TIDMARCL
RNS Number : 2452O
Altus Resource Capital Limited
17 September 2013
Altus Resource Capital Limited
Annual Report
and
Consolidated Financial Statements
for the year ended 30 June 2013
Altus Resource Capital Limited
SUMMARY INFORMATION
Company Overview
Overview
Altus Resource Capital Limited ("ARCL" or the "Company") is a
Guernsey authorised, closed-ended investment company incorporated
on 30 April 2009, which listed on the Specialist Fund Market (the
"SFM") of the London Stock Exchange on 30 June 2009 and the Channel
Islands Stock Exchange (the "CISX") on 22 December 2009.
The Company's objective is to realise capital growth from a
concentrated portfolio of Junior Resource Equities and to generate
a significant capital return to shareholders.
The Company's investment activities are managed by Altus Capital
Limited (the "Investment Manager") who report to the Board. The
Investment Manager is a Financial Conduct Authority ("FCA")
authorised and regulated wholly-owned subsidiary of Altus
Strategies Limited.
The Company issued 26,000,000 Ordinary Shares at GBP1.00 per
share on 30 June 2009 and a further 10,997,233 Ordinary Shares at
GBP1.33 on 22 December 2009. On 2 August 2010 a further 2,722,336
Ordinary Shares were issued at GBP1.40 per share.
The group comprises the Company and its subsidiary Altus Global
Gold Limited (together the "Group") as detailed in Note 7 to the
Consolidated Financial Statements.
Altus Global Gold Limited is an authorised open-ended investment
company incorporated under the laws of Guernsey on 10 October 2011
with registered number 54069. It listed on the Channel Island Stock
Exchange on 1 November 2011.
Altus Global Gold Limited was established to realise capital
growth from a portfolio of gold and precious metals equities, with
the aim of generating a significant capital return to shareholders.
It invests in mid-tier and major gold and precious metals companies
with a focus on mid-tier producers.
The Company invested GBP5,000,000 in its subsidiary company
Altus Global Gold Limited in October 2011.
The financial year end of Altus Global Gold Limited is 30 June,
which is co-terminus with the financial year end of the
Company.
Investment Objectives and Policy
The Company's objective is to realise capital growth from a
concentrated portfolio of Junior Resource Equities and to generate
a significant capital return to shareholders.
The Company invests in companies engaged in the exploration,
development and/or mining of metals and minerals with a focus on
companies that operate in the gold sector. Portfolio companies will
be predominantly, but not exclusively, listed or quoted on either
UK markets or other recognised stock exchanges including the
Canadian and Australian markets. They will typically be capitalised
at less than GBP500 million at the time of investment by the
Company.
Discount Management
The Directors have general shareholder authority to purchase,
from time to time, up to 14.99% of the Company's Ordinary Shares in
issue with a view to addressing any imbalance between the supply
and demand for Shares. The Directors intend to seek annual renewal
of this authority from Shareholders at each future general meeting
held under section 199 of The Companies (Guernsey) Law, 2008, as
amended (the "Law").
In accordance with the Law any Ordinary Share buy backs will be
effected by the purchase of Ordinary Shares in the market for cash
at a price below the estimated prevailing net asset value per
Ordinary Share where the Directors believe such a purchase will
enhance shareholder value. Ordinary Shares which are purchased may
be cancelled or held in treasury.
Altus Resource Capital Limited
CHAIRMAN'S STATEMENT
I hereby present the Annual Report and Consolidated Financial
Statements of the Company for the year ended 30 June 2013 (the
"Year"). The Company's Net Asset Value ("NAV") as announced on 30
June 2013 was GBP28.7 million or GBP0.72 per Ordinary Share, a
decline of 52.8% over the Year and of 24.1% since launch on 30 June
2009.
Political and economic uncertainty, highlighted in last year's
annual report, has continued throughout the Year. However, national
strikes, civil unrest, rioting and bloody uprisings no longer
dominate the headlines to the same extent. Global equity markets
have risen inexorably over the last twelve months with major
indices breaching new highs. With the growth of the US economy
apparently back on track, the Fed has announced a possible tapering
of quantitative easing which has rattled metals and particularly
precious metals prices. With China typically accounting for close
to 50% of global demand of industrial metals, their prices have
remained volatile and extremely sensitive to Chinese economic
growth data.
Against the volatility in metals prices, mining equities
suffered extreme weakness with gold equities in particular being
sold to levels not seen since the financial crisis of 2008. With
the focus of the portfolio on junior gold equities, the Group's NAV
was also subject to significant weakness losing 52.8% over the
Year. The FTSE Gold Mines Index composed of larger gold stocks lost
48.0% and the Market Vectors Junior Gold Miners ETF lost 52.3% over
the Year.
While the performance of the Company has been extremely
disappointing, we remain confident that given current valuations of
junior resource equities and the focus of the portfolio on the
well-managed companies with world class assets and strong balance
sheets, the Company is well positioned to deliver significant NAV
growth over the coming years, in particular should the price of
gold improve towards previously seen levels. I thank you for your
on-going support of the Company through this difficult Year.
Nick Falla
Chairman
16 September 2013
Altus Resource Capital Limited
INVESTMENT MANAGER'S REPORT
Financial Highlights and Investment Review by Altus Capital
Limited
The last twelve months has been a challenging time for the
mining sector and junior resource equities in particular. The
majority of metals prices declined over the Year with gold
suffering severe falls in April and June leading to its worst six
month period to the end of June since 1981. The gold sell-off in
June followed a further build-up of negative sentiment and was
precipitated by Ben Bernanke's comments that QE3 may be tapered
during 2014. Weakness continues to be driven by futures and ETF
trading whilst physical demand for gold, particularly from Asia,
remains extremely strong. This demand, which is from both retail
investors and emerging economy central banks, has helped push the
Gold Forward Offer Rate (GOFO) into negative territory for the
first time since the collapse of Lehman Brothers in 2008 when it
preceded a spike in the gold price. The Investment Manager remains
confident that the current flow from paper gold into physical
bullion reflects a move from more speculative investors to
long-term holders and is ultimately positive for the gold
sector.
Metal Price at Price at % change
30/06/2012 30/06/2013 during
Year
-------------------------- ---------------- ------------ ---------
Gold (US$/oz) 1,597 1,235 -22.7%
-------------------------- ---------------- ------------ ---------
Silver (US$/oz) 27.5 19.7 -28.4%
-------------------------- ---------------- ------------ ---------
Platinum (US$/oz) 1,447 1,327 -8.3%
-------------------------- ---------------- ------------ ---------
Palladium (US$/oz) 583 659 13.1%
-------------------------- ---------------- ------------ ---------
Copper (US$/t) 7,692 6,731 -12.5%
-------------------------- ---------------- ------------ ---------
Zinc (US$/t) 1,881 1,821 -3.2%
-------------------------- ---------------- ------------ ---------
Nickel (US$/t) 16,694 13,644 -18.3%
-------------------------- ---------------- ------------ ---------
CRB US Spot Metals Index 820 825 0.7%
-------------------------- ---------------- ------------ ---------
Source: Bloomberg data
Against the volatility of the gold price, gold equities have
been extremely weak, with the Philadelphia Gold & Silver Index
trading to its lowest level relative to the gold price since its
formation in 1984 and the FTSE Gold Mines Index, the S&P/ TSX
Gold Index and the Market Vectors Junior Gold Miners ETF losing
48.0%, 42.3% and 52.3% respectively. Investors remain wary that
companies will be unable to generate sufficient cash flow to remain
profitable or fund their planned growth. Operating margins have
undoubtedly been squeezed by the sell-off in gold and companies are
scrambling to adjust to the new pricing environment. Mines are
being placed on care and maintenance, development projects are
being put on hold or "optimised" and exploration budgets are being
slashed. Major gold producers have written down close to US$20
billion in the value of their assets since the gold price peaked in
late 2011 and further significant write downs are expected as major
projects suffer delays, capex over-runs and permitting issues.
Other commodities suffered over the Year with a number including
copper and coking coal prices hitting three year lows during June
and the CRB Metals Index and the FTSE 350 Mining Index suffering
their largest six monthly declines in the period to 30 June since
the peak of the financial crisis in the second half of 2008. These
declines were primarily on the back of subdued economic figures and
concerns over the sustainability of growth from China. The majors
are seeking to firm up their balance sheets with asset sales and
with limited capital flowing into the sector from traditional
sources, development projects are being deferred or cancelled.
As is expected in weak markets, junior companies were generally
weaker than their more liquid large-cap counterparts. In the gold
sector the Market Vectors Junior Gold Miner ETF declined 52.3% and
in the junior diversified miners sector the FTSE AIM Basic
Resources Index and the ASX Small Cap Basic Resources Index
declined 38.5% and 48.1% respectively.
Metal Price at Price at % change
30/06/2012 30/06/2013 during
Year
------------------------------- ------------ ------------ ---------
FTSE Gold Mines Index 2,783 1,446 -48.0%
------------------------------- ------------ ------------ ---------
S&P/ TSX Gold Index 2,473 1,427 -42.3%
------------------------------- ------------ ------------ ---------
NYSE Arca Gold Bugs Index 427.8 228.1 -46.7%
------------------------------- ------------ ------------ ---------
Market Vectors Junior Gold
Miner ETF 76.8 36.6 -52.3%
------------------------------- ------------ ------------ ---------
FTSE 350 Mining Index 17,466 14,415 -17.5%
------------------------------- ------------ ------------ ---------
FTSE AIM Basic Resources
Index 5,034 3,098 -38.5%
------------------------------- ------------ ------------ ---------
ASX Small Cap Basic Resources
Index 3,717 1,931 -48.1%
------------------------------- ------------ ------------ ---------
Source: Bloomberg data
The emerging producers and later stage developers, which need
increased cash flow to fund their future projects or capital to
complete their development, have been the most heavily discounted
by the market with fears that the depressed gold price as well as
delays and cost over-runs will cause balance sheet stress and
potentially lead to highly dilutive equity financings. The table
below highlights three core holdings with robust assets and
significant cash holdings that have been sold too close to their
cash backing. The net present value of each company's assets have
been taken from economic studies completed by independent
consultants using gold price scenarios of below current spot and
illustrate the upside potential to the company's valuations.
NPV:
US$ million Mkt Cap Net Cash EV NPV EV
---------------------- -------- --------- --- ------ ------
Guyana Goldfields 164 114 50 800 16.0x
PMI Gold Corporation 122 100 22 375 17.0x
Sabina Gold
& Silver 197 120 77 1,450 18.8x
While additional capital is required to develop these projects,
much of this will be in the form of project debt and therefore not
dilutive to equity shareholders. Further, the strong cash positions
provide each company with flexibility to withstand the current
negative markets.
Outlook
Notwithstanding the extreme disappointment with the Company's
performance and the anticipated continued volatility and
uncertainty in the market, the Investment Manager remains convinced
that portfolio holdings have the potential to deliver very
significant returns from their current levels.
The fundamentals for gold remain positive driven by the
continued strong demand for physical gold both from retail and
central bank buyers albeit tainted by short-term speculator driven
selling. Other commodities also demonstrate strong fundamentals
with anticipated demand particularly from emerging economy
industrialisation outstripping supply as too few new projects are
discovered to replace old and maturing mines.
Resource equities have suffered an unprecedented period of poor
performance and the Investment Manager expects quality companies
with quality assets and proven management teams to outperform over
the short to medium term.
