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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Altus Res. | LSE:ARCL | London | Ordinary Share | GG00B54BPN15 | ORD 100P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 58.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMARCL
RNS Number : 0938G
Altus Resource Capital Limited
27 February 2015
Altus Resource Capital Limited
Half-Yearly
Financial Report
from 1 July 2014 to 31 December 2014 (Unaudited)
SUMMARY INFORMATION
Company Overview
Overview
Altus Resource Capital Limited ("ARC" or the "Company") is a Guernsey authorised, closed-ended investment company incorporated on 30 April 2009, the ordinary shares of which were admitted to trading 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.
At the date of admission the SFM was not a recognised exchange for ISA investors and therefore to enable ISA investors to invest, the Company sought a dual listing on the CISX, being a recognised exchange for ISA investors at that time. On 20 December 2013 the Royal Court of Guernsey approved the scheme of arrangement (the "Scheme") between the CISX and The Channel Islands Securities Exchange (the "CISE"). In accordance with the Scheme, the business of the CISX was acquired by CISE. All securities that were listed on the Official List of the CISX were transferred and are now listed on the Official List of CISE.
In March 2014 the Individual Savings Account Regulations 1998 were amended and ISA investors can now invest in shares listed on the SFM, therefore a dual listing is no longer required by the Company. On 14 January 2015, the listing of the Company's ordinary shares on CISE was cancelled.
At the Company's Annual General Meeting held on 4 December 2014, a resolution was put to the Company's shareholders that, in accordance with Article 154A of the Company's Articles, the Company continue in existence as presently constituted. This resolution did not pass. In accordance with the Company's Articles, the Directors shall within 4 months formulate and put to the Company's shareholders proposals relating to the future of the Company having regard to, inter alia, prevailing market conditions and applicable regulations and legislation.
As stated in the Company's news release of 30 January 2015, the Directors, together with the Company's Corporate & Shareholder Adviser and the Company's Investment Manager, are in discussions with various parties and are considering several options and proposals relating to the future of the Company. A further announcement to shareholders will be released in due course.
While the Directors cannot be certain what the final proposal accepted by shareholders will be, the Financial Statements are prepared on a going concern basis supported by the Directors current assessment of:
-- the Company's ability to continue in existence for the foreseeable future; -- the continued viability of the Company at a lower level of net assets; -- on-going Shareholder interest in the continuation of the Company.
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 per share on 22 December 2009. On 2 August 2010 a further 2,722,336 ordinary shares were issued at GBP1.40 per share.
The Company invested GBP5,000,000 in its subsidiary company Altus Global Gold Limited in October 2011.
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 CISX 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 group comprises the Company and its subsidiary Altus Global Gold Limited (together the "Group").
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 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.
FINANCIAL HIGHLIGHTS
ARC Month End NAV / Share & Share Price
Hot Features
Premium
Performance
Year to Year to Year Year Year Year Since
Jun 10 Jun 11 to Jun to Jun to Jun to Jun launch
12 13 14 15
ARC (NAV/Share) 41.3% 43.6% -20.8% -52.8% 10.5% -24.0% -36.3%
Gold ($/oz) 33.5% 21.2% 6.2% -22.7% 7.5% -10.7% 27.4%
FTSE Gold Mines
Index 31.0% 4.5% -21.9% -48.0% 10.2% -29.7% -56.9%
S&P/TSX Gold
Index 22.0% -2.9% -20.7% -42.3% 20.0% -28.6% -53.5%
Monthly:
--------------------------------------------------------------
Jul Aug Sep Oct Nov Dec
ARC (NAV/Share) 1.1% 2.1% -14.8% -13.7% 3.3% -3.0%
Gold ($/oz) -3.4% 0.4% -6.2% -2.9% -0.5% 1.5%
FTSE Gold Mines
Index -1.2% 3.5% -19.2% -19.3% 4.8% 0.5%
S&P/TSX Gold
Index -1.0% 2.4% -17.9% -19.3% 6.2% 0.1%
Note: The table above sets out the performance of the gold
price and a number of mining market indices. These metrics
illustrate the performance of the mining sector in general
and are not direct benchmarks for the Company given the composition
of its portfolio.
CHAIRMAN'S STATEMENT AND INTERIM MANAGEMENT REPORT
I hereby present the Half-Yearly Financial Report of the Company for the period between 1 July 2014 and 31 December 2014 (the "Period").
With the conclusion of the quantitative easing programme in the US and the expectation of an interest rate rise during 2015, the US Dollar strengthened significantly over the Period. Against this dollar rise, commodity prices declined across the board and led mining equities lower. The FTSE Gold Mines Index and S&P/TSX Gold Index declined 29.7% and 28.6% respectively and the FTSE 350 Mining Index of diversified larger miners and FTSE AIM Basic Resources Index representing junior diversified miners, declined 13.4% and 26.9% respectively. The Company's unaudited Net Asset Value ("NAV") declined by 24.0% to end the Period at GBP24.0 million or GBP0.61 per ordinary share.
During the Period, the Company narrowly failed its continuation vote at its Annual General Meeting held on 4 December 2014. As stated in the news release of 30 January 2015, the Directors, together with the Company's Corporate & Shareholder Adviser and the Company's Investment Manager, are in discussions with various parties and are considering several options and proposals relating to the future of the Company. A further announcement to shareholders will be released in due course.
The Company remains invested in Altus Global Gold Limited, a Guernsey registered open-ended investment company established and managed by Altus Capital Limited, seed-financed by the Company and admitted to the Official List of the ClSX (Mnemonic: AGGL) in November 2011. The investment provides exposure to a concentrated portfolio of primarily mid-tier gold equities and reflects the Investment Manager's conviction that the fundamentals for the gold price remain robust and that, following the significant divergence of gold equities from the gold price, substantial returns can be delivered from investing in quality gold producers.
