Theta Fund Management B.V. Amsterdam. Annual Report 2013

Theta Fund Management B.V. Amsterdam Annual Report 2013

CONTENTS Page DIRECTORS' REPORT

1

General

3

2

ANNUAL REPORT OF THE MANAGING DIRECTORS

4

FINANCIAL STATEMENTS

1 2 3 4 5 6

Balance sheet as at December 31, 2013 Profit and loss statement 2013 Cash flow statement 2013 Notes to the Financial Statements Notes to the balance sheet as of December 31, 2013 Notes to the profit and loss statement 2013

6 8 9 10 12 14

OTHER INFORMATION

1 2 3 4 5

Audit report Statutory profit appropriation Appropriation of the result for the 2012 financial year Appropriation of the profit for 2013 Subsequent events

18 18 18 18 18

DIRECTORS' REPORT

Theta Fund Management B.V. Honthorststraat 19 1071 DC AMSTERDAM Amsterdam, June 30, 2014

Dear management, We hereby send you the annual report for the year 2013 of your company .

THETA FUND MANAGEMENT B.V. AT AMSTERDAM

1

GENERAL

1.1

Company

Theta Fund Management B.V. is a 100% subsidiary of Theta Capital Management B.V. ("Theta"), an independent hedge fund investment specialist based in Amsterdam, The Netherlands, incorporated on May 9, 2001. Both Theta Capital Management B.V. and Theta Fund Management B.V. are regulated by the Dutch Financial Markets Authority ("AFM" Autoriteit Financiële Markten). Theta is a specialist in the management of portfolios in hedge funds both discretionary and on an advisory basis. Theta Fund Management B.V. was the fund manager of Theta Multistar Fund, Theta Deep Value Fund, Theta Legends Fund and Theta Legends XL Fund per 31-12 2011. In 2012, these funds, with the exception of Theta Legends XL Fund, were put into liquidation with the participants being offered the option of subscribing in various Prifund Alpha funds managed by Banque Privée Edmond de Rothschild of Geneva. Theta is also the advisor to fund-of-funds managed by other assets managers. Further details can be found on Theta's website (www.thetacapital.com). The primary objective of Theta remains to preserve and increase the wealth of its clients over the long term, with a limited volatility, by composing well-diversified portfolios of hedge funds. Theta does not act as a single hedge funds manager and has no affiliations to other financial institutions. 1.2

Related party transactions

Theta Fund Management B.V. ("Fund") is a 100% subsidiary of Theta Capital Management B.V. ("Theta"). Theta charges expenses to subsidiary bases on the total costs of Theta and allocated to Fund bases on the share in total consolidated gross fee income.

___________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ __________________________________________________________________________________________________________ -3-

THETA FUND MANAGEMENT B.V. AT AMSTERDAM 2

ANNUAL REPORT OF THE MANAGING DIRECTORS

The Management Board of Theta Fund Management B.V. takes pleasure in presenting you with its financial statements for the year ended 31 December 2013. The year 2013 was a solid year for Theta Capital Management. We achieved excellent returns for our investors, both in absolute and relative terms. Interest for the Theta Legends XL Fund is increasing as investors' appetite for risk taking is returning as investment alternatives such as equities and fixed income seem less attractive. The Theta Legends XL Fund offers a unique proposition though its focus on blue-chip hedge funds, the listing on Euronext Amsterdam and a low minimum investment. We made some important steps solidifying the organization for the anticipated growth in the years ahead. We are in the process of taking the last steps to be fully compliant with AIFMD, the framework under which we will be regulated from July 22nd, 2014. In the fourth quarter, Fokko Hoeksma joined Theta Capital Management as its new COO. Fokko brings many years of experience in all the operational aspects of a fund of hedge funds organization. We moved offices in the summer of 2013 and were able to secure an attractive location next to our previous offices. Finally, Ruud Smets joined the management board in 2013. Ruud has been with Theta since 2005 and has been involved in all aspects of its business.

Amsterdam, June 30, 2014 J.T. van Marle

Tj.J.J. de Vries

___________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ __________________________________________________________________________________________________________ Compilation report issued -4-

FINANCIAL STATEMENTS


BALANCE SHEET AS AT DECEMBER 31, 2013

(after appropriation of the profit) December 31, 2013 €

€

December 31, 2012 €

€

ASSETS FIXED ASSETS Financial fixed assets

(1)

Receivables from group companies Stocks and shares

657,789 1,169

2,357 658,958

2,357

335,502

738,920

21,893

260,845

1,016,353

1,002,122

CURRENT ASSETS Receivables, prepayments and accrued (2) income

Other receivables, deferred assets Liquid assets

(3)