Investment Allocation
At 30 June 2013, the Group's assets were allocated in the
following proportions:
Asset Allocation by Commodity**
Gold 45.4%
Silver 3.5%
Bulk Minerals 12.5%
Base Metals 11.4%
Energy Minerals 7.9%
Platinum Group Metals 8.1%
Diamonds 4.2%
Other 0.6%
Net cash 6.5%
----------
100.0%
----------
Asset Allocation by Development Stage**
Production 26.7%
Development 30.1%
Exploration 16.0%
Commodity Exposure 20.6%
Net cash 6.5%
----------
100.0%
----------
Asset Allocation by Geography**
Africa 35.6%
North America 14.9%
South America 9.3%
Asia - Other 1.8%
Australasia 3.1%
Other (including commodity exposure) 28.6%
Net cash 6.5%
-------
100.0%
-------
**Note totals may not equal 100% due to rounding.
Altus Resource Capital Limited
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
Responsibility Statement
The Directors confirm to the best of their knowledge and
belief:
(a) This Annual Report includes or incorporates by reference a
fair review of the development and performance of the business and
the position of the Group together with a description of the
principal risks and uncertainties that it faces; and
(b) The Consolidated Financial Statements, prepared in
accordance with International Financial Reporting Standards, as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profits of the Group
and performance of the Group over the Year.
A description of important events which have occurred during the
Year, their impact on the performance of the Group as shown in the
Consolidated Financial Statements and a description of the
principal risks and uncertainties facing the Group is given in the
Chairman's Statement, Investment Manager's Report and the notes to
the Consolidated Financial Statements and is incorporated here by
reference.
There were no other material related party transactions which
took place in the Year other than those disclosed in note 16 to the
Consolidated Financial Statements.
Signed on behalf of the Board of Directors on 16 September
2013.
Nick Falla Robert Milroy
Chairman Director
Altus Resource Capital Limited
DIRECTORS
Nicholas J Falla: Chairman (non-executive) (Age 56)
Nicholas Falla has had over thirty years of experience in the
finance industry including fifteen years of experience in the
commodity markets. He is currently the Managing Director of Xocoatl
Limited a private investment company taking strategic proprietary
positions in the commodities markets, Finance Director of Pharma E
Limited, a private pharmaceutical supplier. Nick was senior
non-executive director of MW Tops Limited, a closed-ended
investment company listed on the London Stock Exchange which
entered into voluntary liquidation in September 2010, whilst
transferring its assets into another investment vehicle. From
1993-2000 Nick worked as the financial controller for Bank of
Bermuda (Guernsey) Limited and from 2000 to 2002 he was their
regional controller for Europe. In addition he has acted as an
interim Financial Director for the Guernsey banking operation of
Credit Suisse Guernsey Limited and has worked on various finance
and accounting based projects with companies such as KPMG (Channel
Islands) and the Blenheim Group. Nick trained as an accountant with
Turquands Barton Mayhew & Co in Guernsey.
David Gelber: Director (non-executive) (Age 65)
David Gelber began his career in trading in 1976 when he joined
Citibank in London. David has since held a variety of senior
trading positions, in derivatives in particular, working for
Citibank, Chemical Bank and HSBC, where he was Chief Operating
Officer of HSBC Global Markets. In 1994 David joined ICAP, an
inter-dealer broker, as COO and assisted in implementing two
mergers, first with Exco plc and then with Garban. David currently
serves as a non-executive director on the board of Walker Crips
Group plc a full service stock broker and wealth management company
where he is Chairman. David is also currently a non executive
director of DDCAP Limited, a leading arranger of Islamic banking
transactions and of Exotix Limited, an investment banking boutique
specialising in frontier markets. David is also currently a
non-executive director of Intercapital Private Group Limited, a
holding company invested in ICAP plc and CityIndex Limited, a
spread-betting and contracts for difference provider. David has a
B.Sc in statistics and law from the University of Jerusalem and an
M.Sc in computer science from the University of London.
Robert Milroy: Director (non-independent non-executive) (Age
67)
Robert Milroy is Chairman of Milroy Capital Limited, a company
which invests in various Mining and Energy related projects. He was
a Founding Director and CIO of the Corazon Group and Milroy &
Associates, Guernsey regulated investment management and
stock-broking companies which were acquired by Collins Stewart (CI)
Limited. He has over 40 years experience in the investment, mining
and petroleum industries having participated and worked in various
mining, oil exploration projects and financings in Chile, Peru,
Argentina, Ghana, Canada, USA, Mexico, Australia and Greenland. In
addition, he was the Managing Director of Eagle Drilling Inc. for
13 years, a firm that specialised in hard rock diamond core
drilling in Central and Western Africa.
Robert is also a noted speaker and financial author of various
publications including the Standard & Poor's Guide to Offshore
Investment Funds. Robert graduated with a Bachelor of Commerce
(Honours) from the University of Manitoba and is a director on a
number of Mining and Energy related companies. Robert is also a
director of Altus Global Gold Limited.
David Netherway: (non-independent non-executive) (Age 60)
David Netherway is a mining engineer with over 35 years of
experience in the mining industry and until the takeover by Gryphon
Minerals Limited, was the CEO of Shield Mining Limited, an
Australian listed exploration company. David was involved in the
construction and development of the Iduapriem, Siguiri and Kiniero
gold mines in West Africa and has mining experience in Africa,
Australia, China, Canada, India and the Former Soviet Union. David
served as the CEO of Toronto listed Afcan Mining Corporation, a
China focused gold mining company that was sold to Eldorado Gold in
2005. David has also held senior management positions in a number
of gold mining companies including Golden Shamrock Mines, Ashanti
Goldfields and Semafo Inc. He is currently the chairman of Aureus
Mining Inc, Afferro Mining Inc and Kilo Goldmines Limited and a
non-executive director of Crusader Resources Limited and Altus
Global Gold Limited. David is the current non-executive chairman of
Altus Strategies Limited and is thus not considered an Independent
Director of the Company.
Altus Resource Capital Limited
INVESTMENT MANAGER, ADMINISTRATOR AND SECRETARY (Continued)
Investment Management Agreement
The Board is responsible for the determination of the Company's
investment policy and has overall responsibility for the Company's
day-to-day activities. The Company has, however, entered into an
Investment Management Agreement dated 22 June 2009, as amended by a
Deed of Amendment and Novation dated 30 June 2010, with Altus
Capital Limited (the "Investment Manager"), a wholly-owned, FCA
regulated subsidiary of Altus Strategies Limited. Under the
Investment Management Agreement the Investment Manager has overall
responsibility for the discretionary management of the Company's
assets (including uninvested cash) in accordance with the Company's
investment objective and policy, subject to the overall supervision
of the Board.
The Investment Manager receives a management fee of 0.85% per
annum of the Company's NAV, calculated on the relevant quarterly
accounting date, subject to a minimum fee of GBP150,000 per annum.
In accordance with the Investment Management Agreement the
Investment Manager is also entitled to a performance fee which was
first payable on the second anniversary of the date of Admission
and is payable annually thereafter. During the Year no performance
fee was accrued as the performance hurdle was not met. Further
details of the performance fee can be found in Note 16 of the
Consolidated Financial Statements. Under the terms of the
Investment Management Agreement, the agreement may be terminated by
either party on eighteen months' written notice.
Administration Agreement
The Company entered into an Administration and Secretarial
Agreement dated 22 June 2009 with Anson Fund Managers Limited (the
"Administrator" or the "Secretary"). Under the terms of the
Administration and Secretarial Agreement, the Administrator is
responsible for providing administration and secretarial services
to the Company.
The Administrator carries out the general secretarial functions
required by the Law and ensures that the Company complies with its
continuing obligations as a company with shares admitted to trading
on the Specialist Fund Market of the London Stock Exchange (the
"SFM") and the Channel Islands Stock Exchange ("CISX").
The Administrator also carries out the Company's general
administrative functions such as the calculation of net asset
value, calculating the performance of the Company's investments and
the maintenance of accounting records. The Administration and
Secretarial Agreement is terminable by either party on giving not
less than three months' written notice.
Review
The Board keeps under review the performance of the Investment
Manager and the Administrator and the powers delegated to them
both. In the opinion of the Board the continuing appointment of the
Investment Manager and the Administrator on the terms agreed is in
the interest of shareholders as a whole.
Altus Resource Capital Limited
DIRECTORS' REPORT
The Directors present their report and Consolidated Financial
Statements of the Company for the Year.
Principal Activities and Business Review
The principal activity of the Company is to carry on business as
an investment company. The Directors do not envisage any change in
these activities for the foreseeable future. A description of the
activities of the Company in the Year under review is outlined in
the Investment Manager's Report on pages 5 to 9.
Status
The Company is a closed-ended investment company and was
incorporated with limited liability in Guernsey on 30 April 2009
with registered number 50318. The Company operates under the Law
and the Protection of Investors (Bailiwick of Guernsey) Law, 1987
as amended.
The Company's Ordinary Shares were admitted to trade on the SFM
on 30 June 2009. On 22 December 2009 the Company's Ordinary Shares
were also admitted to trade on the CISX.
The Company's management and administration takes place in
Guernsey and the Company had been granted exemption from income tax
in Guernsey by the Administrator of Income Tax under the Income Tax
(Exempt Bodies) (Guernsey) Ordinance 1989. It is the intention of
the Directors to continue to operate the Company so that each year
this tax-exempt status is maintained.
Results and Dividends
The results of the Group for the Year are set out on page
30.
The Group aims to provide shareholders with an attractive total
return, which is expected to comprise primarily capital growth,
although there is also potential for distributions. The Company's
investment objective and strategy means that the timing and amount
of investment income cannot be predicted.
The Company did not declare any interim dividends during the
Year and the Directors do not propose the declaration of a final
dividend for the Year under review.
Directors
Further details of the Directors in office are shown on pages 11
and 12. Details of the Board's responsibilities are given on pages
25 and 26.
The interests of the Directors in the Ordinary Shares of the
Company as at 30 June 2013 were as follows:
Number of Ordinary Shares
Nick Falla 30,000
David Gelber 53,000
Robert Milroy 30,000
No changes took place in the interests of the Directors in the
Ordinary Shares of the Company between 1 July 2013 and 16 September
2013.
Other than the above Ordinary Share transactions, none of the
Directors nor any persons connected with them had a material
interest in any of the Company's transactions, arrangements or
agreements during the Year and none of the Directors has or has had
any interest in any transaction which is or was unusual in its
nature or conditions or significant to the business of the Company,
and which was effected by the Company during the Year except for
the following:
-- David Netherway is the non-executive chairman of Altus
Strategies Limited, the ultimate parent of the Investment Manager,
who owns 502,399 Ordinary Shares in the Company; and
-- David Netherway is a non-executive chairman of Kilo Goldmines
Limited and Aureus Mining Limited and, until 31 July 2013, was a
non-executive director of Gryphon Minerals Limited, companies in
which the Company has exposure.
At the date of this report, there are no outstanding loans or
guarantees between the Company and any Director.
Substantial Shareholdings
On 16 September 2013 the Company had been notified, in
accordance with Chapter 5 of the Disclosure and Transparency Rules
of the following substantial interests in the Company's share
capital:
Registered Holder % of Total Voting Number of Ordinary
Rights Shares
Baring Asset Management 18.70% 7,427,616
Williams de Broe 17.53% 6,961,074
Ballie Gifford & Co 12.77% 5,070,657
CCLA Investment Management 10.15% 4,030,000
Perpetual Income & Growth Investment
Trust 9.13% 3,625,000
NFU Mutual Insurance Society
Limited 5.54% 2,200,000
Net Asset Value ("NAV")
The consolidated NAV of the Company's Ordinary Shares as at 30
June 2013 was GBP0.72 per Ordinary Share.
