250 2,475 1368Other receivables 16,254 104,578 110,992Cash and cash equivalents 7 1,000,563 269,576 365,985

Total assets 74,356,022 61,249,367 52,649,615

LiabilitiesCurrent liabilitiesDue to brokers (190,000) (62,508) (53,766)Management fee payable (42,232) (33,537) (28,393)Administration fee payable (5,987) (4,676) (3,964)Custodian fee payable (4,191) (3,273) (2,775)Other payabies (5,813) (5,228) (4,913)

Liabilities (excluding net assets attributableto holders of particIpating redeemable

(248,223) (109,222) (93,811)shares)

Net assets attributable to holders ofparticipating redeemable shares 74,107,799 61,140,145 52,555,804

Net assets attributable to holders of participating redeemable shares:

PSG Konsult Houghton Global High Growth (GBP)IC Limited - Class A 58,995,001 47,822,655 41,214,666PSG Konsult Houghton Global High Growth fGBP)IC Limited - Class B 15,112,798 13,317,490 11,341,138

Represented by:Net assets attributable to holders of participatingredeemable shares (at trading value) 74,107,799 61,140,145 52,555,804Adjustment for difference in valuation inputs -

The accompanying notes on pages 13 to 35 form part of these financial statements.

Approved by the Board of Directors and signed on 2016

Director_____________________

9

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDSTATEMENT OF COMPREHENSIVE INCOMEfor the year ended 29 FebruaryAll amounts are stated in GBP

Note 2016 2015

IncomeDividend income 404,525 492158Otherincome 110,238 151,338

Net foreign currency gains and losses on cash and cashequivalents and other balances (102,620) 678Net changes in fair value of financial assets and liabilitiescarried at fair value through profit or loss:

- Unrealised gains and losses (4,451,118) 6,603,033- Realised gains and losses 5,993,079 1,211,557

Total net income 1,954,104 8,458,964

Operating expensesManagement fees 10 (491,852) (399,599)Admin fees 10 (67,902) (56,263)Transaction costs (19,862) (18,394)Custodian fees (47,531) (39384)Directors fees 10 (7,840) (2763)Audit fees (4,189) (3497)Other operating expenses (6,246) (4907)

Total operating expenses (645,422) (524,807)

Operating profit before tax 1,308,682 7,934,157

Withholdings taxes (39,249) (43,390)

Operating profitl(Ioss) after tax 1,269,433 7,890,767

Changes in net assets attributable to holders ofredeemable participating shares 1,269,433 7,890,767

Changes per share in net assets attributable to holders ofredeemable participating shares

PSG Konsult Houghton Global High Growth (GBP) IC Limited -

Class A $0.0368 $0.2453PSG Konsult Houghton Global High Growth (GBP) IC Limited -

Class B $0.01 56 $0.2174


10

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDSTATEMENT OF CHANGES IN NET ASSETSATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARESfor the year ended 29 FebruaryAll amounts are stated in GBP

2016 2015

Operating activitiesChanges in net assets attributable to holders of redeemableparticipating shares 1269,433 7,890,767

Capital share transactionsProceeds from redeemable participating shares issued 13,779,733 3,953,430Redemption of redeemable participating shares (2,081,512) (3,259,856)

Change in net assets attributable to holders ofredeemable participating shares from capital sharetransactions 11,698,221 693,574

Change in net assets attributable to holders ofredeemable participating shares in the year 12,967,654 8,584,341

Net asset value attributable to holders of redeemableparticipating shares at the beginning of the year 61,140,145 52,555,804

Net asset value attributable to holders of redeemableparticipating shares at the end of the year 74,107,799 61,140,145


11

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDSTATEMENT OF CASH FLOWSfor the year ended 29 FebruaryAll amounts are stated in GBP

Cash flows from operating activitiesChanges in net assets attributable to holders of redeemableparticipating shares

Adjustment for:- Dividend income- Other income- Withholding taxes- Realised gains and losses- Unrealised gains and losses- Exchange gains/losses on cash and cash equivalents

Changes from operating assets and liabilities(Increase) in PrepaymentsIncrease in Management fee payableIncrease in Administration fee payableIncrease in Custodian fee payableIncrease in Other payablesIncrease in amounts due to and from brokersProceeds on purchases of investmentsProceeds on sale of investmentsCash used in operations

Dividend received 474,596 486,245Other income received 128,492 163,664

Net cash used in operating activities (10,864,614) (790,861)

Cash flows from financing activitiesProceeds from redeemable participating shares issuedRedemption of redeemable participating shares

Net cash from financing activities

Net increase in cash and cash equivalentsCash and cash equivalents at beginning of the yearExchange (losses)/gains on cash and cash equivalents

Cash and cash equivalents at end of the year


Note 2016 2015

1,269,433 7,890,767

(404,525) (492,158)(110,238) (151,338)

39,249 43,390(5,993,079) (1,211,557)4,451,118 (6,603,033)

102,620 (878)

(645,422) (524,807)

(775) (1,107)8,695 5,1441,311 712

.• 918 498585 315

f 127,492 8,742(44,445,374)(17,307,427)

33,484,868 16,377,159(11,467,702) (1,440,771)

13,779,733(2,081,512)

11,698,221

833,607269,576

(102,620)7

3,953,430(3,259,856)

693,574

(97,287)365,985

878

7 1,000,563 269,576

12

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016

1. General information - The Company and the Fund

PSG Konsult Houghton Global High Growth (GBP) IC Limited (the ‘Fund”) is an incorporated cell of PSGMutual Fund ICC Limited (formerly PSG Mutual Fund PCC Limited), incorporated in the Bailiwick of Guernsey.The Fund was created on the 22 January 2009. It is a Guernsey incorporated Fund authorised by the GuernseyFinancial Services Commission as an authorised Class B Collective Investment Scheme. Prior to PSG MutualFund ICC Limited’s conversion into an incorporated cell Fund and the Fund’s registration as an incorporatedcell, the assets and liabilities of the Fund constituted a protected cell of PSG Mutual Fund PCC Limited. Underthe laws of Guernsey, with effect from the conversion of the Original Portfolio into an incorporated cell on 30December, 2013: (a) all property and rights attributable to the Original Portfolio become the property and rightsof the Fund (b) the Fund became subject to all criminal and civil liabilities, and all contracts, debts and otherobligations, which were attributable to Original Portfolio, (c) all actions and other legal proceedings which,immediately before the conversion, could have been instituted or continued by or against the Original Portfoliocould be instituted or continued by or against the Fund and (U) a conviction, ruling, order orjudgement in favourof or against the Original Portfolio could be enforced by or against the Fund.

