TIDMDTL
RNS Number : 4989K
Dexion Trading Limited
21 April 2010
Dexion Trading Limited (the "Company")
ANNUAL FINANCIAL REPORT
The Company has today, in accordance with DTR 6.3.5, released its Annual
Financial Report for the year ended 31 December 2009. The Report is available
via www.dexiontrading.comand will shortly be available for inspection at the UK
Listing Authority's Document Viewing Facility, which is located at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
The report gives notice to its Shareholders of this year's annual general
meeting, which will be held on 16 June 2010.
CHAIRMAN'S STATEMENT
I am pleased to present Shareholders with the Annual Report and Accounts of
Dexion Trading Limited for the year ended 31 December 2009.
By the end of 2009, the condition of the global financial system had improved
dramatically from the start of the year. Financial markets had shown surprising
resilience to headline risks and ongoing uncertainty due, in no small part, to
the massive fiscal and monetary support from the world's major economies. Whilst
conditions were significantly different to those experienced in 2008 a legacy of
wide discounts persisted across the listed hedge fund sector and the Company
continues to take further actions to help reduce the discount and create
secondary market liquidity in the Company's Shares. In 2009 these actions led to
the discount narrowing significantly from 20.90% as at 31 December 2008 to 8.94%
as at 31 December 2009, amongst the narrowest discount across the listed fund of
hedge funds sector. However, despite these actions a further continuation vote
was triggered and a circular convening the meeting to consider the relevant
resolution was posted to Shareholders on 25 February 2010.
During 2009 the net asset value of the Company's Shares rose by 11.02%. The
annualised NAV return on the Shares from inception to 31 December 2009 has been
+5.75% with annualised volatility of 5.81%. The performance of the Company in
2009 reflects the Investment Adviser's continued focus on global macro trading
strategies which seek to capitalise on price movements in the major liquid asset
classes of the world (interest rates, currencies, commodities, equity indices).
The market price of the Company's Shares rose by 27.8% over 2009 due to the
increase in net assets, together with significant improvements in stock market
liquidity and demand from investors, which has helped reduce the discount. The
Board also continued its programme of share repurchases with 11,786,409 shares
repurchased in 2009.
Throughout the year the Board has continued to maintain its commitment to act in
the best interests of the investors, and
the Company has responded to the growing demand from investors for more
information and transparency in the Company's reporting. Accordingly, a new
monthly portfolio report was launched at the start of 2009, significantly
increasing the amount of written commentary and charted portfolio analysis. This
change has also filtered into the charts in this year's annual report which also
reflect the more detailed level of analysis on the portfolio. On an ad hoc basis
other means of communications continue to be created to assist investors'
understanding of the various corporate actions undertaken and accompanying
Circulars issued by the Company. During the year, two investor meetings
incorporating audio web conference calls were conducted. In both conference
calls, the shift to a live question and answer format at the end of the
presentation has provided investors with the chance to ask the Investment
Adviser direct questions.
As previously reported in the Report and Accounts for 2008, the Board's
corporate activities started in early 2009 when the Company's rolling 12 month
discount floor provision was triggered requiring, in accordance with the
Company's Articles of Association, a continuation vote to be proposed by way of
ordinary class resolution. A meeting of Shareholders for the purpose of
considering a continuation vote was held on 27 May 2009, at which the 2009
Continuation Resolution was passed with 72.27% of the issued share capital being
voted and with 91.68% of the votes cast being cast in favour.
Other corporate business undertaken in the year included an Extraordinary
General Meeting ("EGM") in 2009, where the
Company was granted an authority to make market purchases of Shares representing
up to a maximum of 14.99% of its issued Shares at the date of the EGM, having
exhausted the authority to make market purchases conferred at its 2008 AGM.
As noted above the Board issued a Shareholder Circular on 25 February 2010
convening a class meeting of Shareholders to consider the 2010 Continuation
Resolution and in March 2010, the Board announced that such resolution had been
passed with 72.11% of the issued share capital being voted of which 99.94% of
the votes cast were
cast in favour.
Despite anticipating 2010 being another challenging year for the financial
markets, the Board remains confident in the Investment Adviser's combination of
a rigorous investment process, focus on risk control and an experienced
investment team with the expertise to maximise the performance opportunities of
Permal Macro Holding's portfolio (of which the Company is a feeder fund).