Principal Risks and Uncertainties
The Board has drawn up a risk matrix which identifies the key
risks to the Company and these fall into the following broad
categories:
-- Investment Risks: The Company is focused on investing in
junior resources companies and is therefore subject to the risks
associated with concentrating its investments in this asset class.
The performance of the Company will be affected by the performance
of the securities of investee companies and is thus subject to the
sharp price volatility of shares of companies principally engaged
in activities related to metals and minerals. Historically the
prices of the commodities have fluctuated significantly and are
affected by numerous factors which the Company cannot predict or
control. The Board reviews reports from the Investment Manager at
each quarterly Board meeting, paying particular attention to the
diversification of the portfolio and to the performance and
volatility of underlying investments.
-- Control environment at Service Providers: The Company is
exposed to risks arising from failures of systems and controls in
the operations of its Service Providers. The Remuneration and
Management Engagement Committee perform an annual review of each of
the Company's Service providers.
-- Regulatory Risk: The Company is required to comply with the
regulators of FCA, the Guernsey Financial Services Commission (the
"GFSC") and the CISX. The Investment Manager and Secretary monitor
the Company's compliance with regulatory bodies and will notify the
Board immediately if it receives notice from the FCA, GFSC or
CISX.
Further details of risk can be found in the Investment Manager's
Report on pages 5 to 9 and in Note 15 of the Consolidated Financial
Statements.
Corporate Governance
Statement of Compliance with The UK Corporate Governance
Code
The Company is committed to complying with the corporate
governance obligations which apply to Guernsey registered
companies. As a Guernsey incorporated company and under SFM rules,
the Company is not required to comply with The UK Corporate
Governance Code published in 2010 (the "Code"), or the amendments
to the Code published in 2012, which are appended to the Listing
Rules of the UK's Financial Conduct Authority. However the Board
places a high degree of importance on ensuring that high standards
of corporate governance are maintained and have therefore chosen
voluntarily to comply with the provisions of the Code to the extent
that they are considered relevant to the Company.
The UK Corporate Governance Code is available on the following
website: www.frc.org.uk.
With effect from 1 January 2012 the Company was also required to
comply with the Guernsey Financial Services Commission Financial
Sector Code of Corporate Governance (the "Guernsey Code"). As the
Company complies with the Code it is deemed to meet the Guernsey
Code. The Board has undertaken to evaluate its corporate governance
compliance on an on-going basis.
Subject to the explanations below, the Board considers that it
has maintained procedures during the Year to ensure that it has
complied with the Code:-
-- As the Board is composed exclusively of non-executive
Directors, provisions relating to executive directors or the
position of chief executive are not applicable to the Company.
-- There is no Senior Independent Director which is not in
accordance with provision A.4.1 of the Code. Taking into account
for the size and nature of the Company and the fact there are three
Independent non-executive Directors on the Board this position is
not seen as necessary.
-- There is no internal audit function in the Company and the
requirement for this function is reconsidered on an annual basis.
The Board considers that as all of the Company's administration
functions have been delegated to independent third parties there is
no need for the Company to have an internal audit facility.
Evaluation
The Board carried out a performance evaluation of itself, its
Committees and each of the Directors as required by provision B.6.1
of the Code and is committed to this process being carried out
every year.
For the Year this process was led by the Remuneration and
Management Engagement Committee and the evaluation process
consisted of Directors completing a questionnaire to assess the
Board as a whole and the Chairman completing a questionnaire to
assess each Director individually. All questionnaires were designed
by an external facilitator.
The full Board discussed the results of the evaluation of the
Board and its Committees and concluded that there were no
significant points to raise and that each Director continues to
demonstrate their effectiveness and commitment to the Company.
Board Responsibilities
The Board comprises of four non-executive Directors, of whom
Nick Falla, David Gelber and Robert Milroy are determined to be
independent as they are independent of the Investment Manager.
Biographies of the Directors appear on pages 11 and 12,
demonstrating the wide range of skills and experience they bring to
the Board. The Board meets at least four times per year to consider
the business and affairs of the Company, at which meetings the
Directors review the Company's investments and all other important
issues to ensure control is maintained over the Company's affairs.
The Board also receives full management accounts for review at each
full Board meeting.
During the Year the number of full Board meetings and committee
meetings attended by the Directors were as follows:
Full Board Meetings Audit Committee Remuneration
and Management
Engagement Committee
---------------- -------------------- ---------------- ----------------------
Nick Falla 5 out of 5 4 out of 4 2 out of 2
---------------- -------------------- ---------------- ----------------------
David Gelber 3 out of 5 2 out of 4 1 out of 2
---------------- -------------------- ---------------- ----------------------
Robert Milroy 5 out of 5 4 out of 4 2 out of 2
---------------- -------------------- ---------------- ----------------------
David Netherway 4 out of 5 N/A N/A
---------------- -------------------- ---------------- ----------------------
No Director has a service contract with the Company, nor are any
such contracts proposed. Whilst there is no requirement under the
Company's Articles of Incorporation to retire by rotation the Board
has decided to adopt such practice as recommended by the Code. As
such at each general meeting of the Company all the Directors who
held office at the two preceding annual general meetings and did
not retire shall retire from office and shall be available for
re-election at the same meeting.
The Chairman's other significant commitments include his
appointments as Finance Director of Pharma E Limited, a private
pharmaceutical supplier and Managing Director of Xocoatl Limited, a
private investment company.
The Directors, in the furtherance of their duties, may take
independent professional advice at the Company's expense. The
Directors also have access to the advice and services of the
Corporate and Shareholder Advisory Agent and the Secretary through
their respective appointed representatives who are responsible to
the Board for ensuring that Board procedures are followed and that
applicable rules and regulations are complied with. To enable the
Board to function effectively and allow Directors to discharge
their responsibilities, full and timely access is given to all
relevant information.
Board Committees
Audit Committee
Throughout the Year an Audit Committee has been in operation.
The Audit Committee is chaired by Robert Milroy and each of the
other Board members, with the exception of David Netherway, are
members. The Audit Committee operates within clearly defined Terms
of Reference, which are available from the Company's website or the
Secretary upon request, and provides a forum through which the
Company's external auditors report to the Board.
The Audit Committee meets at least twice a year and reviews,
inter alia, the financial reporting process and the system of
internal control and management of financial risks including
understanding the current areas of greatest financial risk and how
these are managed by the Investment Manager, reviewing half-yearly
and annual financial statements, assessing the fairness of
preliminary and interim statements and disclosures and reviewing
the external audit process. The Audit Committee is responsible for
overseeing the Company's relationship with the external auditors,
including making recommendations to the Board on the appointment of
the external auditors and their remuneration. The Audit Committee
considers the nature, scope and results of the auditors' work and
reviews, and develops and implements policy on the supply of any
non-audit services that are to be provided by the external
auditors. It receives and reviews reports from the Investment
Manager and the Company's external auditors relating to the
Company's annual report and consolidated financial statements.
The Audit Committee focuses particularly on compliance with
legal requirements, accounting standards and the Listing Rules and
ensures that an effective system of internal financial and
non-financial controls is maintained. The ultimate responsibility
for reviewing and approving the annual report and financial
statements remains with the Board of Directors.
During the Year the Audit Committee met to consider the interim
management statements, the Annual Report and Financial Statements
to 30 June 2013 and the Half-yearly Financial Report to 31 December
2012.
Remuneration and Management Engagement Committee
The Remuneration and Management Engagement Committee is chaired
by Robert Milroy and each of the other Board members are members
except David Netherway. The Remuneration and Management Engagement
Committee operates within clearly defined Terms of Reference, which
are available from the Company's website or the Secretary upon
request.
The Remuneration and Management Engagement Committee meets at
least twice a year and reviews, inter alia, the appointment and
remuneration of the Investment Manager and of other suppliers of
services to the Company as well as the fees of the Directors.
Nomination Committee
The Nomination Committee, chaired by Nick Falla, comprises each
of the Directors. The Nomination Committee operates within clearly
defined Terms of Reference, which are available from the Company's
website or the Secretary upon request.
The Nomination Committee meets as and when it is deemed
appropriate to review, inter alia, the structure, size and
composition of the Board and to identify, nominate and recommend
for approval of the Board, candidates to fill Board vacancies as
and when they arise. During the Year there were no changes to the
composition of the Board and therefore it had not been deemed
appropriate for the Nomination Committee to formally meet.
Internal Control and Financial Reporting
The Board is responsible for establishing and maintaining the
Company's system of internal controls which are reviewed for
effectiveness on an annual basis. The Board reviews not just
internal financial controls but all controls including operations,
compliance and risk management. Internal control systems are
designed to meet the particular needs of the Company and manage the
risks to which it is exposed, and by their very nature provide
reasonable, but not absolute, assurance against material
misstatement or loss. The key procedures which have been
established to provide effective internal control are as
follows:
-- Investment management is provided by Altus Capital Limited
under the Investment Management Agreement. The Board is responsible
for setting the overall investment policy and monitors the actions
of the Investment Manager at regular Board meetings.
-- Administration and company secretarial duties for the Company
are performed by Anson Fund Managers Limited.
-- Custody of assets is undertaken by Anson Custody Limited and
Royal Bank of Canada (Channel Islands) Limited.
-- The duties of investment management, accounting and the
custody of assets are segregated. The procedures of the individual
parties are designed to complement one another.
-- The Directors of the Company clearly define the duties and
responsibilities of their agents and advisers. The appointment of
agents and advisers is conducted by the Board after consideration
of the quality of the parties involved; the Board monitors their
on-going performance and contractual arrangements.
-- The Directors of the Company regularly review the performance
and contractual arrangements with the Investment Manager, other
agents and advisers.
-- Mandates for authorisation of investment transactions and
expense payments are set out by the Board.
-- The Board reviews detailed financial information produced by
the Investment Manager and the Administrator on a regular
basis.
Dialogue with Shareholders
All holders of Ordinary Shares in the Company have the right to
receive notice of, and attend, the general meetings of the Company,
during which the Board and the Investment Manager are available to
discuss issues affecting the Company.
The primary responsibility for shareholder relations lies with
the Investment Manager and Nimrod Capital LLP, the Corporate and
Shareholder Advisory Agent. However, the Directors are always
available to enter into dialogue with shareholders and the Chairman
is always willing to meet major shareholders as the Company
believes such communication to be important. The Company's
Directors can be contacted at the Company's registered office.
General Meeting
The notice of the Company's forthcoming General Meeting to be
held pursuant to section 199 of the Law is set out on page 59.
Anti-Bribery and Corruption
The Company adheres to the requirements of the Prevention of
Corruption (Bailiwick of Guernsey) Law, 2003. In consideration of
the UK Bribery Act 2010 which came into force on 1 July 2011, the
Board abhors bribery and corruption of any form and expects all the
Company's business activities to be undertaken, whether directly by
the Directors themselves or on the Company's behalf by third
parties to be transparent, ethical and beyond reproach.