A description of the important events that have occurred during the Period and their impact on the financial statements is included in the Investment Manager's Report on pages 7 to 10, and includes a description of the principal risks and uncertainties, along with Note 13 in the financial statements. Details of all related party transactions are given in Note 14. Other than the information set out in this report, the Board is not aware of any events during the Period, which would have had a material impact on the financial position of the Company.
On behalf of the Board of Directors, I thank all shareholders for their support.
Nick Falla
Chairman
INVESTMENT MANAGER'S REPORT
Following a relatively positive start to 2014, the second half of the year has seen commodity prices and mining equities struggle against a strengthening US Dollar. The US Dollar Index gained 13.2% over the Period as the US Federal Reserve concluded its quantitative easing programme and with expectations of an interest rate rise during 2015. The gold price declined 10.7% to close the Period at US$1,185 per ounce with silver losing 25.3%. The iron ore price has remained under pressure and base metals also suffered declines with copper and nickel dropping 9.6% and 20.5% respectively.
With the gold price close to the marginal cost of production, gold mining equities underperformed with the FTSE Gold Mines Index and the S&P/ TSX Gold Index, both indices of the world's largest gold miners, falling 29.7% and 28.6% respectively. The Market Vectors Junior Gold Miners Index, representing junior and mid-cap producers, declined 43.4% over the Period.
Diversified miners also suffered declines over the Period with the FTSE 350 Mining Index, comprising major diversified miners, losing 13.4% and the FTSE AIM Basic Resource Index comprised of junior resource equities falling 26.9%.
The Company retains a concentrated portfolio of quality junior resource equities. These companies have quality assets and management teams that are capable of delivering superior shareholder returns through managing political and operational risks. The Investment Manager adopts an active approach to trading the portfolio to take advantage of the volatile short-term price moves and anomalous valuations.
With weakening commodity prices and tightening margins, miners will need to replenish or replace reserves with high quality projects and the Investment Manager anticipates that this will lead to a period of M&A and consolidation across the sector. During the Period there was speculation that a private equity firm was preparing a bid for the Company's largest portfolio holding, Nevsun Resources. No formal bid has materialised but the speculation gave a useful boost to the Nevsun share price and supports the thesis that M&A activity will increase and be a driver of value for quality juniors.
At the end of the Period the Company held 22 resource equities, 3 precious metal backed ETFs and cash representing 16.5% of assets under management.
Outlook
Altus Capital Limited remains confident that the fundamentals that have supported a decade of growth for the gold price remain intact today and that the outlook for gold remains positive over the medium term. These factors include the continued currency debasement, low to negative real interest rates and on-going economic stimulus measures by the major central banks, coupled with the increasing demand for gold from the burgeoning middle classes of China and other emerging economies. Gold's status as a reserve currency has also become increasingly important with many emerging economies continuing to increase their gold reserves.
With an increased focus on delivering shareholder returns, gold equities that meet their targets are expected to outperform the gold price going forward.
The fundamentals for many other commodities remain robust driven by the continued industrialisation and urbanisation of China and other BRIC economies. With growing demand, a number of commodities also face increasing supply side constraints. The copper and zinc industries both face significant mine closures or decreasing production from a number of major mines over the coming years and there are insufficient new projects under development to fill the anticipated deficits. Altus Capital Limited continues to monitor companies operating across the full suite of metals and minerals but are focused on equities that should benefit from a strengthening commodity price as well as through delivering operationally.
Principal Risks and Uncertainties
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. Political and economic conditions in metal and mineral producing countries may have a direct effect on the mining and production of these metals and minerals, and consequently, on their prices. In addition, the Company has invested, and will continue to invest in companies with assets or operations in emerging or developing markets and will consequently be exposed to various increased risks associated with investing in such markets.
Investment allocation
At 31 December 2014, the Group's assets were allocated in the following approximate proportions:
Asset Allocation by Development
Stage
Production 32.3%
Development 25.8%
Exploration 14.7%
Commodity Exposure 10.6%
Cash 16.5%
100.0%
-------
Asset Allocation by Geography
Africa 25.0%
North America 17.1%
South America 15.4%
Asia - Other 6.3%
Australasia 0.9%
Other (including commodity
exposure) 18.8%
Cash 16.5%
100.0%
-------
Asset Allocation by Commodity
Gold 40.2%
Silver 1.9%
Bulk Minerals 1.3%
Base Metals 21.5%
Energy Minerals 3.8%
Platinum Group Metals 8.7%
Diamonds 6.1%
Cash 16.5%
100.0%
-------
**Note totals may not equal 100% due to roundings.
Source: Altus Capital Limited
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Board of Directors jointly and severally confirm that, to the best of their knowledge:
(a) The 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 profit or loss of the Company; and
(b) This Interim Management Report includes or incorporates by reference:
(i) an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements;
(ii) a description of the principal risks and uncertainties for the remaining six months of the financial year;
(iii) confirmation that there were no related party transactions in the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period; and
(iv) any changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the Company in the first six months of the current financial year.
Signed on behalf of the Board of Directors on 27 February 2015.
Nick Falla Robert Milroy Chairman Director
DIRECTORS
Nicholas J Falla: Chairman (non-executive)
Nicholas Falla has had over thirty years of experience in the finance industry including sixteen 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 to 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 Nick 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)
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-executive)
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. Robert 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, Robert 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)
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.
David is currently the chairman of Aureus Mining Inc, Kilo Goldmines Limited and a non-executive director of Crusader Resources Limited, Canyon Resources Limited and Altus Global Gold Limited. David is the ex-Chairman of Afferro Mining Inc and was a non-executive director of Gryphon Mineral Ltd, KazakhGold Group and GMA Resources Ltd.
David is the current non-executive chairman of Altus Strategies Limited and is thus not considered an Independent Director of the Company.