Finally, I would like to take this opportunity to thank my fellow directors for
their time and endeavours over past year as the Board has sought to be proactive
in what it considers to be in the best interests of Shareholders as a whole.
I look forward to welcoming Shareholders to the 2010 Annual General Meeting of
the Company at 2 p.m. on 16 June 2010, which will be held at the Company's
registered office at 1 Le Truchot, St Peter Port, Guernsey.
Christopher Spencer
Chairman
20 April 2010
STATEMENTS OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
The Directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law they have elected to prepare the financial
statements in accordance with International Financial Reporting Standards (IFRS)
and applicable law.
The financial statements are required by law to give a true and fair view of the
state of affairs of the Company and of the profit or loss of the Company for
that period.
In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and 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 concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
The Companies (Guernsey) Law, 2008. They have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
Under applicable laws and regulations the Directors are also responsible for
preparing this Director's report and Corporate Governance Statement that comply
with Company laws and their regulations.
Directors' Responsibility Statement
The Directors confirm that they have complied with the above requirements in
preparing the financial statements and that to the best of our knowledge and
belief:
(a) This annual report includes a fair review of the development and
performance of the business and the position of the Company together with a
description of the principal risks and uncertainties that the Company faces; and
(b) The financial statements, prepared in accordance with International
Financial Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit of the Company.
By order of the Board
Christopher Spencer
Carol Goodwin
Director
Director
20 April 2010
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER (Audited)
+-----------------------------------------+-------------+------------+
| | 2009 | 2008 |
| | GBP000 | GBP000 |
+-----------------------------------------+-------------+------------+
| Assets | | |
+-----------------------------------------+-------------+------------+
| Financial assets at fair value through | 132,966 | 137,327 |
| profit or loss | | |
+-----------------------------------------+-------------+------------+
| Other receivables | 5 | 35 |
+-----------------------------------------+-------------+------------+
| Total assets | 132,971 | 137,362 |
+-----------------------------------------+-------------+------------+
| Liabilities | | |
+-----------------------------------------+-------------+------------+
| Accounts payable and accrued expenses | 47 | 211 |
| | | |
+-----------------------------------------+-------------+------------+
| Bank overdraft | 798 | 4,290 |
+-----------------------------------------+-------------+------------+
| Total liabilities | 845 | 4,501 |
+-----------------------------------------+-------------+------------+
| Net assets | 132,126 | 132,861 |
+-----------------------------------------+-------------+------------+
| Represented by: | | |
+-----------------------------------------+-------------+------------+
| Shareholders' equity and reserves | | |
+-----------------------------------------+-------------+------------+
| Share premium | 86,683 | 86,683 |
| | | |
+-----------------------------------------+-------------+------------+
| Other reserves | 45,443 | 46,178 |
| | | |
+-----------------------------------------+-------------+------------+
| Total shareholders' equity | 132,126 | 132,861 |
+-----------------------------------------+-------------+------------+
| Net assets per Share | 130.54p | 117.58p |
| | | |
+-----------------------------------------+-------------+------------+
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER (Audited)
+--------------------------------------------------+-------------+---------------+
| | 2009 | 2008 |
| | GBP000 | GBP000 |
+--------------------------------------------------+-------------+---------------+
| Income | | |
+--------------------------------------------------+-------------+---------------+
| Interest income | 2 | 158 |
| | | |
+--------------------------------------------------+-------------+---------------+
| Net foreign exchange gain | - | 1 |
+--------------------------------------------------+-------------+---------------+
| Net changes in fair value on financial assets at | 11,889 | (8,442) |
| fair value through profit or loss | | |
+--------------------------------------------------+-------------+---------------+
| Total net income/(loss) | 11,891 | (8,283) |
+--------------------------------------------------+-------------+---------------+
| Expenses | | |
+--------------------------------------------------+-------------+---------------+
| Custodian charges | (35) | (38) |
+--------------------------------------------------+-------------+---------------+
| Fund administration fee | (38) | (43) |
| | | |
+--------------------------------------------------+-------------+---------------+
| Directors' remuneration and expenses | (71) | (68) |
+--------------------------------------------------+-------------+---------------+
| Audit fee | (35) | (24) |
+--------------------------------------------------+-------------+---------------+
| Other professional fees | (187) | (120) |
