Share Name Share Symbol Market Type Share ISIN Share Description
Crystal Amber Fund Ltd NEX:CRS.GB NEX Ordinary Share GG00B1Z2SL48
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -2.00p -1.01% 195.50p 187.00p 214.00p 197.50p 187.50p 197.50p 30,993 16:30:20
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - -

Crystal Amber Fund Limited Final results for the year ended 30 June 2019

13/09/2019 7:00am

UK Regulatory (RNS & others)


 
TIDMCRS 
 
13 September 2019 
 
                          Crystal Amber Fund Limited 
 
                 Final results for the year ended 30 June 2019 
 
The Company announces its final results for the year ended 30 June 2019. 
 
                                  Highlights 
 
  * Net Asset Value ("NAV") (1)  per share rose by 1.8% to 249.12p (244.62p at 
    30 June 2018, 221.67p at 31 December 2018). NAV total return for the year 
    was 4.1% including reinvested dividends. 
 
  * Over the last three years, the Fund has delivered an annualised total NAV 
    return of 20.5%. 
 
  * Realised gains of GBP17.9 million on Hurricane Energy plc and GBP3.7 million in 
    Equals Group plc. Successful sales of investments in Boku Inc. and NCC 
    Group during the year, realising profits of GBP3.1 million and GBP2.5 million 
    respectively. 
 
  * Key contribution to NAV performance derived from Leaf Clean Energy 
    Company's successful litigation against Invenergy Renewables. 
 
  * NAV growth held back by the performance of De La Rue plc and Northgate plc. 
 
  * Share buy-back programme maintained, with average discount to month end NAV 
    through the year of 7.8% (2018: 3.0%). 
 
  * To date the value of shares created and gifted to charitable organisations 
    amounts to approximately GBP1 million. 
 
For further enquiries please contact: 
 
Crystal Amber Fund Limited 
 
Christopher Waldron (Chairman)                           Tel: 01481 742 742 
 
Allenby Capital Limited - Nominated Adviser 
 
David Worlidge/Liz Kirchner                              Tel: 020 3328 5656 
 
Winterflood Investment Trusts - Broker 
 
Joe Winkley/Neil Langford                                Tel: 020 3100 0160 
 
Crystal Amber Advisers (UK) LLP - Investment Adviser 
 
Richard Bernstein                                        Tel: 020 7478 9080 
 
(1) All capitalised terms are defined in the Glossary of Capitalised Defined 
Terms unless separately defined. 
 
                             Chairman's Statement 
 
I am pleased to present the twelfth annual report of Crystal Amber Fund Limited 
("the Fund"), for the year to 30 June 2019. At that point, NAV was GBP238.8 
million, compared with an unaudited NAV of GBP213.8 million at 31 December 2018 
and an audited GBP238.1 million at 30 June 2018. NAV per share was 249.12 pence 
at 30 June 2019 compared with 221.67 pence at 31 December 2018 and 244.62 pence 
at 30 June 2018. 
 
The period was dominated by the uncertainty around Brexit. Equities moved 
sideways as deal activity reduced and consumer confidence weakened. Globally, 
the ongoing trade negotiations between the US and China made little progress. 
The frail economic outlook saw a monetary policy about turn at the Federal 
Reserve towards easing, after a period of timid interest rate hikes. 
 
In my interim statement in March, I described the possibility of a "no deal" 
Brexit at the then deadline of March 29 as "incredible". Six months later, with 
a new prime minister and a new deadline of 31 October, a "no deal" outcome 
looks far from incredible and is, in fact, a realistic possibility. The extent 
to which the threat of "no deal" turns out to be an extreme negotiating gambit 
rather than a serious policy decision is unknown at the time of writing, but it 
continues to unsettle markets. It is also increasingly likely that there will 
be a general election before the end of the year, which has the potential to 
result in a business-unfriendly Labour led administration. 
 
It is hardly surprising, therefore, that international investors have reduced 
their exposure to UK assets to historically low levels, sterling has continued 
to weaken and domestic UK equities have underperformed. Given this background, 
the Fund's NAV performance has been very encouraging. NAV per share increased 
by 1.8% during the year and, with dividends reinvested, NAV total return was 
4.1%. The Fund has delivered an excellent annualised total return on NAV of 
20.5% over the last three years, and 11.6% over the last five years. This 
compares favourably to the Numis Smaller Companies Index total returns of 10.9 
and 7.5% over the same three-year and five-year periods. 
 
The Fund remains focused on its activist approach which can generate positive 
returns regardless of market direction. During the year this patient approach 
proved particularly successful with Leaf Clean Energy and, although progress 
has been frustrating in some areas, such as De La Rue and Northgate, we remain 
confident that there is significant value to be unlocked from the Fund's 
portfolio. 
 
During the year, the Fund bought back 1,728,800 of its own shares at an average 
price of 213.05 pence as part of its strategy to limit any substantial discount 
of the Fund's share price to NAV. Over the year, the Fund's shares traded at an 
average month-end discount to NAV of 7.8%. At the year end, the shares traded 
at a discount of 16.9% to NAV. The share buyback programme contributed 0.3% to 
NAV per share growth during the year. 
 
The Fund declared interim dividends of 2.5 pence in July 2018 and December 
2018, in line with the dividend policy of paying 5.0 pence per year. At the 
2018 AGM, interim dividends previously paid were ratified by shareholders. 
 
During the year, the Fund created and issued 250,000 shares to ten charities. 
Today, it has issued an additional 125,000 shares. This follows the authority 
granted at the Fund's Annual General Meeting in November 2017, and renewed in 
November 2018. The total value of shares gifted to date is approximately GBP1 
million. The Fund is delighted to assist so many worthy causes including Cancer 
Research UK, UNICEF and the World Wildlife Fund. The Fund always seeks to make 
a positive difference and I believe that these donations do just that. Were all 
listed companies to follow Crystal Amber's initiative, for a dilution of just 
0.25% per annum, every year, several billion pounds could be directed towards 
less fortunate members of society. 
 
Christopher Waldron 
 
Chairman 
 
12 September 2019 
 
                          Investment Manager's Report 
 
Performance 
 
The Fund's NAV per share increased by 1.8% during the year. With dividends 
reinvested, total returns per share for the year were 4.1%. This compares 
favourably to the Numis Smaller Companies Index total return of -1.8% over the 
same period. 
 
Key contributors to performance were Leaf Clean Energy Company (7.1%), GI 
Dynamics Inc. (4.2%), Hurricane Energy plc (3.6%), Equals Group plc (2.0%) and 
Boku Inc. (0.6%). The main detractors were De La Rue plc (5.1%), STV Group plc 
(2%), Northgate plc (1.4%), Cenkos plc (0.7%) and Sutton Harbour Holdings plc 
(0.3%). 
 
The Fund's performance is calculated after portfolio protection through the 
purchase of FTSE put options. Over the year, this reduced NAV performance by 
1.9%. 
 
Portfolio and Strategy 
 
At 30 June 2019, the Fund held equity investments in 18 companies (2018: 16), 
including one unlisted company. The Fund also held warrants and a senior debt 
instrument in GI Dynamics. Warrants over Hurricane Energy plc and Equals Group 
plc shares were exercised during the year. 
 
Taking account of all investment instruments, the Fund's exposure to its top 
ten investee companies amounted to 96.8% of NAV at 30 June 2019 (2018: 90.7%). 
The Fund's month-end average net cash and accruals position was -0.8% (2018: 
0%), meaning that it has been fully invested over the year. 
 
The Fund's strategy remains focused on a limited number of special situations 
where value can be realised regardless of market direction. By its nature as an 
activist fund, the Fund needs to hold sufficiently large stakes to facilitate 
engagement as a significant shareholder. Therefore, the Fund is exposed to 
concentration risk. Levels of investment in individual companies are closely 
monitored and parameters are set to ensure this risk is kept to an appropriate 
level. 
 
Over the year to 30 June 2019, the weighted average market capitalisation of 
the Fund's listed investee companies was GBP420 million (2018: GBP491 million). 
 
The table below lists the Fund's top ten shareholdings as at 30 June 2019, the 
equity stake that those positions represent in the investee company and their 
percentage contribution to NAV performance over the year. 
 
Top ten shareholdings             Pence per  Percentage of Percentage of  Contribution to 
                                      share            NAV      investee  NAV performance 
                                                             equity held              (1) 
 
Hurricane Energy plc                   54.9          22.0%          5.0%             3.6% 
 
Equals Group plc (formerly             49.8          20.0%         23.4%             2.0% 
FairFX Group plc) 
 
Northgate plc                          36.7          15.0%          7.6%           (1.4%) 
 
De La Rue plc                          20.9           8.0%          6.4%           (5.1%) 
 
Leaf Clean Energy Co.                  18.0           7.0%         25.3%             7.1% 
 
STV Group plc                          16.1           6.0%         11.4%           (2.0%) 
 
GI Dynamics Inc.(2)                    15.4           6.0%         65.1%             1.7% 
 
Allied Minds plc                        9.1           4.0%          5.0%             0.5% 
 
Board Intelligence                      5.8           2.0%             *             0.8% 
 
Sutton Harbour                          3.2           1.0%         10.7%           (0.3%) 
 
Total of ten largest                  229.9 
shareholdings 
 
Other investments                      21.9                                         0.2% 
 
Cash and accruals                     (2.7) 
 
Total NAV                             249.1 
 
(1) Percentage contribution stated for equity holdings only, including warrants 
exercised during the period. Other instruments such as outstanding warrants and 
debt are included in the performance contribution calculation of the prior 
section of this report. 
 
