Half-yearly Report

Third Point Offshore Investors Limited (the "Company") (a closed-ended investment company incorporated with limited liability under the laws of Guernsey with registered number 47161) 27 August 2014 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014 ~ Strong NAV growth driven by corporate and structured credit portfolios ~ Third Point Offshore Investors Limited ("TPOIL" or the "Company"), theclosed-end, London listed event-driven, value-oriented hedge fund managed byDaniel S. Loeb's Third Point LLC (the "Investment Manager"), announces itsinterim results for the six months ended 30 June 2014. Financial Highlights (as at 30 June 2014, unless otherwise stated) * Continued Net Asset Value ("NAV") per share growth of 6.6% in both the USD and GBP classes. Ticker Tranche NAV HY 14 NAV FY 13 NAV Growth TPOU USD Class $ $17.98 $16.87 6.6% TPOG GBP Class £ £17.27 £16.20 6.6% * Overall, the Company's NAV increased 6.8% to $912.2 million (FY13:$854.1 million) * Discount to NAV narrowed considerably during the period * Euro share classes converted into USD class shares to afford shareholders greater liquidity * The board remains committed to continuing to review discount-control mechanisms, including an ongoing annual cash dividend equivalent to 4-5% of the NAV of the Company, to the extent that the positive NAV performance permits Portfolio Performance of the Master Fund * Continued positive performance against a volatile market environment - a weak first quarter, primarily due to negative weather related US market conditions, was offset by a strong second quarter * Positive returns driven by performance in corporate and structured credit portfolios, contributing 25% and 50% of fund returns, respectively, despite significantly less exposure relative to equities * Successful investments made in sovereign credit with attractive risk-adjusted opportunities supplementing the lackluster corporate credit environment * Despite uncertain equity markets, the Investment Manager's equity portfolio outperformed in the US and Latin America. Investments in the Energy and Industrial sectors contributed meaningful returns while positions in TMT and Japan detracted from performance Outlook * The Investment Manager initiated several major new investments during the first half of 2014 and believes that the environment remains attractive for event-driven strategies. * The Investment Manager believes that the global economy is relatively healthy and has adjusted portfolio exposure accordingly Marc Antoine Autheman, Chairman of Third Point Offshore Investors Limited,commented: "I'm pleased to report another period of significant progress forthe Company with robust NAV growth underpinning a strong first halfperformance. This has been driven by positive returns across the structuredcredit portfolio and outperformance in the US and Latin America equityportfolios." "The Board is encouraged to see that the discount has further narrowed and weremain committed to regularly reviewing our discount-control mechanisms,including an ongoing dividend policy where NAV performance allows." "We remain confident in the outlook for the Company and the InvestmentManager's ability to generate attractive returns for shareholders byidentifying compelling event-driven opportunities globally." Enquiries: Third Point Offshore investorsInvestor Relations +1 212 715 6707 FTI ConsultingEd Berry +44 (0)20 3727 1046Tom Blackwell +44 (0)20 3727 1051 Notes to Editors TPOIL is a feeder fund that invests in Third Point Offshore Fund Ltd. (the"Master Fund"), with the investment objective of achieving uncorrelated, longterm, attractive risk-adjusted returns. The Company has two share classes whichdiffer by denomination (LSE: TPOU, TPOG). The financial information set out below do not constitute the Company'sstatutory interim accounts for the period ended 30 June 2014. All figures arebased on the unaudited condensed interim report and financial statements forthe period ended 30 June 2014 ("Interim Report"). The Interim Report will shortly be posted to shareholders and will also beavailable on the company website: www.thirdpointpublic.com Chairman's Statement I am pleased to present the seventh Unaudited Semi-Annual Financials for ThirdPoint Offshore Investors ("the Company"). The Company was established as a closed-end investment company, registered andincorporated in Guernsey on 19 July 2007. The Company invests its assets inThird Point Offshore Master Fund L.P. (the "Master Partnership") via ThirdPoint Offshore Fund, Ltd. (the "Master Fund"), which pursues an opportunisticinvestment approach based on event-driven fundamental value analysis. During the first half of 2014, the Company's net asset value (the "NAV")appreciated approximately 7% across both share classes. Performance was drivenby Third Point LLC's (the "Investment Manager") investment process andopportunistic approach. The Investment Manager continued to search globally forcompelling event-driven equity and credit opportunities as well as select macroinvestments. Top down macroeconomic insight coupled with diligent andthoughtful individual security selection utilising the Investment Manager'sbottom-up, fundamental investment policy has led to an increase in equityexposure and a corresponding decrease in the number of corporate creditinvestments in the Investment Manager's portfolio. Returns for the year havebeen driven by strong performance in corporate, government and structuredcredit positions as well as U.S.-based equity investments. The Investment Manager has initiated several new, significant investmentsduring the first half of the year amidst a continued attractive environment forevent-driven investing. Portfolio construction has been influenced by theInvestment Manager's view that the global economy is relatively healthy andportfolio exposure has increased accordingly. The Investment Manager willcontinue to monitor macroeconomic trends and adjust exposures and portfoliohedges accordingly. Following strong investment performance, a series of corporate actions taken inthe Fourth Quarter of 2012 and a proactive approach to communications, theBoard has been pleased to see a significantly decreased discount in each of theshare classes relative to the year prior. We are committed to continuing toreview discount-control mechanisms, employing an ongoing annual dividend policywhere performance permits, and regular communication in an effort to furtherreduce the discount. We believe in the importance of transparent communicationswith shareholders and aim to be responsive to your inquiries. To this end, theCompany's website (thirdpointpublic.com) publishes monthly NAVs, a monthlyshareholder report, a narrative quarterly letter from the Investment Managerand other relevant information about the Company. In corporate governance matters, the independent Board of Directors and AuditCommittee have met regularly. My fellow Directors and I are honoured to serve our shareholders. Marc Antoine Autheman 26 August 2014 Directors' Report The Directors submit their Report together with the Company's Statements ofAssets and Liabilities, Unaudited Statements of Operations, Statements ofChanges in Net Assets, Unaudited Statements of Cash Flows and the related notesfor the period ended 30 June 2014, "Unaudited Condensed Interim FinancialStatements". These Unaudited Condensed Interim Financial Statements have beenproperly prepared, in accordance with accounting principles generally acceptedin the United States of America, any relevant enactment for the time being inforce, are in agreement with the accounting records and have been properlyprepared in all material aspects. The Company The Company was incorporated in Guernsey on 19 June 2007 as an authorisedclosed-ended investment scheme and was admitted to a secondary listing (Chapter14) on the Official List of the London Stock Exchange on 23 July 2007. Theproceeds from the initial issue of shares on listing amounted to approximatelyUS$523 million. Following changes to the Listing Rules on 6 April 2010, thesecondary listing became a standard listing. The Company is a member of the Association of Investment Companies ("AIC"). Investment Objective and Policy The Company's investment objective is to provide its Shareholders withconsistent long term capital appreciation utilising the investment skills ofThird Point LLC (the "Investment Manager") through investment of all of itscapital (net of short term working capital requirements) in Class E Shares ofThird Point Offshore Fund, Ltd (the "Master Fund"), an exempted company formedunder the laws of the Cayman Islands on 21 October 1996. The Master Fund is a limited partner of Third Point Offshore Master Fund L.P.(the "Master Partnership"), an exempted limited partnership organised under thelaws of the Cayman Islands, of which Third Point Advisors II L.L.C., anaffiliate of the Investment Manager, is the general partner. Third Point LLC isthe Investment Manager to the Company, the Master Fund and the MasterPartnership. The Master Fund and the Master Partnership have the sameinvestment objectives, investment strategies and investment restrictions. The Master Fund and Master Partnership's investment objective is to seek togenerate consistent long- term capital appreciation, by using an event driven,bottom-up, fundamental approach to evaluate various types of securitiesthroughout companies' capital structures. The Investment Manager'simplementation of the Master Fund and Master Partnership's investment policy isthe main driver of the Company's performance. The Investment Manager's fundamental approach to investing begins withanalysing a company's financial performance, its management and competitiveadvantages, its position within its industry and the overall economy. Thisanalysis is performed on historical and current data with the ultimate goal ofproducing a set of projected financial results for the company. Once theprojections are established, the Investment Manager compares the currentvaluation of the company in question relative to its historical valuationrange, the valuation range of its peers and the overall market in general todetermine whether the markets are mis-pricing the company. The InvestmentManager ultimately invests in situations