+--------------------------------------------------+-------------+---------------+
| Other operating expenses | (225) | (193) |
+--------------------------------------------------+-------------+---------------+
| Total operating expenses before finance costs | (591) | (486) |
+--------------------------------------------------+-------------+---------------+
| Finance costs | | |
+--------------------------------------------------+-------------+---------------+
| Interest expense | (52) | (26) |
+--------------------------------------------------+-------------+---------------+
| Total comprehensive income/(loss) | 11,248 | (8,795) |
+--------------------------------------------------+-------------+---------------+
| Basic and Diluted earnings per Share | 10.87p | (12.10p) |
| | | |
+--------------------------------------------------+-------------+---------------+
| All items derive from continuing activities. |
+--------------------------------------------------+-------------+---------------+
IAS 1 (revised), 'Presentation of financial statements', allows a choice of
presenting all items of income and expense recognised in a period either (a) in
a single statement of comprehensive income, or (b) in two statements comprising
(i) a separate income statement, which displays components of profit or loss,
and (ii) a statement of comprehensive income, which begins with profit or loss
and displays components of other comprehensive income. Dexion Trading Limited
has elected to use the single statement approach.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Audited)
FOR THE YEAR ENDED 31 DECEMBER 2009
+---------------------------------------------+----------+----------+----------+
| | Share | Other | Total |
| | Premium | Reserves | GBP000 |
| | GBP000 | GBP000 | |
+---------------------------------------------+----------+----------+----------+
| Balance at 1 January 2009 | 86,683 | 46,178 | 132,861 |
+---------------------------------------------+----------+----------+----------+
| Total comprehensive income for the year: | | | |
+---------------------------------------------+----------+----------+----------+
| Total return for the year | - | 11,248 | 11,248 |
+---------------------------------------------+----------+----------+----------+
| Transactions with shareholders, recorded | | | |
| directly in equity | | | |
+---------------------------------------------+----------+----------+----------+
| Purchase of own shares into treasury | - | (11,983) | (11,983) |
+---------------------------------------------+----------+----------+----------+
| Balance as at 31 December 2009 | 86,683 | 45,443 | 132,126 |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| FOR THE YEAR ENDED 31 DECEMBER 2008 | | | |
+---------------------------------------------+----------+----------+----------+
| | Share | | Total |
| | Premium | Other | GBP000 |
| | GBP000 | Reserves | |
| | | GBP000 | |
+---------------------------------------------+----------+----------+----------+
| Balance at 1 January 2008 | 10,048 | 58,976 | 69,024 |
+---------------------------------------------+----------+----------+----------+
| Total comprehensive income for the year: | | | |
+---------------------------------------------+----------+----------+----------+
| Total return for the year | - | (8,795) | (8,795) |
+---------------------------------------------+----------+----------+----------+
| Transactions with shareholders, recorded | | | |
| directly in equity | | | |
+---------------------------------------------+----------+----------+----------+
| Issue of new shares | 78,000 | - | 78,000 |
+---------------------------------------------+----------+----------+----------+
| Issue costs | (1,365) | - | (1,365) |
+---------------------------------------------+----------+----------+----------+
| Sales of own shares from treasury | - | 743 | 743 |
+---------------------------------------------+----------+----------+----------+
| Purchases of own shares from treasury | - | (4,746) | (4,746) |
+---------------------------------------------+----------+----------+----------+
| Balance as at 31 December 2008 | 86,683 | 46,178 | 132,861 |
+---------------------------------------------+----------+----------+----------+
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER (Audited)
+---------------------------------------------+---------------+---------------+
| | 2009 | 2008 |
| | GBP000 | GBP000 |
+---------------------------------------------+---------------+---------------+
| Cash flows from operating activities | | |
+---------------------------------------------+---------------+---------------+
| Total return for the year | 11,248 | (8,795) |
+---------------------------------------------+---------------+---------------+
| Adjustments: | | |
+---------------------------------------------+---------------+---------------+
| Net gains on financial assets held at fair | (11,889) | 8,452 |
| value through profit or loss | | |
+---------------------------------------------+---------------+---------------+
| Net foreign exchange gain | - | (1) |
+---------------------------------------------+---------------+---------------+
| Decrease in creditors | (164) | (724) |
+---------------------------------------------+---------------+---------------+
| Decrease/(increase) in debtors | 30 | (22) |
+---------------------------------------------+---------------+---------------+
| Net cash used in operating activities | (775) | (1,090) |
+---------------------------------------------+---------------+---------------+
| Cash flow from investing activities | | |