The Fund’s objective is to generate long-term capital appreciation through active asset allocation managementof a diversified portfolio of collective investment schemes established, recognised or regulated in any country,and assets in liquid form.

The Fund’s investment activities are managed by PSG Fund Management (CI) Limited (the ‘Manager’), with theadministration delegated to Vistra Fund Services (Guernsey) Limited (the ‘Administrator’).

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below.These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation and adoption of IFRS

The financial statements of the Fund have been prepared on a going concern basis and in accordance withInternational Financial Reporting Standards (IFRS). Previously, the Fund prepared its financial statements inaccordance with the United Kingdom Generally Accepted Accounting Standards. The Fund has consistentlyapplied the accounting policies used in the preparation of its opening IFRS statement of financial position as at1 March 2014 and through all periods presented, as if these policies had always been in effect. Note 12discloses the impact of the transition to IFRS on the Fund’s reported financial position, financial performance,including the nature and effect of significant changes in accounting policies from those used in the Fund’sfinancial statements for the year ended 29 February 2016.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accountingestimates. It also requires the Board of Directors to exercise its judgement in the process of applying theFund’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas whereassumptions and estimates are significant to the financial statements, are disclosed in Note 4.

In accordance with IFRS 1, the Fund presents three statements of financial position in its first IFRS financialstatements. In future periods, lAS I requires two comparative periods to be presented for the statement offinancial position only in certain circumstances.

(a) Standards, interpretations and amendments to published standards and amendments that areeffective for the first time in 2016

New and amended standards, interpretations and amendments adopted by the Fund

- Amendments to IFRS 13- Fair value measurement (effective 1 July 2014)

- Amendments to lAS 24 - Related party disclosures (effective 1 July 2014)

13

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)

2. Summary of significant accounting policies (continued)

2.1 Basis of preparation and adoption of IFRS (continued)

(a) Standards, interpretations and amendments to published standards and amendments that areeffective for the first time in 2016 (continued)

These standards, interpretations and amendments have no impact on measurements of assets and liabilities ordisclosures in the current or prior years.

New and amended standards, interpretations and amendments not currently relevant to the Fund’soperations

- Amendment to lAS 19, Employee benefits, on defined benefit plans (effective 1 July 2014)

- Amendment to IFRS 8, Operating segments (effective 1 July 2014)

- Amendments to IFRS 7- Financial Instruments; Disclosures (effective 1 January 2016)

- lAS 16, Property, plant and equipment, and lAS 38, Intangible assets (effective 1 July 2014)

- IFRS 3, Business combinations (effective 1 July 2014)

- lAS 40, Investment property (effective 1 July 2014)

- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (effective 1 January 2016)

- lAS 19 — Employee Benefits (effective 1 January 2016)

- lAS 34—Interim Financial Reporting (effective 1 January2016)

These standards, interpretations and amendments have no impact on measurements of assets and liabilities ordisclosures in the current or prior years.

(b) Standards, interpretations and amendments to published standards and amendments that are notyet effective

Certain new standards, amendments and interpretations to existing standards have been published that aremandatory for the Fund’s accounting periods beginning on or after 1 March 2016 or later periods, but which theFund has not early adopted are as follows:

- IFRS 9— Financial Instruments (2009 & 2010) (effective 1 January2018)”

This IFRS is part of the IASB’s project to replace lAS 39. IFRS 9 addresses classification andmeasurement of financial assets and replaces the multiple classification and measurement models in lAS39 with a single model that has three classification categories: amortised cost, fair value through OCI andfair value through profit and loss. For financial liabilities, the standard retains most of the lAS 39requirements and the impairment requirements for financial instruments are based on a forward-lookingexpected credit loss model that should result in a more timely recognition of loan losses.

The IASB has updated IFRS 9, Financial instruments’ to include guidance on financial liabilities andderecognition of financial instruments. The accounting and presentation for financial liabilities and forderecognising financial instruments has been relocated from lAS 39, ‘Financial instruments: Recognitionand measurement’, without change, except for financial liabilities that are designated at fair value throughprofit or loss.

14




(b) Standards, interpretations and amendments to published standards and amendments that are notyet effective (continued)

- Amendment to IFRS 9 - ‘Financial instruments’, on general hedge accounting (effective 1 January 2018) *

The IASB has amended IFRS 9 to align hedge accounting more closely with an entity’s risk management.The revised standard also establishes a more principles-based approach to hedge accounting andaddresses inconsistencies and weaknesses in the current model in lAS 39.

- Amendments to IFRS 10, ‘Consolidated financial statements’ and lAS 28, ‘Investments in associates andjoint ventures’ on sale or contribution of assets (postponed) A

The postponement applies to changes introduced by the IASB in 2014 through narrow-scope amendmentsto IFRS 10 Consolidated Financial Statements’ and lAS 28 ‘Investments in Associates and Joint Ventures’.Those changes affect how an entity should determine any gain or loss it recognises when assets are soldor contributed between the entity and an associate or joint venture in which it invests. The changes do notaffect other aspects of how entities account for their investments in associates and joint ventures.

The reason for making the decision to postpone the effective date is that the IASB is planning a broaderreview that may result in the simplification of accounting for such transactions and of other aspects ofaccounting for associates and joint ventures.

- Amendments to IFRS 10 ‘Consolidated financial statements’, IFRS 12 and lAS 28 Investment entities —

Applying the consolidation exception (effective 1 January 2016) A

The amendments clarify the application of the consolidation exception for investment entities and theirsubsidiaries.

- Amendments to IFRS 11 — Joint arrangements (effective 1 January 2016) *

This amendment adds new guidance on how to account for the acquisition of an interest in a joint operationthat constitutes a business. The amendments specify the appropriate accounting treatment for suchacquisitions.

IFRS 14 Regulatory deferral accounts (effective 1 January 2016)*

The IASB has issued IFRS 14, ‘Regulatory deferral accounts’ specific to first time adopters (IFRS 14’), aninterim standard on the accounting for certain balances that arise from rate-regulated activities (‘regulatorydeferral accounts’). Rate regulation is a framework where the price that an entity charges to its customersfor goods and services is subject to oversight and/or approval by an authorised body.