(2) Following the conversion of unsecured loan notes. 
 
* Board Intelligence Ltd is a private company and its shares are not listed on 
a stock exchange. Therefore, the percentage held is not disclosed. 
 
Seven of the Fund's top ten positions at 30 June 2019 were amongst the top ten 
at 30 June 2018. Over the year, the position in Equals Group plc increased to 
23.4% (2018: 19.2%) of the issued equity of Equals Group plc through the 
exercise of warrants and open market purchases, despite the Fund realising a GBP 
3.7 million profit on the sale of part of this investment. The Fund increased 
its position in Northgate plc to 7.6% (2018: 6.3%) and De La Rue plc to 6.4% 
(2018: 3.2%). Leaf Clean's position was reduced taking a profit of GBP0.8 million 
after its successful appeal. STV Group's position was reduced to 11.4% of the 
equity (2018: 18.2%). The Fund increased its investment in GI Dynamics through 
the conversion of loan notes to equity at the end of the period and market 
purchases, as explained in the GI Dynamics section of this report, taking the 
Fund's stake to 65.1%. 
 
The holding in Allied Minds was acquired during the year. NCC Group plc and 
Boku Inc. were sold outright. 
 
Investee companies 
 
Our comments on a number of our principal investments are as follows; 
 
Hurricane Energy plc 
 
Hurricane is an oil exploration company targeting naturally fractured basement 
reservoirs in the West of Shetland. It controls 2.6 billion Barrels of Oil 
Equivalent ("BOE") certified resources and reserves. The Fund's previous annual 
reports include additional background information on this investment. 
 
This was a year of great achievement for Hurricane. In September, it agreed a 
farm-in deal with Spirit Energy over 50% of its Greater Warwick acreage. The 
company's first farm-in deal with an industry partner supports the case for 
basement reservoirs in the UK continental shelf. The deal also re-started 
Hurricane's exploration operations with an intensive three-year appraisal 
campaign. As Warwick had only been drilled once by Hurricane in 2016, it was 
behind Lancaster in the appraisal and development process. Spirit's commitment 
of $387 million should accelerate this. As such, we believe that the deal with 
Spirit is transformational for Hurricane. 
 
The Greater Warwick exploration campaign started in the spring of 2019 with a 
three-well programme, fully funded by Spirit. The first well was the riskiest 
due to its depth, and unfortunately results were disappointing. Oil was 
discovered but it did not flow at commercial rates and so the well was 
abandoned. The campaign has continued with the Lincoln Crestal well. In 
parallel, long lead items have been ordered so that in 2020 one of the wells 
drilled in 2019 will be tied back to the Floating Production and Storage vessel 
for production appraisal. As with the Lancaster Early Production System 
("EPS"), this step will enable collection of additional reservoir data ahead of 
an initial full field development of 500 million barrels of reserves. This 
approach is expected to leverage Hurricane's Lancaster infrastructure, and 
generate incremental revenues to the company at little additional cost. 
 
In June 2019, Hurricane announced first oil from its EPS. This has been 
delivered on time and on budget albeit with a protracted final hook-up phase. 
In July 2019, following the period end, the company advised that the EPS was 
performing above expectations during the first month of operation and increased 
its production forecast. The two horizontal wells are producing 20k BOE per day 
under natural flow conditions, that is, without electrical pumps. Whilst it is 
too early to establish the asset's long-term potential, initial production data 
supports the company's reservoir model. Hurricane retains 100% ownership of 
this asset that is expected to generate US$200 million per annum at US$60/BOE. 
This cash flow underpins Hurricane's options to appraise further its Great 
Lancaster asset either independently or in partnership. 
 
The Fund is a longstanding supporter of Hurricane, having funded its 
exploration efforts since 2013 and its production strategy since 2016, when the 
EPS's long lead items were first purchased. Over the last year, Hurricane has 
developed in size and complexity and continued to perform well. Over the 
period, the Fund reduced its opening position by 22% as it took profits of GBP 
17.9 million and exercised its warrants over 23.3 million shares. Despite 
banking total profits of GBP41.8 million on Hurricane, the year-end carrying 
value includes an unrealised profit of GBP28.0 million. 
 
Equals Group plc ("Equals") 
 
Equals is an international payment services provider operating under an e-money 
licence. It serves retail and business customers mainly in the United Kingdom. 
Equals provides faster, cheaper and more convenient money management than 
traditional banking services. In June 2019, the company rebranded from FairFX 
to Equals to reflect the broader range of services it now offers that go beyond 
foreign currency. Equals' reliability and excellent customer service have 
earned it a five-star Trustpilot score. 
 
Equals' strategy to date has been focused on improving scale and operational 
efficiencies across its platform, which has been driven through R&D investment, 
acquisition and rationalising its supply chain. Equals' services include 
international payments, corporate expenses, current accounts, credit 
facilities, currency cards and travel cash. Through its subsidiary, Spectrum 
Payment Services Ltd (SPS), Equals has access to real-time settlement accounts 
with the Bank of England and is a member of the UK faster payments scheme, 
meaning customers can transfer and receive funds instantly. In 2018, Equals 
processed more than 1 million transactions, which it is now able to process in 
real-time and at lower cost. SPS is also approved by the FCA to provide credit 
facilities, acting as a broker, which is a significant cross-selling 
opportunity. 
 
During the year, Equals announced a binding term sheet with Metropolitan 
Commercial Bank for a multi-year contract to provide payment services in the 
US. The agreement covers both international payments and prepaid card 
issuance.  Equals' is confident that there is strong demand for their corporate 
expense platform in the US, which could provide an additional growth engine for 
the business. 
 
Equals' 2018 full year results showed revenue increasing to GBP26 million (up 
69%) and adjusted profit after tax increasing from GBP1 million to GBP7 million. 
Equals has also surpassed the one million customers milestone. 
 
The Fund's position in Equals dates from a 20p per share placing in March 2016. 
This included warrants that were fully exercised in the period. Following very 
favourable share price performance over the Fund's 2018 financial year, the 
stock has been range bound with headwinds from Brexit and UK macro uncertainty. 
 
The Fund has continued to provide strategic advice to Equals throughout the 
year and advocated the development of a broader platform of services that take 
advantage of regulatory and technological change. Equals is embarking on a 
major marketing and product refresh over the latter months of 2019. 
 
Northgate plc 
 
Northgate is the leading light commercial vehicle flexible hire business in the 
UK, Spain and Ireland. The company is expanding its minimum term hire offering 
to help its customers accelerate their switch away from vehicle ownership. 
Northgate has a fleet of around 106,000 vehicles and operates from more than 
100 sites. 
 
In March 2019, for only the second time in its eleven-year history, the Fund 
judged it necessary to requisition a shareholder general meeting to effect 
change at the board of an investee company. This followed extensive attempts to 
engage with Northgate's executive and non-executive directors since the Fund's 
investment in April 2016. In response to the meeting requisition, Northgate 
announced the resignation of its chairman, Andrew Page, with immediate effect. 
 
The Fund's assessment is that Northgate has suffered from inadequate strategic 
leadership, overseen by a board lacking in direct experience within hire 
industries. Following the departure of Andrew Page, we expressed our view that 
the new chair should be someone with relevant industry experience, and who 
would be focused on delivering the best outcome for Northgate's stakeholders, 
including being supportive of releasing Northgate's strategic value. The Fund 
is therefore encouraged by last month's announcement of the appointment of 
Avril Palmer-Baunack as the new chair of Northgate. 
 
At 347.5p as of 28 June 2019, Northgate's shares traded at a substantial 
discount to the company's reported net tangible asset value of 412p per share 
as at 30 April 2019, which is roughly equivalent to the market value of 
Northgate's fleet. 
 
Northgate's well-managed Spanish business, which generates over half of the 
group's operating profit, is the clear leader in its market with a strong 
brand, good geographic coverage and an attractive return on assets. The Fund 
believes that the considerable value of the Spanish business is not reflected 
in Northgate's share price and that the company should therefore properly 
explore all options to realise the value of this asset. For example, if the 
Spanish business were to be worth 130% of net asset value to an acquirer, then 
investors in Northgate would be currently paying less than one third of net 
asset value for the residual UK and Ireland businesses. 
 
Whilst the Fund takes some comfort from the progress made to date in returning 
UK vehicle-on-hire numbers to growth, it is disappointed that UK margins and 
returns on capital remain very depressed. 
 
The Fund would have welcomed share purchases by Northgate's directors following 
the full year results announcement, as a demonstration of their belief in the 
company's prospects and undervaluation. The Fund expects rental margins, 
returns on capital and the dividend (5.7% current yield) to grow, driven 
predominantly by further fleet growth and consequent scale benefits in all 
geographies. 
 