+---------------------------------------------+---------------+---------------+
| Investments acquired | - | (77,000) |
+---------------------------------------------+---------------+---------------+
| Proceeds from sale of investments | 16,250 | 6,551 |
+---------------------------------------------+---------------+---------------+
| Net cash from/(used) in investing | 16,250 | (70,449) |
| activities | | |
+---------------------------------------------+---------------+---------------+
| Cash flow from financing activities | | |
+---------------------------------------------+---------------+---------------+
| Issue of shares | - | 78,000 |
+---------------------------------------------+---------------+---------------+
| Costs related to issue of shares | - | (1,365) |
+---------------------------------------------+---------------+---------------+
| Sale of own shares from treasury | - | 742 |
+---------------------------------------------+---------------+---------------+
| Purchase of own shares into treasury | (11,983) | (4,746) |
+---------------------------------------------+---------------+---------------+
| Net cash (used in)/from financing | (11,983) | 72,631 |
| activities | | |
+---------------------------------------------+---------------+---------------+
| Increase in cash and cash equivalents | 3,492 | 1,092 |
+---------------------------------------------+---------------+---------------+
| Exchange gain on cash and cash equivalents | - | 1 |
+---------------------------------------------+---------------+---------------+
| Cash at beginning of the year | (4,290) | (5,383) |
+---------------------------------------------+---------------+---------------+
| Cash and cash equivalents at the end of the | (798) | (4,290) |
| year | | |
+---------------------------------------------+---------------+---------------+
| Analysis of cash at end of the year | | |
+---------------------------------------------+---------------+---------------+
| Cash at bank | - | - |
+---------------------------------------------+---------------+---------------+
| Bank overdraft | (798) | (4,290) |
+---------------------------------------------+---------------+---------------+
| | (798) | (4,290) |
+---------------------------------------------+---------------+---------------+
| Included in the net cash flows from | | |
| operating activities are: | | |
+---------------------------------------------+---------------+---------------+
| Interest income on financial assets that | 2 | 158 |
| are not at fair value through profit or | | |
| loss | | |
+---------------------------------------------+---------------+---------------+
| Interest expense for financial liabilities | (52) | (26) |
| that are not at fair value through profit | | |
| or loss | | |
+---------------------------------------------+---------------+---------------+
FINANCIAL RISK MANAGEMENT
The Investment Manager provides services to the Company, co-ordinates access to
domestic and international financial markets, monitors and manages risks
relating to the operations of the Company through internal risk reports which
analyse exposures by degree and magnitude of risks.
The techniques and instruments utilised for the purposes of efficient portfolio
management are those which are reasonably believed by the Investment Manager to
be economically appropriate to the efficient management of the Company. The
Company's financial instruments include investments designated as fair value
through profit or loss, cash and currency hedging instruments. The main risks
arising from the Company's financial instruments are market price risk, interest
rate risk, currency risk, liquidity risk and credit risk.
a) Capital risk management
The Company manages its capital to ensure that it is able to continue as a going
concern while maximising the return to equity holders through the optimisation
of equity balance. The capital structure of the Company consists of
shareholders' equity which comprises of issued share capital, and other
reserves. The Company adheres to the Listing Rules of the UK Listing Authority.
b) Market risk
Market risk embodies the potential for both losses and gains and includes
currency risk, interest rate risk and price
risk.
The Company's strategy on the management of investment risk is driven by the
Company investment objective. The Company's investment objective is detailed in
the Director's report (see Annual Report & Accounts). The Company's main
investment guidelines and restrictions are:
- The Company invests all or substantially all of its assets in Class A GBP
shares issued by Permal Macro. The Investment policy of Permal Macro is to
diversify its investment risk.
- No more that 20% of the value of Permal's gross assets may be lent to or
invested in the securities of any one issuer (including the issuer's
subsidiaries and affiliate) or may be exposed to the creditworthiness or
solvency of any one counterparty (including that counterparty's subsidiaries or
affiliates).
- Gross assets in excess of 20% and up to 40% of the value of Permal Macro
may be invested in any one underlying fund or may be allocated to any one
Portfolio Manager to manage on a discretionary basis, provided that each such
Underlying Fund or Portfolio Manager operates on the principle of risk
spreading. Permal Asset Management will monitor the investment portfolio of the
Underlying Funds and Portfolio Managers with which Permal Macro has invested
more than 20% of the value of its gross assets to ensure that, in the aggregate,
the restrictions quoted above are not breached.