IFRS 15 Revenue from contracts with customers (effective 1 January 2018) A

The FASB and IASB issued their long awaited converged standard on revenue recognition on 29 May2014. It is a single, comprehensive revenue recognition model for all contracts with customers to achievegreater consistency in the recognition and presentation of revenue. Revenue is recognised based on thesatisfaction of performance obligations, which occurs when control of good or service transfers to acustomer.

15

•

•

• •t





- Amendments to lAS 1,’Presentation of financial statements’ disclosure initiative (effective 1 January 2016)

In December 2014 the IASB issued amendments to clarify guidance in lAS 1 on materiality andaggregation, the presentation of subtotals, the structure of financial statements and the disclosure ofaccounting policies.

- Amendment to lAS 16, ‘Property, plant and equipment’ and lAS 38, ‘Intangible assets’, on depreciation andamortisation (effective 1 January 2016) *

In this amendment the IASB has clarified that the use of revenue based methods to calculate thedepreciation of an asset is not appropriate because revenue generated by an activity that includes the useof an asset generally reflects factors other than the consumption of the economic benefits embodied in theasset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis formeasuring the consumption of the economic benefits embodied in an intangible asset.

- Amendments to lAS 27, ‘Separate financial statements’ on equity accounting (effective 1 January 2016) A

In this amendment the IASB has restored the option to use the equity method to account for investments insubsidiaries, joint ventures and associates in an entity’s separate financial statements.

- Amendments to lAS 16, ‘Property, plant and equipment’ and lAS 41, ‘Agriculture’ on bearer plants (effective1 January 2016)*

In this amendment to lAS 16 the IASB has scoped in bearer plants, but not the produce on bearer plantsand explained that a bearer plant not yet in the location and condition necessary to bear produce is treatedas a self-constructed asset. In this amendment to lAS 41, the IASB has adjusted the definition of a bearerplant include examples of non-bearer plants and remove current examples of bearer plants from lAS 41.

- Amendment to lAS 12— ‘Income taxes’ (effective 1 January 2017) *

The amendments were issued to clarify the requirements for recognising deferred tax assets on unrealisedlosses. The amendments clarify the accounting for deferred tax where an asset is measured at fair valueand that fair value, is below the asset’s tax base. They also clarify certain other aspects of accounting fordeferred tax assets.

The amendments clarify the existing guidance under lAS 12. They do not change the underlying principlesfor the recognition of deferred tax assets.

- Amendment to lAS 7— ‘Cash flow statements’ (effective 1 January 2017) A

In January 2016, the International Accounting Standards Board (IASB) issued an amendment to lAS 7introducing an additional disclosure that will enable users of financial statements to evaluate changes inliabilities arising from financing activities.

16





- IFRS 16— ‘Leases’ (effective 1 January 2019) *

After ten years of joint drafting by the IASB and FASB they decided that lessees should be required torecognise assets and liabilities arising from all leases (with limited exceptions) on the balance sheet.Lessor accounting has not substantially changed in the new standard.

The model reflects that, at the start of a lease, the lessee obtains the right to use an asset for a period oftime and has an obligation to pay for that tight. In response to concerns expressed about the cost andcomplexity to apply the requirements to large volumes of small assets, the IASB decided not to requite alessee to recognise assets and liabilities for short-term leases (less than 12 months), and leases for whichthe underlying asset is of low value (such as laptops and office furniture).

Key* Management has assessed the impact of these standards, interpretations and amendments on the reported

results of the Fund and do not foresee any impact.

Management is in the process of assessing the impact of these standards, interpretations and amendments onthe reported results of the Fund.

+ Management has assessed the impact of these amendments on the reported results of the Fund and foreseeonly minor disclosure changes.

17



2.2 Foreign Currency translation

(a) Functional and presentation currency

These financial statements are presented in British Pound Sterling (GEP), which is the Fund’s functional andpresentation currency. The subscriptions and redemptions of redeemable shares are denominated in GBPand the performance of the Fund is measured and reported to investors in GBP. The Board of Directorsconsiders the GBP as the currency that most faithfully represents the economic effects of the underlyingtransactions, events and conditions.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailingat the dates of the transactions. Foreign currency assets and liabilities are translated into the functionalcurrency using the exchange rate prevailing at the statement of financial position date.

Foreign exchange gains and losses arising from translation are included in the statement of comprehensiveincome.

Foreign exchange gains and losses relating to cash and cash equivalents are presented in the statement ofcomprehensive income within the ‘net foreign currency gains and losses on cash and cash equivalents andother balances’.

Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value throughprofit or loss are presented in the statement of comprehensive income within ‘net changes in fair value onfinancial assets and financial liabilities carried at fair value through profit or loss’.

2.3 Financial assets and financial liabilities

(a) Classification

The Fund classifies financial assets and financial liabilities into the following categories.

Financial assets at fair value through profit and loss:

• Held for trading: derivative financial instruments.• Designated as at fair value through profit or loss: equity investments.

Financial assets at amortised cost:• Loans and receivables: cash and cash equivalents and balances due from brokers.

Financial liabilities at fair value through profit and loss:

• Held for trading: securities sold short and derivative financial instruments.

Financial liabilities at amortised cost:• Other liabilities: balances due to brokers.

A financial instrument is classified as held for trading if:• it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;• on initial recognition, it is part of the portfolio that is managed together and for which there is evidence

of a recent pattern of short-term profit-taking; or

• it is a derivative, other than a designated and effective hedging instrument.

12

/

I

L



2.3 Financial assets and financial liabilities (continued)

(a) Classification (continued)

The Fund designates all equity investments at fair value through profit or loss on initial recognition because itmanages these securities on a fair value basis in accordance with its documented investment strategy.

A non-derivative financial asset with fixed or determinable payments may be classified as a loan andreceivable unless it is quoted in an active market or is an asset for which the holder may not recoversubstantially all of its initial investment, other than because of credit deterioration.

For a reconciliation of line items in the statement of financial position to the categories of financialinstruments, as defined by lAS 39, see note 6.

(b) Recognition and initial measurement

Financial assets and liabilities at fair value through profit or loss are initially recognised on the trade date,which is the date the Fund becomes a party to the contractual provisions of the instrument. Other financialassets and financial liabilities are recognised on the date which they are originated.

Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value,with transactions costs recognised in profit or loss. Financial assets or financial liabilities not at fair valuethrough profit or loss are initially recognised at fair value plus transactions cost that are directly attributable totheir acquisition or issue.

Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or lossare measured at fair value. Gains and losses arising from changes in the fair value of the ‘financial assets orfinancial liabilities at fair value through profit or loss’ category are presented in the statement ofcomprehensive income within other net changes in fair value of financial assets and liabilities at fair valuethrough profit or loss.

Dividend income from financial assets at fair value through profit or loss is recognised in the statement ofcomprehensive income within dividend income when the Fund’s right to receive payments is established.Dividend expense on short sales of equity securities is included within other net changes in fair value onfinancial assets and financial liabilities at fair value through profit or loss.

(c) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurment date. The fair value of financial assets andlaibilities traded in active markets are based on quoted market prices at the close of trading on the reportingdate. The Fund adopted IFRS 13, ‘Fair value measurement’, from 1 March 2014; it changed its fair valuationinput to utilise the last trades market price for both financial assets and financial liabilities where the lasttraded price falls within the bid ask spread. In circumstances where the last traded price is not within the bid-ask spread, management will determine the point within the bid-ask spread that is most representative of fairvalue.

If a significant movement in fair value occurs subsequent to the close of trading up to midnight on the yearend date, valuation techniques will be applied to determine the fair value. A significant event is any event thatoccurs after the last market price for a security, close of market or close of the foreign exchange, but beforethe Fund’s valuation time that materially affects the intergrity of the closing prices for any security, instrument,currency or securities affected by that event so that they cannot be considered ‘readily available’ marketquotations.

19



2.3 Financial assets and financial liabilities (continued)

(c) Fair value estimation (continued)

The fair value of financial assets and liabilities that are not traded in an active market is determined usingvaluation techniques. The Fund uses a variety of methods and makes assumptions that are based on marketconditions existing at each reporting date. Valuation techniques used include the use of comparable recentarm’s length transactions, reference to other instruments that are substantially the same and other valuationtechniques commonly used by market participants making the maximum use of market inputs and relying aslittle as possible on entity-specific inputs.

(d) Amortised cost measurement

The amortised cost of a financial asset or liability is the amount at which the financial asset or financial liabilityis measured at initial recognition, minus principal payments, plus or minus the cumulative amortisation usingthe the effective interest rate method of any difference between the initial amount recognised and the maturityamount, minus any reduction for impairment.

(e) Impairment

A financial asset not classified at fair value through profit or loss is assessed at each reporting date todetermine whether there is objective evidence of impairment. A financial asset or a group of financial assetsis ‘impaired’ if there is objective evidence of impairment as a result of one or more events that occurred afterthe initial recognition of the asset(s) and that loss event(s) had an impact on the estimated future cash flowsof that asset(s) that can be estimated reliably.

Objective evidence that financial assets are impaired includes significant financial difficulty of the borrower orissuer, default or delinquency by a borrower, restructuring of the amount due on terms that the Fund wouldnot otherwise consider, indications that a borrower or issuer will enter bankruptcy, or adverse changes in thepayment status of the borrowers.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the differencebetween its carrying amount and the present value of the estimated future cash flows discounted at theasset’s original effective interest rate. Losses are recognised in profit and loss and reflected in an allowanceaccount against receivables. Interest on the impaired asset continues to be recognised. If an event occurringafter the impairment was recognised causes the amount of impairment loss to decrease, then the decrease inimpairment loss is reversed through profit and loss.

(f) Derecognition

The Fund derecognises a financial asset when the contractual rights to the cash flows from the asset expire,or transfers the rights to receive the contractual cash flows in a transaction in which substantially all of therisks and rewards of ownership of the financial asset are transferred or in which the Fund neither transfers norretains substantially all of the risks and rewards of ownership and does not retain control of the financialasset.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carryingamount allocated to the portion of the asset that is derecognised) and the consideration received (includingany new asset obtained less any new liability assumed) is recognised in the statement of comprehensiveincome. Any interest in such transferred financial assets that is created or retained by the Fund is recognisedas a seperate asset or liability.

The Fund derecognises a financial liability when its contractual obligations are discharged or cancelled, orexpired.

20

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTS S

for the year ended 29 February 2016 (continued) S

2. Summary of significant accounting policies (continued) SS

S

2.3 Financial assets and financial liabilities (continued)S -

(g) Transfers between levels of the fair value hierarchy.5

S

Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of theS

reporting period.S

2.4 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial positionwhere the Fund currently has a legally enforceable tight to set-off the recognised amounts and there is anintention to settle on a net basis or realise the asset and settle the liability simultaneously. The legallyenforceable right must not be contingent on future events and must be enforceable in the normal course ofbusiness and in the event of default, insolvency or bankruptcy of the company or the counterparty.

2.5 Due from and due to brokers

Amounts due from and to brokers represent receivables for securities sold and payable for securitiespurchased that have been contracted for but not yet settled or delivered on the statement of financial positiondate respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost using theeffective interest method, less provision for impairment for amounts due from brokers. A provision forimpairment of amounts due from brokers is established when there is objective evidence that the Fund willnot be able to collect all amounts due from the relevant brokers. Significant financial difficulties of the broker,probability that the broker will enter bankruptcy or financial reorganisation, and default in payments areconsidered indicators that the amount due from brokers is impaired. Once a financial asset or a group ofsimilar financial assets has been written down as a result of an impairment loss, interest income is recognisedusing the rate of interest used to discount the future cash flows for the purpose of measuring the impairmentloss.

The effective interest method is a method of calculating the amortised cost of a financial asset or financialliability and of allocating the interest income or interest expense over the relevant period. The effectiveinterest rate is the rate that exactly discounts estimated future cash payments or receipts throughout theexpected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount ofthe financial asset or financial liability. When calculating the effective interest rate, the Fund estimates cashflows considering all contractual terms of the financial instrument but does not consider future credit losses.The calculation includes all fees and points paid or received between parties to the contract that are anintegral part of the effective interest rate, transaction costs and all other premium or discounts.

2.6 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-terminvestments in an active market with original maturities of three months or less and bank overdrafts. Bankoverdrafts are shown in current liabilities in the statement of financial position.

2.7 Prepayments and other receivables

Prepayments and other receivables are recognised initially at fair value and subsequently measured atamortised cost using the effective interest method.

21



2.8 Other payables and accrued expenses

Other payables and accrued expenses are recognised when the Fund has a present obligation arising frompast events, the settlement of which is expected to result in an outflow of economic benefits from the Fund.Other payables and accrued expenses are recognised initially at fair value and and subsequently stated atamortised cost using the effective interest rate method.