where it believes mis-pricing existsbecause this fundamental analysis indicates that such a disconnection willcorrect itself over time. The Investment Manager's bottom-up approach attempts to identify individualcompanies that would make attractive investment targets based on their growthand profitability characteristics. This approach differs from a top-downmethodology which first evaluates macro-economic, sector, industry orgeographic factors to select the best sectors or industries for investment. The Investment Manager seeks to identify Event Driven situations in which itcan take either a long or short investment position where it can identify anear or long-term catalyst that would unlock value. Results and Dividends The results for the period are set out in the Unaudited Statements ofOperations. Except in unusual circumstances, it is anticipated that the Boardof Directors of the Company (the "Board"), following discussions with theInvestment Manager, will declare an annual cash dividend equivalent to 4-5% ofthe Net Asset Value ("NAV") of the Company, to the extent that the positive NAVperformance of the Company is sufficient to support such dividends. Share Capital Share Capital Conversions took place during the period ended 30 June 2014. Asummary and the number of shares in issue at the period-end are disclosed inNote 6 to the Unaudited Condensed Interim Financial Statements. Going Concern After making enquiries and given the nature of the Company and its investment,the Directors are satisfied that it is appropriate to continue to adopt thegoing concern basis in preparing these Unaudited Condensed Interim FinancialStatements. The Master Fund Shares are liquid and can be converted to cash tomeet liabilities as they fall due. After due consideration, the Directorsconsider that the Company is able to continue for the foreseeable future. Directors The Directors of the Company during the period and to the date of this reportare as listed on these Unaudited Condensed Interim Financial Statements. Directors' Interests Mr Targoff holds the position of Chief Operating Officer, Partner and GeneralCounsel of Third Point LLC. Pursuant to an instrument of indemnity entered into between the Company andeach Director, the Company has undertaken, subject to certain limitations, toindemnify each Director out of the assets and profits of the Company againstall costs, charges, losses, damages, expenses and liabilities arising out ofany claims made against them in connection with the performance of their dutiesas a Director of the Company. The Directors hold no shares in the Company and held no shares during theperiod. Corporate Governance Policy The Board has considered the principles and recommendations of the AIC Code ofCorporate Governance ("AIC Code") by reference to the AIC Corporate GovernanceGuide for Investment Companies ("AIC Guide"). The AIC Code, as explained by theAIC Guide, addresses all the principles set out in the UK Corporate GovernanceCode, as well as setting out additional principles and recommendations onissues that are of specific relevance. The Board has determined that reporting against the principles andrecommendations of the AIC Code, and by reference to the AIC Guide (whichincorporates the UK Corporate Governance Code), will provide better informationto shareholders. The Company has complied with all the recommendations of theAIC Code and the relevant provisions of the UK Corporate Governance Code,except as set out below. The UK Corporate Governance Code includes provisions relating to: * the role of the chief executive; * executive directors' remuneration; and * the need for an internal audit function. For the reasons set out in the AIC Guide, the Board considers these provisionsare not relevant to the position of the Company, being an externally advisedinvestment company with no executive directors or employees. The Company hastherefore not reported further in respect of these provisions. The AIC Code provides a "comply or explain" code of corporate governancedesigned especially for the needs of investment companies. The AIC published anew code of corporate governance in October 2010 and the Company has reviewedits compliance with these standards. The UK Financial Reporting Council ("FRC")has confirmed that so far as investment companies are concerned it considersthat companies which comply with the AIC Code will be treated as meeting theirobligations under the UK Corporate Governance Code ("The Code") and Section9.8.6 of the Listing Rules. The Company does not have employees, hence no whistle-blowing policy isnecessary. However, the Directors have satisfied themselves that the Company'sservice providers have appropriate whistle- blowing policies and procedures andconfirmation has been sought from the service providers that nothing has arisenunder those policies and procedures which should be brought to the attention ofthe Board. On 30 September 2011 the Guernsey Financial Services Commission ("GFSC") issueda new Code of Corporate Governance (the "Guernsey Code") which came into effecton 1 January 2012. The Guernsey Code replaces the existing GFSC guidance,"Guidance on Corporate Governance in the Finance Sector". The Guernsey Codeprovides a framework that applies to all entities licensed by the GFSC or whichare registered or authorised as a collective investment scheme. Companiesreporting against the UK Corporate Governance Code or the Association ofInvestment Companies Code of Corporate Governance are deemed to comply with theGuernsey Code. It is the Company's policy to comply with the AIC Code. The FRC issued a revised UK Corporate Governance Code in September 2012, forreporting periods beginning on or after 1 October 2012. The AIC updated the AICCode (including the Jersey and Guernsey editions) and its AIC Guide in February2013 to reflect the relevant changes to the FRC document. Board Structure The Board currently consists of five non-executive Directors. As the Chairmanof the Board is an independent non-executive, the Board considers itunnecessary to appoint a senior independent Director. Name Position Independent Date Appointed Marc Antoine Autheman Non-Executive Chairman Yes 21 June 2007 Christopher Legge Non-Executive Director Yes 19 June 2007 Keith Dorrian Non-Executive Director Yes 19 June 2007 Christopher Fish Non-Executive Director Yes 19 June 2007 Joshua L Targoff Non-Executive Director No 29 May 2009 One third of the Directors retire by rotation at every AGM with the exceptionof Mr. J Targoff, who as the Chief Operating Officer, General Counsel andPartner of the Investment Manager, is not considered independent and willtherefore be subject to annual re-election by shareholders. All other Directorsare considered by the Board to be independent of the Company's investmentmanager. Any Directors appointed to the Board since the previous AGM alsoretire and stand for re-election. The Independent Directors take the lead inany discussions relating to the appointment or re-appointment of directors. TheIndependent Directors consider it important that the Board includes arepresentative of the Investment Manager. The Board meets at least four times a year and in addition there is regularcontact between the Board, the Investment Manager and Northern TrustInternational Fund Administration Services (Guernsey) Limited (the"Administrator"), and the Board requires to be supplied in a timely manner withinformation by the Investment Manager, the Administrator, Northern TrustInternational Fund Administration Services (Guernsey) Limited (the "CompanySecretary") and other advisors in a form and of a quality appropriate to enableit to discharge its duties. The Board, excluding Mr Targoff, regularly reviewsthe performance of the Investment Manager and the Master Fund to ensure thatperformance is satisfactory and in accordance with the terms and conditions ofthe relative appointments and Prospectus. It carries this review out throughconsideration of a number of objective and subjective criteria and through areview of the terms and conditions of the advisors' appointment with the aim ofevaluating performance, identifying any weaknesses and ensuring value for moneyfor the Company's shareholders. New Directors will receive an induction from the Investment Manager on joiningthe Board, and all Directors undertake relevant training as necessary. The Company has no executive directors or employees. All matters, includingstrategy, investment and dividend policies, gearing and corporate governanceprocedures are reserved for approval by the Board of Directors. The Boardreceives full information on the Company's investment performance, assets,liabilities and other relevant information in advance of Board meetings. Board Tenure No member of the Board has served for longer than 9 years to date. As such noissue has arisen to be considered by the Board with respect to long tenure.When and if any independent director shall have been in office (or onre-election would at the end of that term of office) for more than 8 years, theCompany will consider further on this matter as to whether there is any riskthat such director might reasonably be deemed to have lost independence throughsuch long service. Directors' Biographies Marc Antoine Autheman Marc Antoine Autheman, is a resident of France. He has over 35 years ofexperience in the public and private finance sectors. Mr. Autheman is currentlyChairman of Euroclear S.A. and Chairman of Cube Infrastructure Fund. He workedin the French Treasury for ten years from 1978 to 1988, prior to joining theMinister of Finance's private office, Minister Beregovoy, as advisor formonetary and financial affairs between 1988 and 1993. From 1993 to 1997, heworked as Executive Director for France for the International Monetary Fund andthe World Bank and chaired the audit committee of the World Bank during thistime. From 1997 to 2004, he worked in a number of roles at Credit Agricole S.A.