STATEMENT OF COMPREHENSIVE INCOME
for the period from 1 July 2014 to 31 December 2014
Restated
1 Jul 2014 1 Jul 2013
to to
31 Dec 2014 31 Dec 2013
Notes GBP GBP
Net movement in unrealised
(depreciation) / appreciation
on investments 8 (3,016,958) 9,773,639
Realised losses on investments 8 (4,400,209) (8,782,768)
Operating income 3 44,494 39,364
Operating expenses 4 (293,745) (342,586)
Net (loss) / gain for the
Period before foreign exchange
losses (7,666,418) 687,649
Unrealised foreign exchange
gain / (loss) 36,573 (311,052)
Net (loss) / gain for the
Period (7,629,845) 376,597
-------------------------------- -----------------------------
Other comprehensive income - -
-------------------------------- -----------------------------
Total comprehensive (loss)
/ income (7,629,845) 376,597
================================ =============================
Earnings per share for the
Period
- Basic and Diluted 6 (0.19) 0.01
-------------------------------- -----------------------------
There are no recognised gains or losses for the Period other
than those disclosed above.
In arriving at the results for the financial period, all amounts
are derived from continuing operations.
The notes on pages 19 to 43 form an integral part of these
financial statements
STATEMENT OF FINANCIAL POSITION
as at 31 December 2014
Restated
31 Dec 2014 30 Jun 2014
Notes GBP GBP
NON-CURRENT ASSETS
Financial assets designated
as at fair value through profit
and loss 8 20,084,534 30,420,579
CURRENT ASSETS
Cash and cash equivalents 4,001,544 3,194,635
Trade and other receivables 9 24,706 173,746
-------------------------- ----------------------
4,026,250 3,368,381
TOTAL ASSETS 24,110,784 33,788,960
-------------------------- ----------------------
CURRENT LIABILITIES
Trade and other payables 10 84,251 2,132,582
-------------------------- ----------------------
84,251 2,132,582
NET ASSETS 24,026,533 31,656,378
-------------------------- ----------------------
EQUITY
Share premium 12 42,602,254 42,602,254
Revenue reserve (18,575,721) (10,945,876)
Equity attributable to owners
of the Company 24,026,533 31,656,378
TOTAL EQUITY 24,026,533 31,656,378
-------------------------- ----------------------
Net asset value per ordinary
share Pence Pence
based on 39,719,569 (30 Jun
2014: 39,719,569) Shares in
issue 60.49 79.69
-------------------------- ----------------------
The unaudited consolidated financial statements were approved
and authorised for issue by the Board on 27 February 2015.
Nick Falla Robert Milroy
Chairman Director
The notes on pages 19 to 43 form an integral part of these
financial statements
STATEMENT OF CHANGES IN EQUITY
for the period from 1 July 2014 to 31 December 2014
Share Capital Share Accumulated Total
Premium Profits
GBP GBP GBP GBP
Balance as at 1
July 2014 - 42,602,254 (10,945,876) 31,656,378
Net loss for the
Period - - (7,629,845) (7,629,845)
Balance as at 31
December 2014 - 42,602,254 (18,575,721) 24,026,533
------------------ ---------------------- --------------- ---------------
Share Capital Share Accumulated Total
Premium Profits
GBP GBP GBP GBP
Balance as at 1
July 2013 - 42,602,254 (13,971,908) 28,630,346
Net gain for the
Period - - 376,597 376,597
Balance as at 31
December 2013 - 42,602,254 (13,595,311) 29,006,943
------------------ ---------------------- --------------- ---------------
The notes on pages 19 to 43 form an integral part
of these financial statements
STATEMENT OF CASH FLOWS
for the period from 1 July 2014 to 31 December 2014
Restated
1 Jul 2014 1 Jul 2013
to to
31 Dec 2014 31 Dec 2013
Notes GBP GBP
OPERATING ACTIVITIES
Net (loss) / profit for the
Period attributable to shareholders (7,629,845) 376,597
Net movement in unrealised
depreciation / (appreciation)
on investments 8 3,016,958 (9,773,639)
Interest received 3 (2,156) (7,437)
Decrease in payables 10 (31,153) (4,801)
Decrease / (increase) in receivables 9 6,740 (9,010)
Realised losses on investments 8 4,400,209 8,782,768
Foreign exchange movements (36,573) 311,052
NET CASH FLOW FROM OPERATING
ACTIVITIES (275,820) (324,470)
------------ ------------
INVESTING ACTIVITIES
Interest received 3 2,156 7,437
Purchase of investments 8 (9,864,046) (9,064,661)
Sale of investments 8 10,908,046 11,972,619
NET CASH FLOW FROM INVESTING
ACTIVITIES 1,046,156 2,915,395
------------ ------------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 3,194,635 1,533,032
Increase in cash and cash
equivalents 770,336 2,590,925
Effect of foreign exchange
rates 36,573 (311,052)
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 4,001,544 3,812,905
------------ ------------
The notes on pages 19 to 43 form an integral part of these
financial statements
NOTES TO THE FINANCIAL STATEMENTS
for the period from 1 July 2014 to 31 December 2014
1 GENERAL INFORMATION
The Company is a closed-ended investment company incorporated
in Guernsey on 30 April 2009, which listed on the Specialist
Fund Market ("SFM") of the London Stock Exchange on 30
June 2009 and on the Channel Islands Stock Exchange ("CISX")
on 22 December 2009.
On 20 December 2013 the Royal Court of Guernsey approved
the scheme of arrangement (the "Scheme") between the CISX
and The Channel Islands Securities Exchange (the "CISE").
In accordance with the Scheme, the business of the CISX
has been acquired by CISE. All securities that were listed
on the Official List of the CISX have been transferred
and are now listed on the Official List of CISE.
The principal activity of the Company 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 in relation to the Company's 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 which became effective and have
been adopted by the Company in the current period, are
relevant to the Company's operations.
IFRS 10 Consolidated Financial Statements - Amendments
for investment entities for annual periods beginning on
or after 1 January 2014.
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 - Amendments resulting
from Annual Improvements 2011 - 2013 Cycle, effective
for annual periods beginning on or after 1 July 2014.
IAS 27 Separate Financial Statements - Amendments for
investment entities effective for annual periods beginning
on or after 1 January 2014.
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.