De La Rue plc 
 
De La Rue designs and prints banknotes and produces related components, 
including security features. The company also supplies tax stamps as well as 
products and software to authenticate and track individual products throughout 
their supply chains, and it produces components for inclusion within individual 
identity documents. De La Rue is the incumbent provider of passports to the UK, 
under a long-term contract due to end in March 2020. 
 
Following its latest full-year results announcement on 30 May 2019, De La Rue's 
share price fell by 34%, despite management's claims that the company's 
performance had been "reasonable" and had "broadly met market expectations." 
These claims did not reflect the reality that the GBP60 million of 
management-adjusted operating profits included an unexpected GBP7 million benefit 
from an accounting standard change and ignored an GBP18 million provision charge 
related to the supply of banknotes to Venezuela. Along with its results, De La 
Rue also announced that chief executive Martin Sutherland would be leaving the 
company following the appointment of a successor. To date, the total 
shareholder return during his five-year tenure has been -45%. 
 
Following the Fund's meeting in June 2019 with De La Rue's chairman Philip 
Rogerson, the chairman subsequently reneged on an agreement to engage with a 
leading industry player who had indicated to Crystal Amber that it was open to 
a dialogue with the company to explore mutually beneficial strategic 
opportunities. As a result, on 20 June 2019 Crystal Amber wrote to Philip 
Rogerson stating that "we have concluded that all stakeholders would be better 
served if you now stand down from the board." On 24 June 2019, De La Rue 
announced that Philip Rogerson would be leaving the board once a new chief 
executive had been recruited. On 2 September 2019, De La Rue announced that 
Philip Rogerson will be leaving the board on 1 October 2019. To date, no chief 
executive has been recruited. 
 
On 23 July 2019 the UK Serious Fraud Office announced the commencement of an 
investigation into De La Rue and its associated persons in relation to 
suspected corruption in the conduct of business in South Sudan.  This caused 
the share price to fall a further 22% over the subsequent two days. 
 
At De La Rue's annual general meeting on 25 July 2019, only 52% of votes were 
cast in approval of the directors' remuneration report.  The Fund had objected 
strenuously to the payment of bonuses to executive management following a year 
of poor underlying financial performance (as was recognised by the stock 
market). 
 
As far back as September 2018, the Fund introduced De La Rue to a director of 
the Swiss National Bank, with the hope and expectation that the Swiss National 
Bank would become both a long-standing customer and a shareholder. The Fund 
subsequently witnessed how this opportunity was squandered. It was equally as 
baffling as the decision to continue to print banknotes for the Central Bank of 
Venezuela without requiring payment in advance, despite the political 
environment and tightening sanctions. De La Rue has since provided in full for 
the non-payment of GBP18 million from this customer. Shamefully, the board of De 
La Rue awarded the CEO of De La Rue a bonus of GBP197,000 by including the 
invoice for the Central Bank of Venezuela in calculating his bonus yet 
excluding the full provision. The destruction of shareholder value at De La Rue 
is the direct result of an appalling level of mismanagement, arrogance and lack 
of accountability at this once great British company. 
 
Notwithstanding these recent developments, the Fund continues to believe that 
De La Rue enjoys a combination of strong competitive positions in high return 
businesses and attractive growth opportunities backed by a capacity for both 
significant organic investment and the acquisition of further technological 
competencies. Regrettably, the mismanaged and opaque communication surrounding 
the full year results overshadowed some material positive developments, 
including a 20% increase in the company's total order book (now disclosed, 
following repeated requests by the Fund) and a 38% increase in its revenue from 
security features. 
 
De La Rue also has obvious strategic value, as evidenced by the takeover 
approach from its competitor Oberthur in late 2010, and the acquisition last 
year of another banknote producer, Crane Currency, for US$800 million. The Fund 
notes that the shares now trade at below one quarter of the price offered by 
Oberthur, a cash bid rejected by De La Rue's board at the time. 
 
In the Fund's view, De La Rue has suffered from a lack of strong and 
knowledgeable leadership, including an insufficient understanding of investor 
expectations and how to deliver against them. This has resulted in an 
unacceptable financial performance over many years, evidenced amongst other 
factors by a drop in earnings per share despite tailwinds from the company's 
various end-markets. 
 
The Fund believes that the board departures announced recently create an 
opportunity to build a higher-quality leadership team able to maximise the 
value of the banknote business and to capitalise on the opportunities presented 
by De La Rue's high-growth, high-margin authentication activities. 
 
Leaf Clean Energy Co ("Leaf Clean") 
 
Leaf Clean is an investment company focused on clean energy, largely in North 
America. It currently owns three assets the largest of which is a claim against 
Invenergy Renewables ("Invenergy", formerly Invenergy Wind) that accounted for 
substantially all of Leaf's NAV at 31 December 2018. The Fund's previous Annual 
Reports contain the background to this investment. 
 
The investment in Leaf Clean has been a key contributor to performance of the 
Fund this year. The Fund first invested in Leaf Clean in October 2013. 
Following engagement with the then company board, the Fund took decisive action 
to change the leadership of the company. An EGM requisition resulted in the 
replacement of the chairman and executive directors. The Fund supported a new 
executive chairman with a clear mandate to realise investments in an orderly 
fashion. An incentive package was agreed based on the cash returned to 
shareholders. The new board decisively cut additional funding to unsuccessful 
investments, initiated disposals and reduced running costs. 
 
As a direct result of the Fund's activism, Leaf Clean has been in orderly 
realisation since July 2014. In 2015, management advised that the realisation 
of all investments would probably take two years. However, the Fund noted that 
timings were unpredictable, given the private nature of the investments. 
Unfortunately, the unwillingness of the company's main investment, Invenergy, 
to abide by the terms of the investment agreement has extended the process to 
the present date. 
 
Invenergy is North America's largest independent privately held renewable 
energy provider. It has developed over 15,000 MW of generation capacity in over 
100 projects. Leaf Clean initially invested $40 million in convertible notes in 
2008 and 2009. It elected to convert its interest into a 2.3% equity stake in 
June 2015. In July 2015, TerraForm Power announced the signing of definitive 
agreements for a proposed purchase from Invenergy of 930 MW of contracted wind 
power generation facilities. On 16 December 2015, the transaction closed and on 
21 December 2015, Leaf Clean filed a complaint against Invenergy for breach of 
contract. The complaint alleges that Invenergy was required either to obtain 
Leaf Clean's consent to the sale prior to its consummation or, in the absence 
of such consent, make a payment to Leaf Clean upon the closing of the sale. 
Leaf Clean did not consent to the sale and Invenergy made no payment to Leaf 
Clean. 
 
In July 2016 Leaf Clean announced a favourable preliminary decision, which was 
subsequently reversed. In September 2017, the Fund provided a commitment of up 
to US$2.5 million to support the company's ongoing litigation with Invenergy. 
In April 2018, Leaf Clean received the Chancery Court decision which found that 
Invenergy had breached its contractual obligations but surprisingly held that 
Leaf Clean was only entitled to nominal damages. The final market value for 
Leaf Clean's stake in Invenergy was set at US$50.7 million. Leaf Clean lodged 
an appeal at the Supreme Court against this judgement seeking an additional 
payment of US$85.8 million. 
 
In May 2019, the Delaware Supreme Court held that Leaf Clean was entitled to 
damages in the full amount of its contractually defined Target Multiple and, 
therefore, reversed the Court of Chancery's decision to award only nominal 
damages. In June 2019, the Chancery Court entered its ?nal order and judgement, 
ordering Invenergy to pay Leaf Clean US$114.5 million. Consistent with its 
litigious stance throughout the process, Invenergy notified Leaf Clean of its 
intention to appeal and filed for a review of the interest payment calculation 
at the Supreme Court. 
 
Following the year end, in July 2019, Leaf Clean announced a GBP53.1 million 
capital return, which was effected in August 2019 by means of pro-rata share 
cancellation. 
 
The Fund invested GBP13.0 million in Leaf Clean. By the year end, it had received 
GBP7.8 million from the 2015 special dividend and the 2018 capital return. In 
August 2019, it received GBP13.4 million from the latest capital return. The 
value of the Fund's holding at the end of August 2019 was GBP4.5 million. The 
Fund is pleased that its intensive engagement with Leaf Clean and subsequent 
strategic support has delivered an excellent outcome for Leaf Clean's 
shareholders. 
 
STV Group plc 
 
STV broadcasts free to air TV in Scotland through the Channel 3 licence. 
Following ITV plc's ("ITV") acquisition of UTV Ireland in 2016, STV is the only 
franchise in that channel not owned by the ITV network. 95% of STV's broadcast 
content is produced by ITV and purchased by STV through long term agreements. 
These agreements have a revenue share component that distinguishes STV's 
business model from that of other broadcasters. STV's programming costs 
fluctuate with its advertising revenues, limiting its operational gearing. The 
Fund's previous Annual Reports contain additional background on the company. 
 
Over the period, STV initiated the execution of its new strategy, focused on 
growing digital revenues and the production division. Two new divisional heads 
were recruited, and substantial operational progress has been made. 
 