2.9 Redeemable participating shares

The Fund issues two classes of redeemable participating shares, which are redeemable at the holder’soption. Such shares are classified as financial liabilities. Redeemable participating shares can be put back tothe Fund at any dealing date for cash equal to a proportionate share of the Fund’s net asset value attributableto the share class. Shares are redeemable weekly.

The redeemable participating shares are carried at the redemption amount that is payable at the statement offinancial position date if the holder exercises the right to redeem their shares in the Fund.

Redeemable participating shares are issued and redeemed at the holder’s option at prices based on theFund’s net asset value per share at the time of issue or redemption. The Fund’s net asset value per share iscalculated by dividing the net assets attributable to the holders of each class of redeemable participatingshares with the total number of outstanding redeemable participating shares for each respective class. Inaccordance with the provisions of the Fund’s regulations, investment positions are valued based on the lasttraded market price for the purpose of determining the net asset value per share for subscriptions andredemptions.

The total proceeds and amounts paid out from redeemable participating shares issued and redeemed, asreflected per the Statement of changes in net assets attributable to holders of redeemable participatingshares and the Statement of cash flows on pages 11 and 12 respectively, are indicative of the net amountsreceived or paid out by the Fund on a daily basis for subscriptions and redemptions

Note 8 reflects the individual capital share transactions for each share class whereas the individual cashvalues are shown on a net basis as noted above.

2.10 Structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the dominantfactor in deciding who controls the entity, such as when any voting rights relate to administrative tasks onlyand the relevant activities are directed by means of contractual arrangements. A structured entity often hassome or all of the following features or attributes: (a) restricted activities, (b) a narrow and well-definedobjective, such as to provide investment opportunities for investors by passing on risks and rewardsassociated with the assets of the structured entity to investors, (c) insufficient equity to permit the structuredentity to finance its activities without subordinated financial support and (d) financing in the form of multiplecontractually linked instruments to investors that create concentrations of credit or other risks (tranches).

The Fund considers all of its investments in other funds (‘Investee funds”) to be investments inunconsolidated structured entities. The Investee funds apply various investment strategies to accomplish theirrespective investment objectives. The Investee funds finance their operations by issuing redeemable interests(e.g. shares) which are puttable at the holder’s option and entitles the holder to a proportional stake in therespective fund’s net assets. The Fund holds redeemable interests in each of its Investee funds. The changein fair value of each Investee fund is included in the statement of comprehensive income in ‘Net changes infair value of financial assets and liabilities carried at fair value through profit or loss”.

22



2.11 Income

Dividend income is recognised when the right to receive payment is established. Where applicable,withholdings taxes are deducted at source on investment income and the gross amounts recognised in thestatement of comprehensive income.

Other income is recognised on an accwal basis or when the right to receive payment is established.

2.12 Transaction costs

Transaction costs are costs incurred to acquire financial assets and liabilities at fair value through profit orloss. They include fees and commissions paid to agents, advisers, brokers and dealers. Transactions costs,

when incurred, are immediately recognised in profit or loss as an expense.

2.13 Expenses

Expenses are recognised on an accrual basis and recognised in the statement of comprehensive income.

2.14 Distributions payable to holders of redeemable shares

It is not the present intention of the Directors that the Fund will make a distribution, however, the Directorsreserve the right at any time if they consider a distribution is appropriate. Income from the Fund will beaccumulated and reflected in the net asset value of the Fund.

2.15 Increase!decrease in net assets attributable to holders of redeemable shares from operations

Income not distributed is included in net assets attributable to holders of redeemable shares. Movements innet assets attributable to holders of redeemable shares are recognised in the statement of comprehensiveincome.

2.16 Taxation

The Director of Income Tax in Guernsey has confirmed that the Fund is exempt from Guernsey Income Taxunder the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989. Pursuant to the exemption grantedunder the above mentioned Ordinance, the Fund is subject to an annual fee, currently £1,200, payable for theGuernsey Authorities.

The Fund currently incurs withholdings taxes imposed by certain countries on investment income. Suchincome or gains are recorded gross of withholdings taxes in the statement of comprehensive income.Withholdings taxes are shown as a separate item in the statement of comprehensive income.

23

-

1 -

a-:./

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless otherwise stated

3. Financial risks

3.1 Financial risk factors

The Fund’s activities expose it to a variety of financial risks: market risk (including currency risk, fair valueinterest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The Fund is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securitiesheld in custody occassioned by the insolvency or negligence of the custodian. Although an appropriate legalframework is in place that eliminates the risk of loss of value of the securities held by the custodian, in the eventof its failure, the ability of the Fund to transfer securities might be temporarily impaired.

The Fund’s overall risk management programme seeks to maximise the returns derived for the level of risk towhich the Fund is exposed and seeks to minimise potential adverse effects on the Fund’s financialperformance.

The management of these risks is carried out by the Manager under policies approved by the Board ofDirectors. The Board provides written principles for overall risk management, as well as written policies coveringspecific areas, such as foreign exchange risk, interest rate risk, credit risk and the investment of excessliquidity.

The Fund uses different methods to measure and manage the various types of risk to which it is exposed; thesemethods are explained below.

3.1.1 Market risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due tochanges in market variables such as interest rates, foreign exchange rates and market prices.

(a) Price risk

The Fund is exposed to price risk from the underlying equity securities within the Funds’ investments in otherfunds. This arises from investments held by the Fund in other funds for which prices in the future are uncertain.Where non-monetary financial instwments - for example, equity securities- are denominated in currencies otherthan GBP, the price initially expressed in foreign currency and then converted into GBP will also fluctuatebecause of changes in foreign exchange rates. Paragragh (b) ‘Foreign exchange risk’ below sets out how thiscomponent of price risk is managed and measured.

The Fund’s policy is to manage price risk through diversification and selection of funds holding securities andother financial instruments within specified limits set by the Board of Directors. The Fund’s policy does not limitthe asset classes in which the Manager may invest and if the Manager considers that the circumstanceswarrant it, the Fund may be invested predominantly or entirely in bond funds or cash.

At year end, the Funds overall exposure to price risk were as follows:

2016 2015 2014Fair value of unit-linked investments 73335,955 60,872,738 52,171,270

The Fund’s underlying investments are largely concentrated within the equity sector and is thus classified as anequity portfolio for the price sensitivity analysis.

24

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless otheiwise stated

3. Financial risks (continued)

3.1 Financial risk factors (continued)

3.1.1 Market risk (continued)

(a) Price risk (continued)

The Directors deem the use of 20% variance to be a reasonable estimate of possible fluctuations in theunderlying fund prices. The table below summarises the sensitivity of the Fund’s net assets attributable toholders of redeemable shares to equity price movements as at year end.