The Company has applied IFRS 10 for the first time in
the current period. IFRS 10 replaces the parts of IAS
27 Consolidated and Separate Financial Statements that
deal with consolidated financial statements and SIC-12
Consolidation - Special Purpose Entities. IFRS 10 changes
the definition of control such that an investor has control
over an investee when a) it has power over the investee,
b) it is exposed, or has rights, to variable returns from
its involvement with the investee and c) has the ability
to use its power to affect its returns. All three of these
criteria must be met for an investor to have control over
an investee. Previously, control was defined as the power
to govern the financial and operating policies of an entity
so as to obtain benefits from its activities.
IFRS 10 also introduces an exception for 'Investment Entities'
to consolidate its Subsidiaries and instead account for
Subsidiaries at fair value. The definition of an investment
entity is an entity that:
-- obtains funds from one or more investors for the purpose
of providing those investor(s) with investment management
services;
-- commits to its investor(s) that its business purpose
is to invest funds solely for returns from capital appreciation,
investment income or both; and
-- measures and evaluates the performance of substantially
all of its investments on a fair value basis.
In assessing whether the Company meets the above definition
of an investment entity, the Directors have also considered
whether the Company has the following typical characteristics
of an investment entity:
-- it holds more than one investment;
-- it has more than one investor;
-- it has investors which are not related parties of the
entity; and
-- it has ownership interests in the form of equity or
similar interests.
The Directors considered the Company's principal activity,
which is to realise capital growth from a concentrated
portfolio of resource equities and to generate a significant
capital return to shareholders, and note that the assets
of the Company are measured and evaluated on a fair value
basis. These characteristics are in line with the definition
of an investment entity per IFRS10. Furthermore, the Directors
consider that the Company demonstrates all of the above
typical characteristics of an investment entity. Therefore,
the Company is deemed to be an investment entity and is
not required to consolidate its Subsidiaries but account
for them at fair value in the financial statements.
The Company has a 90.22% interest in the Altus Global
Gold Limited (the "Subsidiary"). Since the Company is
deemed to be an investment entity under IFRS 10, the results
of the Subsidiary are no longer required to be consolidated
in these financial statements. The Subsidiary will instead
will be shown at fair value based on the latest available
NAV provided by the Subsidiary's administrator.
Comparative amounts for 31 December 2013, 30 June 2014
and the related amounts as at 1 July 2013 have been restated
in accordance with the relevant transitional provisions
set out in IFRS 10 (see tables below for details).
IFRS 12 is a new disclosure standard and is applicable
to entities that have interests in subsidiaries, joint
arrangements, associates and/or unconsolidated structured
entities. It will be adopted at the same time as IFRS 10
and in general, the application of IFRS 12 will result
in more extensive disclosures in the financial statements.
The table below illustrates the impact on profit or loss
of the adoption of IFRS 10. In accordance with the transitional
provisions of IFRS 10, this information is provided for
the comparative period only.
1 Jul 2014
to
31 Dec 2013
GBP
Decrease in net
movement
in unrealised
appreciation
of investments (1,162,546)
Decrease in realised
losses
on investments 1,255,420
Decrease in operating
income (18,803)
Decrease in operating
expenses 154,424
---------------------------------
Increase in profit for
the year 228,495
---------------------------------
Impact on assets, liabilities and equity as at 1 July 2013
of the application of the new and revised Standards
As at
1 Jul 2013 As at
as previously IFRS 10 1 Jul 2013
reported adjustments as restated
GBP GBP GBP
Financial assets
designated
as at fair value
through
profit and loss 28,065,169 (1,273,008) 26,792,161
Cash and cash
equivalents 1,868,097 (335,065) 1,533,032
Trade and other
receivables 936,053 (439,873) 496,180
Trade and other
payables (209,731) 18,704 (191,027)
------------------------- ----------------------------------------- ---------------------------------
Total effect on net
assets 30,659,588 (2,029,242) 28,630,346
------------------------- ----------------------------------------- ---------------------------------
Share premium 42,602,254 - 42,602,254
Revenue reserve (14,133,732) 161,824 (13,971,908)
Non-controlling
interest 2,191,066 (2,191,066) -
------------------------- ----------------------------------------- ---------------------------------
Total effect on equity 30,659,588 (2,029,242) 28,630,346
------------------------- ----------------------------------------- ---------------------------------
Impact on assets, liabilities and equity as at 30 June
2014 of the application of the new and revised Standards
As at
30 Jun 2014 As at
as previously IFRS 10 30 Jun 2014
reported adjustments as restated
GBP GBP GBP
Financial assets
designated
as at fair value
through
profit and loss 30,536,125 (115,546) 30,420,579
Cash and cash
equivalents 3,491,801 (297,166) 3,194,635
Trade and other
receivables 182,034 (8,288) 173,746
Trade and other
payables (2,281,792) 149,210 (2,132,582)
------------------------- ----------------------------------------- ---------------------------------
Total effect on net
assets 31,928,168 (271,790) 31,656,378
------------------------- ----------------------------------------- ---------------------------------
Share premium 42,602,254 - 42,602,254
Revenue reserve (11,201,361) 255,485 (10,945,876)
Non-controlling
interest 527,275 (527,275) -
------------------------- ----------------------------------------- ---------------------------------
Total effect on equity 31,928,168 (271,790) 31,656,378
------------------------- ----------------------------------------- ---------------------------------
Impact on cash flows for the period ended 31 December
2014 on the application of IFRS10
1 Jul 2014
to
31 Dec 2013
GBP
Net cash inflow from
operating
activities 103,687
Net cash inflow from
investing
activities (404,843)
Net cash inflow from
financing
activities (5,000)
Effect of foreign
exchange
rates 47,015
Net cash inflow (259,141)
---------------------------------
IFRS 7 Financial Instruments: Disclosures - Amendments
relating to the offsetting of assets and liabilities and
additional hedge accounting disclosures (and consequential
amendments). Applies only the IRFS 9 is adopted, which
is effective for annual periods beginning 1 January 2018.