- Permal Macro may not invest in aggregate more than 20% of the value of its
gross assets in other funds whose principal investment objectives include
investing in other funds.
- Permal Macro may not take or seek to take legal or management control of
the issuer of any of its underlying investments.
- Permal Macro may not invest more than 10% in aggregate, of the value of its
gross assets directly in physical commodities and real property.
- Permal Macro has the power to borrow and may do so not only to meet
redemptions (which would otherwise result in Permal Macro prematurely
liquidating investments), but also as part of its investment philosophy. Such
borrowing, in the aggregate, will not exceed 20% of the net assets of Permal
Macro.
i) Market price risk management
Market price risk arises mainly from uncertainty about future prices of
financial instruments held. It represents the potential for both loss and gain
that might be suffered through holding market positions in the face of price
movements. The Company's investment portfolio is exposed to market price
fluctuations which are monitored by the Investment Adviser in pursuance of its
investment objective and policies.
Details of the Company's exposure in underlying investments held via Permal
Macro as at 31 December 2009 are disclosed in summary form in the Manager's
Report (see full Annual Report & Accounts).
Price sensitivity analysis
The Company's only investment is in Permal Macro. Therefore, market price risk
is managed indirectly through diversification of the investment portfolio in
Permal Macro.
The Investment Adviser provides a Portfolio & Risk analysis for Permal Macro
that is included within the Board report process. The analysis provides data on
a Value at Risk measurement of 99% on a best fit or "proxy" data that aligns
with the investment strategy of the portfolio. Performance data is approximated
reasonably by using Extreme Value Theory.
The following details the Company's sensitivity to a 10% increase and decrease
in the market prices, with 10% being the sensitivity rate used when reporting
price risk internally to key management personnel and representing management
assessment of the possible change in market prices. At 31 December 2009 if the
market prices had been 10% higher with all other variables held constant, the
increase in the net assets attributable to equity shareholders for the year
would have been GBP13,212,578 (2008: GBP13,286,105); an equal change in the
opposite direction would have decreased the net assets attributable to equity
shareholders.
Actual trading results may differ from the above sensitivity analysis and those
differences may be material.
ii) Interest rate risk management
Substantially all of the Company's assets are non-interest bearing equity
investments and its exposure to interest rate changes is minimal. Interest
receivable on bank deposits and interest payable on bank overdraft positions
will be affected by fluctuations in interest rates. The rate of interest in
respect of the overdraft facility is fixed at Royal Bank of Canada (Channel
Islands) Limited base rate plus 1%. Any decrease in the USD LIBOR rate will
reduce interest costs. Credit monies are sufficient to provide liquidity for
ongoing expenses of the Company.
The Company's investment in Permal Macro is not directly exposed to interest
rate risk. However, the Company may be indirectly exposed through the underlying
portfolio held by Permal Macro.
As at 31 December 2009, most of the Company's assets and liabilities were non-
interest bearing. The Company's other liabilities pay interest at variable rate
(see table below).
+---------------------------------+-------------+--------------+------------+
| | Less than 3 | Non-interest | Total |
| | months | bearing | GBP000 |
| | GBP000 | GBP000 | |
+---------------------------------+-------------+--------------+------------+
| Assets | - | 132,971 | 132,971 |
| Other assets and receivables | | | |
+---------------------------------+-------------+--------------+------------+
| Total assets | - | 132,971 | 132,971 |
+---------------------------------+-------------+--------------+------------+
| Liabilities | (798) | | |
| | | | |
+---------------------------------+-------------+--------------+------------+
| Bank overdraft | (798) | - | (798) |
+---------------------------------+-------------+--------------+------------+
| Other liabilities and accounts | - | (47) | (47) |
| payable | | | |
+---------------------------------+-------------+--------------+------------+
| Total liabilities | (798) | (47) | (845) |
+---------------------------------+-------------+--------------+------------+
| Net assets | (798) | 132,924 | 132,126 |
+---------------------------------+-------------+--------------+------------+
Liabilities with variable rate are shown as less than three months.
As at 31 December 2008, most of the Company's assets and liabilities were non-
interest bearing. The Company's other liabilities pay interest at variable rate
(see table below).