On the digital division, the company has focused on optimising the user 
experience in its Player product and on making this available in additional 
platforms. Bugs have been ironed out and the user experience improved. For 
those who prefer to watch advert free, STV launched a subscription service for 
Apple's iOS, which will be rolled out across other platforms. It also announced 
deals with two retransmission partners, Virgin TV and Sky, and has already 
launched on Virgin´s platform. The increased availability of STV's own player 
product on additional platforms and the improved user experience will give the 
company more digital video advertising inventory to sell. This inventory has 
achieved and sustained premium rates relative to other digital channels. In the 
first quarter of 2019, the digital audience was up 30% year on year. 
 
The Fund has been an investor since 2013. As a result of renewed Brexit 
concerns, the Fund realised profits on part of this holding during the second 
half of the year. At 30 June 2019, it was the Fund's sixth largest position. 
 
GI Dynamics Inc. 
 
GI Dynamics is the developer of the EndoBarrier, a minimally invasive therapy 
for the treatment of Type 2 diabetes and obesity. EndoBarrier is a temporary 
bypass sleeve that is endoscopically delivered to the duodenal intestine. It 
offers similar effects to the surgical gastric bypass, without the risks of a 
major surgical procedure. The Fund's previous annual reports contain the 
background to the company and the Fund's investment. 
 
Over the period, GI Dynamics took its first steps to rebuild its strategy by 
securing a US FDA pivotal trial, appointing a new CE Mark accreditation body 
and reaching an agreement with Apollo Sugar for a trial in India. 
 
The company secured permission for its new US clinical trial, the STEP-1 trial, 
in August 2018. This was obtained without a costly product re-design. During 
the remainder of the period, GI Dynamics has undertaken the necessary 
preparations for the trial. It has expanded its team, fulfilled the relevant 
regulatory steps and finalised agreements with high calibre research centres. 
For example, the principal trial site will be Brigham and Women's Hospital, a 
teaching affiliate of Harvard Medical School. Another centre is the Thomas 
Jefferson University Hospital of Philadelphia, a top 100 facility in America 
according to Becker's Hospital Review. 
 
The trial will begin enrolling patients who have type 2 diabetes and obesity 
during the second half of 2019. The primary endpoint of STEP-1 is reduction in 
average blood sugar levels (HbA1c) at 12 months of treatment. The pivotal trial 
will consist of randomized EndoBarrier implant and control groups; patients in 
both groups will receive identical lifestyle therapy that complies with the 
most current American Diabetes Association guidelines. 
 
In November 2018, GI Dynamics announced an agreement with Apollo Sugar to study 
the safety and efficacy of EndoBarrier in India. Apollo Sugar is a division of 
Apollo Hospitals Group ("Apollo") in partnership with Sanofi. It is focused on 
the treatment of metabolic disorders and operates a network of centres of 
excellence for diabetes, obesity and endocrinology. Apollo is the largest 
hospital system in India. The agreement provides for the commencement of a 
clinical trial with 100 patients which would enable the commercialisation of 
the EndoBarrier in India. 
 
The Fund participated in an equity placing in November 2018 worth $2.4m and 
purchased two convertible loan notes worth a combined $4 million in March and 
May 2019. The Fund converted its three outstanding unsecured loan notes to 
equity at the end of June 2019, with an aggregate principal of $5.75 million. 
The maturity of the Fund's $5 million secured loan note was extended. The Fund 
retained the warrants issued in conjunction with the loan notes. 
 
The agreement with Apollo Sugar is an excellent endorsement of the 
attractiveness of GI Dynamics' EndoBarrier. It creates an additional path to 
create value in parallel to the FDA and the CE Mark certifications. Despite the 
company's limited resources, the company continues to make progress toward 
regulatory approval for the EndoBarrier. 
 
Allied Minds plc 
 
Allied Minds describes itself as an early-stage investor in technology and life 
science companies. In 2014, it listed on the London Stock Exchange at 190p per 
share, valuing the company at GBP398m. In December 2016, it raised GBP64m at 367p 
per share. Since its formation, Allied Minds has invested in over 40 companies. 
In 2017, it discontinued funding of several portfolio companies in order to 
focus primarily on its six largest remaining portfolio companies. From 2014 to 
2018, Allied Minds reported total operating losses of US$464 million. 
 
The net asset value of Allied Minds now comprises four significant technology 
and space-related investments, two life-sciences investments that have been 
substantially written-down, four small new investments made since 2017, and a 
cash balance of around US$25-30 million after two recently announced follow-on 
investments. Based on the disclosure regarding individual investee company 
holding values, we estimate that Allied Minds' net asset value currently stands 
at between 95p and 105p per share. 
 
The Fund initiated an investment in Allied Minds during autumn 2018 and 
currently owns 6.9% of its issued share capital at an average cost of 60.6p per 
share. 
 
Following the Fund's investment, concerns were expressed to the company 
regarding its excessive parent company running costs and the urgent need to 
realign its cost base. The Fund also objected to elements of the management's 
compensation, specifically the long-term incentive shares that had cost around 
US$3.9 million during the first half of 2018, and also the unprecedented 
practice of paying out 10% of gains arising from any successful individual 
investment independent of the scale of losses incurred on other investments in 
the portfolio (the "Phantom Plan"). 
 
On 7 February 2019, Allied Minds announced that its annualised HQ cash 
operating expenses would fall by over 40%, extending its cash runway into 2021. 
However, this left total HQ expenses at a still-unacceptable level of around 
US$13m per annum. Following a meeting with then-chief executive Jill Smith, the 
manager wrote to the company reiterating the Fund's concerns. 
 
On 26 April 2019, along with its 2018 results, Allied Minds announced that it 
would henceforth focus on maximising returns from its ten portfolio companies 
and related shareholder distributions, rather than continuing to invest in new 
businesses. It also stated that annualised HQ cash operating expenses would be 
cut by a further US$2-3 million compared to the implied target from February, 
extending its cash runway from around two years to three or four years. 
Furthermore, the company ceased disclosing a proxy for net asset value, which 
enabled it to avoid specifying the scale of markdown to its two largest life 
sciences investments, SciFluor and Precision Biopsy. 
 
On 10 June 2019, Allied Minds announced that Jill Smith had resigned as Chief 
Executive, to be replaced as co-CEOs by the chief financial officer and the 
General Counsel. The remuneration terms for the co-CEOs have not yet been 
disclosed, but the Fund questions why a portfolio of only ten holdings and with 
a stated aim of reducing HQ costs is better served by having two CEOs rather 
than one. Allied Minds also disclosed its decision not to make any further 
grants under its long-term incentive plan, including cancelling the issuance 
that had been planned for May following the 2018 results. 
 
On 20 June 2019, Allied Minds announced that its chairman and senior 
independent director would no longer seek re-election to the board at the AGM 
scheduled for 28 June. This leaves a board composed of three non-executive 
directors (appointed in April 2014, November 2017 and May 2018) plus the 
co-CEOs. 
 
On 6 August 2019 HawkEye 360, one of the top-four portfolio companies, 
announced it had raised US$70 million at a valuation more than double its 
September 2018 round. The Fund believes that this fundraising added at least 8p 
to Allied Mind's net asset value per share, after accruing for the Phantom 
Plan. On 4 September 2019 Federated Wireless, another of the top-four portfolio 
companies, announced it had raised US$51 million at a valuation more than 20% 
higher than its September 2017 round, adding a further 3 to 4p to Allied Mind's 
net asset value per share. 
 
Notwithstanding the recent positive news regarding HawkEye 360 and Federated 
Wireless, the Fund notes that the share price of Allied Minds continues to 
trade at a very material discount to its estimated net asset value. The Fund 
attributes this to the continued excessive level of central operating expenses 
for a company now in run-off where four investments plus parent-level cash 
account for more than 90% of asset value and the board's failure to cancel the 
egregious Phantom Plan that ignores all portfolio losses when calculating 
management bonuses. 
 
The Fund believes that the scale of share price discount has not been addressed 
by the board of Allied Minds and therefore intends to take appropriate action. 
 
Board Intelligence ("BI") 
 
BI is a privately-owned UK company with a mission to improve the quality of 
board decision-making. The company offers cloud-based board-pack tools on a 
Software-as-a-Service (SaaS) basis. The product encompasses workflow management 
for the drafting of meeting packs, structured communication templates to 
improve the effectiveness of meetings, and an app-based portal allowing meeting 
participants to access information securely. The primary audience is corporate 
boards, but the tools can also be used by other committees. 
 
SaaS products have high contribution margins: platform costs are relatively 
fixed, so they experience significant operating leverage as volumes increase - 
profit margins are higher than is evident during the growth phase.  BI's 
customer acquisition cost is low relative to the customer lifetime value, so 
growth in the customer base is incremental to the company's enterprise value. 
Price is a secondary consideration relative to the high value attributed to any 
improvement in board meeting productivity and data security. Furthermore, once 
a solution is adopted by a company there are switching costs to change to 
another provider, which results in low organic churn. 
 
BI has a very impressive client list, including UK large-caps and government 
departments, and has emphatic public testimonials from leading companies such 
as Rolls Royce and National Grid. The Fund does not invest in unquoted 
companies save in exceptional circumstances but was attracted by the economics 
of the business and the many growth opportunities amongst the 9,350 UK 
organisations employing over 250 people that could make use of this product. BI 
also has options to expand the product internationally. 
 