IFRS 9 Financial Instruments - Classification and Measurement
effective no earlier than annual periods beginning on or
after 1 January 2018, subject to EU endorsement.
IFRS 9 Financial Instruments - accounting for financial
liabilities and derecognition effective for annual periods
beginning on or after 1 January 2018, subject to EU endorsement.
IFRS 9 Financial Instruments - reissue to incorporate a
hedge accounting chapter effective no earlier than annual
periods beginning on or after 1 January 2017.
IAS 1 Presentation of Financial Statements - amendments
resulting from disclosure initiative effective for annual
periods beginning on or after 1 January 2016.
IAS 34 Interim Financial Reporting - amendments resulting
from September 2014 Annual Improvements to IFRSs, effective
for annual periods beginning on or after 1 January 2016.
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 Company's
financial statements with the following exceptions.
The adoption of IFRS 9 will impact both the measurement
and disclosure of the Company's Financial Instruments.
As the Standard has not yet been adopted by the EU, it
is not practicable to provide a reasonable estimate of
the effect of the Standard.
These items will be applied in the first financial period
for which they are required.
(b) 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.
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 that the Company meets the definition of
an investment entity (see note 2(a)), the functional currency
of the Company (see note 2(c)(i)) and the fair value of
investments designated to be at fair value through profit
or loss (see note 2(d)(i)) and the ability of the entity
to continue as a going concern (see note 2(e)).
In estimating the fair value of an asset or liability,
the Company uses market observable data to the extent it
is available. Where direct market data is not available,
the Company's Investment Manager performs the valuation.
The Board works closely with the Investment Manager to
establish the appropriate valuation techniques and inputs
to the model. The Investment Manager reports quarterly
to the board to explain the cause of fluctuations in the
fair value of assets and liabilities. Information about
the valuation techniques and inputs used in determining
the fair value of various assets and liabilities are discussed
in Note 8.
(c) Foreign currency
(i) Functional and Presentation
Currency
The Company's investors are mainly from the UK. 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 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 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 31 December 2014 no forward
foreign currency contracts were taken out.
(d) Financial Instruments
Financial assets and financial liabilities are recognised
in the Statement of Financial Position when the Company
becomes a party to the contractual provisions of the instrument.
The Company's main financial instruments comprise:
-- Cash and cash equivalents that arise directly from
the Company's operations; and
-- Quoted and unquoted investment securities.
(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 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 Statement of Comprehensive Income. Commissions
paid on the sale or purchase of investments are recognised
in the Statement of Comprehensive Income as incurred.
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 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 Statement of Comprehensive Income.
(e) Going Concern
At the General Meeting of the Company held on 4 December
2014, the ordinary resolution put to the Company's shareholders
that the Company continue in existence as presently constituted,
did not pass. (13,441,761 votes cast in favour, 14,855,474
against and none withheld).
On 22 January 2015 the Directors held a meeting to discuss
the future of the Company. The Directors together with
the Company's Corporate & Shareholder Adviser and the
Company's Manager, are considering various options and
proposals, and will notify shareholders of their proposals
for the future of the Company within four months of the
resolution failing to pass.
While the Directors cannot be certain what the final proposal
accepted by shareholders will be, the Financial Statements
are prepared on a going concern basis supported by the
Directors current assessment of:
-- the Company's ability to continue in existence or
the foreseeable future;
-- the continued viability of the Company at a lower level
of net assets;
-- on-going Shareholder interest in the continuation of
the Company.
(f) Taxation
The Company has 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
GBP1,200.
(g) Expenses
All expenses are accounted for on an accruals basis.
Interest, Dividend and Bond
(h) Income
Interest income is accounted for on an accruals basis.
(i) 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 Statement of Cash Flows,
cash and cash equivalents consist of cash and deposits
at bank.
(j) Share issue costs
The Share issue costs borne by the Company are recognised
in the Statement of Changes in Equity, as the Company's
ordinary shares have no fixed redemption date.
(k) 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.
(l) Segmental Reporting
The Directors are of the opinion that the Company is engaged
in a single segment of business, being the investment business
and operates solely from Guernsey, therefore no segmental
reporting is provided.
3 OPERATING INCOME
Restated
1 Jul 2014 1 Jul 2013
to to
31 Dec 2014 31 Dec 2013
GBP GBP
Bank interest 2,156 7,437
Dividend income 39,551 31,927
Sundry income 2,787 -
44,494 39,364
------------------------------- ---------------------------------------
4 OPERATING EXPENSES
Restated
1 Jul 2014 1 Jul 2013
to to
31 Dec 2014 31 Dec 2013
GBP GBP
Investment Manager's fee 111,161 132,752
Accountancy fees 3,025 4,457
Administrator's fee 21,757 23,765
Registrar's fee 3,289 3,312
Directors' fees 44,362 44,844
Custody fees 4,033 2,976
Audit fee 15,603 10,905
Directors' and Officers' insurance 2,392 2,418
Annual fees 8,483 9,483
Printing and stationery 2,041 2,036
Bank interest and charges 2,232 3,381
Commissions paid 25,273 51,305
Corporate and Shareholder Adviser fees 19,617 23,427
Legal and professional fees 6,304 -
Travel expenses 18,319 22,788
Sundry costs 5,854 4,737
293,745 342,586
---------------------------------------- ---------------------------------------
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.
6 (LOSS) / EARNINGS PER SHARE
(Loss) / earnings per ordinary share is calculated by dividing
the net loss for the Period attributable to holders of ordinary
shares of the Company ('Shareholders') of GBP7,629,845 (31
Dec 2013: gain GBP376,597) by the weighted average number
of ordinary shares in issue during the Period (39,719,569
(31 Dec 2013: 39,719,569). There are no dilutive instruments
and therefore basic and diluted earnings per ordinary share
are identical.