2016 2015 2014

Effect on net assets attributable to redeemableshares to a 20% increase in equity prices 14,667,191 12,174,548 10,434,254Effect on net assets attributable to redeemableshares to a 20% decrease in equity prices (14,667,191) (12,174,548) (10,434,254)

The Fund’s investments in lnvestee funds are subject to the terms and conditions of the respective lnvesteefund’s offering documentation and are susceptible to market price risk arising from uncertainties about futurevalues of those Investee funds. The Manager makes investment decisions after extensive due diligence of theunderlying fund, its strategy and the overall quality of the underlying funds manager. All of the lnvestee funds inthe investment portfolio are managed by portfolio managers who are compensated by the respective Investeefunds for their services. Such compensation generally consists of an asset based fee and a performance basedincentive fee and is reflected in the valuation of the Fund’s investment in each of the Investee funds.

The exposure to investments in lnvestee funds at fair value is disclosed as part of Note 6. These investmentsare included in ‘Financial assets at fair value through profit or loss” in the statement of financial position. TheFund’s maximum exposure to loss from its interests in Investee funds is equal to the total fair value of itsinvestments in investee funds.

(b) Foreign exchange risk

The Fund operates internationally and holds both monetary and non-monetary assets denominated incurrencies other than GBP, the functional currency. Foreign currency risk as defined in IFRS 7 arises as thevalue of future transactions, recognised monetary assets and monetary liabilities denominated in othercurrencies fluctuate due to changes in foreign exchange rates. IFRS 7 considers the foreign exchangeexposure relating to non-monetary assets and liabilities to be a component of market price risk not foreigncurrency risk. However, the Directors monitor the exposure on all foreign currency denominated assets andliabilities. The table below provides analysis between monetary and non-monetary items to meet therequirements of IFRS 7.

The table below summarises the Fund’s assets and liabilities, monetary and non-monetary, which aredenominated in a currency other than GBP.

25




3.1.1 Market risk (continued)

(b) Foreign exchange risk (continued)

Concentration of foreign currency exposure

Currency 2016 2015 2014AssetsMonetary assets USD 2 70,071 57,985Non-monetary assets USD 8,107,815 6,137,233 5,244,207

LiabilitiesMonetary liabilities USD - - -

Non-monetary liabilities USD - - -

The table below summarises the sensitivity of the Fund’s monetary assets and liabilities to changes in foreignexchange movements at 29 February 2016. The analysis is based on the assumptions that the relevant foreignexchange rate increased/decreased by the percentage disclosed in the table below, with all other variables heldconstant. This represents the Directors best estimate of a reasonable possible shift in the foreign exchangerates.

2016CurrencyUSD- Monetary +/-20% - ÷1- 14,014 +/- 1 1,597

(c) Interest rate risk

Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates on thefair value of financial assets and liabilities. The Fund holds cash and cash equivalents that does not expose theFund to fair value interest rate risk as the bank accounts are non-interest bearing.

Unit-linked investments that are predominantly invested in interest bearing instruments will expose the fund tofair value interest rate risk. At year end the Fund did not hold such investments.

3.1.2 Liquidity risk

Liquidity risk is the risk that the Fund may not be able to generate sufficient cash resources to settle itsobligations in full as they fall due or can only do so on terms that are materially disadvantageous.

The Fund’s investments are considered readily realisable, as the majority are investments in collectiveinvestments schemes, which under normal market conditions are readily convertible to cash. In addition, theFund’s policy is to maintain sufficient cash and cash equivalents to meet normal operating requirements andexpected redemption requests.

Reasonablepossible

shift in rate Impact2016

Impact2015

Impact2014

26




3.1.2 Liquidity risk (continued)

In order to manage the Fund’s overall liquidity, the Directors may limit the total number of shares redeemed orconverted on any redemption dealing day to 10% of the total number of redeemable shares in issue in theFund. The Directors did not limit any redemptions during 2016 and 2015.

The table below analyses the Funds financial liabilities into relevant maturity groupings based on the remainingperiod at the statement of financial position date to the contractual maturity date. The amounts in the table arethe contractual undiscounted cash flows.

7 days to 3months

Redeemable shares are redeemed on demand at the holder’s option. However, the Board of Directors does notenvisage that the contractual maturity disclosed in the table above will be representative of the actual cashoutflows, as holders of these instruments typically retain them for the medium to long term.

Carryingamount

Less than 7days > 3 months

At 29 February 2016Due to brokers 190,000 190,000 - -

Management fee payable 42,232 - 42,232 -

Administration fee payable 5,987 - 5,987 -

Custodian fee payable 4,191 - 4,191 -

Other payables 5,813 - 5,813 -

Net assets attributable to holdersof participating redeemable shares 74,107,799 37,053,900 37,053,899 -

Contractual cash out flows 74,356,022 37,243,900 37,112,122 -















27

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GEl’) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless othe,wise stated



3.1.2 Liquidity risk (continued)

The Fund manages its liquidity risk by investing predominantly in collective investments that it expects to beable to liquidate within 14 days or less. The following table illustrates the expected liquidity of assets held;

3.1.3 Credit risk

Less than 7days

1-12months

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party byfailing to discharge an obligation. The Fund is exposed to counterparty credit risk on cash and cash equivalents,amounts due from brokers and other receivable balances.

2016 2015 2014P-I 1,000,563 269,576 365,985Not rated 16,254 104,578 110,992Total 1,016,817 374,154 476,977

All transactions in collective investments are settled/paid for upon delivery or prior to delivery using thecustodian to trade on the Fund’s behalf. The risk of default is considered minimal, the trade will fail if either partyfails to meet its obligation.

The maximum exposure to credit risk at year end is the carrying amount of the financial assets as set out below.

2016 2015 2014Cash and cash equivalents 1,000,563 269,576 365,985Other receivables 16,254 104,578 110,992Total 1,016,817 374,154 476,977

None of these assets are impaired nor past due but not impaired.