(``CASA''), mainly as CEO of Credit Agricole Indosuez. He holds Master'sdegrees in Law and Economics from the University of Paris. Keith Dorrian Keith Dorrian, is a Guernsey resident and has over 40 years' experience in theoffshore finance industry. Joining Manufacturers Hanover in 1973 he moved toFirst National Bank of Chicago in 1984 where he was appointed Vice Presidentand Company Secretary. In 1989 he joined ANZ Bank (Guernsey) where, as aDirector of the Bank and Fund Management company, he was closely involved inthe banking and fund management services of the Group. He took up the positionof Manager Corporate Clients in Bank of Bermuda Guernsey in 2000 and wasappointed local Head of Global Fund Services and Managing Director of theGuernsey Bank's Fund Administration company Management International (Guernsey)Limited in Guernsey in 2001, retiring on 31 December 2003. He is currently amember of the Guernsey Investment Fund Association, the Institute of FinancialServices, the Institute of Directors and is a Director of a number of funds andfund management companies and holds the Institute of Directors Diploma inCompany Direction. Mr Dorrian has been elected a Fellow of the Institute ofDirectors. Christopher Fish Christopher Fish, is a director of two UK listed funds as well as threeGuernsey based financial companies. During the past 35 years he has heldexecutive positions as a director of the Royal Bank of Canada (Channel Islands)Limited and as the Americas Offshore Head of Coutts where he was responsiblefor the Bahamas, Bermuda, Cayman and Uruguay offices. In 1997 he was appointedthe Senior Client Partner for Coutts Offshore before taking up the position ofManaging Director of Close International Private Banking in 1999 from where heretired in 2005. Mr. Fish is resident in Guernsey. Christopher Legge Christopher Legge, is a Guernsey resident and worked for Ernst & Young inGuernsey from 1983 to 2003. Having joined the firm as an audit manager in 1983,he was appointed a partner in 1986 and managing partner in 1998. From 1990 to1998, he was head of Audit and Accountancy and was responsible for the auditsof a number of insurance, banking, investment fund and financial servicesclients. He also had responsibility for the firm's training, quality controland compliance functions. He was appointed managing partner of Ernst & Youngfor the Channel Islands region in 2000. Since his retirement from Ernst & Youngin 2003, Mr. Legge has held a number of non-executive directorships in thefinancial sector. He is an FCA and holds a BA (Hons) in Economics from theUniversity of Manchester. Joshua L. Targoff Joshua L. Targoff has been the Chief Operating Officer of the InvestmentManager since May 2009. He joined as General Counsel in May 2008. Previously,Mr. Targoff was the General Counsel of the Investment Banking Division ofJefferies & Co. Mr. Targoff spent seven years doing M & A transactional work atDebevoise & Plimpton LLP. Mr. Targoff graduated with a J.D. from Yale LawSchool, and holds a B.A. from Brown University. In 2012, Mr Targoff was made aPartner of the Investment Manager. Meeting Attendance Records The table below lists Directors' attendance at meetings during the period, tothe date of this report. Scheduled Board Audit Committee Meetings Meetings Attended Atended (max 2) (max 1) Marc Antoine Autheman 2 of 2 0 of 1 Christopher Legge 2 of 2 1 of 1 Keith Dorrian 2 of 2 1 of 1 Christopher Fish 2 of 2 1 of 1 Joshua L Targoff1,2 2 of 2 N/A * Mr. Targoff is not a member of the Audit Committee. * Mr. Targoff does not attend Meetings as a director where recommendations from the Investment Manager are under consideration. Committees of the Board The AIC Code requires the Company to appoint nomination, remuneration andmanagement engagement committees. The Board has not deemed this necessary as,being comprised wholly of non- executive Directors, the whole Board considersthese matters. Following the "Women on Boards" review conducted by Lord Davies' of Abersoch inFebruary 2011, the Board has examined Lord Davies' Recommendations and notedthat it was consistently reviewing its policy and future appointments to theBoard would continue to be based on the individual's skills and experienceregardless of gender. The Investment Manager has wide experience in managing and administering fundvehicles and has access to extensive investment management resources. The Boardconsiders that the continued appointment of the Investment Manager on the termsagreed would be in the interests of the Company's shareholders as a whole. Audit Committee The Company's Audit Committee conducts formal meetings at least three times ayear for the purpose, amongst others, of considering the appointment,independence, effectiveness of the audit and remuneration of the auditors andto review and recommend the annual statutory accounts and interim report to theBoard of Directors. Directors' Duties and Responsibilities The Directors have adopted a set of Reserved Powers, which establish the keypurpose of the Board and detail its major duties. These duties cover thefollowing areas of responsibility: * Statutory obligations and public disclosure; * Strategic matters and financial reporting; * Board composition and accountability to shareholders; * Risk assessment and management, including reporting, compliance, monitoring, governance and control; and * Other matters having material effects on the Company. These Reserved Powers of the Board have been adopted by the Directors toclearly demonstrate the seriousness with which the Board takes its fiduciaryresponsibilities and as an ongoing means of measuring and monitoring theeffectiveness of its actions. The Directors are responsible for the overall management and direction of theaffairs of the Company. The Company has no Executive Directors or employees.The Company invests all of its assets in shares of the Master Fund and ThirdPoint LLC acts as Investment Manager to the Master Fund and is responsible forthe discretionary investment management of the Master Fund's investmentportfolio under the terms of the Master Fund Prospectus. Northern Trust International Fund Administration Services (Guernsey) Limited("NT") acts as Administrator and Company Secretary and is responsible to theBoard under the terms of the Administration Agreement. The Administrator isalso responsible for ensuring compliance with the Rules and Regulations ofGuernsey Law, London Stock Exchange listing requirements and observation of theReserved Powers of the Board and in this respect the Board receives detailedquarterly reports. The Directors have access to the advice and services of the Company Secretarywho is responsible to the Board for ensuring that Board procedures are followedand that it complies with applicable rules and regulations of Guernsey Law, theGFSC and the London Stock Exchange. Individual Directors may, at the expense ofthe Company, seek independent professional advice on any matter that concernsthem in the furtherance of their duties. The Company maintains appropriateDirectors' and Officers' liability insurance in respect of legal action againstits Directors on an ongoing basis and the Company has maintained appropriateDirectors' Liability Insurance cover throughout the period. The Board is also responsible for safeguarding the assets of the Company andfor taking reasonable steps for the prevention and detection of fraud and otherirregularities. Internal Control and Financial Reporting The Directors acknowledge that they are responsible for establishing andmaintaining the Company's system of internal control and reviewing itseffectiveness. Internal control systems are designed to manage rather thaneliminate the failure to achieve business objectives and can only providereasonable but not absolute assurance against material misstatements or loss. The Directors review all controls including operations, compliance and riskmanagement. The key procedures which have been established to provide internalcontrol are: * Investment advisory services are provided by the Investment Manager. The Board is responsible for setting the overall investment policy, ensuring compliance with the Company's Investment Strategy and monitors the action of the Investment Manager and Master Fund at regular Board meetings. The Board has also delegated administration and company secretarial services to NT; however it retains accountability for all functions it has delegated. * The Board considers the process for identifying, evaluating and managing any significant risks faced by the Company on an on-going basis. It ensures that effective controls are in place to mitigate these risks and that a satisfactory compliance regime exists to ensure all local and international laws and regulations are upheld. In light of recent market volatility and economic turmoil, particular attention has been given to the effectiveness of controls to monitor liquidity risk, asset values, counterparty exposure and credit availability. * The Non-Executive Directors of the Company clearly define the duties and responsibilities of their agents and advisors and appointments are made by the Board after due and careful consideration. The Board monitors the ongoing performance of such agents and advisors. * The Investment Manager and NT maintain their own systems of internal control, on which they report to the Board. The Company, in common with other investment companies, does not have an internal audit function. The Audit Committee has considered the need for an internal audit function, but because of the internal control systems in place at the Investment Manager and NT, has decided it appropriate to place reliance on their systems and internal control procedures. * The systems are designed to ensure effectiveness and efficient operation, internal control and compliance with laws and regulations. In establishing the systems of internal control, regard is paid to the materiality of relevant risks, the likelihood of costs being incurred and costs of control. It follows therefore that the systems of internal control can only provide reasonable but not absolute assurance against the risk of material misstatement or loss. Board Performance The Board and Audit Committee undertake a formal annual evaluation of their ownperformance and that of their committees and individual Directors. In order toreview their effectiveness, the Board and Audit Committee carry out a processof formal self-appraisal. The Directors and Committee consider how the Boardand Audit Committee functions as a whole and also review the individualperformance of its members. This