+---------------------------------+-------------+--------------+------------+
| | Less than 3 | Non-interest | Total |
| | months | bearing | GBP000 |
| | GBP000 | GBP000 | |
+---------------------------------+-------------+--------------+------------+
| Assets | - | 137,362 | 137,362 |
| Other assets and receivables | | | |
+---------------------------------+-------------+--------------+------------+
| Total assets | - | 137,362 | 137,362 |
+---------------------------------+-------------+--------------+------------+
| Liabilities | (798) | | |
| | | | |
+---------------------------------+-------------+--------------+------------+
| Bank overdraft | (4,290) | - | (4,290) |
+---------------------------------+-------------+--------------+------------+
| Other liabilities and accounts | - | (211) | (211) |
| payable | | | |
+---------------------------------+-------------+--------------+------------+
| Total liabilities | (4,290) | (211) | (4,501) |
+---------------------------------+-------------+--------------+------------+
| Net assets | (4,290) | 137,151 | 132,861 |
+---------------------------------+-------------+--------------+------------+
The Company has a facility dated 18 November 2008 with Royal Bank of Canada
(Channel Islands) Limited for an overdraft of GBP20,000,000 or 15% of Net Value
of Assets in custody whichever is the lower. The facility is secured by an
interest over the cash and the investment portfolio of the Company. The facility
is payable on demand.
Except for the bank overdraft noted above, the Company has no significant
financial liabilities other than short term creditors arising directly from its
investing activities.
Interest rate sensitivity analysis
The average Sterling credit balance during 2009 was GBP879,714 and the average
rate of interest earned was 0.45% compared to the one month average LIBOR of
0.66%. The average USD credit balance was Nil throughout 2009, the one month
average LIBOR rate was 0.33%. The average Sterling overdrawn balance of
GBP5,032,422 at 1.79% reflected margin costs of borrowing compared to the one
month average LIBOR of 0.97% for each relevant overdrawn balance. The USD
overdrawn balance was Nil throughout 2009.
If the interest rates had been 1% higher/lower and all other variables were held
constant, the Company's increase/(decrease) in profit for the year resulting
from the sensitivity analysis for the 2009 financial period would be
insignificant.
Actual trading results may differ from the above sensitivity analysis and those
differences may be material.
iii) Currency risk management
The Company's investment in Permal Macro is predominantly in Sterling,
therefore, the effect of currency fluctuation is minimal. Permal Macro's
investments comprises predominantly US dollar denominated investments. Whilst
Permal Macro will (subject to the availability of appropriate foreign exchange
and credit lines) engage in currency hedging in an attempt to reduce the impact
on its class A GBP shares of currency fluctuations, volatility of returns may
result from such currency exposure. Any uninvested monies such as working
capital requirements are monitored by the Investment Manager. The credit cash
balances as at the year ended 31 December 2009 and 2008 were held in Sterling
and no currency hedging was required.
The Company had no significant exposure to currency risk at 31 December 2009 and
2008.
c) Liquidity risk management
The ultimate responsibilities for liquidity risk management rests with the board
of directors which has appropriately
reviewed the funding requirements for the management of the Company's short,
medium and long-term funding needs. The Company maintains adequate reserves by
continuously monitoring forecast and actual cash flows and maintains an
overdraft facility as described on page of the Annual Report & Accounts to
assist with any unforeseen timing mismatches.
The Company's financial instrument is an investment in Permal Macro, which
generally may be illiquid. The Company is currently required to give 20 days
prior notice of redemptions to redeem its holding in Permal Macro.
Some of the investments made by Permal Macro may not be readily realisable and
their marketability may be restricted and it may be difficult for Permal Macro
to sell or realise its investments in whole or in part.
+----------------------------------+--------------------------+----------+----------+
| Residual contractual maturities | | | |
| of financial liabilities | | | |
+----------------------------------+--------------------------+----------+----------+
| | | 1-3 | |
+----------------------------------+--------------------------+----------+----------+
| | Less than 1 month | months | Total |
+----------------------------------+--------------------------+----------+----------+
| 31 December 2009 | GBP000 | GBP000 | GBP000 |
+----------------------------------+--------------------------+----------+----------+
| Bank overdrafts | - | 798 | 798 |
+----------------------------------+--------------------------+----------+----------+
| Accounts payable | 35 | - | 35 |
+----------------------------------+--------------------------+----------+----------+
| Accrued expenses | 12 | - | 12 |
+----------------------------------+--------------------------+----------+----------+
| 31 December 2008 | | | |
+----------------------------------+--------------------------+----------+----------+
| Bank overdrafts | - | 4,290 | 4,290 |
+----------------------------------+--------------------------+----------+----------+
| Accounts payable | 199 | - | 199 |
+----------------------------------+--------------------------+----------+----------+
| Accrued expenses | 12 | - | 12 |
+----------------------------------+--------------------------+----------+----------+
d) Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company. The carrying
amounts of financial assets best represent the maximum credit risk exposure at
the balance sheet date. Investments made by Permal Macro may not be regulated by
the rules of any stock exchange or investment exchange or other regulatory body
or authority. The counterparties to such investments may have no obligation to
make markets in such investments and may have the ability to apply essentially
discretionary margin and credit requirements. As a result, the Company will be
subject to the risk of bankruptcy of, or the inability or refusal to perform
with respect to such investments by the counterparties with which the Company
deals. The diversity of the portfolio assists with the mitigation of such risk.
