PSH-Annual-Report

Annual Report December 31, 2014Notes to Financial Statements (continued)1. CORPORATE INFORMATION (continued)Board of DirectorsThe Company’s Board of Directors is comprised ofNicholas Botta, a partner of the InvestmentManager, Anne Farlow, Richard Battey, JonathanKestenbaum and William Scott, all of whom areindependent non-executive Directors. EffectiveJuly 29, 2014 and August 28, 2014, JonathanKestenbaum and Anne Farlow, respectively, wereappointed to the Board. On October 6, 2014, AnneFarlow was appointed Chairman of the Board.Audit CommitteeThe Company has established an audit committee(the “Audit Committee”) effective on the Admissiondate that is comprised of Ms Farlow and MessrsBattey, Kestenbaum and Scott. Mr Battey wasappointed as Chairman of the Audit Committee onSeptember 10, 2014. The Audit Committee’sresponsibilities may include, but are not limited to,the appointment of external auditors, discussionand agreement with the external auditors as to thenature and scope of the audit, review of the scope,results and cost effectiveness of the audit and theindependence and objectivity of the externalauditor, review of the external auditors’ letter ofengagement and management letter and review ofthe key procedures adopted by the Company’sservice providers. The Audit Committee will reportregularly and make such recommendations as itdeems appropriate to the Board on any matterwithin its remit.Prime BrokersPursuant to prime broker agreements, GoldmanSachs & Co. and UBS Securities LLC (the “PrimeBrokers”) serve as the custodians and primaryclearing brokers for the Company.Administrator and Sub-AdministratorPursuant to an administration and subadministrationagreement dated April 2, 2012,Elysium Fund Management Limited (the“Administrator”) and Morgan Stanley FundServices (Bermuda) Ltd. (the “Sub-Administrator”)have been appointed as administrator and subadministrator,respectively, to the Company. TheAdministrator provides certain administrative andaccounting services including the maintenance ofthe Company’s accounting and statutory records.The Administrator delegates certain of theseservices to the Sub-Administrator. TheAdministrator and Sub-Administrator receivecustomary fees, plus out of pocket expenses,based on the nature and extent of servicesprovided.2. SUMMARY OF SIGNIFICANTACCOUNTING POLICIESBasis of PreparationThe financial statements of the Company havebeen prepared in accordance with InternationalFinancial Reporting Standards (“IFRS”) as issuedby the International Accounting Standards Board(“IASB”). The financial statements have beenprepared on a historical-cost basis, except forfinancial assets and financial liabilities designatedas at fair value through profit or loss that havebeen measured at fair value.The Company presents its statement of financialposition with assets and liabilities listed in order ofliquidity. An analysis regarding recovery orsettlement within 12 months after the reportingdate (current) and more than 12 months after thereporting date (non-current) is presented in Note13.The Company’s investment activities, together withfactors likely to affect its future development,performance and position, are set out in Note 1and Note 13 to the financial statements. Aftermaking reasonable inquiries and assessing all datarelating to the Company’s liquidity, particularly itsholding of cash and Level 1 investments, theInvestment Manager and the Directors believe thatthe Company is well placed to manage its businessrisks, has adequate resources to continue inoperational existence for the foreseeable futureand do not consider there to be any threat to thegoing concern status of the Company. For thesereasons, they have adopted the going concernbasis in preparing the financial statements.Financial Instruments(i) ClassificationThe Company classifies its financial assets andfinancial liabilities at initial recognition, inaccordance with IAS 39 Financial Instruments:Recognition and Measurement.PERSHING SQUARE HOLDINGS, LTD. 45