process is conducted by the respectiveChairman reviewing individually with each of the Directors and members of theCommittee their performance, contribution and commitment to the Company. Theperformance of the Chairman is evaluated by the other independent Directors. Management of Principal Risks and Uncertainties As noted in the Statement of Directors' Responsibilities in respect of theUnaudited Condensed Interim Financial Statements, the Directors are required toprovide a description of the principal risks and uncertainties facing theCompany. The Directors have considered the risks and uncertainties facing theCompany and have prepared and review regularly a risk matrix which documentsthe significant risks faced by the Company. This document considers thefollowing information: * Identifying and reporting changes in the risk environment; * Identifying and reporting changes in the operational controls; * Identifying and reporting on the effectiveness of controls and remediation of errors arising; and * Reviewing the risks faced by the Company and the controls in place to address those risks. The Directors have acknowledged they are responsible for establishing andmaintaining the Company's system of internal control and reviewing itseffectiveness by focusing on four key areas: * Consideration of the investment advisory services provided by the Investment Manager; * Consideration of the process for identifying, evaluating and managing any significant risks faced by the Company on an ongoing basis; * Clarity around the duties and responsibilities of the agents and advisors engaged by the Directors; and * Reliance on the Investment Manager and Administrator maintaining their own systems of internal controls. Further discussion on Internal Control is documented in the Directors' Reportunder "Internal Control and Financial Reporting". The main risks and uncertainties that the Directors consider to apply to theCompany are as follows: * Underlying investment performance of the Master Fund. To mitigate this risk the Directors receive regular updates from the Investment Manager on the performance of the Master Fund. The Board reviews quarterly performance updates on the Master Fund and has access to the Investment Manager on any potential question raised; * Concentration of Investor Base. The Directors receive quarterly investor reports from the Corporate Broker and there is regular communication between the Directors and Broker to identify potential significant changes in the shareholder base; * Discount/Premium to the NAV. The Investment Manager, Corporate Broker and, when considered necessary, the Board of Directors, maintain regular contact with the significant shareholders to the Company. As part of ongoing process to seek to narrow the discount to NAV per Share at which the Shares are traded, the Directors introduced an annual dividend policy. Under that policy it was anticipated that the Company would pay a cash dividend of 4-5% of NAV to the extent that the positive NAV performance of the Company would support such a dividend and absent other, exigent circumstances relating to the Investment Manager and otherwise. The initial dividend paid in 2012 formed part of a number of corporate actions designed to narrow the ongoing discount to NAV, which included the return of US$60 million to Shareholders through a special dividend and a tender offer for shares in the fourth quarter of 2012. The Board monitors the discount/premium to the NAV on a regular basis and continually maintains regular contact with significant shareholders and the Investment Manager when necessary. On 14 November 2013, the Company announced the payment of a second annualdividend of approximately 5% of net asset value of each share class. Thepayment of this dividend formed part of a number of corporate actions designedto narrow the ongoing discount to NAV. As a result of the narrowing of thediscount and with the aim of increasing liquidity in the Company's shares, theMaster Partnership sold 135,000 USD shares in the Company on 30 May 2014 at aprice of $17.10 and 50,000 USD shares in the Company on 29 July 2014 at a priceof $17.40, both of which were at a discount to NAV of approximately of 3%. * Performance of the Investment Manager. The Directors review the performance of the Investment Manager on an annual basis and Board representatives conduct bi-annual visits to the Investment Manager; * Failure of appointed service providers to the Company. The Directors conduct a formal review of each service provider annually in addition to receiving regular updates from each service provider and ensuring that there is ongoing communication between the Board and the various service providers to the Company; * Financial Risk. The Board employs independent administrators to prepare the Unaudited Condensed Interim Financial Statements of the Company and meets with the independent auditors at least twice a year to discuss all financial matters including the appropriateness of the accounting policies. Significant Events During The Period On 7 February 2014 the Directors announced the compulsory Euro share classconversion into the USD share class. At the Extraordinary General Meeting of the Company held on 12 March 2014,Shareholders approved to amend the Company's Articles, further details of whichare disclosed in Note 10. Relations with Shareholders The Board welcomes Shareholders' views and places great importance oncommunication with its Shareholders. The Board receives regular reports on theviews of shareholders and the Chairman and other Directors are available tomeet shareholders if required. Shareholders who wish to communicate with theBoard should contact the Administrator in the first instance, whose contactdetails can be found on the Company's website. The Annual General Meeting ofthe Company provides a forum for shareholders to meet and discuss issues withthe Directors of the Company. The seventh Annual General Meeting was held on 6June 2014 with all proposed resolutions being passed by the Shareholders. Foreign Account Tax Compliance Act The Foreign Account Tax Compliance Act ("FATCA") became effective on 1 January2013. The legislation is aimed at determining the ownership of US assets inforeign accounts and improving US tax compliance with respect to those assets.On 13 December 2013, The States of Guernsey signed an intergovernmentalagreement ("IGA") with US Treasury in order to facilitate the requirementsunder FATCA. The Board is monitoring implementation with the assistance of itslegal advisers and accountants. UK - Guernsey Intergovernmental Agreement On 22 October 2013, The States of Guernsey have signed an intergovernmentalagreement with the UK ("UK-Guernsey IGA") under which potentially mandatorydisclosure requirements may be required in respect of Shareholders who have aUK connection. The Board is monitoring implementation of the UK- Guernsey IGAwith the assistance of its legal advisers and accountants. Significant Shareholdings As at 14 August 2014, the following had significant shareholdings in excess of3% in the Company: Total Shares Held % Holding in ClassSignificant Shareholders* US Dollar Shares Goldman Sachs Securities (Nominees) 11,952,238 25.26Limited Vidacos Nominees Limited 8,568,279 18.11 HSBC Global Custody Nominee (UK) 5,584,899 11.80 Pershing Nominees Limited 2,111,765 4.46 Smith & Williamson Nominees Limited 2,080,699 4.40 Morstan Nominees Limited 2,052,528 4.34 The Bank of New York Nominees Limited 1,993,923 4.21 Nortrust Nominees Limted 1,730,427 3.66 State Street Nominees Limited 1,706,648 3.61 Sterling Shares James Capel (Nominees) Limited 433,713 20.81 HSBC Global Custody Nominee (UK) 205,414 9.85 James Capel (Channel Islands) Nominees 172,789 8.29Limited Hargreaves Lansdown (Nominees) 153,562 7.37 The Bank of New York (OCS) Nominees 122,668 5.88Limited Platform Securities Nominees 96,024 4.61 Alliance Trust Savings Nominees 80,485 3.86 Smith & Williamson Nominees Limited 76,947 3.69 Vestra Nominees Limited 62,753 3.01 * Other than Vestra Nominees Limited holding increasing to above 3% in SterlingShares in the period between 30 June 2014 and 14 August 2014, no othersignificant changes to significant shareholdings took place during the period. The Directors confirm to the best of their knowledge: * these Unaudited Condensed Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and give a true and fair view of the financial position of the Company; * these Unaudited Condensed Interim Financial Statements include information detailed in the Directors' Report, the Investment Manager's Review and Notes to the Unaudited Condensed Interim Financial Statements, which provide a fair review of the information required by: a. DTR 4.2.7 of the Disclosure and Transparency Rules ("DTR"), being an indication of important events that have occurred during the first six months of the financial year 2014 and their impact on these Unaudited Condensed Interim Report and Financial Statements: and a description of the principal risks and uncertainties for the remaining six months of the year; and b. DTR 4.2.8 of the DTR, being related party transactions that have taken place in the first six months of the current financial year 2014 and that have materially affected the financial position or the performance of the Company during the six month period ended 30 June 2014 and any changes in the related party transactions described in the last Annual Audited Financial Statements that could have a material effect on the financial position or performance of the Company in the first six months of the financial year 2014. Signed on behalf of the Board by: Christopher LeggeDirector Keith DorrianDirector 26 August 2014 Disclosure of Directorships in Public Listed Companies The following summaries the Directors' directorships in public companies: Company Name Exchange Christopher Legge Ashmore Global Opportunities Limited London Baring Vostok Investments PCC Limited Channel Islands BH Macro Limited London, Bermuda & Dubai John Laing Environmental Assets Group LondonLimited Sherborne Investors (Guernsey) B Limited London TwentyFour Select Monthly Income Fund LondonLimited Keith Dorrian AB Alternative Strategies PCC Limited Channel Islands AB International Fund PCC Limited