7 UNCONSOLIDATED 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 CISX on 1 November 2011. The Administrator of the
Subsidiary is Praxis Group and the Custodian is the Royal
Bank of Canada (Channel Islands) Limited. 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 53.23% of the voting
equity as at 31 December 2013, then increased to 90.22% following
redemption of shares held by third parties in the Subsidiary
as at 31 December 2014. As the Company is deemed to be an
investment entity the results for the Subsidiary are no longer
consolidated into the Company with effect from 1 July 2014
and comparatives restated under IFRS 10 transitional provisions.
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 FAIR VALUE THROUGH PROFIT OR LOSS INVESTMENTS
TOTAL TOTAL
31 Dec 2014 30 Jun 2014
GBP GBP
Opening portfolio cost 40,368,023 58,549,807
Additions - cost 7,846,868 24,937,331
Sales (10,765,746) (25,317,106)
Realised losses on investments (4,400,209) (17,802,008)
Unrealised depreciation on
valuation brought forward (9,947,444) (31,757,644)
Unrealised (depreciation)
/ appreciation on valuation
for the Period (3,016,958) 21,810,200
Closing valuation 20,084,534 30,420,579
----------------------------------------------- ----------------------------------------
Unrealised depreciation on
valuation carried forward (12,964,402) (9,947,444)
----------------------------------------------- ----------------------------------------
IFRS 13 requires disclosure of fair value of measurements
of financial assets and liabilities, using a three-level
hierarchy as detailed below:
-- Level 1 fair value measurements are those derived from
quoted prices (unadjusted) in active markets for identical
assets or liabilities;
-- Level 2 fair value measurements are those derived from
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 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable
inputs).
Valuation Techniques
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. The methods used for determining the Fair Value
of each of the financial assets and liabilities held by the
Company are as follows:
Investments in listed or publically quoted securities
Listed or publically quoted securities where there is an
active market in those securities are valued according to
their quoted bid price. These investments are included within
Level 1 of the fair value hierarchy.
Listed or publicly quoted securities where there is not an
active market and trading occurs infrequently are valued
according to their quoted bid prices but are included within
Level 2 of the fair value hierarchy due to infrequency of
trading.
Warrants
The Company invests in unlisted warrants and options which
relate to listed or publically quoted equities. These warrants
and options are valued by the Investment Manager using standard
binomial and Black-Scholes modelling techniques. The valuation
inputs include:
-- The bid price of the underlying equity;
* The volatility of the underlying equity based on the
minimum of 260 day averages of daily volatility over
the last 2 years;
-- The term and exercise price of the warrant or option;
and
-- Risk free rates based on generic composite rates for relevant
government bonds.
To the extent that the significant inputs are observable
or derived from market data relating to the underlying securities,
the Company categorises these investments as Level 2.
Managed Investment Companies
The Subsidiary of the Company is an open-ended investment
company which has no restrictions on trading. The investment
in the Subsidiary is based on the NAV per share published
by the administrator. As the Subsidiary is listed on the
CISE, publically quoted and offers monthly liquidity, this
investment is categorised as Level 1.
Details of the value of each classification are listed in
the table below. Values are based on the market value of
the investment as at the reporting date:
Fair Value Fair Value
31 Dec 2014 30 Jun 2014
GBP GBP
Level 1 19,806,931 29,995,950
Level 2 277,603 424,629
Total 20,084,534 30,420,579
----------------------------------------------- ----------------------------------------
There have been no transfers between Level 1 and Level 2
of the fair value hierarchy during the Period under review.
9 TRADE AND OTHER RECEIVABLES
31 Dec 2014 30 Jun 2014
GBP GBP
Accrued income 19,401 19,142
Prepayments 5,305 12,304
Broker debtors - 142,300
24,706 173,746
----------------------------------------------- ----------------------------------------
The above carrying value of receivables is equivalent to
its fair value.
10 TRADE AND OTHER PAYABLES
(amounts falling due within
one year) 31 Dec 2014 30 Jun 2014
GBP GBP
Trade creditors 51,800 76,240
Accrued expenses 32,451 39,164
Broker creditors - 2,017,178
84,251 2,132,582
----------------------------------------------- ----------------------------------------
The above carrying value of payables is equivalent to its
fair value.
11 SHARE CAPITAL
Authorised SHARES GBP
Unlimited number of ordinary shares
of no par value Unlimited -
======================================== ====================================
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 2014 and 31 December 2014 39,719,569 -
======================================== ====================================
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 2014
and 31 December 2014 42,602,254
====================================
Under IAS 32 'Financial Instruments: Presentation', transaction
costs of any 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 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company'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 Company 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 Company at the Period end is shown in the
Schedule of Top 10 Investments on page 44.
If the value of the Company's investment portfolio were
to increase by 30%, it would represent a gain of GBP6,025,360
(30 Jun 2014: GBP9,126,174). This would cause the net
asset value of the Company to rise by 25.08%. (30 Jun
2014: 28.83%).
If the value of the Company's investment portfolio were
to decrease by 30%, it would represent a decrease of GBP6,025,360
(30 Jun 2014: GBP9,126,174). This would cause the net
asset value of the Company to fall by 25.08%. (30 Jun
2014: 28.83%).
Some of the market price risk is mitigated by the Investment
Manager's use of various put and call options and Exchange-traded
funds ("ETFs").
It is Company policy not to invest more than 20% of the
gross assets of the Company in the securities of any one
company or group at the time the investment is made.
The Company has no significant concentration of market
risk, with exposure spread over a large number of investments.
At 31 December 2014 the Company's largest exposure to
a single investment was GBP2,476,297 (30 Jun 2014: GBP2,685,697),
which represents 12.33% (30 Jun 2014: 8.83%) of the total
market value of the Company's investments.
Investors should be aware that the prospective returns
to Shareholders mirror the returns under the investments
held or entered into by the Company and that any default
by an issuer of any such investment held by the Company
would have a consequential adverse effect on the ability
of the Company 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.
(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 Company. The Directors receive financial information
on a regular basis which is used to identify and monitor
risk.