On discovery of any activity or transaction that breaches the
requirements of the Prevention of Corruption (Bailiwick of
Guernsey) Law, 2003 or the UK Bribery Act 2010, such discovery will
be reported to the relevant authorities in accordance with
prescribed procedures. The Company is committed to regularly
reviewing its policy and procedures to uphold good business
practice.
Going Concern
The Company's principal activities are set out on pages 1, 2 and
15. The financial position of the Group is set out on page 31. In
addition, Note 15 to the Consolidated Financial Statements includes
the Company's objectives, policies and processes for managing its
capital; its financial risk management objectives and its exposures
to credit risk and liquidity risk.
The Directors have a reasonable expectation, after making
reasonable enquiries, that the Group has adequate resources to
continue in operational existence for the foreseeable future as it
has maintained a good cash balance at the end of the Year and no
debt. Thus they continue to adopt the going concern basis of
accounting in preparing the annual financial statements and that
they have been prepared in accordance with 'Going Concern and
Liquidity Risk: Guidance for Directors of UK Companies 2009',
published by the Financial Reporting Council.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Directors'
Report and the Consolidated Financial Statements in accordance with
applicable law and regulations.
The Law requires the Directors to prepare financial statements
for each financial year. Under that Law the Directors are required
to prepare the financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union. Under the Law the Directors must not approve
the accounts unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period. In preparing these
Consolidated Financial Statements, International Accounting
Standard 1 requires that the Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRS are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Consolidated Financial Statements comply with the Law. They are
also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Guernsey and the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Disclosure of Information to Auditor
The Directors who held office at the date of approval of this
Directors' Report confirm in accordance with the provisions of
Section 249 of the Law that, so far as they are each aware, there
is no relevant audit information of which the Company's Auditor is
unaware; and each Director has taken all the steps that he ought to
have taken as a Director to make himself aware of any relevant
audit information and to establish that the Company's Auditor is
aware of that information.
Auditor
Deloitte LLP has expressed its willingness to continue in office
as Auditor. A resolution proposing their reappointment will be
submitted at the forthcoming General Meeting to be held pursuant to
section 199 of the Law.
Signed on behalf of the Board on 16 September 2013.
Nick Falla Robert Milroy
Chairman Director
Altus Resource Capital Limited
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ALTUS RESOURCE
CAPITAL LIMITED
We have audited the Consolidated Financial Statements of Altus
Resource Capital Limited for the year ended 30 June 2013 which
comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Cash Flows, the Consolidated Statement of Changes in
Equity and the related notes 1 to 16. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards ("IFRS") as
adopted by the European Union.
This report is made solely to the Company's shareholders, as a
body, in accordance with Section 262 of The Companies (Guernsey)
Law, 2008, as amended. Our audit work has been undertaken so that
we might state to the Company's shareholders those matters we are
required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company and the
Company's shareholders as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective Responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors'
Responsibilities on pages 25 and 26, the Directors are responsible
for the preparation of the Consolidated Financial Statements and
for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
Consolidated Financial Statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the Audit of the Consolidated Financial Statements
An audit involves obtaining evidence about the amounts and
disclosures in the Consolidated Financial Statements sufficient to
give reasonable assurance that the Consolidated Financial
Statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the Group's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the Consolidated
Financial Statements. In addition, we read all the financial and
non-financial information in the annual report to identify material
inconsistencies with the audited
Consolidated Financial Statements. If we become aware of any
apparent material misstatements or inconsistencies we consider the
implications for our report.
Opinion on the Consolidated Financial Statements
In our opinion the Consolidated Financial Statements:
-- give a true and fair view of the state of the Group's affairs
as at 30 June 2013 and of its loss for the year then ended;
-- have been properly prepared in accordance with IFRS as
adopted by the European Union; and
-- have been prepared in accordance with the requirements of The
Companies (Guernsey) Law, 2008, as amended.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where The Companies (Guernsey) Law, 2008 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept; or
-- the Consolidated Financial Statements are not in agreement
with the accounting records and returns; or
-- we have not received all the information and explanations we require for our audit.
John G Clacy FCA
for and on behalf of Deloitte LLP
Chartered Accountants and Recognised Auditors
Guernsey, Channel Islands
16 September 2013
Neither an audit nor a review provides assurance on the
maintenance and integrity of the website, including controls listed
to achieve this and in particular whether any changes have occurred
to the financial information since first published. These matters
are the responsibility of the Directors but no control procedures
can provide absolute assurance in this area.
Legislation in Guernsey governing the preparation and
dissemination of financial information differs from legislation in
other jurisdictions.
Altus Resource Capital Limited
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2013
Year ended Year ended
30 Jun 2013 30 Jun 2012
Notes GBP GBP
Net movement in unrealised
(depreciation)/ appreciation
on investments 8 (20,472,832) (21,334,742)
Realised (losses) /
gains on investments 8 (12,397,227) 6,428,446
Operating income 3 243,942 315,103
Operating expenses 4 (1,316,745) (1,437,940)
--------------------------------- ----------------------------------
Net loss for the year (33,942,862) (16,029,133)
--------------------------------- ----------------------------------
Other Comprehensive - -
Income
--------------------------------- ----------------------------------
Total Comprehensive
Income (33,942,862) (16,029,133)
--------------------------------- ----------------------------------
Attributable to:
Owners of the Company (32,196,202) (15,936,859)
Non-controlling interest 13 (1,746,660) (92,274)
--------------------------------- ----------------------------------
(33,942,862) (16,029,133)
--------------------------------- ----------------------------------
Loss per share for
the year - Basic and
Diluted 6 (0.81) (0.40)
--------------------------------- ----------------------------------
There are no recognised gains or losses for the year other
than those disclosed above.
In arriving at the results for the financial year, all amounts
above are derived from continuing operations.
The notes on pages 34 to 55 form an integral part of these
financial statements.
Altus Resource Capital Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2013
30 Jun 2013 30 Jun 2012
Notes GBP GBP
NON-CURRENT ASSETS
Financial assets
designated as at
fair value through
profit and loss 8 28,065,169 47,525,971
CURRENT ASSETS
Cash and cash equivalents 1,868,097 13,893,566
Trade and other receivables 9 936,053 298,590
------------------------- --------------------------
2,804,150 14,192,156
TOTAL ASSETS 30,869,319 61,718,127
------------------------- --------------------------
CURRENT LIABILITIES
Trade and other payables 10 209,731 615,677
------------------------- --------------------------
209,731 615,677
NET ASSETS 30,659,588 61,102,450
------------------------- --------------------------
EQUITY
Share premium 12 42,602,254 42,602,254
Revenue reserve (14,133,732) 18,062,470
------------------------- --------------------------
Equity attributable
to owners of the
Company 28,468,522 60,664,724
Non-controlling interest 13 2,191,066 437,726
TOTAL EQUITY 30,659,588 61,102,450
------------------------- --------------------------
Pence Pence
Net asset value per Ordinary
Share based on 39,719,569
(2012: 39,719,569) shares
in issue 71.67 153.83
------------------------- --------------------------
The consolidated financial statements were approved and authorised
for issue by the Board on 16 September 2013.
Nick Falla Robert Milroy
The notes on pages 34 to 55 form an integral part of these
financial statements.
Altus Resource Capital Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2013
Share Share Accumulated Non-controlling Total
Capital Premium Profits interest
Notes GBP GBP GBP GBP GBP
Balance as at
1 July 2012 - 42,602,254 18,062,470 437,726 61,102,450
Net loss for
the year - - (32,196,202) (1,746,660) (33,942,862)
Adjustment arising
from change
in non-controlling
interest - - - 3,500,000 3,500,000
Balance as at
30 June 2013 - 42,602,254 (14,133,732) 2,191,066 30,659,588
------------------ ---------------------- ------------------------ ---------------------- ----------------
Share Share Accumulated Non-controlling Total
Capital Premium Profits interest
GBP GBP GBP GBP GBP
Balance as at
1 July 2011 - 42,602,254 33,999,329 - 76,601,583
Acquisition
of Subsidiary - - - 530,000 530,000
Net loss for
the year - - (15,936,859) (92,274) (16,029,133)
Balance as at
30 June 2012 - 42,602,254 18,062,470 437,726 61,102,450
------------------ ---------------------- ------------------------ ---------------------- ----------------
The notes on pages 34 to 55 form an integral part of these financial
statements
Altus Resource Capital Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2013
Year ended Year ended
30 Jun 2013 30 Jun 2012
Notes GBP GBP
OPERATING ACTIVITIES
Net loss for the year
attributable to shareholders (33,942,862) (16,029,133)
Net movement in unrealised
depreciation on investments 8 20,472,832 21,334,742
Interest received (33,283) (113,692)
Decrease in payables (73,377) (6,338,662)
Decrease / (increase)
in receivables 109,584 (120,328)
Realised losses / (gains)
on investments 8 12,397,227 (6,428,446)
Foreign exchange movements 125,332 146,968
NET CASH FLOW FROM
OPERATING ACTIVITIES (944,547) (7,548,551)
--------------------------------- -------------------------
INVESTING ACTIVITIES
Interest received 33,283 115,633
Purchase of investments (71,331,970) (60,753,426)
Acquisition of subsidiary 7 - (5,000,000)
Sale of investments 56,843,097 58,613,013
NET CASH FLOW FROM
INVESTING ACTIVITIES (14,455,590) (7,024,780)
--------------------------------- -------------------------
FINANCING ACTIVITIES
Proceeds from issue
of shares in Subsidiary 3,500,000 5,530,000
NET CASH FLOW FROM
FINANCING ACTIVITIES 3,500,000 5,530,000
--------------------------------- -------------------------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 13,893,566 23,083,865
Decrease in cash and
cash equivalents (11,900,137) (9,043,331)
Effect of foreign exchange
rates (125,332) (146,968)
CASH AND CASH EQUIVALENTS
AT END OF YEAR 1,868,097 13,893,566
--------------------------------- -------------------------
The notes on pages 34 to 55 form an integral part of these
financial statements
Altus Resource Capital Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 30 June 2013
1 GENERAL INFORMATION
The consolidated financial statements incorporate the
financial statements of Altus Resource Capital Limited
(the "Company") and Altus Global Gold Limited (the "Subsidiary")
together known as (the "Group").
The Company is a closed-ended investment company incorporated
in Guernsey on 30 April 2009, which listed on the Specialist
Fund Market of the London Stock Exchange on 30 June
2009 and on the Channel Islands Stock Exchange ("CISX")
on 22 December 2009.
The principal activity of the Group is to realise capital
growth from a concentrated portfolio of resource equities
and to generate a significant capital return to shareholders.
2 ACCOUNTING POLICIES
The following significant accounting policies have been
applied consistently in dealing with the items which
are considered material to the Group's Consolidated
Financial Statements:
(a) Basis of Preparation
The consolidated financial statements have been prepared
in conformity with International Financial Reporting
Standards ("IFRS") as adopted in the European Union
which comprise standards and interpretations approved
by the International Accounting Standards Board ("IASB")
and International Financial Reporting Interpretations
Committee ("IFRIC"), together with applicable Guernsey
law. The financial statements have been prepared on
a historical cost basis except for the measurement at
fair value of certain financial instruments.
The following Standards or Interpretations have been
adopted by the Group in the current year:
IAS 1 Presentation of Financial Statements - Amendments
to revise the way other comprehensive income is presented
effective for annual periods beginning on or after 1
July 2012.
The following Standards or Interpretations that are
expected to affect the Group have been issued but not
yet adopted by the Group as shown below. Other Standards
or Interpretations issued by the IASB and the IFRIC
are not expected to affect the Group.