Channel Islands BH Credit Catalyst Limited London Eurocastle Investments Limited Euronext IIAB PCC Limited Channel Islands MasterCapital Fund Limited Ireland Christopher Fish Boussard & Gavaudan Holding Limited Euronext and London Statement of Directors' Responsibilities in Respect of the Financial Statements The Directors are responsible for preparing the Unaudited Condensed InterimFinancial Statements in accordance with applicable Guernsey Law and generallyaccepted accounting principles. Guernsey Company Law requires the Directors toprepare Financial Statements for each financial period which give a true andfair view of the state of affairs of the Company and of the net income orexpense of the Company for that period. In preparing these Unaudited Condensed Interim Financial Statements theDirectors should: * select suitable accounting policies and then apply them consistently; * make judgements and estimates that are reasonable and prudent; * state whether the applicable accounting standards have been followed subject to any material departures disclosed and explained in the Unaudited Condensed Interim Financial Statements; and * prepare the Unaudited Condensed Interim Financial Statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of theCompany and to enable them to ensure that the Unaudited Condensed InterimFinancial Statements comply with The Companies (Guernsey) Law, 2008. They arealso responsible for the system of internal controls, safeguarding the assetsof the Company and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. The Directors have responsibility to confirm that: * these Unaudited Condensed Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and give a true and fair view of the financial position of the Company; and * these Unaudited Condensed Interim Financial Statements include information detailed in the Directors' Report, the Investment Manager's Review and Notes to the Unaudited Financial Statements, which provide a fair review of the information required by: a. DTR 4.2.7 of the Disclosure and Transparency Rules ("DTR"), being an indication of important events that have occurred during the first six months of the financial year 2014 and their impact on these Unaudited Condensed Interim Report and Financial Statements: and a description of the principal risks and uncertainties for the remaining six months of the year; and b. DTR 4.2.8 of the DTR, being related party transactions that have taken place in the first six months of the current financial year 2014 and that have materially affected the financial position or the performance of the Company during the six month period ended 30 June 2014 and any changes in the related party transactions described in the last Annual Audited Financial Statements that could have a material effect on the financial position or performance of the Company in the first six months of the financial year 2014. Signed on behalf of the Board by: Christopher LeggeDirector Keith DorrianDirector 26 August 2014 Investment Manager's Review Performance Summary 30-June-2014 31-December-2013 % Change USD Class Share Price 17.45 15.85 10.1% Net asset value per 17.98 16.87 6.6%share Premium/(discount) (2.9%) (6.0%) GBP Class 30-June-2014 31-December-2013 % Change Share Price 16.23 14.45 12.3% Net asset value per 17.27 16.20 6.6%share Premium/(discount) (6.0%) (10.8%) On 7 February 2014, the Company announced a mandatory conversion (the"Conversion") of all of the Euro-denominated class shares into U.S.Dollar-denominated class shares, effective 28 February 2014, in an effort toafford the Euro class shareholders greater liquidity. The Conversion was inaccordance with the provision in the Company's Articles of Incorporationgranting the directors the discretionary right to convert any class with a netasset value of less than $50 million. Strategy Performance For the six months ended 30 June 2014, the net asset value per share increasedby 6.6% in the U.S. Dollar class and 6.6% in the Sterling class. Amidst a volatile market environment, the Investment Manager posted positiveperformance results and the share price discount to NAV continued to narrowconsiderably. Weak performance during the First Quarter was driven primarily byweather-related negative market conditions in the United States. However, theInvestment Manager performed well in the Second Quarter and ended the firsthalf of the year positively positioned relative to several market benchmarks.After entering the year with relatively high exposure levels, the InvestmentManager has been steadily reducing exposures throughout 2014. Positive returns have been predominantly driven by strength in both thecorporate and structured credit portfolios in 2014, contributing nearly 25% and50% of fund returns, respectively, despite significantly less exposure relativeto equities. The Manager has also made several successful investments insovereign credit and continues to find attractive risk-adjusted opportunitiesto supplement a lackluster broader corporate credit environment. Despite a choppy equity market, the Investment Manager's equity portfolio inboth the United States and Latin America outperformed. Investments in theEnergy and Industrials sectors contributed meaningfully to returns whilepositions in the TMT space and in Japan detracted from performance. Risk Outlook The Investment Manager anticipates periods of market volatility during thesecond half of the year. As such, the Investment Manager will carefully monitormacroeconomic developments and search for compelling investment opportunitieswith attractive entry points. The Manager maintains a diversified portfolio,with exposure to long/short equity, credit, mortgage and macro investments. At 30 June 2014, exposure in the Investment Manager's portfolio across fourfunds and two managed accounts was as follows1: Long Short Net Equities 73.5% (11.3%) 62.2% Credit 34.8% (7.2%) 27.6% Macro 6.1% (7.9%) (1.8%) Other 2.7% 0.0% 2.7% Net equity exposure is defined as the long exposure minus the short exposure ofall equity positions (including long/short, arbitrage, and other strategies),and can serve as a rough measure of the exposure to fluctuations in overallmarket levels. The Investment Manager continues to closely monitor theliquidity of the portfolio, and is comfortable that the current composition isaligned with the redemption terms of the fund. The funds are hard closed aseffective July 1, 2011. 1 Relates to the Third Point Offshore Master Fund L.P. Independent Review Report Third Point Offshore Investors Limited Introduction We have been engaged by the Company to review the Unaudited Condensed InterimFinancial Statements in the Unaudited Condensed Interim Report for the sixmonths ended 30 June 2014 which comprise the Statements of Assets andLiabilities, Unaudited Statements of Operations, Statements of Changes in NetAssets, Unaudited Statements of Cash Flows and the related notes 1 to 13. Wehave read the other information contained in the interim report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe information in the interim condensed financial statements. This report is made solely to the Company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the Company, for our work, for thisreport, or for the conclusions we have formed. Directors' Responsibilities The interim financial report is the responsibility of, and has been approvedby, the Directors. The Directors are responsible for preparing the UnauditedCondensed Interim Report in accordance with the Disclosures and TransparencyRules of the United Kingdom's Financial Conduct Authority. As disclosed in note3, the interim condensed financial statements of the Company are prepared inaccordance with accounting principles generally accepted in the United States. Our Responsibility Our responsibility is to express to the Company a conclusion on the UnauditedCondensed Interim Financial Statements in the Unaudited Condensed InterimReport based on our review. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us tobelieve that the Unaudited Condensed Interim Financial Statements in theUnaudited Condensed Interim Report for the six months ended 30 June 2014 arenot prepared, in all material respects, in accordance with accountingprinciples generally accepted in the United States and the Disclosure andTransparency Rules of the UK's Financial Conduct Authority. Ernst & Young LLP Guernsey, Channel Islands 26 August 2014 The maintenance and integrity of the Third Point Offshore Investors Limited website is the responsibility of the directors; the work carried out by theauditors does not involve consideration of these matters and, accordingly, theauditors accept no responsibility for any changes that may have occurred to thefinancial statements since they were initially presented on the web site. Legislation in Guernsey governing the preparation and dissemination offinancial statements may differ from legislation in other jurisdictions. Statements of Assets and Liabilities Unaudited Audited As at As at 30 June 31 December 2014 2013 (Stated in United States Dollars) $ $ Assets Investment in Third Point Offshore Fund Ltd 912,288,344 854,158,083at fair value (Cost: US$473,864,745; 31 December 2013:US$474,285,168) Cash 47,060 103,657 Other assets 254,721 155,404 Total assets 912,590,125 854,417,144 Liabilities Accrued expenses and other liabilities 203,428 133,601 Directors' fees payable (Note 5) 99,027 89,438 Administration fee payable (Note 4) 48,928 46,758 Total liabilities 351,383 269,797 Net assets 912,238,742 854,147,347 Number of Ordinary Shares in issue (Note 6) US Dollar Shares 47,299,218 45,998,773 Euro Shares - 702,380 Sterling Shares 2,094,580 2,327,871 Net asset value per Ordinary Share (Notes 8and 12) US Dollar Shares $17.98 $16.87 Euro Shares - €16.16 Sterling Shares £17.27 £16.20 Number of Ordinary B Shares in issue (Note6) US Dollar Shares 31,532,828 30,665,862 Euro Shares - 468,255 Sterling Shares 1,396,393 1,551,919 The financial statements were approved by the Board of Directors on 26 August2014 and signed on its behalf by: Christopher Legge Director Keith Dorrian Director See accompanying notes and attached unaudited condensed interim financialstatements of Third Point Offshore Fund Ltd. and Third Point Offshore MasterFund L.P. Unaudited