The Company 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 Company's financial assets exposed to credit risk are
as follows:
31 Dec 2014 30 Jun 2014
GBP GBP
Cash and cash equivalents 4,001,544 3,194,635
Trade and other receivables 24,706 173,746
4,026,250 3,368,381
---------------------------------------- ------------------------------------
The credit risk on liquid funds is limited because the counterparties
are banks with high credit ratings assigned by international
credit-rating agencies. The Company monitors the placement
of cash balances on an ongoing basis. The Company 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 respectively
as at the date of signing.
The investments of the Company are held in custody by Royal
Bank of Canada (Channel Islands) Limited ("RBCCI"). Bankruptcy
or insolvency of the Custodian may cause the Company's rights
with respect to investments held by the Custodian to be delayed.
RBCCI mitigate risk by using a sub custodian network comprising
top-rated and well respected counterparties. The custodian
network is monitored on an ongoing basis to ensure that
each one continues to meet RBCCI's stringent criteria.
(c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter
difficulty in realising assets or otherwise raising funds
to meet financial commitments. The Company's main financial
commitment is its ongoing operating expenses.
The Investment Manager ensures that the Company 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 31 December
2014:
Less than 1 to 3 3 months Greater Total
1 month months to 1 year than
1 year
GBP GBP GBP GBP GBP
Trade creditors 51,800 - - - 51,800
Accrued expenses 11,312 8,537 12,603 - 32,451
Broker creditors - - - - -
Total Liabilities 63,112 8,537 12,603 - 84,251
----------------------- ----------------------------------------- ------------------------------------ ------------------------------- ------------------------------
As at 30 June 2014:
Trade creditors 76,240 - - - 76,240
Accrued expenses 13,939 22,000 3,225 - 39,164
Broker creditors 2,017,178 - - - 2,017,178
Total Liabilities 2,107,357 22,000 3,225 - 2,132,582
----------------------- ----------------------------------------- ------------------------------------ ------------------------------- ------------------------------
Note that all amounts included within the 1-12 months column
above have a contractual maturity within 3 months.
(d) Interest Rate Risk
The Company 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 Company attract or incur interest.
The following table details the Company's exposure to interest
rate risks:
As at 31 December
2014:
Floating
less than Non-interest
1 month bearing Fixed Total
GBP GBP GBP GBP
Assets
Designated
as at fair
value through
profit or
loss on
initial
recognition:
Investments - 20,084,534 - 20,084,534
Loans and
receivables: -
Accrued
income - 19,401 - 19,401
Prepayments - 5,305 - 5,305
Broker debtors - - - -
Cash and
cash equivalents 4,001,544 - - 4,001,544
------------------------------------------ ---------------------------------- ------------------------------------ -------------------------------
Total Assets 4,001,544 20,109,240 - 24,110,784
------------------------------------------ ---------------------------------- ------------------------------------ -------------------------------
Liabilities
Financial
liabilities
measured
at amortised
cost:
Trade creditors - 51,800 - 51,800
Accrued
expenses - 32,451 - 32,451
Broker creditors - - - -
Total Liabilities - 84,251 - 84,251
------------------------------------------ ---------------------------------- ------------------------------------ -------------------------------
Total interest
sensitivity
gap 4,001,544
------------------------------------------
As at 30 June 2014:
Floating
less than Non-interest
1 month bearing Fixed Total
GBP GBP GBP GBP
Assets
Designated
as at fair
value through
profit or loss
on initial
recognition:
Investments - 30,420,579 - 30,420,579
Loans and receivables: -
Accrued income - 19,142 - 19,142
Prepayments - 12,304 - 12,304
Broker debtors - 142,300 - 142,300
Cash and cash
equivalents 3,194,635 - - 3,194,635
---------------------------------- -------------------------------- ----------------------------------------------- -----------------------------------------
Total Assets 3,194,635 30,594,325 - 33,788,960
---------------------------------- -------------------------------- ----------------------------------------------- -----------------------------------------
Liabilities
Financial liabilities
measured at
amortised cost:
Trade creditors - 76,240 - 76,240
Accrued expenses - 39,164 - 39,164
Broker creditors - 2,017,178 - 2,017,178
Total Liabilities - 2,132,582 - 2,132,582
---------------------------------- -------------------------------- ----------------------------------------------- -----------------------------------------
Total interest
sensitivity
gap 3,194,635
----------------------------------
Interest rate sensitivity
If interest rates had been 25 basis points higher and all
other variables were held constant, the Company's net loss
attributable to Shareholders for the period ended 31 December
2014 would have decreased by approximately GBP5,002 (30 Jun
2014: GBP7,987 increase in net gain) or 0.02% (30 Jun 2014:
0.03%) of Net Assets due 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 Company's net loss
attributable to Shareholders for the period ended 31 December
2014 would have decreased by approximately GBP5,002 (30 Jun
2014: GBP7,987) or 0.02%(30 Jun 2014: 0.03%) of Net Assets
due a decrease in the amount of interest receivable on the
bank balances.
(e) Foreign Exchange Risk
A substantial proportion of the Company's portfolio is invested
in overseas securities and movements in exchange rates can
significantly affect their Sterling value. The Company 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 Company 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 Company's foreign currency denominated
monetary assets at the reporting date are as follows:
31 Dec 2014 30 Jun 2014
GBP GBP
Australian Dollar 3,150,309 5,945,413
Canadian Dollar 13,627,392 15,890,711
US Dollar 2,934,730 2,971,453
19,712,431 24,807,578
------------------------------------------------ ---------------------------------------
The following table details the Company's sensitivity to
a 15% appreciation and depreciation in Sterling against the
relevant foreign currencies. 15% represents the Directors'
assessment of the reasonably possible change in foreign exchange
rates. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts their
translation at the period end for a 15% change in foreign
currency rates. A positive number below indicates an increase
in profit and other equity where Sterling strengthens 15%
against the relevant currency. For a 15% weakening of the
Sterling against the relevant currency, there would be a
comparable but opposite impact on the profit and other equity:
31 Dec 2014 30 Jun
Currency Impact 2014
GBP GBP
Australian Dollar
Profit or loss (410,910) (775,489)
Other equity (410,910) (775,489)
================================================ =======================================
Canadian Dollar
Profit or loss (1,777,486) (2,072,701)
Other equity (1,777,486) (2,072,701)
================================================ =======================================
US Dollar
Profit or loss (382,791) (387,581)
Other equity (382,791) (387,581)
================================================ =======================================
(f) Concentration Risk
The majority of the Company's investments are in companies
and related securities associated with the gold and precious
metals sector and so it is subject to the risk of concentrating
its investments in this asset class. The Company's performance
will depend largely on the overall condition of the precious
metals and mining industry.