The Fund invested in BI in 2018 at a significant discount to the valuation 
multiples of listed cloud/SaaS companies. The company's Annual Recurring 
Revenue (ARR) has subsequently continued to grow at an impressive rate without 
the cash burn shown by many high growth companies. BI has a dynamic 
entrepreneurial management team who have used our investment to strengthen the 
organisation and enhance the product. The Fund continues to engage with 
management on how to maximise long-term value. 
 
Sutton Harbour Group plc 
 
Sutton Harbour owns and operates Sutton Harbour in the Barbican, Plymouth's 
historic old port, and holds the lease to Plymouth's 113-acre former airport 
site. Sutton Harbour includes a leisure marina, the second largest fresh fish 
market in England and an estate of investment properties around the harbour. 
The marina is a 5 Gold Anchor rated facility and considered to be one of the 
best deep water harbours in the South West. The Fund's previous annual reports 
provide further background to this investment. 
 
From the beginning of 2018, FB Investors LLP have been the majority 
shareholders in the company and have been shaping Sutton Harbour's new 
strategy. In July 2018, the new management submitted a planning application for 
the redevelopment of Sugar Quay and Harbour Arch Quay. This was approved in 
November 2018 and the company launched a GBP3 million open offer to fund post 
planning pre-construction phase project costs, capital maintenance project 
costs and to provide cash headroom. The Fund took its full entitlement and has 
continued to grow this position. 
 
In March 2019, the government inspectors' report concerning the local 
authority's new planning framework was issued. It affirmed the safeguarding of 
the former airport site for possible general aviation use for a period not to 
exceed five years. 
 
Final results to the end of March 2019 reported NAV of 39.4 pence per share 
versus a then share price of 26.8 pence. 
 
The Fund maintains an open dialogue with the company and remains supportive of 
its new management strategy. 
 
Outlook 
 
The Fund is increasingly cautious on the outlook for markets. Trade tensions, 
Brexit uncertainty and political divisiveness have increased. With its focus on 
UK companies, the Fund believes that Sterling's weakness has created several 
activist opportunities particularly attractive to overseas acquirers. In the 
coming year, the Fund may opportunistically increase its cash balances and will 
continue to focus on activist opportunities that can generate attractive 
returns regardless of broader market conditions. In the interim, the Fund 
continues to follow its policy of purchasing put options to provide some 
protection against a significant market sell-off. 
 
Crystal Amber Asset Management (Guernsey) Limited 
 
12 September 2019 
 
                               Investment Policy 
 
The Company is an activist fund which aims to identify and invest in 
undervalued companies and, where necessary, take steps to enhance their value. 
The Company aims to invest in a concentrated portfolio of undervalued companies 
which are expected to be predominantly, but not exclusively, listed or quoted 
on UK markets (usually the Official List or AIM) and which have a typical 
market capitalisation of between GBP100 million and GBP1,000 million. Following 
investment, the Company and its advisers will also typically engage with the 
management of those companies with a view to enhancing value for all their 
shareholders. 
 
Investment objective 
 
The objective of the Company is to provide its shareholders with an attractive 
total return, which is expected to comprise primarily capital growth but with 
the potential for distributions from realised distributable reserves, including 
distributions arising from the realisation of investments, if this is 
considered to be in the best interests of its shareholders. 
 
At the date of signing these Financial Statements, the investment strategy and 
investment restrictions which applied to the Company following Admission and 
after the passing of Resolution 1 at the EGM held on 15 August 2013, were as 
follows: 
 
Investment strategy 
 
The Company focuses on investing in companies which it considers are 
undervalued and will aim to promote measures to correct the undervaluation. In 
particular, it aims to focus on companies which the Company's Investment 
Manager and Investment Adviser believe may have been neglected by fund managers 
and investment funds due to their size; where analyst coverage is inadequate or 
where analysts have relied on traditional valuation techniques and/or not fully 
understood the underlying business. The Company and its advisers seek the 
co-operation of the target company's management in connection with such 
corrective measures as far as possible. Where a different ownership structure 
would enhance value, the Company will seek to initiate changes to capture such 
value. The Company may also seek to introduce measures to modify existing 
capital structures and introduce greater leverage and/or seek the sale of 
certain businesses or assets of the investee company. 
 
Pending investment of the type referred to above, the Company's funds will be 
placed on deposit but the Company also has the flexibility to make other 
investments (including money market instruments) which are considered to be 
reasonably liquid in order to ensure that its funds are appropriately deployed. 
The Company may, in certain circumstances, acquire stakes in target companies 
from investors in exchange for shares in the Company. 
 
Where it considers it to be appropriate, the Company may (i) utilise leverage 
for the purpose of investment and enhancing returns to shareholders and/or (ii) 
enter into derivative transactions, for example to provide portfolio protection 
against significant falls in the market or for the purposes of efficient 
portfolio management, in seeking to manage its exposure to interest rate and 
currency fluctuations through the use of currency and interest rate hedging 
arrangements, and to acquire exposure to target companies through contracts for 
difference. 
 
Investment restrictions 
 
It is not intended that the Company will invest, save in exceptional 
circumstances, in: 
 
  * companies with a market capitalisation of less than GBP100 million at the 
    time of investment; 
 
  * pure technology based businesses; or 
 
  * unlisted companies or companies in pre-IPO situations. 
 
It is expected that no single investment in any one company will represent more 
than 20% of the Gross Asset Value of the Company at the time of investment. 
However, there is no guarantee that this will be the case after any investment 
is made, or where the Investment Manager believes that an investment is 
particularly attractive. 
 
Dividend policy 
 
With effect from 1 January 2015, the annual target dividend was increased to 5 
pence per share. The Company's dividend policy is to distribute to 
shareholders, as a dividend, a proportion of the income received from the 
Company's portfolio holdings. In certain circumstances, the Company may make 
distribution payments out of realised investments if it is considered to be in 
the best interests of shareholders. 
 
Due to the nature of the Company's investment objective and strategy, the 
timing and amount of investment income cannot be predicted and is dependent on 
the composition of the Company's portfolio. Before recommending any dividend, 
the Board will consider the capital and cash positions of the Company, and the 
impact on such capital and cash by virtue of paying that dividend, and will 
ensure that the Company will satisfy the solvency test, as prescribed by the 
Companies Law, immediately after payment of any dividend. Therefore, there can 
be no guarantee as to the timing and amount of any distribution payable by the 
Company. The projected dividends set out above are targets only and there can 
be no assurance that these targets can, or will, be met. 
 
Composition of the portfolio 
 
The Board, Investment Manager and Investment Adviser believe that the number of 
potential target companies is high with more than 2,000 companies quoted on AIM 
or the Official List and they consider that a significant number of these are 
in the Company's targeted range. 
 
Target investee companies typically operate in one or more of the following 
sectors: 
 
  * consumer products; 
 
  * industrial products; 
 
  * retail; 
 
  * support services; 
 
  * healthcare; or 
 
  * financial services. 
 
However, the Company is not restricted to these sectors and investment 
decisions are taken based on market conditions and other investment 
considerations at the time. 
 
                            Report of the Directors 
 
Incorporation 
 
The Company was incorporated on 22 June 2007 and the Company was admitted to 
trading on AIM on 17 June 2008. 
 
Principal activities 
 
The Company is a Guernsey registered closed ended company established to 
provide shareholders with an attractive total return, which is expected to 
comprise primarily capital growth and distributions from accumulated retained 
earnings taking into consideration unrealised gains and losses at that time. 
This will be achieved through investment in a concentrated portfolio of 
companies that are considered to be undervalued and which are expected to be 
predominantly, but not exclusively, listed or quoted on UK markets and which 
mostly have a market capitalisation of between GBP100 million and GBP1,000 million. 
 
The Company became a member of the AIC on 26 March 2009. 
 
Business review 
 
A review of the business together with likely future developments is contained 
in the Chairman's Statement and the Investment Manager's Report. 
 
Results and dividend 
 
The results for the year are set out in the Statement of Profit or Loss and 
Other Comprehensive Income. 
 
On 6 July 2018, the Company declared an interim dividend of GBP2,433,145 equating 
to 2.5 pence per Ordinary share, which was paid on 17 August 2018 to 
shareholders on the register on 20 July 2018. 
 
On 13 December 2018, the Company declared an interim dividend of GBP2,412,832 
equating to 2.5 pence per Ordinary share, which was paid on 18 January 2019 to 
shareholders on the register on 21 December 2018. 
 
Subsequent to the year end, on 10 July 2019, the Company declared an interim 
dividend of GBP2,369,550, equating to 2.5 pence per Ordinary share, which was 
paid on 19 August 2019 to shareholders on the register on 19 July 2019. 
 
Going concern 
 
The Directors are confident that the Company has adequate resources to continue 
in operational existence for the foreseeable future and do not consider there 
to be any threat to the going concern status of the Company. 
 
Discontinuation vote 
 
The Company is subject to a discontinuation vote scheduled to occur every two 
years. Following the results of the 2018 AGM, an extraordinary resolution was 
passed under which 75% of votes would be required to cease to continue as 
currently constituted. The next discontinuation vote will be proposed at the 
2019 AGM. Following due inquiry, the Directors have no reason to doubt that 
shareholders will vote to enable the Company to continue as constituted at the 
2019 AGM. 
 