Statements of Operations For the For the period ended period ended 30 June 2014 30 June 2013 (Stated in United States Dollars) $ $ Realised and unrealised gain from investmenttransactions allocated from Master Fund Net realised gain from securities, commodities, derivative contracts and foreign currency 89,844,525 91,872,112translations Net change in unrealised (loss)/gain on securities derivative contracts and foreign currency (1,049,465) 29,713,055translations Net (loss)/gain from currencies allocated from (12,310,344) 3,254,523Master Fund Total net realised and unrealised gain frominvestment transactions allocated from Master Fund 76,484,716 124,839,690 Net investment loss allocated from Master Fund Interest income 4,443,265 3,885,162 Dividends, net of withholding taxes ofUS$1,088,679 (30 June 2013: US$289,401) 3,432,504 1,124,935 Other income 14,140 2,523 Stock borrow fees (53,276) (642,839) Incentive allocation (14,271,596) (21,671,621) Investment Management fee (8,750,994) (7,665,418) Dividends on securities sold, not yet purchased (18,364) (308,418) Interest expense (972,055) (290,584) Other expenses (1,298,379) (1,242,652) Total net investment loss allocated from Master (17,474,755) (26,808,912)Fund Company expenses Administration fee (Note 4) (88,159) (76,007) Directors' fees (Note 5) (149,911) (125,358) Other fees (601,827) (330,378) Expenses paid on behalf of Third Point OffshoreIndependent Voting Company Limited (Note 4) (78,669) (60,226) Total Company expenses (918,566) (591,969) Net loss (18,393,321) (27,400,881) Net increase in net assets resulting from 58,091,395 97,438,809operations See accompanying notes and attached unaudited condensed interim financialstatements of Third Point Offshore Fund Ltd. and Third Point Offshore MasterFund L.P. Statements of Changes in Net Assets Unaudited Audited For the For the period ended year ended June 2014 31 December (Stated in United States Dollars) $ $ Increase in net assets resulting from operations Net realised gain from securities, commodities,derivative contracts and foreign currency translations allocated from 89,844,525 191,348,510Master Fund Net change in unrealised (loss)/gain onsecurities, derivative contracts and foreign currency translations allocated from (1,049,465) 66,561,369Master Fund Net (loss)/gain from currencies allocated from (12,310,344) 7,083,394Master Fund Total net investment loss allocated from Master (17,474,755) (62,009,665)Fund Total Company expenses (918,566) (1,187,702) Net increase in net assets resulting from 58,091,395 201,795,906operations Decrease in net assets resulting from capitalshare transactions Dividend Distribution - (42,511,128) Net assets at the beginning of the period 854,147,347 694,862,569 Net assets at the end of the period 912,238,742 854,147,347 See accompanying notes and attached unaudited condensed interim financialstatements of Third Point Offshore Fund Ltd. and Third Point Offshore MasterFund L.P. Unaudited Statements of Cash Flows For the For the period period ended ended 30 June 30 June 2014 2014 (Stated in United States Dollars) $ $ Cash flows from operating activities Operating expenses (631,317) (505,018) Directors' fees (140,322) (130,512) Administration fee (85,989) (72,237) Third Point Offshore Independent Voting Company (78,669) (60,226)Limited¹ Redemption from Master Fund 879,700 629,199 Cash outflow from operating activities (56,597) (138,794) Net decrease in cash (56,597) (138,794) Cash at the beginning of the period 103,657 189,506 Cash at the end of the period 47,060 50,712 1 Third Point Offshore Independent Voting Company Limited expenses consist ofDirector Fees, Audit Fee and General Expenses. See accompanying notes and attached unaudited condensed interim financialstatements of Third Point Offshore Fund Ltd. and Third Point Offshore MasterFund L.P. Notes to the Unaudited Condensed Interim Financial Statements For the period ended 30 June 2014 1. The Company Third Point Offshore Investors Limited (the "Company") is an Authorisedclosed-ended investment company incorporated in Guernsey on 19 June 2007 for anunlimited period, with registration number 47161. The Company offers multiple classes of Ordinary Shares, which differ in termsof currency of issue. To date, Ordinary Shares have been issued in US Dollarsand Sterling. On 7 February 2014, the Company announced a mandatory conversion(the "Conversion") of all the Euro class shares in issue into US Dollar classshares, effective 28 February 2014. It was resolved to convert the shares toafford Euro class shareholders greater liquidity. The Conversion was inaccordance with the provision in the Company's Articles of Incorporationgranting the Directors the discretionary right to convert any class with a NetAsset Value ("NAV") of less than US$50 million. We consider the Conversion tobe in the best interest of the shareholders of the Euro class and the Companyas a whole. Details of the Conversion are noted in note 6. 2. Organisation Investment Objective and Policy The Company's investment objective is to provide its Shareholders withconsistent long term capital appreciation, utilising the investment skills ofthe Investment Manager, through investment of all of its capital (net ofshort-term working capital requirements) in Class E shares of Third PointOffshore Fund, Ltd. (the "Master Fund"), an exempted company formed under thelaws of the Cayman Islands on 21 October 1996. The Master Fund's investmentobjective is to seek to generate consistent long-term capital appreciation, byusing an event driven, bottom-up, fundamental approach to evaluate varioustypes of securities throughout companies' capital structures. The Master Fundis managed by the Investment Manager and the Investment Manager'simplementation of the Master Fund's investment policy is the main driver of theCompany's performance. The Master Fund is a limited partner of Third Point Offshore Master Fund L.P.(the "Master Partnership"), an exempted limited partnership organised under thelaws of the Cayman Islands, of which Third Point Advisors II L.L.C., anaffiliate of the Investment Manager, is the general partner. Third Point LLC isthe Investment Manager to the Company, the Master Fund and the MasterPartnership. The Master Fund and the Master Partnership share the sameinvestment objective, strategies and restrictions as described above. The Unaudited Condensed Interim Financial Statements of the Master Fund and theUnaudited Condensed Interim Financial Statements of the Master Partnershipshould be read alongside the Company's Unaudited Interim Report and FinancialStatements. Investment Manager The Investment Manager is a Limited Liability Company formed on 28 October 1996under the laws of the State of Delaware. The Investment Manager was appointedon 27 June 2007 and is responsible for the management and investment of theCompany's assets on a discretionary basis in pursuit of the Company'sinvestment objective, subject to the control of the Company's Board and certainborrowing and leveraging restrictions. The Company does not pay the Investment Manager for its services as theInvestment Manager is paid a management fee of 2 per cent per annum of theCompany's share of the Master Fund's net asset value (the "NAV") and a generalpartner incentive allocation of 20 per cent of the Master Fund's NAV growth("Full Incentive Fee") invested in the Master Partnership, subject to certainconditions and related adjustments, by the Master Fund. If a particular seriesinvested in the Master Fund depreciates during any fiscal year and duringsubsequent years there is a profit attributable to such series, the series mustrecover an amount equal to 2.5 times the amount of depreciation in the prioryears before the Investment Manager is entitled to the Full Incentive Fee.Until this occurs, the series will be subject to a reduced incentive fee equalto half of the Full Incentive Fee. The Company was allocated US$14,271,596 (30June 2013: US$21,671,621) of incentive fees for the period ended 30 June 2014. 3. Significant Accounting Policies Basis of Presentation These Unaudited Condensed Interim Financial Statements have been prepared inaccordance with relevant accounting principles generally accepted in the UnitedStates of America ("US GAAP"). The functional and presentational currency ofthe Company is United States Dollars. The Unaudited Condensed Interim Financial Statements do not include all theinformation and disclosures opined in the Annual Financial Statements andshould be read in conjunction with the Company's Annual Financial Statements asat 31 December 2013. The following are the significant accounting policies adopted by the Company: Cashand Cash Equivalents Cash in the Statements of Assets and Liabilities comprises cash at bank and onhand. Usually this is short term cash that settles between 0-3 months. Valuation of Investments The Company records its investment in the Master Fund at fair value. Inaccordance with Financial Accounting Standards Board ("FASB") AccountingStandards Codification ("ASC") Topic 820 "Fair Value Measurement" defines fairvalue as the price the Company would receive upon selling a security in atimely transaction to an independent buyer in the principal or mostadvantageous market of the security. For further information refer to theMaster Partnership's Unaudited Condensed Interim Financial Statements. The valuation of securities held by the Master Partnership, which the MasterFund directly invests in, is discussed in the notes to the Master Partnership'sUnaudited Condensed Interim Financial Statements. The net asset value of theCompany's investment in the Master Fund reflects its fair value. At 30 June2014, the Company's US Dollar and Sterling shares represented 12.98% and 0.94%(31 December 2013: 12.56% and 1.01%) respectively of the Master Fund's NAV. Uncertainty in Income Tax ASC Topic 740 "Income Taxes" requires the evaluation of tax positions taken orexpected to be taken in the course of preparing the Company's tax returns todetermine whether the tax positions are "more- likely-than-not" of beingsustained by the applicable tax authority based on the technical merits of theposition. Tax positions not deemed to meet the more-likely-than-not thresholdwould be recorded as a tax benefit or expense in the year of determination.Management has evaluated the implications of ASC 740 and has determined that ithas not had a material impact on these Unaudited Condensed Interim FinancialStatements. Income and Expenses The Company records its proportionate share of the Master Fund's income,expenses and realised and unrealised gains and losses on a monthly basis. Inaddition, the Company accrues interest income, to the extent it is expected tobe collected, and other expenses. Use of Estimates The preparation of Unaudited Condensed Interim Financial Statements inconformity with US GAAP (relevant accounting principles generally accepted inthe United States of America) may require management to make estimates andassumptions that affect the amounts and disclosures in the financial statementsand accompanying notes. Actual results could differ from those estimates. Otherthan what is underlying in the Master Fund and the Master Partnership, theCompany does not use any estimates in respect of amounts that are material tothe Unaudited Condensed Interim Financial Statements. Foreign Exchange Investment securities and other assets and liabilities denominated in foreigncurrencies are translated into United States Dollars using exchange rates atthe reporting date. Purchases and sales of investments and income and expenseitems denominated in foreign currencies are translated into United StatesDollars at the date of such transaction. All foreign currency translation gainsand losses are included in the Unaudited Statement of Operations. 