(g) Capital Management
The investment objective of the Company 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
Company, the Directors have given detailed consideration
to the discount risk and how this may be managed.
14 RELATED PARTY TRANSACTIONS AND DIRECTORS BENEFICIAL INTERESTS
The Company is managed by the Investment Manager, a wholly-owned
FCA authorised and regulated subsidiary of Altus Strategies
Limited ("ASL"). ASL owns 504,755 ordinary shares (1.27%)
in the Company.
The Director David Netherway is a non-executive chairman
of Altus Strategies Limited, which owns 150,000 ordinary
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 Company. The total investment in Kilo
Goldmines Limited represents 0.83% of the market value of
the Company's investments.
The Director Nick Falla holds 30,000 ordinary shares (0.08%)
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 (0.08%)
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 and GBP150,000 per annum.
During the Period the Company incurred GBP111,161 (Dec 2013: GBP132,752)
of fees, of which GBP51,526 (Jun 2014: GBP70,079) was outstanding at
the Period end as shown in trade and other payables.
During the Period, the Company was charged travel expenses totalling
GBP18,319 (Dec 2013: GBP22,788) by the Investment Manager.
The Investment Manager is also entitled to receive a performance fee
(the "Performance Fee") from the Company. The first component of the
Performance Fee was calculated for the first time in respect of the
financial accounting period first ending following the second anniversary
of the date of Admission. 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 ordinary shares, a redemption of ordinary shares or other capital
reorganisation of the Company or Subsidiary, 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 of the Company and Subsidiary 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.
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 Period
as the 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 Period the
Company incurred GBP19,617 (Dec 2013: GBP23,427) of costs,
of which GBP9,093 (Jun 2014: GBP11,839) was outstanding
at the Period end as shown in accrued expenses.
15 SUBSEQUENT EVENTS
On 14 January 2015 the Company delisted from the CISE as
dual listing is no longer required.
TOP 10 INVESTMENTS IN SECURITIES AS AT 31 DECEMBER 2014
31 Dec 2014
Investment Cost Market Unrealised
profit /
Value (loss)
GBP GBP GBP
Nevsun Resources Limited 2,290,785 2,476,297 185,512
Altus Global Gold 5,000,000 1,950,000 (3,050,000)
Ivanhoe Mines Limited 2,357,959 1,765,589 (592,370)
Guyana Goldfields Inc 1,374,106 1,209,482 (164,624)
ETFS Palladium 1,057,614 1,107,893 50,279
Beadell Resources Limited 2,868,907 1,094,921 (1,773,986)
Oceanagold Corporation 1,237,029 1,053,462 (183,567)
ETFS Metal Securities 1,132,877 989,807 (143,070)
Kennady Diamonds Inc. 355,560 933,909 578,349
Panoro Minerals Limited 2,006,141 910,705 (1,095,436)
19,680,978 13,492,065 (6,188,913)
----------------------- ------------------------- -----------------------
TOP 10 INVESTMENTS IN SECURITIES AS AT 30 JUNE 2014
30 Jun 2014
Investment* Cost Market Unrealised
profit /
Value (loss)
GBP GBP GBP
Nevsun Resources Limited 2,845,485 2,685,697 (159,788)
Altus Global Gold 5,000,000 2,400,000 (2,600,000)
Guyana Goldfields Inc 2,412,237 1,853,860 (558,377)
Beadell Resources Limited 1,986,021 1,686,431 (299,590)
Base Resources Limited 1,985,973 1,614,355 (371,618)
Amara Mining Plc 1,148,164 1,512,875 364,711
Panoro Minerals Limited 2,006,141 1,308,114 (698,027)
Fission Uranium Corp 964,082 1,227,620 263,538
ETFS Palladium 1,124,896 1,159,144 34,248
Kennady Diamonds Inc 319,158 1,114,333 795,175
19,792,157 16,562,429 (3,229,728)
----------------------- ----------------------- -----------------------
ADVISORS & CONTACT INFORMATION
Key Information
Exchange Specialist Fund Market
of the LSE
Ticker ARCL
Listing Date 30 June 2009
Fiscal Year End 30 June
Base Currency GBP
ISIN GG00B54BPN15
SEDOL B54BPN1
Country of Incorporation Guernsey -- Registration
number 50318
Management and Administration
Registered Office Secretary and Administrator
Altus Resource Capital JTC (Guernsey) Limited
Limited
PO Box 156 PO Box 156
Frances House Frances House
Sir William Place Sir William Place
St Peter Port St Peter Port
Guernsey GY1 4EU Guernsey GY1 4EU
Investment Manager Registrar
Altus Capital Limited Anson Registrars Limited
14 Station Road P.O. Box 426, Anson House
Didcot Havilland Street
Oxfordshire OX11 7LL St Peter Port
Guernsey GY1 3WX
Placing and Corporate and Auditor
Shareholder Advisory Agent
Deloitte LLP
Nimrod Capital LLP Regency Court
3 St Helen's Place Glategny Esplanade
London EC3A 6AB St Peter Port
Guernsey GY1 3HW
Custodian
Royal Bank of Canada (Channel
Islands) Limited
Canada Court
Upland Road
St Peter Port
Guernsey GY1 3BQ
This information is provided by RNS
The company news service from the London Stock Exchange
END
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