IFRS 7 Financial Instruments - Disclosures - amendments
requiring disclosures about the initial application
of IFRS 9 effective for annual periods beginning on
or after 1 January 2015 (or otherwise when IFRS 9 is
first applied).
IFRS 9 Financial Instruments - Classification and Measurement
(revised November 2009) effective for annual periods
beginning on or after 1 January 2013.
2 ACCOUNTING POLICIES (CONTINUED)
(a) Basis of Preparation (continued)
IFRS 9 Financial Instruments - accounting for financial
liabilities and derecognition effective for annual periods
beginning on or after 1 January 2015.
IFRS 10 Consolidated Financial Statements - Original
Issue and Amendments to transitional guidance effective
for annual periods beginning on or after 1 January 2013.
IFRS 10 Consolidated Financial Statements - Amendments
for investment entities for annual periods beginning
on or after 1 January 2014.
IFRS 11 Joint Arrangements - Original Issue and Amendments
for investment entities for annual periods beginning
on or after 1 January 2013.
IFRS 12 Disclosure of Interests in Other Entities -
Original Issue and Amendments to transitional guidance
effective for annual periods beginning on or after 1
January 2013.
IFRS 12 Disclosure of Interests in Other Entities -
Amendments for investment entities for annual periods
beginning on or after 1 January 2014.
IFRS 13 Fair value measurement - Original issue effective
for annual periods beginning on or after 1 January 2013.
IAS 27 Separate Financial Statements - Original Issue
effective for annual periods beginning on or after 1
January 2013.
IAS 27 Separate Financial Statements - Amendments for
investment entities effective for annual periods beginning
on or after 1 January 2014.
IAS 28 Investments in Associate and Joint Ventures -
Original Issue effective for annual periods beginning
on or after 1 January 2013.
IAS 32 Financial Instruments: Presentation - Amendments
relating to the offsetting of assets and liabilities
effective for annual periods beginning on or after 1
January 2014.
IAS 32 Financial Instruments: Presentation - annual
improvements effective for annual periods beginning
on or after 1 January 2013.
2 ACCOUNTING POLICIES (CONTINUED)
(a) Basis of Preparation (continued)
IAS 36 Impairment of Assets - Amendments arising from
'Recoverable Amounts Disclosures for Non-Financial Assets'
effective for annual periods beginning on or after 1
January 2014.
IAS 39 Financial Instruments: Recognition and Measurement
- Amendments for novations of derivatives effective for
annual periods beginning on or after 1 January 2014.
The Directors have considered the above and are of the
opinion that the above Standards and Interpretations
are not expected to have a material impact on the Group's
financial statements except for the presentation of additional
disclosures and changes to the presentation of components
of the financial statements. These items will be applied
in the first financial period for which they are required.
(b) Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and its Subsidiary.
The Company owns 53.28% (2012: 90.41%) of the shares
in the Subsidiary and has the power to govern the financial
and operating policies of the Subsidiary so as to obtain
benefits from its activities.
Intra-group balances and transactions, and any unrealised
income and expenses arising from intra-group transactions
are eliminated in preparing the consolidated financial
statements.
Non-controlling interests in the Subsidiary are identified
separately from the Group's equity therein. The interests
of non-controlling shareholders are initially measured
at the non-controlling interest's proportionate share
of the fair value of the acquiree's identifiable net
assets. Subsequent to acquisition, the carrying amount
of non-controlling interest is the amount of the interest
at initial recognition plus the non-controlling interest's
share of subsequent changes in equity. Total comprehensive
income is attributed to non-controlling interest even
if this results in the non-controlling interest having
a deficit balance.
(c) Judgements and estimates
The preparation of financial statements in accordance
with IFRS requires management to make judgements, estimates
and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during
the reporting period. The estimates and associated assumptions
are based on historical experience and other factors
that are considered to be relevant. Actual results could
differ from such estimates.
The estimates and underlying assumptions are reviewed
on an on-going basis. Revisions to accounting estimates
are recognised in the period in which the estimate was
revised, if the revision affects only that period, or
in the period of the revision and future periods if the
revision affects both current and future periods.
2 ACCOUNTING POLICIES (CONTINUED)
(c) Judgements and estimates (continued)
The most critical judgements, apart from those involving
estimates, that management has made in the process of
applying the Company's accounting policies and that
have the most significant effect on the amounts recognised
in the financial statements are the functional currency
of the Company (see note 2(d)(i)) and the fair value
of investments designated to be at fair value through
profit or loss (see note 2(e)(i)). The valuation methods/techniques
used by the Company in valuing financial instruments
involve critical judgements to be made and therefore
the actual value of financial instruments could differ
significantly from the value disclosed in these consolidated
financial statements.
(d) Foreign currency
(i) Functional and Presentation
Currency
The Company's investors are mainly from the UK, with
the subscriptions and redemptions of the Participating
Redeemable Shares denominated in Sterling. The primary
activity of the Company is to realise capital growth
from a portfolio of gold and precious metals equities
with the aim of generating a significant capital return
to Shareholders.
The performance of the Company is measured and reported
to investors in Sterling. The Directors consider Sterling
as the currency that most faithfully represents the
economic effects of the underlying transactions, events
and conditions. The financial statements are presented
in Sterling, which is the Company's functional and presentation
currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions
and from the translation at period-end exchange rates
of monetary assets and liabilities denominated in foreign
currencies are recognised in the Consolidated Statement
of Total Comprehensive. Translation differences on non-monetary
financial assets and liabilities such as equities at
fair value through profit or loss are recognised in
the Consolidated Statement of Total Comprehensive Income.
The Company holds investments denominated in Australian,
Canadian and US Dollars at the reporting date, and may
enter into forward foreign currency contracts to hedge
the exchange rate risk arising from future cash flows
on these investments. As at 30 June 2013 no forward
foreign currency contracts were taken out.
2 ACCOUNTING POLICIES (CONTINUED)
(e) Financial Instruments
Financial assets and financial liabilities are recognised
in the Consolidated Statement of Financial Position when
the Company becomes a party to the contractual provisions
of the instrument.
(i) Financial Assets
The classification of financial assets at initial recognition
depends on the purpose for which the financial asset was
acquired and its characteristics.
All financial assets are initially recognised at fair value.
All purchases of financial assets are recorded at the trade
date, being the date on which the Company became party to
the contractual requirement of the financial asset.
The Company's financial assets are categorised as financial
assets at fair value through profit or loss. Unless otherwise
indicated the carrying amounts of the Company's financial
assets approximate to their fair values. Gains and losses
arising from changes in the fair value of financial assets
classified as fair value through profit or loss are recognised
in the Consolidated Statement of Total Comprehensive Income.
A financial asset (in whole or in part) is derecognised
either:
-- when the Company has transferred substantially all the
risk and rewards of ownership;
-- when it has not retained substantially all the risk and
rewards and when it no longer has control over the asset
or a portion of the asset; or
-- when the contractual right to receive cash flow has expired.
(ii) Financial Liabilities
The classification of financial liabilities at initial recognition
depends on the purpose for which the financial liability
was issued and its characteristics.
All financial liabilities are initially recognised at fair
value net of transaction costs incurred. All purchases of
financial liabilities are recorded on the trade date, being
the date on which the Company becomes party to the contractual
requirements of the financial liability. Unless otherwise
indicated the carrying amounts of the Company's financial
liabilities approximate to their fair values.
Financial liabilities measured at amortised cost include
other short-term monetary liabilities, which are initially
recognised at fair value and subsequently carried at amortised
cost using the effective interest rate method.
A financial liability (in whole or in part) is derecognised
when the Company has extinguished its contractual obligations,
it expires or is cancelled. Any gain or loss on derecognition
is taken to the Consolidated Statement of Comprehensive
Income.
2 ACCOUNTING POLICIES (CONTINUED)
(f) Going concern
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable
future. The Directors believe the Group is well placed
to manage its business risks successfully despite the
current economic climate for the 12 months subsequent
to signing. Accordingly, the Directors have adopted
the going concern basis in preparing the financial information.
(g) Taxation
The Company and its Subsidiary have been granted exemption
under the Income Tax (Exempt Bodies) (Guernsey) Ordinance,
1989 from Guernsey Income Tax, and each entity is charged
an annual fee of GBP600.
(h) Expenses
All expenses are accounted for on an accruals basis.
(i) Interest, Dividend and Bond
Income
Interest, dividend and bond income is accounted for
on an accruals basis.
(j) Cash and cash equivalents
Cash at bank and short term deposits which are held
to maturity are carried at cost. Cash and cash equivalents
are defined as call deposits, short term deposits and
highly liquid investments readily convertible to known
amounts of cash and subject to insignificant risk of
changes in value. For the purposes of the Consolidated
Statement of Cash Flows, cash and cash equivalents consist
of cash and deposits at bank.
(k) Share issue costs
The Share issue costs borne by the Company are recognised
in the Consolidated Statement of Changes in Equity,
as the Company's Ordinary Shares have no fixed redemption
date.
(l) Investments
All investments and derivative financial instruments
have been designated as financial assets "at fair value
through profit and loss". Investments are initially
recognised on the date of purchase at cost, being the
fair value of the consideration given, excluding transaction
costs associated with the investment. After initial
recognition, investments are measured at fair value,
with unrealised gains and losses on investments and
impairment of investments recognised in the Consolidated
Statement of Comprehensive Income. Commissions paid
on the sale or purchase of investments are recognised
in the Consolidated Statement of Comprehensive Income
as incurred.
2 ACCOUNTING POLICIES (CONTINUED)
(l) Investments (continued)
Fair value is the amount for which the financial instruments
could be exchanged, or a liability settled, between
knowledgeable willing parties in an arms length transaction.
Fair value also reflects the credit quality of the issuers
of the financial instruments.
For investments actively traded in organised financial
markets, fair value is determined by reference to Stock
Exchange quoted market bid prices as at the close of
business on the reporting date. If no quoted market
price is available as at the close of business on the
reporting date, the last available market bid price
is used.
Valuations of unquoted trade investments are based on
valuations provided to the Company by Altus Capital
Limited (the "Investment Manager"). These valuations
are intended to be an indication of the fair value of
those investments, using valuation techniques designed
to reflect the best estimation of the price at which
they could be sold, even though there is no guarantee
that a willing buyer might be found if the Group chose
to sell the relevant investment. The indicative fair
values of the investments are based on an approximation
of the market level of the investments. As the investments
are not traded in an active market, the indicative fair
value is determined by using valuation techniques. The
Investment Manager uses a variety of methods and makes
assumptions that are based on market conditions existing
at the reporting date. Different assumptions regarding
these factors, combined with different valuation techniques
and models used, could lead to different valuations
of the financial instruments by different parties.
(m) Trade Date Accounting
All "regular way" purchases and sales of financial assets
are recognised on the "trade date", i.e. the date that
the entity commits to purchase or sell the asset. Regular
way purchases or sales are purchases or sales of financial
assets that require delivery of the asset within the
time frame generally established by regulations or convention
in the market place.
(n) Segmental Reporting
The Directors are of the opinion that the Group is engaged
in a single segment of business, being investment business
and operates solely from Guernsey; therefore no segmental
reporting is provided.