The Company's financial assets which were exposed to credit risk via investment
via investment in Permal Macro were concentrated as follows:
+--------------------------------------------+------------+----------+
| | | |
+--------------------------------------------+------------+----------+
| | 2009 | 2008 |
+--------------------------------------------+------------+----------+
| | GBP000 | GBP000 |
+--------------------------------------------+------------+----------+
| Banks: | | |
+--------------------------------------------+------------+----------+
| - Cash and cash equivalents | - | - |
+--------------------------------------------+------------+----------+
| Investment in Permal Macro | 132,966 | 137,327 |
+--------------------------------------------+------------+----------+
| | 132,966 | 137,327 |
+--------------------------------------------+------------+----------+
RELATED PARTIES
Manager
Following the restructuring of the Company from 1 October 2007, Permal Macro
will pay the Investment Adviser an annual fee (payable monthly in arrears) of
2.0% of the value of the Total Assets attributable to its class A shares in
Permal Macro (together with certain other operational costs and expenses). The
Investment Adviser has agreed to rebate half of that amount to the Manager in
complete discharge of the Company's obligation to pay fees to the Manager
pursuant to the Investment Management Agreement out of which 0.5% will be
available as a trail commission to Qualifying Investors.
During the year ended 31 December 2009, Permal Macro paid a total annual fee
amounting to the equivalent of GBP2,591,544 (2008: GBP2,551,102) to the
Investment Adviser and half of this amount (the equivalent of GBP1,275,772,
2008: GBP1,275,551) was paid by the Investment Adviser to the Manager.
The Manager is responsible for discharging all the fees of the Investment
Consultant.
The Investment Management Agreement may be terminated by either party giving to
the other not less than 9 months' notice, or otherwise in circumstances where,
amongst other things, one of the parties has a receiver appointed of its assets
or if an order is made or an effective resolution passed for the winding up of
one of the parties or if, following a continuation vote not being passed or if a
resolution for the winding-up of the Company is passed.
Under the Investment Advisory Agreement, the Company pays a nominal fee to the
Investment Adviser save where the Company's investment in Permal Macro is
redeemed otherwise than on at least nine months' notice (save where such
redemptions are to fund repurchases by the Company of Ordinary Shares or to pay
costs and expenses in the ordinary course of business) in which case a
termination fee equal to 33% of the net asset value of the Company's investment
in Permal Macro which is then being redeemed (as at the Valuation Date
immediately preceding redemption) is payable.
Administrator
RBC Offshore Fund Managers Limited (the "Administrator"), performs
administrative duties for which it was remunerated at a rate of 0.03% of the Net
Asset Value of the Company subject to a minimum of GBP30,000 per annum.
Secretary
Dexion Capital (Guernsey) Limited ("the Secretary") performs secretarial duties
for which it was remunerated at an annual fee of GBP20,000 and separately
remunerated GBP6,000 for additional meetings held during 2009.
Custodian
Royal Bank of Canada (Channel Islands) Limited ("the Custodian"), is remunerated
at an annual rate of 0.03% of the Net Asset Value of the Company subject to a
minimum of GBP10,000 per annum.
These are not full statutory accounts. The full audited accounts for 31
December 2009 will be sent to Shareholders and will be available for inspection
at 1 Le Truchot, St Peter Port, Guernsey, the registered office of the Company
or the Company's website www.dexiontrading.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URAVRRWASUAR
Dexion Trading (LSE:DTL)
過去 株価チャート
から 6 2024 まで 7 2024
Dexion Trading (LSE:DTL)
過去 株価チャート
から 7 2023 まで 7 2024