Long term viability 
 
The Company is a member of the AIC and complies with the AIC Code. In 
accordance with the AIC Code, the Directors have made a robust assessment of 
the prospects of the Company over the three year period ending 30 June 2022. 
The Directors consider that three years is an appropriate period to assess the 
viability of the Company given the average length of investment in each 
portfolio company and the time horizon over which investment decisions are 
made. 
 
In considering the prospects of the Company, the Directors have considered the 
risks facing the Company, giving particular attention to the principal risks 
identified, the effectiveness of controls over those risks, and have evaluated 
the sensitivities of the portfolio to market volatility. 
 
The Directors have also considered the Company's income and expenditure 
projections over the three year period, the fact that the Company currently has 
no borrowings and that most of its investments comprise readily realisable 
securities which can be expected to be sold to meet funding requirements if 
necessary. 
 
Based on the results of this analysis and mindful of the discontinuation vote 
to take place at the 2019 AGM, the Directors have a reasonable expectation that 
the Company will be able to continue in operation and meet its liabilities as 
they fall due over the three year period of their assessment. 
 
Principal risks and uncertainties 
 
The Company has implemented a rigorous risk management framework including a 
comprehensive risk matrix that is reviewed and updated regularly. The 
Investment Manager has created a Risk Committee from which the Board receives 
quarterly reports. Nigel Ward, one of the Directors, liaises with the Risk 
Committee and attends its regular meetings to offer an independent view and to 
enhance communication between the committee and the Board. The Directors have 
carried out a robust assessment of the principal risk areas relevant to the 
performance of the Company including those that would threaten its business 
model, future performance, solvency and liquidity and these are detailed below. 
As it is not possible to eliminate risks completely, the purpose of the 
Investment Manager's risk management policies and procedures is to reduce risk 
and to ensure that the Company is as adequately prepared as reasonably possible 
to respond to such risks and to minimise their impact should they occur. 
 
Regulatory compliance risk 
 
A breach of regulatory rules could lead to a suspension of the Company's stock 
exchange listing or financial penalties. The Company Secretary monitors the 
Company's compliance with the AIM Rules in conjunction with the Nominated 
Adviser and compliance with these rules is reviewed by the Directors at each 
Board meeting. 
 
One of the most significant regulatory risks for an activist investor such as 
the Company is in relation to market abuse provisions. The FCA has published 
guidance stating that in general it would not consider an activist 
shareholder's conduct to amount to market abuse where the shareholder merely 
carried out acquisitions of a target company's securities on the basis of its 
intentions and knowledge of its strategy. 
 
However, the FCA has stated that if, for example, other shareholders trade in 
the target's shares on the basis of another shareholder's strategy, they may 
view such conduct as amounting to market abuse. There is no guarantee that 
other shareholders will not follow the Company's strategy, and, in certain 
circumstances the Company may act with, or be dependent upon, the support of 
other shareholders to implement its strategies. There is also no guarantee that 
the FCA's guidance will not change. The Company and its Advisers operate in a 
highly regulated environment and whilst they will always seek to take 
appropriate professional advice, there is a risk of an inadvertent breach of 
securities laws or regulations, or allegations of such breach, taking place. 
 
The following risks, whilst they may affect the performance of the Company, 
will not in themselves affect the ability of the Company to operate. 
 
'Key Man' risk 
 
The Investment Adviser and the Investment Manager rely heavily on the 
expertise, knowledge and network of Richard Bernstein when sourcing investment 
opportunities. He is a shareholder of the Company, a director and shareholder 
of the Investment Manager and a member of the Investment Adviser and his loss 
to these service providers could have an adverse effect on the Company's 
performance. In the absence of Richard Bernstein, the Board and Investment 
Manager have sufficient relevant experience to manage the Company's portfolio 
while considering the future of the Company. Key Man risk is covered in the 
Investment Adviser's continuity plan. 
 
Portfolio concentration risk 
 
By its very nature as an activist fund, the Company is exposed to the risk that 
its portfolio of investee companies is not sufficiently diversified to absorb 
the impact of a major investment falling in value. As noted in the Investment 
Policy, the Company seeks to invest in companies and use activism to unlock 
value. An inherent consequence of this policy is a portfolio concentrated on a 
number of key investee companies. The Board is aware of this risk and feels it 
is a necessary risk to take in order to provide returns through the investment 
strategy. Levels of investment in individual companies are monitored and 
parameters are set to ensure that the risk is kept to an acceptable level, 
while also ensuring a sufficiently high level of stock is purchased to allow 
engagement as a major shareholder, if required. 
 
Underlying investment performance risk 
 
The Company invests in underlying investee companies, the securities of which 
are publicly traded or are offered to the public. The performance of these 
companies is likely to fluctuate due to a number of factors beyond the 
Company's control. The Investment Manager and Investment Adviser monitor 
investee company performance on a daily basis and investigate returns of more 
or less than 10% based on weekly valuations prepared by the Administrator. The 
Investment Adviser engages with investee companies through regular meetings and 
reports to the Board. The Investment Manager and Investment Adviser also 
compare the Company's performance to the Numis Smaller Companies Index and 
investigate all underperformance and unrealised losses of the Company. 
 
Market risk 
 
The Company's investments include investments in companies the securities of 
which are publicly traded or are offered to the public. The market prices and 
values of these securities may be volatile and are likely to fluctuate due to a 
number of factors beyond the Company's control. These include actual and 
anticipated fluctuations in the quarterly, half yearly and annual results of 
the companies in which investments are made and other companies in the 
industries in which they operate and market perceptions concerning the 
availability of additional securities for sale. They also include general 
economic, social or political developments, changes in industry conditions, 
shortfalls in operating results from levels forecast by securities analysts, 
the general state of the securities markets and other material events, such as 
significant management changes, refinancings, acquisitions and disposals. 
Changes in the values of these investments may adversely affect the Company's 
NAV and cause the market price of the Company's shares to fluctuate. The 
Company hedges price risk by holding put options linked to the FTSE index to 
provide some protection against a significant market sell-off. 
 
Shareholder concentration risk 
 
A total of 6 investors with holdings of 3% or more each of the shares of the 
Company hold a combined 76.40% of the voting rights. A significant shareholder 
seeking liquidity could have a negative impact on the Company causing movements 
in Company share price, through voting at an AGM, or by placing pressure on the 
Board to act to realise value in the portfolio at a sub-optimal time and value. 
To manage this risk the Investment Manager maintains regular contact with 
significant shareholders to discuss the performance of the Company and any 
views the shareholder may have. 
 
Liquidity risk 
 
The Company's ability to meet its obligations arising from financial 
liabilities could be reliant on its ability to reduce or exit investment 
holdings. This could be more difficult with the Company's less liquid portfolio 
holdings. To manage this risk, the cash and trade positions are monitored on a 
daily basis by the Investment Adviser and the Administrator. The liquidity of 
stocks is also considered at the point of recommendation by the Investment 
Adviser and prior to investment. 
 
It is not intended that the Company will invest, save in exceptional 
circumstances, in companies with a market capitalisation of less than GBP100 
million at the time of investment. Companies with a market capitalisation of 
less than GBP100 million are in many cases considered to be higher risk and may 
also be less liquid than companies with a market capitalisation of more than GBP 
100 million. However, the Investment Adviser may, from time to time, identify 
exceptional investment opportunities with a market capitalisation of less than 
GBP100 million. 
 
The Company's risk of investment in companies with market capitalisation of 
less than GBP100 million is mitigated as all investments are monitored by the 
Board on a quarterly basis. Any proposals to invest in companies below GBP100 
million market capitalisation are considered in detail by the Investment 
Manager and are recommended in exceptional circumstances only. 
 
Inside information risk 
 
The Company may, from time to time, be exposed to insider information. A breach 
of insider trading rules could lead to a suspension of the Company's stock 
exchange listing or financial penalties. This risk is mitigated and managed 
through continual monitoring and policy setting, which ensures all employees of 
the Investment Adviser clearly understand insider trading rules and adhere to 
all relevant procedures. 
 
Implementation risk 
 
The Company's ability to generate attractive returns for shareholders depends 
upon the Investment Adviser's ability to assess future values that can be 
realised in connection with investments. The ability to assess future values 
and the timing thereof, whether in connection with the making of an investment 
or exiting from an investment, may be particularly important in the case of 
investments over which the Company has little or no control on its own. The 
ability of the Company to exit certain investments on favourable terms will be 
dependent (inter alia) upon the successful implementation of the strategic 
plans for such investee company and, in particular, the ability to persuade 
management to adopt such strategic plans. It will also depend on the relative 
liquidity of the stock of the investee company at that time. 
 
In summary, the above risks are mitigated and managed by the Board, the 
Investment Manager and Investment Adviser through continual review of the 
portfolio, policy setting and updating of the Company's risk matrix to ensure 
that procedures are in place to minimise the impact of the above mentioned 
risks. 
 
Further detail on the Company's risk factors is set out in the Company's 
admission document, available on the Company's website (www.crystalamber.com) 
and should be reviewed by shareholders. 
 