3 OPERATING INCOME
Year ended Year ended
30 Jun 2013 30 Jun 2012
GBP GBP
Bank interest 33,283 113,692
Dividend income 118,818 78,270
Bond income 91,841 123,141
243,942 315,103
--------------------------------- ----------------------------------
4 OPERATING EXPENSES
Year ended Year ended
30 Jun 2013 30 Jun 2012
GBP GBP
Investment Manager's
fees 466,671 593,912
Performance fees - -
Accountancy fees 8,975 7,492
Administrator's fee 76,246 58,718
Registrar's fee 6,727 7,779
Directors' fees 150,585 129,420
Custody fees 39,380 34,188
Audit fee 32,954 32,938
Directors' and Officers'
insurance 4,732 5,187
Annual fees 13,087 12,990
Printing and stationery 3,490 5,380
Bank interest and charges 10,852 9,014
Commissions paid 216,258 198,000
Corporate and Shareholder
Adviser fees 76,349 101,365
Sponsor fees 9,125 7,976
Legal and professional
fees - 13,212
Travel expenses 50,000 50,363
Sundry costs 25,982 19,083
Loss on foreign exchange 125,332 150,923
1,316,745 1,437,940
--------------------------------- ----------------------------------
5 DIRECTORS' REMUNERATION
The Directors of the Company are paid GBP20,000 per annum.
In addition to GBP20,000 per annum, Nicholas Falla receives
an additional fee of GBP5,000 as Chairman and Robert Milroy
receives an additional fee of GBP3,000 as Chairman of the
audit committee.
The Directors of the Subsidiary are paid GBP15,000 per
annum. In addition to GBP15,000 per annum, the Chairman
receives an additional fee of GBP3,000.
6 EARNINGS PER SHARE
Earnings per Ordinary Share is calculated by dividing the
net loss for the year attributable to holders of Ordinary
Shares of the Company ('Shareholders') of GBP32,196,202
(2012: loss GBP15,936,359) by the weighted average number
of Ordinary Shares in issue during the year (39,719,569
(2012: 39,719,569)). There are no dilutive instruments
and therefore basic and diluted earnings per Ordinary Share
are identical.
7 SUBSIDIARIES
On 27 October 2011 the Company acquired 90.41% of the voting
equity of Altus Global Gold Limited (the "Subsidiary")
for a consideration of GBP5,000,000. The Subsidiary is
an authorised open-ended investment company with registered
number 54069. The Subsidiary was incorporated on 10 October
2011 and listed on the Channel Island Stock Exchange ("CISX")
on 1 November 2011. The Administrator of the Subsidiary
is Praxis Group and the Custodian is the Royal Bank of
Canada. At the time of the acquisition, the Subsidiary
had no assets or liabilities and had not commenced trading.
The Company's holding in the Subsidiary has subsequently
decreased to 53.28% of the voting equity as at 30 June
2013, due to further issues of shares to minority investors
by the Subsidiary. Included in the Total Comprehensive
Income for the year attributable to the owners of the Company
is a loss of GBP1,991,912 (June 2012: loss GBP869,912)
representing the Company's share of the Subsidiary's loss
for the year.
The Subsidiary was established to realise capital growth
from a portfolio of gold and precious metals equities,
with the aim of generating a significant capital return
to shareholders. The Subsidiary invests in mid-tier and
major gold and precious metals companies with a focus on
mid-tier products.
The financial year end of the Subsidiary is 30 June, which
is co-terminus with the financial year end of the Company.
8 INVESTMENTS
TOTAL TOTAL
30 Jun 2013 30 Jun 2012
GBP GBP
Opening portfolio
cost 58,593,473 49,337,815
Additions - cost 70,999,401 61,172,546
Sales (57,590,144) (58,345,334)
Realised (losses)
/ gains on investments (12,397,227) 6,428,446
Unrealised (depreciation)
/ appreciation on valuation
brought forward (11,067,502) 10,267,240
Unrealised depreciation
on valuation for the year (20,472,832) (21,334,742)
----------------------- ------------------------
Closing valuation 28,065,169 47,525,971
----------------------- ------------------------
Unrealised appreciation
on valuation carried forward (31,540,334) (11,067,502)
----------------------- ------------------------
IFRS 7 requires the fair value of investments to be disclosed
by the source of inputs, using a three level hierarchy
as detailed below:
* Quoted prices (unadjusted) in active markets for
identical assets or liabilities (Level 1);
* Inputs other than quoted prices included in Level 1
that are observable for the asset or liability,
either directly (as prices) or indirectly (derived
from prices) (Level 2);
* Inputs for the asset or liability that are not based
on observable market data (unobservable inputs)
(Level 3).
Investments held by the Group have been classified as Level
1, for those investments that are quoted and are valued
using quoted market bid prices and Level 2, for those unquoted
investments that are valued using standard modelling techniques
by the Investment Manager using observable inputs and Level
3 for the private equity investments that are valued using
a combination of methods including a comparable transaction,
market multiple approach, discounted cash flow or liquidation
analysis approaches, after taking account of foreign exchange
movements. This is in accordance with the fair value hierarchy.
8 INVESTMENTS (CONTINUED)
Details of the value of each classification are listed
in the table below. Values are based on the market value
of the investments as at the reporting date:
Market Value Market Value
30 Jun 2013 30 Jun 2012
GBP GBP
Level 1 26,675,726 38,549,814
Level 2 1,016,078 6,322,083
Level 3 373,365 2,654,074
Total 28,065,169 47,525,971
----------------------- ------------------------
The following table shows a reconciliation of all movements
in the fair value of financial instruments categorised
within Level 3 between the beginning and the end of the
reporting year:
30 Jun 2013 30 Jun 2012
GBP GBP
Opening portfolio cost 3,391,077 3,105,976
Additions - cost - 322,373
Sales - (44,701)
Realised gain on investments - 7,429
Unrealised (depreciation)
/ appreciation on valuation
brought forward (737,003) 8,707
Unrealised depreciation on
valuation for the year (2,280,709) (745,710)
Closing valuation 373,365 2,654,074
----------------------- ------------------------
Level 3 investments are valued using a combination of methods
including a comparable transaction, market multiple approach
discounted cash flow or liquidation analysis approaches,
after taking account of foreign exchange movements.
There have been no transfers between Level 1 and Level
2 of the fair value hierarchy during the year under review.
9 TRADE AND OTHER RECEIVABLES
30 Jun 2013 30 Jun 2012
GBP GBP
Accrued income 28,706 138,854
Prepayments 15,211 14,647
Broker debtors 892,136 145,089
936,053 298,590
--------------------------- ----------------------------------
The above carrying value of receivables is equivalent to
its fair value.
10 TRADE AND OTHER PAYABLES
(amounts falling due within 30 Jun 2013 30 Jun 2012
one year)
GBP GBP
Trade creditors 70,671 136,161
Accrued expenses 52,509 60,396
Broker creditors 86,551 419,120
209,731 615,677
--------------------------- ----------------------------------
The above carrying value of payables is equivalent to its
fair value.
11 SHARE CAPITAL
Authorised SHARES GBP
Unlimited number of Ordinary Unlimited -
Shares of no par value
=========================== ==================================
Issued
Date of issue SHARES GBP
29 June 2009 26,000,000 -
21 December 2009 10,997,233 -
3 August 2010 2,722,336 -
Ordinary Shares in issue as -
at 30 June 2013 and
30 June 2012 39,719,569
--------------------------- ----------------------------------
11 SHARE CAPITAL (CONTINUED)
Holders of Ordinary Shares are entitled to receive, and
participate in, any dividends out of income; other distributions
of the Company available for such purposes and resolved
to be distributed in respect of any accounting period; or
other income or right to participate therein.
On a winding up, Shareholders are entitled to the surplus
assets remaining after payment of all the creditors of the
Company.
Shareholders also have the right to receive notice of and
to attend, speak and vote at general meetings of the Company
and each Member being present in person or by proxy or by
a duly authorised representative at a meeting shall upon
a show of hands have one vote and upon a poll each such
holder present in person or by proxy or by a duly authorised
representative shall have one vote in respect of every Ordinary
Share held by him.
12 SHARE PREMIUM
GBP
Premium on shares issued 29 June 2009 26,000,000
Premium on shares issued 21 December
2009 14,667,020
Premium on shares issued 3 August 2010 3,818,894
Issue costs (1,883,660)
Share premium as at 30 June 2013 and
30 June 2012 42,602,254
-------------------------
Under IAS 32 'Financial Instruments: Presentation', transaction
costs of an equity transaction are accounted for as a deduction
from equity to the extent they are incremental costs directly
attributable to the equity transaction that otherwise would
have been avoided.
13 NON-CONTROLLING INTEREST
The Subsidiary has a 46.72% non-controlling interest.
GBP
Balance as at 1 July 2012 437,726
Share of loss for the period (1,746,660)
Adjustment arising from change in
non-controlling interest 3,500,000
Balance as at 30 June 2013 2,191,066
-------------------------
14 FINANCIAL INSTRUMENTS
The Group's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the
Group's operations; and
(b) Quoted and unquoted investment securities.
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group's financial instruments
are market price risk, credit risk, liquidity risk, interest
rate risk, foreign exchange risk and capital management
risk. The Board regularly reviews and agrees policies
for managing each of these risks and these are summarised
below:
(a) Market Price Risk
Market price risk arises mainly from uncertainty about
future prices of financial instruments held. It represents
the potential loss the Group might suffer through holding
market positions in the face of price movements. The
Investment Manager actively monitors market prices and
reports to the Board as to the appropriateness of the
prices used for valuation purposes. A list of the top
10 investments held by the Group is shown in the Schedule
of Top 10 Investments on page 56.
If the value of the Group's investment portfolio were
to increase by 30%, it would represent a gain of GBP8,419,551
(2012: GBP14,257,791). This would cause the net asset
value of the Group to rise by 27.46% (2012: 23.33%).
If the value of the Group's investment portfolio were
to decrease by 30%, it would represent a decrease of
GBP8,419,551 (2012: GBP14,257,791). This would cause
the net asset value of the Group to fall by 27.46% (2012:
23.33%).
Some of the market price risk is mitigated by the use
of various put and call options and Exchange-traded funds
("ETFs").
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty
will be unable or unwilling to meet a commitment that
it has entered into with the Group. The Directors receive
financial information on a regular basis which is used
to identify and monitor risk.
It is Group policy not to invest more than 20% of the
gross assets of the Group in the securities of any one
company or group at the time the investment is made.
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(b) Credit Risk (continued)
The Group has no significant concentration of credit risk,
with exposure spread over a large number of investments.
At 30 June 2013 the Group's largest exposure to a single
investment was GBP3,195,273 (2012: GBP5,079,424), which
represents 11.39% (2012: 10.69%) of the total market value
of the Group's investments.
Investors should be aware that the prospective returns to
Shareholders mirror the returns under the investments held
or entered into by the Group and that any default by an
issuer of any such investment held by the Group would have
a consequential adverse effect on the ability of the Group
to pay some or all of the entitlement to Shareholders. Such
a default might, for example, arise on the insolvency of
an issuer of an investment.
The Group's financial assets exposed to credit risk are
as follows:
30 Jun 2013 30 Jun 2012
GBP GBP
Investments in equities /
warrants 28,065,169 47,525,971
Cash and cash equivalents 1,868,097 13,893,566
Trade and other receivables 936,053 298,590
30,869,319 61,718,127
------------------------- --------------------------
The Group is exposed to credit risk in respect of its cash
and cash equivalents, arising from possible default of the
relevant counterparty, with a maximum exposure equal to
the carrying value of those assets. The credit risk on liquid
funds is limited because the counterparties are banks with
high credit ratings assigned by international credit-rating
agencies. The Group monitors the placement of cash balances
on an on going basis.