December 31, 2012

December 31, 2013 €

€

€

€

EQUITY AND LIABILITIES EQUITY

(4)

Issued share capital Share premium reserve Other reserves

NON-CURRENT LIABILITIES

18,000 208,891 747,163

Other liabilities and accruals and deferred income

974,054

732,250

-

142,273

42,299

127,599

1,016,353

1,002,122

(5)

Loans from group companies CURRENT LIABILITIES

18,000 208,891 505,359

(6)



PROFIT AND LOSS STATEMENT 2013

2012

2013 €

Fee income Reallowance

(7) (8)

€

846,759 68,853

Gross profit

€

€

1,430,415 231,391 777,906

1,199,024

777,906

1,199,024

Operating expenses

Personnel costs Depreciation of tangible fixed assets Other operating expenses

(9) (10) (11)

154,929 17,442 300,271

375,573 36,177 390,625 472,642

802,375

305,264

396,649

11,465

-3,047

Result from general operations before tax

316,729

393,602

Taxation on result from general operations

-74,925

-88,400

241,804

305,202

Net income

Financial income and expenses

Result after tax

(12)

(13)



CASH FLOW STATEMENT 2013

The cash flow statement has been prepared using the indirect method. 2013 €

2012 €

€

€

Cash flow from operating activities

Nett income Adjustments for: Movement of working capital: Movement of accounts receivable Movement of short-term liabilities (excluding short-term part of long-term debts)

241,804

305,202

403,418

-177,749

-85,300

-61,451


559,922

66,002


559,922

66,002

Cash flow from financing activities

Increase in receivable group companies Decrease other securities Movement of intercompany debt Cash flow from financing activities

-657,789 1,188 -142,273

12,766 172,663 -798,874

185,429

-238,952

251,431

Compilation of the liquidities

Cash and cash equivalents as per January 1 Movement of cash and cash equivalents Cash and cash equivalents at December 31

2013

2012

€

€

260,845

9,414

-238,952

251,431

21,893

260,845



NOTES TO THE FINANCIAL STATEMENTS

4.1

GENERAL

GENERAL ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE ANNUAL ACCOUNTS

The financial statements have been prepared in accordance with Title 9 Book 2 of the Dutch Civil Code. In general, assets and liabilities are stated at the amounts at which they were acquired or incurred, or current value (historical costs). If not specifically stated otherwise, they are recognised at the amounts at which they were acquired or incurred. The balance sheet and income statement include references to the notes. Functional currency

The financial statements are presented in EUR, which is the companies functional currency. 4.2

PRINCIPLES OF VALUATION OF ASSETS AND LIABILITIES

Financial fixed assets

Upon initial recognition the receivables on and loans to participations and other receivables are valued at fair value and then valued at amortised cost, which equals the face value, after deduction of any provisions. The other securities are valued at fair value. 4.2.1 Receivables and deferred assets

Upon initial recognition the receivables on and loans to participations and other receivables are valued at fair value and then valued at amortised cost, which equals the face value, after deduction of any provisions. The fair value and amortised cost equal the face value. Any provisions for the risk of doubtful debts are deducted. These provisions are determined based on individual assessment of the receivables. 4.2.2 Liquid assets

The cash is valued at face value. If cash equivalents are not freely disposable, then this has been taken into account in the valuation. 4.2.3 Liabilities

Liabilities are valued at nominal value, unless determined differently.

4.3

PRINCIPLES FOR THE DETERMINATION OF THE RESULT

4.3.1 General

The result is defined as the difference between the revenue from investment management services (management of portfolios in hedge funds) performed on one hand and, on the other hand, the costs and expenses for that year, valued at historical costs.

___________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ __________________________________________________________________________________________________________ Compilation report issued - 10 -

THETA FUND MANAGEMENT B.V. AT AMSTERDAM 4.3.2 Determination of the result

The result is determined based upon the difference between the nett turnover and the costs and other expenses taking into account the aforementioned valuation principles. 4.3.3 Fee income

Fee income consists of fixed fees related to the management of the Thtea Multistar Fund. Theta Deep Value Fund, Theta Legends Fund, Theta Legends Fund XL and Prifund Alpha Uncorrelated Fund. 4.3.4 Reallowance

Reallowance expenses relate to the acquiring and retaining of investors in the fund and have a direct relationship with income. Given the variability and the direct relationship with fee income, Theta Fund Management B.V. presents these costs as a deduction from fee income. 4.3.5 Gross margin

The gross operating profit and loss comprises fee income, less the reallowance expenses. 4.3.6 Amortisation and depreciation

The depreciation on tangible fixed assets is calculated by using a fixed rate on the acquisition cost based on the expected life cycle. Financial profit and losses on disposal of tangible fixed assets are recorded under amortisation/depreciation, profit only to the extent that the profit is not deducted from replacement investments. 4.3.7 Financial income and expenses

Financial income and expenses comprise interest income and expenses for loans (issued and received) during the current reporting period. 4.3.8 Taxes

Corporate income tax is calculated at the applicable rate on the result for the financial year, taking into account permanent differences between profit calculated according to the annual account and profit calculated for taxation purposes, and with which deferred tax assets (if applicable) are only valued insofar as their realisation is likely.