Details about the financial risks associated with the Company's investment 
portfolio and the way they are managed are given in note 14 to the Financial 
Statements. 
 
Ongoing charges 
 
For the year ended 30 June 2019 the ongoing charges ratio of the Company was 
1.93% (2018: 2.00%). The ongoing charges ratio has been calculated using the 
AIC recommended methodology. Ongoing charges are those expenses of a type which 
are likely to recur in the foreseeable future, whether charged to capital or 
revenue, and which relate to the operation of the Company as a collective fund, 
excluding the costs of acquisition/disposal of investments, performance fees, 
financing charges and gains/losses arising on investments. Ongoing charges are 
based on costs incurred in the year as being the best estimate of future costs. 
The ongoing charges ratio is calculated by dividing the annualised ongoing 
charges by the average NAV for the financial year. 
 
Directors 
 
The Directors of the Company who served during the year and up to the date of 
this report are shown. Biographies of the Directors holding office as at 30 
June 2019 and at the date of signing these Financial Statements are shown. 
 
Directors' interests 
 
The interests of the Directors in the share capital of the Company at the 
year-end are disclosed in Note 16. 
 
Directors' remuneration 
 
Following a review of the Directors' remuneration for similar AIM listed 
investment companies and, after benchmarking these against the current fees and 
recognising the level of activity of the Company and increased regulatory 
obligations on the Company, the Board concluded in September 2017 that the 
Directors' fees should be increased with effect from 1 January 2019. The 
remuneration of the Directors during the year is disclosed in Note 16. 
 
Substantial interests 
 
As at 20 August 2019, the Company had been notified of the following voting 
rights of 3 per cent or more of its total voting rights: 
 
                                                      Number of Ordinary          Total 
                                                                  shares  voting rights 
 
Invesco Perpetual                                             28,305,510         29.88% 
 
Wirral BC                                                     12,938,214         13.66% 
 
Baring Asset Management                                       12,119,839        12.79% 
 
1607 Capital Partners                                          9,725,400         10.27% 
 
Crystal Amber Asset Management (Guernsey)                      6,386,395          6.74% 
 
Aviva Investors                                                2,896,440          3.06% 
 
Total                                                         72,371,798         76.40% 
 
Statement of Directors' responsibilities 
 
The Directors are responsible for preparing the Directors' Report and the 
Financial Statements in accordance with applicable law and regulations. 
 
Company law requires the Directors to prepare financial statements for each 
financial year. Under that law they have elected to prepare the Financial 
Statements in accordance with International Financial Reporting Standards, as 
issued by the IASB, and applicable law. 
 
The financial statements are required by law to 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 financial statements, the Directors are required to: 
 
  * select suitable accounting policies and then apply them consistently; 
 
  * make judgements and estimates that are reasonable and prudent; 
 
  * state whether applicable accounting standards have been followed, subject 
    to any material departures disclosed and explained in the financial 
    statements; 
 
  * assess the Company's ability to continue as a going concern, disclosing, as 
    applicable, matters related to going concern; and 
 
  * use the going concern basis of accounting unless they either intend to 
    liquidate the Company or to cease operations, or have no realistic 
    alternative but to do so. 
 
The Directors are responsible for keeping proper accounting records which 
disclose with reasonable accuracy at any time the financial position of the 
Company and enable them to ensure that the financial statements comply with the 
Companies (Guernsey) Law, 2008. They are responsible for such internal control 
as they determine is necessary to enable the preparation of financial 
statements that are free from material misstatement, whether due to fraud or 
error, and have general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the Company and to prevent and detect 
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 
(www.crystalamber.com), and for the preparation and dissemination of financial 
statements. Legislation in the United Kingdom and Guernsey governing the 
preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions. 
 
Disclosure of information to the Auditor 
 
The Directors each confirm that they have complied with the above requirements 
in preparing the Financial Statements. They also confirm that so far as they 
are each aware, there is no relevant audit information of which the Company's 
auditor is unaware and that they have taken all the steps they ought to have 
taken as Directors to make themselves aware of any relevant audit information 
and to establish that the Company's auditor is aware of that information. 
 
Corporate governance 
 
As a Guernsey registered company, the share capital of which is admitted to 
trading on AIM, the Company is not required to comply with the FRC Code. 
However, the Directors recognise the value of sound corporate governance and it 
is the Company's policy to comply with best practice on good corporate 
governance that is applicable to investment companies. 
 
The Board has considered the principles and recommendations of the AIC Code and 
decided to follow the AIC Guide. The AIC Code and AIC Guide were updated in 
July 2016, and further updated in February 2019, to take into account the 
updated FRC Code, and the Company has used this revised AIC Code and AIC Guide 
for the financial year ended 30 June 2019. The 2019 AIC Code will be applicable 
for the financial year ended 30 June 2020. The AIC Code and the AIC Guide are 
available on the AIC's website, www.theaic.co.uk. The FRC Code is available on 
the FRC's website, www.frc.org.uk. 
 
The GFSC Code came into force in Guernsey on 1 January 2012. Under the GFSC 
Code, the Company shall be deemed to satisfy the GFSC Code provided that it 
continues to conduct its governance in accordance with the requirements of the 
AIC Code. 
 
The Company adheres to a Stewardship Code adopted from 14 June 2016. The 
Company's Stewardship Code incorporates the principles of the UK Stewardship 
Code. A copy of the Stewardship Code is available on the Company's website 
www.crystalamber.com. 
 
The Company is led and controlled by a Board of Directors, which is 
collectively responsible for the long-term success of the Company. The Company 
believes that the composition of the Board is a fundamental driver of its 
success as the Board must provide strong and effective leadership of the 
Company. The current Board was selected, as their biographies illustrate, to 
bring a breadth of knowledge, skills and business experience to the Company. 
 
The Board comprises four Non-Executive Directors (2018: four), all of whom are 
considered to be independent of the Investment Manager and Investment Adviser 
and free from any business or other relationship that could materially 
interfere with the exercise of their independent judgement. Board appointments 
are considered by all members of the Board and have been made based on merit, 
against objective criteria. 
 
The Board monitors developments in corporate governance to ensure the Board 
remains aligned with best practice especially with respect to the increased 
focus on diversity. The Board acknowledges the importance of diversity, 
including gender, for the effective functioning of the Board and commits to 
supporting diversity in the boardroom. It is the Board's ongoing aspiration to 
have a well-diversified membership; in addition to gender diversity, the Board 
also values diversity of business skills and experience which bring a wide 
range of perspectives to the Company. 
 
The Chairman of the Board is Christopher Waldron. In considering the 
independence of the Chairman, the Board has taken note of the provisions of the 
AIC Code relating to independence and has determined that Mr Waldron is an 
independent director. The Company has no employees and therefore there is no 
requirement for a Chief Executive. 
 
A biography for the Chairman and all the other Directors follows in the next 
section, which sets out the range of investment, financial and business skills 
and experience represented. The Directors believe that the current mix of 
skills, experience, ages and length of service represented on the Board are 
appropriate to the requirements of the Company. 
 
Internal evaluation of the Board, the Committee and individual Directors is 
undertaken on an annual basis in the form of questionnaires, peer appraisal, 
and discussions to determine effectiveness and performance in various areas as 
well as the Directors' continued independence. 
 
In view of the Board's non-executive nature and the requirement of the Articles 
of Incorporation that one third of Directors retire by rotation at least every 
three years, the Board considers that it is not appropriate for the Directors 
to be appointed for a specified term as recommended by principle 3 of the AIC 
Code. In accordance with the recent publication of the 2019 AIC Code, which the 
Board adopted from 1 July 2019, all Directors will be subject to annual 
re-election. Currently, Nigel Ward is the only Director who has served for more 
than nine years. It is intended that Mr. Ward will step down, as originally 
intended, at the forthcoming AGM in November 2019. 
 
None of the Directors has a contract of service with the Company. The Company 
has no executive Directors and no employees. However, the Board has engaged 
external companies to undertake the investment management, administrative and 
custodial activities of the Company. Clearly documented contractual 
arrangements are in place with these companies which define the areas where the 
Board has delegated certain responsibilities to them, but the Board retains 
accountability for all delegated responsibilities. 
 
Board responsibilities 
 
The Board is responsible to shareholders for the overall management of the 
Company. The Board has adopted a set of reserved powers which set out the 
particular duties of the Board. Such reserved powers include decisions relating 
to the determination of investment policy and oversight of the Investment 
Manager and their advisers, strategy, risk assessment, Board composition, 
capital raising, statutory obligations and public disclosure, financial 
reporting and entering into any material contracts by the Company. 
 
The Directors have access to the advice and services of the Administrator and 
Secretary, who are responsible to the Board for ensuring that Board procedures 
are followed and that it complies with the Companies Law and applicable rules 
and regulations of the GFSC and the London Stock Exchange. Where necessary, in 
carrying out their duties, the Directors may seek independent professional 
advice at the expense of the Company. 
 