The Group invests its cash and cash equivalents with Royal
Bank of Canada (Channel Islands) Limited and Barclays Private
Clients International, which had a Standard and Poor's rating
of AA- and A+ as at the date of signing.
The investments of the Group are held in custody by Anson
Custody Limited or Royal Bank of Canada (Channel Islands)
Limited ("RBCCI"). Bankruptcy or insolvency of the Custodians
may cause the Group's rights with respect to investments
held by the Custodians to be delayed. Investments held with
Anson Custody Limited are held in a Crest account maintained
by Anson Registrars Limited in a sub-account designated
exclusively for the Group. This ensures that the investments
are ring fenced and will be protected should Anson Custody
Limited become bankrupt or insolvent.
RBCCI mitigate risk by using a subcustodian network comprising
top-rated and well respected counterparties. The custodian
network is monitored on an on going basis to ensure that
each one continues to meet RBCCI's stringent criteria.
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(c) Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in realising assets or otherwise raising funds
to meet financial commitments. The Group's main financial
commitment is its on going operating expenses.
The Investment Manager ensures that the Group has sufficient
liquid resources available to fulfil its operational plans
and to meet its financial obligations as they fall due.
The table below details the residual contractual maturities
of financial liabilities:
As at 30 June 2013 1-12 months Over 1 year
GBP GBP
Trade creditors 70,671 -
Accrued expenses 52,509 -
Broker creditors 86,551 -
--------------------------- ----------------------------------
209,731 -
--------------------------- ----------------------------------
As at 30 June 2012 1-12 months Over 1 year
GBP GBP
Trade creditors 136,161 -
Accrued expenses 60,396 -
Broker creditors 419,120 -
--------------------------- ----------------------------------
615,677 -
--------------------------- ----------------------------------
Note that all amounts included within the 1-12 months
column above have a contractual maturity within 3 months.
(d) Interest Rate Risk
The Group holds cash in several bank accounts, the return
on which is subject to fluctuations in market interest
rates.
Other than cash and cash equivalents, none of the assets
or liabilities of the Group attract or incur interest.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
15 (CONTINUED)
(d) Interest Rate Risk
(continued)
The following table details the Group's exposure
to interest rate risks:
As at 30 June 2013:
Floating Non-interest
less than bearing
1 month Fixed Total
GBP GBP GBP GBP
Assets
Designated
at fair value
through profit
or loss on
initial
recognition:
Investments - 27,736,503 328,666 28,065,169
Loans and receivables:
Accrued income - 28,706 - 28,706
Prepayments - 15,211 - 15,211
Broker debtors - 892,136 - 892,136
Cash and
cash equivalents 1,868,097 - - 1,868,097
----------------------- -------------------------- -------------------- -----------------
Total Assets 1,868,097 28,672,556 328,666 30,869,319
----------------------- -------------------------- -------------------- -----------------
Liabilities
Financial
liabilities
measured
at amortised
cost:
Trade creditors - 70,671 - 70,671
Accrued expenses - 52,509 - 52,509
Broker creditors - 86,551 - 86,551
Total Liabilities - 209,731 - 209,731
----------------------- -------------------------- -------------------- -----------------
Total interest
sensitivity
gap 1,868,097
-----------------------
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
15 (CONTINUED)
(d) Interest Rate Risk
(continued)
As at 30 June 2012:
Floating Non-interest Fixed Total
less than bearing
1 month
GBP GBP GBP GBP
Assets
Designated
at fair value
through profit
or loss on
initial
recognition:
Investments - 44,226,964 3,299,007 47,525,971
Loans and receivables:
Accrued income - 138,854 - 138,854
Prepayments - 14,647 - 14,647
Broker debtors - 145,089 - 145,089
Cash and
cash equivalents 13,893,566 - - 13,893,566
----------------------- -------------------------- -------------------- -----------------
Total Assets 13,893,566 44,525,554 3,299,007 61,718,127
----------------------- -------------------------- -------------------- -----------------
Liabilities
Financial
liabilities
measured
at amortised
cost:
Trade creditors - 136,161 - 136,161
Accrued expenses - 60,396 - 60,396
Broker creditors - 419,120 - 419,120
Total Liabilities - 615,677 - 615,677
----------------------- -------------------------- -------------------- -----------------
Total interest
sensitivity
gap 13,893,566
-----------------------
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(d) Interest Rate Risk (continued)
Interest rate sensitivity
If interest rates had been 25 basis points higher and
all other variables were held constant, the Group's net
loss attributable to Shareholders for the year ended 30
June 2013 would have decreased by approximately GBP4,670
(2012: GBP34,734) or 0.02% (2012: 0.06%) of Net Assets
due to an increase in the amount of interest receivable
on the bank balances.
If interest rates had been 25 basis points lower and all
other variables were held constant, the Group's net loss
attributable to Shareholders for the year ended 30 June
2013 would have increased by approximately GBP4,670 (2012:
GBP34,734) or 0.02% (2012: 0.06%) of Net Assets due to
a decrease in the amount of interest receivable on the
bank balances.
(e) Foreign Exchange Risk
A substantial proportion of the Group's portfolio is invested
in overseas securities and movements in exchange rates
can significantly affect their Sterling value. The Group
does not normally hedge against foreign currency movements
affecting the value of the investment portfolio, but takes
account of this risk when making investment decisions.
The Group undertakes certain transactions denominated
in foreign currencies. Hence, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed
by minimising the amount of foreign currency held at any
one time.
The carrying amounts of the Group's foreign currency denominated
monetary assets at the reporting date are as follows:
30 Jun 2013 30 Jun 2012
GBP GBP
Australian Dollar 6,579,996 16,667,388
Canadian Dollar 14,437,911 18,235,685
US Dollar 7,037,398 11,178,251
Norwegian Krone - 2,367,125
28,055,305 48,448,449
--------------------------------- -------------------------
As the Group does not invest in Eurozone equities, with
the exception of the United Kingdom, the Investment Manager
does not consider that there is any increased risk to
the Group as a result of the Eurozone crisis and the directors
have considered whether the UK assets have suffered impairment
in value in the current economic climate.
15 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(f) Capital Management
The investment objective of the Group is to provide Shareholders
with attractive long term returns, expected to be in the
form of capital through a diversified portfolio.
As the Company's Ordinary Shares are traded on the SFM,
the Ordinary Shares may trade at a discount to their Net
Asset Value per Share on occasion. However, in structuring
the Group, the Directors have given detailed consideration
to the discount risk and how this may be managed.
The Group monitors capital on the basis of the carrying
amount of equity as presented on the face of the Consolidated
Statement of Financial Position.
16 RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
The Group is managed by the Investment Manager, a wholly-owned
FCA authorised and regulated subsidiary of Altus Strategies
Limited ('ASL'). ASL owns 502,399 Ordinary Shares (1.26%)
in the Company and 500,000 Ordinary Shares (5.33%) in
the Subsidiary.
The Director David Netherway is a non-executive chairman
of Altus Strategies Limited, which as mentioned above,
owns 502,399 shares (1.26%) in the Company. David Netherway
is also Non-Executive Chairman of Kilo Goldmines Limited,
whose equities and warrants are invested in by the Group.
The total investment in Kilo Goldmines Limited represents
2.61% of the market value of the Group's investments.
The Director Nick Falla holds 30,000 Ordinary Shares (0.07%)
in the Company.
The Director David Gelber holds 53,000 Ordinary Shares
(0.13%) in the Company. This is held as part of a nominee
trust holding in the Company.
The Director Robert Milroy holds 30,000 Ordinary Shares
(0.07%) in the Company.
Under the Investment Management Agreement between the
Investment Manager and the Company, the Investment Manager
is entitled to receive fees of the greater of 0.85% per
annum of the Company's Net Asset Value or GBP150,000 per
annum.
Under the Investment Management Agreement between the
Investment Manager and the Subsidiary, the Investment
Manager is entitled to receive fees of 1.5% per annum
of the Subsidiary's Net Asset Value, subject to the Total
Expense Ratio not exceeding 2%.
RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
16 (CONTINUED)
During the year the Group incurred GBP466,671 (2012:
GBP593,912) of fees, of which GBP61,398 (2012: GBP128,215)
was outstanding at the year end as shown in trade and
other payables.
During the year, the Group was charged travel expenses
totalling GBP50,000 (2012: GBP50,363) by the Investment
Manager.
The Investment Manager agreed to rebate the Company in
full for any management fees paid by the Subsidiary.
During the year no such fees had been received by the
Investment Manager from the Subsidiary.
The Investment Manager is also entitled to receive a
performance fee (the "Performance Fee"). The first component
of the Performance Fee will be calculated for the first
time in respect of the financial accounting period first
ending following the second anniversary of the date of
Admission ("the Calculation Period"). The fee is equal
to 20% of the excess of the NAV per Share as at the end
of the financial accounting period (adjusted to account
for dividends and returns of capital paid out during
the period and in respect of which the Manager has been
paid or is to be paid the second component of the Performance
Fee) over the basic performance hurdle, this being an
amount equal to the Issue Price increased by 10% of the
Issue Price per annum up to the end of the relevant performance
period. Thereafter this fee shall be paid on an annual
basis in respect of each financial period subject to
the basic performance hurdle and a high watermark having
been exceeded. The high watermark is the NAV at the end
of the financial period in respect of which the last
Performance Fee was paid. If however, the high watermark
is not exceeded for any consecutive period of three years
it shall be re-based to a value equal to the NAV as at
the end of the third financial period. The basic performance
hurdle, as described above, must however still be exceeded
in order for this component of the performance fee to
be payable.
The first component of the Performance Fee will be paid
on a per Share basis, multiplied by the time weighted
average of the number of Shares in issue in the relevant
performance period (or since Admission in the first performance
period) (together, if applicable, with an amount equal
to the VAT thereon). In the event that there is a further
issue of Shares, redemption of Shares or other capital
reorganisation of the Company, the calculation of the
performance fee will be adjusted appropriately.
The second component of the Performance Fee is an amount
equal to 20% of the sum of all dividends, distributions
and other returns of capital paid out to Shareholders
during the relevant performance period (but excluding
redemptions and share buy backs that are deemed distributions
under the Companies Law), subject to the performance
hurdle having been satisfied.
RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
16 (CONTINUED)
The performance hurdle is the requirement that the NAV
on the relevant calculation date must exceed an amount
equal to the Issue Price increased by 10% of the Issue
Price per annum up to the end of the relevant performance
period.
No Performance Fee provision has been made for the Company
for the year as the performance hurdle has not been met.
No Performance Fee provision has been made for the Subsidiary
for the year as the performance hurdle has not been met.
Nimrod Capital LLP is the Company's Corporate and Shareholder
Adviser and is entitled to receive fees of 0.15% of the
Company's Net Asset Value per annum. During the year
the Group incurred GBP76,349 (2012: GBP101,365) of costs,
of which GBP10,391 (2012: GBP22,626) was outstanding
at the year end as shown in accrued expenses.