Carryingamount

7 days to ImonthAt29February2Ol6 -

Financial assets at fair valuethrough profit or loss 73,335,955 - 73,335,955 -

Cash and cash equivalents 1,000,563 1,000,563 - -

Other receivables 16,254 8,544 829 6,880Total assets 74,352,772 1,009,107 73,336,784 6,880

At 28 February 2015


Cash and cash equivalents 269,576 269,576 - -

Other receivables 104,578 2,702 70,071 31,805Total assets 61,246,892 272,278 60,942,809 31,805

At 28 February 2014


Cash and cash equivalents 365,985 - - -

Other receivables 110,992 3,426 76,238 31,328Total assets 52,648,247 3,426 52,247,508 31,328

28




3.1.3 Credit risk (continued)

The clearing and depository operations for the Fund’s security transactions are mainly concentrated with oneprime broker, namely BNP Paribas, a members of a major securities exchange, and at 29 February 2016 had acredit rating of P-I (2015: P-I ). Moodys is the reputable credit rating institution. At 29 February 2016,substantially all cash and cash equivalents, balances due from custodians and investments are placed incustody with BNP Paribas.

3.2 Fair value estimation

The fair value of financial assets and liabilities traded in active markets are based on quoted market prices atthe close of trading on the year end date. The fund classifies fair value measurements within a hierarchy whichgives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I)and the lowest prority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are:

• Level I - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

• Level 2 - inputs other than quoted prices included in level 1 that are observable for the asset orliability, either directly or indirectly; and

• Level 3 - inputs are unobservable for the asset or liability.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety isdetermined on the basis of the lowest level input that is significant to the fair value measurment in its entirety.For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If afair value measurement uses observable inputs that require significant adjustment based on unobservableinputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fairvalue measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the Fund. The Fundconsiders observable data to be that market data that is readily available, regularly distributed or updated,reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in therelevant market.

Investments whose values are based on quoted market prices in active markets, and are therefore classifiedwithin Level 1, include active listed equities. The Fund does not adjust the quoted price for these investments.

Financial instruments that trade in markets that are not considered to be active but are valued based on quotedmarket prices, dealer quotations or alternative pricing sources supported by observable inputs are classifiedwithin Level 2. These include listed equities. As Level 2 investments include positions that are not traded inactive markets and/or are subject to transfer restrictions, valuations maybe adjusted to reflect illiquidity and/ornon-transferability, which are generally based on available market information.

Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. Level 3instruments include private equity. As observable prices are not available for these securities, the Fund will usevaluation techniques to derive the fair value.

29



3.2 Fair value estimation (continued)

The following table analyses within the fair value hierarchy the Fund’s assets and liabilities measured at fairvalue:

As at 29 February 2016 Level I Level 2 Level 3 Total

Unit-linked investments - 73,335,955 - 73,335,955

As at 28 February 2015Unit-linked investments - 60,872,738 - 60,872,738

As at 28 February 2014Unit-linked investments - 52,171,270 - 52,171,270

All fair value measurements above are recurring. Fair values are classified as level I when the related securityis actively traded and a quoted price is available. If an instrument classified as level 1 subsequently ceases tobe actively traded, it is transferred out of level 1. In such cases, instruments are reclassified into level 2, unlessthe measurement of it’s fair value requires the use of significant unobservable inputs, in which case it isclassified as level 3.

3.3 Capital risk management

The capital of the Fund is represented by the net assets attributable to holders of redeemable shares. Theamount of net assets attributable to holders of redeemable shares can change significantly on a weekly basis,as the Fund is subject to weekly subscriptions and redemptions at the discretion of members, as well aschanges resulting from the Fund’s performance. The Fund’s objective when managing capital is to safeguardthe Fund’s ability to continue as a going concern in order to provide returns to members, provide benefits forother stakeholders and maintain a strong capital base to support the development of the investment activities ofthe Fund.

In order to maintain the capital structure, the Fund’s policy is to redeem and issue new shares in accordancewith the supplemental particulars of the Fund, which include the ability to restrict redemptions and requirecertain minimum holdings and subscriptions.

4. Critical accounting estimates and judgements

4.1 Critical accounting estimates and assumptions

The Directors make estimates and assumptions concerning the future. The resulting accounting estimates will,by definition, seldom equal the related results. These estimates and assumptions that have a significant risk ofcausing a material adjustment to the carrying amounts of assets and liabilities are outlined below.

(a) Fair value of securities not quoted in an active market

The fair value of such securities not quoted in an active market may be determined by the Fund using reputablepricing resources (such as pricing agencies). Broker quotes as obtained from the pricing sources may beindicative and not executable or binding. The Fund would exercise judgement and estimates on the quantityand quality of pricing sources used. Where no market data is available, the Fund may value positions using itsown models, which are usually based on valuation methods and techniques generally recognised as standardwithin the industry.

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4. Critical accounting estimates and judgements (continued)

4.1 Critical accounting estimates and assumptions (continued)

(a) Fair value of securities not quoted in an active market (continued)

Models use obervable data, to the extent practicable. The determination of what constitutes ‘observable’requires significant judgement by the Fund. The Fund considers observable data to be market data that isreadily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided byindependent sources that are actively involved in the relevant market.

4.2 Critical judgements

Functional currency

The Board of Directors considers the Pound Sterling the currency that most faithfully represents the economiceffect of the underlying transactions, events and conditions. The Pound Sterling is the currency in which theFund measures its performance and reports its results, as well as the currency in which it receives subscriptionsfrom its investors.

5. Financial assets at fair value through profit or loss

2016 2015 2014Financial assets designated at fair value throughprofit or loss at inceptionUnit-linked investments 73,335,955 60,872,738 52,171,270Total financial assets at fair value throughprofit or loss 73,335,955 60,872,738 52,171,270

Other net changes in fair value on financial assetsat fair value through profit or loss:

- Realised 5,993,079 1,21 1,557 1,533,744- Change in unrealised (4,451,118) 6,603,033 87,565Total gains 1,541,961 7,814,590 1,621,309

Financial instruments by category

, Assets atfairLoans and value through

29 February 2016 receivables profit and loss TotalAssets as per the statement of financial positionFinancial assets at fair value through profit or loss - 73,335,955 73,335,955Other receivables and prepayments 19,504 - 19,504Cash and cash equivalents 1,000,563 - 1,000,563Total 1,020,067 73,335,955 74,356,022

28February2Ol5Assets as per the statement of financial positionFinancial assets at fair value through profit or loss - 60,872,738 60,872,738Other receivables and prepayments 107,053 - 107,053Cash and cash equivalents 269,576 - 269,576Total 376,629 60,872,738 61,249,367

6.