4. Material Agreements Management and Incentive fees The Investment Manager was appointed by the Company to invest its assets inpursuit of the Company's investment objectives and policies. As disclosed inNote 2, the Investment Manager is remunerated by the Master Fund for managementfees and incentive fees. Administration fees Under the terms of an Administration Agreement dated 29 June 2007, the Companyappointed Northern Trust International Fund Administration Services (Guernsey)Limited as Administrator and Corporate Secretary. The Administrator is paid fees based on the NAV of the Company, payablequarterly in arrears. The fee is at a rate of 2 basis points of the NAV of theCompany for the first £500 million of NAV and a rate of 1.5 basis points forany NAV above £500 million. This fee is subject to a minimum of £4,250 permonth. The Administrator is also entitled to an annual corporate governance fee of£30,000 for its Company secretarial and compliance activities. In addition, the Administrator is entitled to be reimbursed out-of-pocketexpenses incurred in the course of carrying out its duties, and may chargeadditional fees for certain other services. Total Administrator expenses during the period amounted to US$88,159 (30 June2013: US$ 76,007) with US$48,928 (31 December 2013: US$46,758) outstanding. Related Party The Company has entered into a support and custody agreement with Third PointOffshore Independent Voting Company Limited ("VoteCo") whereby, in return forthe services provided by VoteCo, the Company will provide VoteCo with fundsfrom time to time in order to enable VoteCo to meet its obligations as theyfall due. Under this agreement, the Company has also agreed to pay all theexpenses of VoteCo, including the fees of the directors of VoteCo, the fees ofall advisors engaged by the directors of VoteCo and premiums for directors andofficers insurance. The Company has also agreed to indemnify the directors ofVoteCo in respect of all liabilities that they may incur in their capacity asdirectors of VoteCo. 5. Directors' Fees The Chairman is entitled to a fee of £60,000 per annum. All other independentDirectors are entitled to receive £36,000 per annum with the exception of Mr.Legge who receives £44,000 per annum as the audit committee chairman. Mr.Targoff has waived his fees. The Directors are also entitled to be reimbursedfor expenses properly incurred in the performance of their duties asDirector.The Directors' fees during the period amounted to US$149,911 (30 June2013: US$125,358) with US$99,027 (31 December 2013: US$89,438) outstanding. 6. Share Capital The Company was incorporated with the authority to issue an unlimited number ofOrdinary Shares (the "Shares") with no par value and an unlimited number ofOrdinary B Shares ("B Shares") of no par value. All B Shares are to be unlistedand held at all times by VoteCo. The Shares may be divided into at least twoclasses denominated in US Dollar and Sterling. The Company has issued approximately 40 per cent of the aggregate voting rightsof the Company to VoteCo in the form of B Shares. The B Shares are unlisted, donot carry any economic interest, other than to receive an annual dividend at afixed rate of 0.0000001 pence (Sterling) per B Share, and at all times willrepresent approximately 40 per cent. of the aggregate issued capital of theCompany. The Articles of Association provide that the ratio of issued US DollarB Shares to Euro B Shares to Sterling B Shares shall at all times approximateas closely as possible the ratio of issued US Dollar Shares to Euro Shares toSterling Shares in the Company. On 7 February 2014 the Directors announced theCompulsory Euro Share Class Conversion into USD share class. US Dollar Euro Sterling Shares Shares Shares Number of Ordinary Shares Shares issued 1 January 2014 45,998,773 702,380 2,327,871 Shares Converted Total shares transferred to share class 1,319,666 - 17,394during the period Total shares transferred out of share (19,221) (702,380) (250,685)class during the period Shares in issue at end of period 47,299,218 - 2,094,580 US Dollar Euro Sterling Shares US$ Shares US$ Shares US$ Share Capital Account Share capital account at 1 January 2014 776,037,009 15,646,721 62,463,617 Shares Converted Total share value transferred to shareclass during theperiod 22,647,009 - 481,048 Total share value transferred out of shareclass during theperiod (336,248) (15,962,702) (6,829,107) Net increase in net assets resulting from 52,009,378 315,981 5,766,036operations Share capital account at end of period 850,357,148 - 61,881,594 US Dollar Euro Sterling Shares Shares Shares Number of Ordinary B Shares Shares in issue as at 1 January 2014 30,665,862 468,255 1,551,919 Shares converted Total shares transferred to share class 879,781 - 11,597during the period Total shares transferred out of share (12,815) (468,255) (167,123)class during the period Shares in issue at end of period 31,532,828 - 1,396,393 In respect of each class of Shares a separate class account has beenestablished in the books of the Company. An amount equal to the aggregateproceeds of issue of each Share Class has been credited to the relevant classaccount. Any increase or decrease in the NAV of the Master Fund, as calculatedby the Master Fund, is allocated to the relevant class account in the Companyaccording to the number of shares held by each class. Each class account isallocated those costs, expenses, losses, dividends, profits, gains and incomewhich the Directors determine in their sole discretion relate to a particularclass. Expenses which relate to the Company as a whole rather than specificclasses are allocated to each class in the proportion that its NAV bears to theCompany as a whole. Voting Rights Ordinary Shares carry the right to vote at general meetings of the Company andto receive any dividends, attributable to the Ordinary Shares as a class,declared by the Company and, in a winding-up will be entitled to receive, byway of capital, any surplus assets of the Company attributable to the OrdinaryShares as a class in proportion to their holdings remaining after settlement ofany outstanding liabilities of the Company. B Shares also carry the right tovote at general meetings of the Company. As prescribed in the Company's Articles, each Shareholder present at generalmeetings of the Company shall, upon a show of hands, have one vote. Upon apoll, each Shareholder shall, in the case of a separate class meeting, have onevote in respect of each Share or B Share held and, in the case of a generalmeeting of all Shareholders, have one vote in respect of each US Dollar Shareor US Dollar B Share held, and two votes in respect of each Sterling Share orSterling B Share held. Fluctuations in currency rates will not affect therelative voting rights applicable to the Shares and B Shares. In addition allof the Company's Shareholders have the right to vote on all material changes tothe Company's investment policy. Repurchase of Shares and Discount Control The Directors of the Company were granted authority to purchase in the marketup to 14.99 per cent of each class of Shares in issue at the Annual GeneralMeeting on 6 June 2014, and they intend to seek annual renewal of thisauthority from Shareholders. The Directors propose to utilise this sharerepurchase authority to address any imbalance between the supply of and demandfor shares. Pursuant to the Director's share repurchase authority, the Company,through the Master Fund, commenced a share repurchase program in December 2007.The Shares are being held by the Master Partnership. The Master Partnership'sgains or losses and implied financing costs related to the shares purchasedthrough the share purchase programme are entirely allocated to the Company'sinvestment in the Master Fund. The Master Partnership has an ownership of10.79% of the shares outstanding at 30 June 2014 (31 December 2013: 11.15%). Inaddition, the Company, the Master Fund, the Investment Manager and itsaffiliates have the ability to purchase Shares in the after-market at any timethe Shares trade at a discount to NAV. During the period ended 30 June 2014,the Master Partnership sold 135,000 USD shares in the Company at a price of$17.10 which was at discount to NAV of approximately 3%. At 30 June 2014 and 31 December 2013 the Master Fund held the following Sharesin the Company in the after-market: Number of Average Cost30 June 2014 Currency shares Cost per Share US Dollar Shares USD 5,329,753 US$57,172,498 US$10.73 Number of Average Cost31 December2013 Currency shares Cost per Share US Dollar Shares USD 5,464,753 US$58,389,679 US$10.68 Further issue of Shares Under the Articles, the Directors have the power to issue further shares on anon-pre-emptive basis. If the Directors issue