Altus Resource Capital Limited
TOP 10 INVESTMENTS IN SECURITIES AS AT 30 JUNE 2013
30 Jun 2013
Investment * Cost Market Unrealised
Value profit / (loss)
GBP GBP GBP
Base Resources Ltd 3,267,138 3,195,273 (71,865)
Endeavour Mining Corp 6,825,087 1,596,857 (5,228,230)
Nevsun Resources Ltd 1,922,035 1,518,005 (404,030)
ETFS Physical Palladium 1,624,643 1,490,416 (134,227)
Detour Gold Corp 4,031,861 1,436,851 (2,595,010)
Uranium Participation
Corp 1,469,266 1,410,051 301,375
ETFS Physical Platinum 1,585,539 1,384,542 (200,997)
Guyana Goldfields
Inc 3,496,264 1,278,219 (2,218,045)
iShares Silver Trust 1,549,997 1,126,714 (423,283)
SPDR Gold Shares 1,226,189 964,269 (261,920)
26,998,018 15,401,196 (11,236,231)
------------------- ------------------------- ----------------------------
* Each line represents the amalgamated holdings in an entity
if the Group has holdings in more than one share class in
the same company.
Altus Resource Capital Limited
TOP 10 INVESTMENTS IN SECURITIES AS AT 30 JUNE 2012
30 Jun 2012
Investment * Cost Market Unrealised
Value profit / (loss)
GBP GBP GBP
Detour Gold Corp 6,397,967 5,079,424 (1,318,543)
Northland Resources
SA 3,000,000 4,952,829 1,952,829
Endeavour Mining Corporation
** 4,657,503 4,804,642 147,139
Perseus Mining Ltd 3,672,117 4,432,457 760,340
Beadell Resources Ltd 5,018,843 3,936,477 (1,082,366)
Cuco Resources Ltd 3,068,704 2,654,075 (414,629)
Kilo Goldmines Ltd 3,156,064 2,452,185 (703,879)
Eldorado Gold Corp 765,617 2,173,780 1,408,163
SPDR Gold Shares 1,659,468 1,816,454 156,986
Eastcoal Inc 2,557,387 1,681,698 (875,689)
33,953,670 33,984,022 30,352
-------------------- ------------------------ ----------------------------
* Each line represents the amalgamated holdings in an entity
if the Group has holdings in more than one share class in
the same company.
** Note that during the year a share exchange took place
and the Group received 2,871,985 shares in Endeavour Mining
Corporation in exchange for 14,917,142 shares in Adamus
Resources Limited. The exchange took place at the fair value
of the shares in Adamus Resources Limited on the date of
the transaction and the fair value has been used as the
initial cost of the Endeavour Mining Corporation shares.
Altus Resource Capital Limited
ADVISORS & CONTACT INFORMATION
Key Information
Exchange
Ticker
Listing Date
Fiscal Year End
Base Currency
ISIN
SEDOL
Country of Incorporation
Management and Administration
Registered Office
Altus Resource Capital Limited
Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey, GY1 1EJ
Investment Manager
Altus Capital Limited
14 Station Road
Didcot
Oxfordshire, OX11 7LL
Placing and Corporate and Shareholder Advisory Agent
Nimrod Capital LLP
4 The London Fruit and Wool Exchange
Brushfield Street
London, E1 6HB
Principal Custodian
Anson Custody Limited
Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey, GY1 1EJ
Specialist Fund Market of the LSE/ CISX
ARCL/ ARC
30 June 2009 / 22 December 2009
30 June
GBP
GG00B54BPN15
B54BPN1
Guernsey - Registration number 50318
Secretary and Administrator
Anson Fund Managers Limited
P.O. Box 405, Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey, GY1 3GF
Registrar
Anson Registrars Limited
PO Box 426, Anson Place
Mill Court, La Charroterie
St Peter Port
Guernsey, GY1 3WX
Auditor
Deloitte LLP
Regency Court
Glategny Esplanade
St Peter Port
Guernsey, GY1 3HW
Custodian
Royal Bank of Canada (Channel Islands) Limited
Canada Court
Upland Road
St Peter Port
Guernsey, GY1 3BQ
Board of Directors
Nick Falla (Chairman)
Robert Milroy
David Gelber
David Netherway
Altus Resource Capital Limited
Registered in Guernsey No. 50318
NOTICE OF GENERAL MEETING
NOTICE IS HEREBY GIVEN that the GENERAL MEETING of the voting
Members of Altus Resource Capital Limited (the "Company") will be
held at Anson Place, Mill Court, La Charroterie, St Peter Port,
Guernsey, Channel Islands on 5 December 2013 at 9.30 a.m., for the
following purposes:
Ordinary Business:
1. TO receive the audited Annual Report and Consolidated
Financial Statements for the year ended 30 June 2013.
2. TO re-appoint Deloitte LLP as Auditor to the Company, to hold
office from the conclusion of this meeting until the conclusion of
the next general meeting to be held in 2014 under section 199 of
The Companies (Guernsey) Law, 2008, as amended, and to authorise
the Directors to determine its remuneration
Special Business: to be proposed as an ordinary resolution
3. TO resolve as an ordinary resolution that the Company be
authorised, in accordance with section 315 (1) (a) of the Law, to
make market purchases (within the meaning of section 316 of the
Law) of ordinary shares of no par value each (the "Shares"), and to
cancel such Shares or hold such Shares as treasury shares, provided
that:
i. The maximum number of Shares hereby authorised to be
purchased shall be 14.99% of the Shares in issue;
ii. Purchases by the Company will only be made in the market at
prices below the estimated prevailing NAV per Share where the
Directors believe such purchases will result in an increase in the
NAV per Share of the remaining Shares and as a means of addressing
any imbalance between the supply of, and demand for, such
Shares;
iii. The maximum which may be paid for a Share shall not be at a
price higher than 5% above the average mid-market values for the
Shares for the five Business Days before the purchase is made or
the higher of the last independent trade or the
highest independent bid for the shares;
iv. the minimum price to be paid for a Share shall be 1 pence; and
v. Unless previously varied, revoked or renewed, the authority
hereby conferred shall expire at the conclusion of the General
Meeting of the Company to be held in 2014, under section 199 of the
Law, save that the Company may, prior to such expiry, enter into a
contract to purchase Shares under such authority and make a
purchase of Shares pursuant to such contract.
BY ORDER OF THE BOARD Registered Office:
Anson Fund Managers Limited Anson Place
Secretary Mill Court
La Charroterie
16 September 2013 St Peter Port
Guernsey
Notes:
-- Ordinary Resolution: This resolution requires a simple
majority of those Shareholders voting in person or by proxy at the
General Meeting to be passed.
-- A member entitled to attend and vote at the meeting is
entitled to appoint one or more proxies to attend and vote instead
of him or her. A proxy need not be a member of the Company.
Completion and return of the form of proxy will not preclude
members from attending or voting at the meeting, if they so
wish.
-- More than one proxy may be appointed provided each proxy is
appointed to exercise the rights attached to different shares.
-- To be valid the Form of Proxy, together with the original
power of attorney or other authority, if any, under which it is
executed (or a notarially certified copy of such power of
authority) must be deposited with the Company's agent, for this
purpose being, Anson Registrars Limited, Anson Place, Mill Court,
La Charroterie, St Peter Port, Guernsey, C.I. GY1 1EJ, not less
than 48 hours before the time for holding the meeting. A Form of
Proxy is enclosed with this Notice.
-- All persons recorded on the register of shareholders as
holding shares in the Company as at 9.30 a.m. (Guernsey time) on 5
December 2013 or, if the General Meeting is adjourned, as at 48
hours before the time of any adjourned General Meeting, shall be
entitled to attend and vote (either in person or by proxy) at the
General Meeting and shall be entitled to one vote per share
held.
-- Where there are joint registered holders of any shares such
persons shall not have the right of voting individually in respect
of such shares but shall elect one of their number to represent
them and to vote whether in person or by proxy in their name. In
default of such election the person whose name stands first on the
register of shareholders shall alone be entitled to vote. Where
there are joint participants in respect of any share such persons
shall not have the right of voting individually in respect of such
share but shall elect one of their number to represent them and to
vote whether in person or by proxy in their name. In default of
such election the participant whose interests are first notified to
the Company shall alone be entitled to vote.
-- On a poll votes may be given either personally or by proxy
and a shareholder entitled to more than one vote need not use all
his votes or cast all the votes he uses in the same way.
-- Any corporation which is a shareholder may by resolution of
its directors or other governing body authorise such person as it
thinks fit to act as its representative at this meeting. Any person
so authorised shall be entitled to exercise on behalf of the
corporation which he represents the same powers (other than to
appoint a proxy) as that corporation could exercise if it were an
individual shareholder.
EXPLANATORY NOTES TO THE NOTICE OF GENERAL MEETING
At the General Meeting there are three Resolutions which
shareholders will be asked to consider and, if thought fit,
approve. An explanation of each of these Resolutions is given
below. All Resolutions are proposed as ordinary resolutions. An
ordinary resolution requires more than 50% of votes cast at the
General Meeting relating to that resolution to be cast in favour of
it for the resolution to be passed.
ORDINARY RESOLUTIONS
Resolution 1: Annual Report and Consolidated Financial
Statements
For each financial year the Directors are required by Law to
present the Directors' report, the audited accounts and the
auditors' reports to shareholders at a general meeting.
Shareholders are asked to receive the Annual Report and
Consolidated Financial Statements of the Company for the financial
year ended 30 June 2013.
Resolution 2: Appointment and remuneration of the Auditors
Following the previous general meeting of the Company the
appointment of Deloitte LLP as Auditor of the Company concludes at
the end of this General Meeting.
Deloitte LLP have indicated that they are willing to continue to
be the Company's Auditor for the next financial year. You are asked
to approve their re-appointment, to hold office from the conclusion
of this General Meeting until the conclusion of the next general
meeting to be held in 2014 under section 199 of the Law, and to
authorise the Directors of the Company to determine their
remuneration.
Resolution 3: Authority to make Market Purchases
The Company has previously been granted authority to make market
acquisitions of its ordinary shares to address, among other things,
any imbalance in the supply of, and demand for, its Ordinary
Shares.
This Resolution proposes to renew the authority of the Company
to make market acquisitions of up to a maximum of 14.99% of the
Shares in issue as at the date of this resolution being passed.
The Directors wish to have the ability to make market purchases
of the Company's Shares should such be considered desirable and
this authority provides the flexibility to allow them to do so in
the future. The Directors will only exercise this authority when it
would be in the best interests of the Company, and of its
shareholders generally, and could be expected to result in an
increase in the earnings per share of the Company.
In accordance with the Law, the Company may only make market
purchases of its Shares provided it satisfies the "solvency test"
(as detailed in the Law) immediately after the Shares are acquired.
A company satisfies the "solvency test" if: (i) it is able to pay
its debts as they become due; and (ii) the value of its assets are
greater than the value of its liabilities. In connection with any
purchase of the Company's ordinary shares, the Directors will
therefore need to confirm that the solvency test will be satisfied
immediately following such purchase being made.
The minimum price which may be paid for each Share shall be 1
pence. The maximum price which may be paid for a Share shall not be
at a price higher than 5% above the average mid-market values for
the Shares for the five business days before the purchase is made
or the higher of the last independent trade or the highest
independent bid for the shares. Any shares purchased under the
renewed authority will either be cancelled or held in treasury.
Such decision will be made by the Directors at the time of the
purchases.
The authority sought under this Resolution will expire at the
end of the general meeting of the Company held in 2014 under
section 199 of the Law, unless previously varied, revoked or
renewed.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LRMFTMBJBBAJ
Altus Res. (LSE:ARCL)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Altus Res. (LSE:ARCL)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024