NOTES TO THE BALANCE SHEET AS OF DECEMBER 31, 2013

ASSETS

FIXED ASSETS 1. Financial fixed assets

12/31/2013

12/31/2012

€

€

Receivables from group companies

Theta Capital Management B.V.

657,789

-

1,169

2,357

335,502 -

738,815 105

335,502

738,920

21,893

260,845

Stocks and shares

Theta Multistar Fund

CURRENT ASSETS 2. Receivables, prepayments and accrued income

Other receivables, deferred assets Current assets

Performance & management fee receivables Interests

3. Liquid assets

Bank accounts

The liquid resources are valued at nominal value. The liquid resources available as per December 31, 2013 are freely available to the company


THETA FUND MANAGEMENT B.V. AT AMSTERDAM

EQUITY AND LIABILITIES 4. Equity

The company's issued and fully paid-up capital now amounts to € 18.000, divided into 180 ordinary shares of € 100 each. The shares are owned by Theta Capital Management B.V.

Issued share capital

Share premium reserve

Other reserves

Total

€

€

€

€

Book value as of January 1, 2013 Result

18,000 -

208,891 -

505,359 241,804

732,250 241,804

Book value as of December 31, 2013

18,000

208,891

747,163

974,054

5. Non-current liabilities

12/31/2013

12/31/2012

€

€

Loans from group companies

Theta Capital Management B.V.

-

142,273

40,213 2,086

127,247 352 -

42,299

127,599

6. Current liabilities

Other liabilities and accruals and deferred income Accruals and deferred income

Reallowances to be invoiced Reallowances payable General costs



NOTES TO THE PROFIT AND LOSS STATEMENT 2013

2013

2012

€

€

7. Fee income

Fee income

846,759

1,430,415

68,853

231,391

154,929

375,573

17,442

36,177

65,825 234,446

150,237 240,388

300,271

390,625

Office expenses Administrative and audit expenses Travel expenses

14,430 19,468 11,091

31,944 48,608 7,646

Transport

44,989

88,198

Fee income consists of fixed fees related to the management of the Theta Multistar Fund, Theta Deep Value Fund,Theta Legends Fund XL and Prifund Alpha Uncorrelated Fund. 8. Reallowance

Reallowance expenses Reallowance relate to the acquiring and retaining of investors in the fund. Reallowance expenses have a direct relationship with fee income. Given the variability and the direct relationship with fee income, Theta Fund Management B.V. presents reallowances as a deduction from fee income. 9. Personnel costs

Personnel costs Staff

During the year 2013 Theta Fund Management B.V. employed a combined average workforce of 0 full-time equivalents (2012: 0). 10. Depreciation of tangible fixed assets

Depreciation costs 11. Other operating expenses

Housing expenses Office and general expenses

Office and general expenses



2012

€

€

Transport

44,989

88,198

Insurance expenses Legal and service expenses Representation expenses Costs supervisors Custody fees Other general expenses

16,342 24,236 3,961 13,300 83,446 48,172

18,414 33,828 4,718 95,230

234,446

240,388

12,246 -161 -620

1,437 -399 -4,085

11,465

-3,047

10,354 1,892

1,312 125

12,246

1,437

-161

-399

620 -

3,896 189

620

4,085

All expenses are charged by Theta Capital Management B.V. and allocated to Theta Fund Management B.V. based on the share in total consolidated gross fee income. This year the expenses charged to subsidiary amount to € 445,986 (2012: € 802,255). 12. Financial income and expenses

Interest and similar income Result financial investments Interest and similar expenses

Interest and similar income

Interest current account Theta Capital Management B.V. Interest income

Result financial investments

Result Theta Multistar Class A+B Interest and similar expenses

Bank charges Interest current account others Differences of exchange



2012

€

€

13. Taxation on result from general operations

Corporate income tax

74,925

88,400


OTHER INFORMATION

THETA FUND MANAGEMENT B.V. AT AMSTERDAM OTHER INFORMATION 1

Audit report

Reference is made to the auditor's report as included hereinafter. 2

Statutory profit appropriation

Based on article 17 of the statutes the result is at disposal of the General Meeting. 3

Appropriation of the result for the 2012 financial year

The annual account for 2012 was adopted by the General Meeting. The General Meeting has determined the appropriation of the result as it was proposed. 4

Appropriation of the profit for 2013

The board of directors proposes to add the profit for 2013 of € 241,804 to the other reserves. This proposal has been processed in the annual account in advance of the adoption by the General Meeting. 5

Subsequent events

There are no subsequent events after the date of the financial statements which require a modification or disclosure.