further Shares, the issue pricewill not be less than the then-prevailing estimated weekly NAV per Share of therelevant class of Shares. Share Conversion Scheme The Company's Articles incorporate provisions to enable shareholders of any oneClass of Ordinary Shares to convert all or part of their holding into any otherCurrency Class of Ordinary Share on a monthly basis. Upon conversion acorresponding number of B Shares will be converted in a similar manner. If the aggregate NAV of any Currency Class at any month-end falls below theequivalent of US$50 million, the Shares of that Class may be convertedcompulsorily into Shares of the Currency Class with the greatest aggregatevalue in US Dollar terms at the time. Each conversion will be based on NAV(Note 8) of the share classes to be converted. On 7 February 2014, the Directors announced that as at 31 January 2014 theaggregate NAV attributable to the Euro share class of the Company was €9.7million, equivalent to US$13.2 million at the prevailing exchange rate as atthat date. The aggregate NAV of the Euro share class has been below US$50million continuously since July 2011. The Directors therefore resolved, inaccordance with the Articles, to convert all the Euro class shares in issueinto US Dollar class shares (the "Euro Conversion"). The Directors consideredthat the Euro Conversion was in the best interest of shareholders of the Euroshare class and the Company as a whole. Shareholders who had their Euro sharesconverted into US Dollar shares benefited from holding shares in asignificantly larger share class offering higher levels of liquidity. TheCompulsory Conversion of Euro class shareholders took place on 26 February 2014and the Euro class shares ceased to exist on 3 April 2014 and were removed fromthe Official List on the same day. 7. Taxation The Fund is exempt from taxation in Guernsey under the provisions of the IncomeTax (Exempt Bodies) (Guernsey) Ordinance 1989. 8. Calculation of Net Asset Value The NAV of the Company is equal to the value of its total assets less its totalliabilities. The NAV per Share of each class is calculated by dividing the NAVof the relevant class account by the number of Ordinary Shares of the relevantclass in issue on that day. 9. Related Party Transactions At 30 June 2014 other investment funds owned by or affiliated with theInvestment Manager owned 5,630,444 (31 December 2013: 5,630,444) US DollarShares in the Company. 10. Significant Events On 7 February 2014 the Directors announced the compulsory Euro share classconversion into USD share class. The Financial Conduct Authority's new restrictions on the retail distributionof non-mainstream pooled investments came into effect on 1 January 2014. Havingtaken legal advice an EGM was held on 12 March 2014 to approve a proposal bythe Company to a minor amendment to its Articles so as to enable the Company'sShares to continue to be recommended by independent financial advisers toordinary UK retail investors. This amendment detailed below will aid in theCompany's continued efforts to maintaining the liquidity profile and thegeneral marketability of the Company's Shares. The Articles were amended by replacing Article 3(4)(i) with a new Article 3(4)(i) as set out below: Dividends B Shareholders are entitled to receive an annual dividend at a fixed rate of0.0000001 pence (Sterling) per B Share, irrespective of whether their B Sharesare denominated in Sterling or in any other currency, but B Shares shall conferno other right to share in the profits of the Company. 11. Subsequent Events Subsequent to 30 June 2014, the Master Partnership sold 50,000 USD shares inthe Company at a price of $17.40 which was at discount to NAV of approximately3%. 12. Financial Highlights The following tables include selected data for a single Ordinary Share of eachof the Ordinary Share classes in issue at the period end and other performanceinformation derived from the Unaudited Condensed Interim Financial Statements. US Dollar Euro Sterling Shares Shares Shares 30 28 30 30 June 2014 February 2014* June 2014 US$ € £ Per Share Operating Performance Net Asset Value beginning of the period 16.87 16.16 16.20 Income from Operations Net realised and unrealised gain from investment transactions allocated from Master Fund¹ 1.47 0.45 1.41 Net loss (0.36) (0.12) (0.34) Total Return from Operations 1.11 0.33 1.07 Net Asset Value, end of the period 17.98 16.49 17.27 Total return before incentive fee allocated from 8.24% 2.58% 8.28%Master Fund Incentive allocation from Master Fund (1.66%) (0.54%) (1.68%) TotalreturnafterincentivefeeallocatedfromMasterFund 6.58% 2.04% 6.60% *FinancialhighlightsfortheEuroShareClasshavebeencalculatedfortheperiodfrom1January2014to28February2014,thedateoftheConversion.SeeNote1. Total return from operations reflects the net return for an investment made atthe beginning of the period and is calculated as the change in the NAV perOrdinary Share during the period ended 30 June 2014 and is not annualised. Anindividual Shareholder's return may vary from these returns based on the timingof their purchases and sales of shares on the market. US Dollar Euro Sterling Shares Shares Shares 30 June 30 June 30 June 2013 2013 2013 US$ € £ Per Share Operating Performance Net Asset Value beginning of the period 13.77 13.17 13.08 Income from Operations Net realised and unrealised gain from investment transactions allocated from Master Fund¹ 2.54 2.47 2.48 Net loss (0.55) (0.49) (0.40) Total Return from Operations 1.99 1.98 2.08 Net Asset Value, end of the period 15.76 15.15 15.16 Total return before incentive fee allocated from 17.72% 18.67% 19.34%Master Fund Incentive allocation from Master Fund (3.27%) (3.64%) (3.44%) TotalreturnafterincentivefeeallocatedfromMasterFund 14:45% 15.03% 15.90% Total return from operations reflects the net return for an investment made atthe beginning of the period and is calculated as the change in the NAV perOrdinary Share during the period ended 30 June 2013 and is not annualised. Anindividual Shareholder's return may vary from these returns based on the timingof their purchases and sales of shares on the market. USDollar Euro Sterling Shares Shares Shares 30 30 30 June 2014 June 2014 June 2014 US$ € £ Supplemental data Net Asset Value, end of the period 850,357,148 - 36,173,259 Average Net Asset Value, for the 811,156,882 10,046,288 36,061,348period² Ratiotoaveragenetassets Operating expenses³ (1.36%) (0.44%) (1.35%) Incentive fee allocated from Master (1.63%) (0.55%) (1.61%)Fund Total operating expense³ (2.99%) (0.99%) (2.96%) Net loss³ (2.10%) (0.74%) (2.08%) USDollar Euro Sterling Shares Shares Shares 30 30 30 June 2014 June 2014 June 2014 US$ € £ Supplemental data Net Asset Value, end of the period 726,308,391 10,263,391 34,601,344 Average Net Asset Value, for the period² 696,905,196 11,945,090 33,848,425 Ratiotoaveragenetassets Operating expenses³ (1.41%) (1.35%) (1.40%) Incentive fee allocated from Master Fund (2.91%) (2.54%) (1.99%) Total operating expense³ (4.32%) (3.89%) (3.39%) Net loss³ (3.66%) (3.27%) (2.74%) 1 Includes foreign currency translation of profit/(loss)with respect to Euro and Sterling share classes. 2 Average Net Asset Value for the period is calculated based on published weeklyestimates of NAV. 3 Operating expenses are Company expenses together with operating expensesallocated from the Master Fund. 13. Ongoing Charge Calculation Ongoing charges for the period/year ended 30 June 2014 and 31 December 2013have been prepared in accordance with the AIC recommended methodology.Performance fees were charged on the Fund. In line with AIC guidance, anOngoing Charge has been disclosed both including and excluding performancefees. The Ongoing charges for the period/year ended 30 June 2014 and 31December 2013 excluding performance fees and including performance fees arebased on Company expenses and allocated Master Fund expenses outlined below. (excluding performance fees) 30 June 31 December 2014 2013 US Dollar Shares 2.50% 2.59% Euro Shares 1.69%* 2.55% Sterling Shares 2.49% 2.57% (including performance fees) 30 June 31 December 2014 2013 US Dollar Shares 5.79% 8.49% Euro Shares 4.06%* 8.06% Sterling Shares 5.73% 7.59% * Ongoing charges for the Euro Share Class have been calculated for the periodfrom 1 January 2014 to 28 February 2014, the date of the Conversion. See Note1. Management and Administration Directors Marc Antoine Autheman (Chairman)* Christopher Legge* PO Box 255, Trafalgar Court, Les PO Box 255, Trafalgar Court, LesBanques, Banques, St Peter Port, Guernsey, St Peter Port, Guernsey, Channel Islands, GY1 3QL. Channel Islands, GY1 3QL. Keith Dorrian* Joshua L TargoffPO Box 255, Trafalgar Court, Les PO Box 255, Trafalgar Court, LesBanques, Banques,St Peter Port, Guernsey, St Peter Port, Guernsey,Channel Islands, GY1 3QL. Channel Islands, GY1 3QL. Christopher Fish* * These Directors are independent.PO Box 255, Trafalgar Court, Les (All Directors are non-executive).Banques,St Peter Port, Guernsey,Channel Islands, GY1 3QL. Investment Manager Registered OfficeThird Point LLC PO Box 255, Trafalgar Court, Les Banques,18th Floor, 390 Park Avenue, St Peter Port, Guernsey,New York, NY 10022, Channel Islands, GY1 3QL.United States of America. Auditors Administrator and SecretaryErnst & Young LLP Northern Trust International FundPO Box 9, Royal Chambers Administration Services (Guernsey) Limited,St Julian's Avenue, PO Box 255, Trafalgar Court, Les Banques,St Peter Port, Guernsey, St Peter Port, Guernsey,Channel Islands, GY1 4AF. Channel Islands, GY1 3QL. Legal Advisors (UK Law) Legal Advisors (Guernsey Law)Herbert Smith LLP Mourant OzannesExchange House, Primrose Street, PO Box 186, Le Marchant Street,London, EC2A 2HS, St Peter Port, Guernsey,United Kingdom. Channel Islands, GY1 4HP. Legal Advisors (US Law) Receiving AgentCravath, Swaine & Moore, LLP Capita Registrars825 Eighth Avenue, Worldwide Plaza, The Registry,New York, NY 10019-7475, 34 Beckenham Road,United States of America. Beckenham, Kent BR3 4TU United Kingdom. Registrar and CREST Service Provider Corporate BrokerCapita Registrars (Guernsey) Limited Jefferies International Limited2nd Floor, No.1 Le Truchot, Vintners Place,St Peter Port, Guernsey, 68 Upper Thames Street,Channel Islands, GY1 1WO. London EC4V 3BJ, United Kingdom.