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PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GB!’) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless otherwise stated

6. Financial instruments by category (continued)

Assets at fairvalue throughprofit and loss28 February 2014

Assets as per the statement of financial positionFinancial assets at fair value through profit or loss - 52,171,270 52,171,270Other receivables and prepayments 112,360 - 112,360Cash and cash equivalents 365,985 - 365,985Total 478,345 52,171,270 52,649,615

Liabilities atfair value

Other financial through profit29 February 2016 liabilities or loss Total

Liabilities as per the statement of financial positionDue to broker 190,000 - 190,000Management fee payable 42,232 - 42,232Administration fee payable 5,987 - 5,987Custodian fee payable 4,191 - 4,191Other payables 5,813 - 5,813Net assets attributable to holders of participatingredeemable shares

- 74,107,799 74,107,799Total 248,223 74,107,799 74,356,022

28 February 2015Liabilities as per the statement of financial positionDue to broker 62,508 - 62,508Management fee payable 33,537 - 33,537Administration fee payable 4,676 - 4,676Custodian fee payable 3,273 - 3,273Other payables 5,228 - 5,228Net assets attributable to holders of participatingredeemableshares - 61,140,145 61,140,145Total 109,222 61,140,145 61,249,367

28 February 2014Liabilities as per the statement of financial positionDue to broker 53,766 - 53,766Management fee payable 28,393 - 28,393Administration fee payable 3,964 - 3,964Custodian fee payable 2,775 - 2,775Other payables 4,913 - 4,913Net assets attributable to holders of participatingredeemable shares - 52,555,804 52,555,804Total 93,811 52,555,804 52,649,615

TotalLoans andreceivables

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7. Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances withoriginal maturity of less than 90 days:

2016 2015 2014Cash at bank 1,000,563 269,576 365,985Short-term deposits - - -

Total 1,000,563 269,576 365,985

8. Redeemable participating shares

During the year ended, the number of shares issued, redeemed and outstanding was as follows:

Class A 2016 2015 2014Shares outstanding at the beginning of the year 25,602,073 25,351,799 23,137,561

Redeemable participating shares issued 7,187,836 3,766,078 3,240,956Redeemable participating shares redeemed (1,793,087) (3,515,804) (1,026,718)Shares outstanding at the end of the year 30,996,822 25,602,073 25,351,799

Class BShares outstanding at the beginning of the year 7,406,621 7,214,777 5,096,711

Redeemable participating shares issued 1,981,438 668,612 2,548,345Redeemable participating shares redeemed (1,066,797) (476,768) (430,279)Shares outstanding at the end of the year 8,321,262 7,406,621 7,214,777

Holders of redeemable participating shares, have the right to receive notice of, attend, and vote on any matterrequiring the approval of members. The redeemable participating shares carry the right to one vote each,provided that no voting rights shall be attached to fractional shares.

The redeemable participating shares of each Fund participate solely in the assets of the respective Fund and inany dividends, and, upon liquidation, in any distributions of the Fund relating to the respective Fund.

The redeemable participating shares may be repurchased at the option of the holders thereof according to theArticles and in accordance with any terms and conditions pursuant to which the redeemable participating sharesare issued and as stated in the Prospectus.

The Directors have the ability to limit cash redemption if it exceeds 10% of the total number of shares in issueon any redemption dealing day. The limitation will be applied pro rata to all members who have requestedredemptions to be effected on such redemption dealing day so that the proportion of each holding redeemed isthe same for all members.

9. Distributions

It is not the present intention of the Directors that the Fund will pay dividends. Income from the Fund will beaccumulated and reflected in the net asset value of the Fund.

33

PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless othe,wise stated

10. Related-party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significantinfluence over the other party in making financial or operational decisions.

(a) Management fee and administration fee

The Fund is managed by PSG Fund Management (Cl) Limited (the ‘Manager’), an investment managementcompany incorporated in Guernsey. Under the terms of the management agreement, the Fund appointed PSGFund Management (Cl) Limited as the Manager to provide management services and administration servicesto the Fund. The Manager receives in return a fee based on the net asset value of the Fund based on tradedvalues, payable monthly in arrears.

ManagementAdmin Fees

FeesPSG Konsult Houghton Global High Growth minimum admin(GBP) IC Limited - Class A 0.5% pa 0.1% pa fee of £18 000PSG Konsult Houghton Global High Growth per annum for the(GBP) IC Limited - Class B 1.5% pa 0.1% pa fund

2016 2015 2074Management fee expense 491,852 399,599 344,683Management fee expense accrual 42,232 33,537 28,393Administration fee expense 67,902 56,263 49,230Administration fee expense accrual 5,987 4,676 3,964

(b) Board of Directors’remuneration

The total remuneration paid to directors consisted of only fixed directors’ fees.

2016 2015 2014Directors’ fee expense 7,840 2,763 3,229Directors’ fee expense accrual 1,464 734 888

11. Subsequent events

The Board of Directors resolved to change the name of the Fund from PSG Konsult Global High Growth (GBP)IC Limited to PSG Wealth Global Flexible FoE (GBP) IC Limited and appoint PSG Multi-Management (Pty)limited to replace PSG Wealth Financial Planning (Pty) Limited as Investment Advisor to the Fund with effectfrom 15th July 2016.

12. Transition to IFRS

The effect of the Fund’s transition to IFRS is summarized in this note as follows:

12.1 Transition elections

The Fund did not apply any transition exceptions or exemptions to full retrospective application of IFRS.

72.2 Statement of cash flows

Under UK GAAP, the fund was exempt from providing a statement of cash flows. lAS 1 requires that a completeset of financial statements include a statement of cash flows for the current and comparative periods, withoutexception.

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PSG KONSULT HOUGHTON GLOBAL HIGH GROWTH (GBP) IC LIMITEDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 29 February 2016 (continued)All amounts shown in GBP unless othe,wise stated

12. Transition to IFRS (continued)

12.3 Classification of redeemable participating shares issued by the Fund

Under UK GAAP, the Fund accounted for its redeemable participating shares as equity. Under IFRS, lAS 32requires that the shares of an entity which include a contractual obligation for the issuer to repurchase orredeem them for cash or another financial asset be classified as a financial liability. The Fund’s shares do notmeet the criteria in lAS 32 for classification as equity and therefore, have been reclassified as financial liabilitieson transition to IFRS.

There has been no impact on profit for the year ended 28 February 2015 or equity as at 1 March 2014 or 28February 2015 as a result of the transition to IFRS.

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psg high growth gbp · 2016. 9. 2. · class fund 2016 2015 % increase psg konsult houghton global...

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