Aan: de directie van Theta Fund Management B.V.

Controleverklaring van de onafhankelijk accountant Verklaring betreffende de jaarrekening Wij hebben de in dit rapport opgenomen jaarrekening 2013 van Theta Fund Management B.V. te Amsterdam gecontroleerd. Deze jaarrekening bestaat uit de balans per 31 december 2013 en de winst- en verliesrekening en het kasstroomoverzicht over 2013 met de toelichting, waarin zijn opgenomen een overzicht van de gehanteerde grondslagen voor financiële verslaggeving en andere toelichtingen. Verantwoordelijkheid van de directie De directie is verantwoordelijk voor het opmaken van de jaarrekening die het vermogen en het resultaat getrouw dient weer te geven, alsmede voor het opstellen van het jaarverslag, beide in overeenstemming met Titel 9 Boek 2 van het in Nederland geldende Burgerlijk Wetboek (BW) en de Wet op het financieel toezicht. De directie is tevens verantwoordelijk voor een zodanige interne beheersing als het noodzakelijk acht om het opmaken van de jaarrekening mogelijk te maken zonder afwijkingen van materieel belang als gevolg van fraude of fouten. Verantwoordelijkheid van de accountant Onze verantwoordelijkheid is het geven van een oordeel over de jaarrekening op basis van onze controle. Wij hebben onze controle verricht in overeenstemming met Nederlands recht, waaronder de Nederlandse controlestandaarden. Dit vereist dat wij voldoen aan de voor ons geldende ethische voorschriften en dat wij onze controle zodanig plannen en uitvoeren dat een redelijke mate van zekerheid wordt verkregen dat de jaarrekening geen afwijkingen van materieel belang bevat. Een controle omvat het uitvoeren van werkzaamheden ter verkrijging van controle-informatie over de bedragen en de toelichtingen in de jaarrekening. De geselecteerde werkzaamheden zijn afhankelijk van de door de accountant toegepaste oordeelsvorming, met inbegrip van het inschatten van de risico's dat de jaarrekening een afwijking van materieel belang bevat als gevolg van fraude of fouten. Bij het maken van deze risico-inschattingen neemt de accountant de interne beheersing in aanmerking die relevant is voor het opmaken van de jaarrekening en voor het getrouwe beeld daarvan, gericht op het opzetten van controlewerkzaamheden die passend zijn in de omstandigheden. Deze risico-inschattingen hebben echter niet tot doel een oordeel tot uitdrukking te brengen over de effectiviteit van de interne beheersing van de entiteit. Een controle omvat tevens het evalueren van de geschiktheid van de gebruikte grondslagen voor financiële verslaggeving en van de redelijkheid van de door de directie gemaakte schattingen, alsmede een evaluatie van het algehele beeld van de jaarrekening. Wij zijn van mening dat de door ons verkregen controle-informatie voldoende en geschikt is om een onderbouwing voor ons oordeel te bieden.

Oordeel Naar ons oordeel geeft de jaarrekening een getrouw beeld van de grootte en samenstelling van het vermogen van Theta Fund Management B.V. per 31 december 2013 en van het resultaat over 2013 in overeenstemming met Titel 9 Boek 2 BW en de Wet op het financieel toezicht.

Verklaring betreffende overige bij of krachtens de wet gestelde eisen Ingevolge artikel 2:393 lid 5 onder e en f BW vermelden wij dat ons geen tekortkomingen zijn gebleken naar aanleiding van het onderzoek of het jaarverslag, voor zover wij dat kunnen beoordelen, overeenkomstig Titel 9 Boek 2 BW is opgesteld, en of de in artikel 2:392 lid 1 onder b tot en met h BW vereiste gegevens zijn toegevoegd. Tevens vermelden wij dat het jaarverslag, voor zover wij dat kunnen beoordelen, verenigbaar is met de jaarrekening zoals vereist in artikel 2:391 lid 4 BW. Den Haag, 30 juni 2014 Ernst & Young Accountants LLP

w.g. drs. R.J. Bleijs RA

Theta Fund Management B.V. Amsterdam. Annual Report 2013

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