The Company maintains appropriate directors' and officers' liability insurance 
in respect of legal action against its Directors on an ongoing basis. 
Investment Advisory services are provided to the Company by Crystal Amber 
Advisers (UK) LLP through the Investment Manager. The Board is responsible for 
setting the overall investment policy and has delegated day to day 
implementation of the Company's strategy to the Investment Manager but retains 
responsibility to ensure that adequate resources of the Company are directed in 
accordance with their decisions. The Board monitors the actions of the 
Investment Adviser and Investment Manager at regular Board meetings. The Board 
has also delegated administration and company secretarial services to Estera 
International Fund Managers (Guernsey) Limited but retains accountability for 
all functions it delegates. 
 
The Directors are responsible for ensuring the effectiveness of the internal 
controls of the Company which are designed to ensure that proper accounting 
records are maintained, the financial information on which business decisions 
are made and which is issued for publication is reliable, and the assets of the 
Company are safeguarded. A formal review of the effectiveness of the Company's 
risk management and internal control systems is conducted at least once a year 
and this was completed successfully during the year under review. The 
Investment Manager has established a Risk Committee to monitor and manage risks 
faced by the Company. These committee meetings are attended by Nigel Ward. 
 
The Board meets at least four times a year for regular, scheduled meetings and 
should the nature of the business of the Company require it, additional 
meetings may be held, some at short notice. Prior to each of its quarterly 
meetings, the Board receives reports from the Investment Adviser and 
Administrator covering activities during the period, performance of relevant 
markets, performance of the Company's assets, finance, compliance matters, 
working capital position and other areas of relevance to the Board. The Board 
also considers from time to time reports provided by the Investment Manager and 
other service providers. The Board also receives quarterly reports from the 
Risk Committee. There is regular contact between the Board, the Investment 
Manager and the Administrator. The Directors maintain overall control and 
supervision of the Company's affairs. 
 
There may be a requirement to hold Board meetings outside the scheduled 
quarterly meetings in order to review and consider investment opportunities and 
/or formal execution of documents and to consider ad hoc business. 
 
Between meetings there is regular contact with the Investment Manager and the 
Administrator, and the Board requires to be supplied in a timely manner with 
information by the Investment Manager, the Company Secretary and other advisers 
in a form and of a quality to enable it to discharge its duties. 
 
The Board, through the Remuneration and Management Engagement Committee, is 
responsible for the appointment and monitoring of all service providers 
including the Investment Manager, and conducts a formal review of all service 
providers on an annual basis and confirms that such a review has taken place 
during the year. 
 
New Directors receive an induction on joining the Board, and all Directors 
receive other relevant training as necessary. Directors have regular contact 
with the Investment Manager to ensure that the Board remains regularly updated 
on all issues. All members of the Board are members of professional bodies and 
serve on other Boards, which ensures they are kept abreast of the latest 
technical developments in their areas of expertise. 
 
Audit committee 
 
Due to the size of the Board, all Directors are members of the Audit Committee. 
Jane Le Maitre acts as Chairman of the Committee. The responsibilities of the 
Committee include reviewing the Annual Report and Audited Financial Statements, 
the Interim Report and Financial Statements, the system of internal controls 
and risk management, and the terms of appointment and remuneration of the 
Auditor. It is also the forum through which the Auditor reports to the Board. 
 
The Committee met twice in the year ended 30 June 2019. Matters considered at 
these meetings included but were not limited to: 
 
  * review of the accounting policies and format of the financial statements; 
  * review of the Annual Report and Audited Financial Statements for the year 
    ended 30 June 2018; 
  * review of the Interim Report and Unaudited Interim Condensed Financial 
    Statements for the six months ended 31 December 2018; 
  * review of the audit plan and timetable for the preparation of the Annual 
    Report and Audited Financial Statements for the year ended 30 June 2019; 
  * discussions and approval of the fee for the external audit; 
  * assessment of the effectiveness of the external audit process as described 
    below; 
  * review of the Company's significant risks and internal controls; 
  * review and consideration of the AIC Code, the GFSC Code and the Stewardship 
    Code; and 
  * detailed review of the 2019 Annual Report in relation to the AIC Code 
    including the period of assessment and long term viability of the Company. 
 
The Committee considered the following significant issue in relation to these 
Financial Statements: 
 
Valuation of Investments 
 
The Company's accounting policy is to value investments as designated at fair 
value through profit or loss or as derivatives held for trading, and to 
recognise sales and purchases of those investments using trade date accounting. 
This is significant as the Company's investments and derivatives amount to 
101.1% of the NAV. The Committee has satisfied itself that the sources used for 
pricing the Company's investments are appropriate and reliable. 
 
The Committee also reviews the objectivity and independence of the Auditor. The 
Board considers KPMG to be independent of the Company. The audit fees disclosed 
in the profit or loss section of the Statement of Profit or Loss and Other 
Comprehensive Income are in relation to the audit of the Financial Statements. 
During the year, KPMG did not receive any remuneration from the Company for 
non-audit services. 
 
The Committee assessed the effectiveness of the audit process by considering 
KPMG's fulfilment of the agreed audit plan through the reporting presented to 
the Committee by KPMG and the discussions at the Committee meeting, which 
highlighted the major issues that arose during the course of the audit. In 
addition, the Committee also sought feedback from the Investment Manager and 
the Administrator on the effectiveness of the audit process. The Committee was 
satisfied that there had been appropriate focus and challenge on the primary 
areas of audit risk and assessed the quality of the audit process to be good. 
 
The external audit was initially put out to tender in 2008 when the Company's 
shares were listed and admitted to trading on AIM and KPMG was appointed. The 
lead audit partner changed in 2010 and 2015, and will change again by rotation 
in 2020. There are no obligations to restrict the Company's choice of external 
auditor. The external audit was put out to tender again in 2017. Following a 
robust competitive tender process, the Committee concluded that the interests 
of the Company and its shareholders would be best served by retaining the 
services of KPMG to provide a consistent audit approach. 
 
The Board considers that an internal audit function specific to the Company is 
unnecessary and that the systems and procedures employed by the Investment 
Manager and the Administrator, including their own internal control functions, 
provide sufficient assurance that a sound system of internal control is 
maintained, which safeguards the Company's assets. Formal terms of reference 
for the Committee are available on the Company's website www.crystalamber.com. 
 
Other committees 
 
Although the AIC Code recommends that companies appoint a Nomination Committee, 
as the Board is wholly comprised of non-executive Directors the Board has not 
deemed this necessary and as such all matters are considered by the full Board. 
 
On 27 March 2017, the Board resolved to establish a Remuneration and Management 
Engagement Committee. Due to the size of the Board, all Directors are members 
of the Remuneration and Management Engagement Committee. Nigel Ward acts as 
Chairman of the committee. The Remuneration and Management Engagement Committee 
meets at least once a year pursuant to its terms of reference. The Remuneration 
and Management Engagement Committee provides a formal mechanism for the review 
of the remuneration of the Chairman and Directors and the review of the 
performance and remuneration of the Investment Manager, Investment Adviser and 
other service providers. 
 
Remuneration policy 
 
The Company aims to ensure remuneration is competitive, aligned with 
shareholder interests, relatively simple and transparent, and compatible with 
the aim of attracting, recruiting and retaining suitably qualified and 
experienced directors. The Board conducted a review of the Directors' fees 
during the prior year and concluded that the fees should be increased with 
effect from 1 January 2019. 
 
In addition, the Board reviews the arrangements for the provision of management 
and other services to the Company on an ongoing basis. The Company receives 
regular reporting from the Investment Adviser and regular valuations of the 
Company's investments, which allows the Board to form a judgement as to the 
performance of its portfolio. 
 
Board meetings, Committee meetings and Directors' attendance 
 
One of the key criteria the Company uses when selecting Directors is their 
confirmation prior to their appointment that they will be able to allocate 
sufficient time to the Company to discharge their responsibilities in a timely 
and effective manner. 
 
The Board formally met four times during the year and other ad hoc Board 
committee meetings were called in relation to specific events or to issue 
approvals, often at short notice and did not necessarily require full 
attendance. Directors are encouraged when they are unable to attend a meeting 
to give the Chairman their views and comments on matters to be discussed, in 
advance. 
 
Attendance at the quarterly Board meetings is further set out below: 
 
                        Board   Audit Committee  Remuneration and     Tenure as at 30 
                                                    Management           June 2019 
                                                    Engagement 
                                                     Committee 
 
Nigel Ward             4 of 4       2 of 2            1 of 1         12 years, 1 month 
 
Christopher Waldron    4 of 4       2 of 2            1 of 1              5 years 
 
Jane Le Maitre         4 of 4       2 of 2            1 of 1         2 years, 2 months 
 
Fred Hervouet          4 of 4       2 of 2            1 of 1         1 year, 7 months 
 
In addition to the above, there were three additional Board committee meetings 
during the year. One Board committee meeting has occurred since the year end. 
 
Relations with shareholders 
 
The Board welcomes the views of shareholders and places great importance on 
communication with its shareholders. Senior members of the Investment Adviser 
make themselves available to meet with principal shareholders and key sector 
analysts. The Chairman and other Directors are also available to meet with 
shareholders, if required. 
 
All shareholders have the opportunity to ask questions of the Company at its 
registered office. The Annual General Meeting of the Company provides a forum 
for shareholders to meet and discuss issues with the Directors and Investment 
Adviser. Company information is also available to shareholders on the Company's 
website www.crystalamber.com. 
 
The Board regularly monitors the shareholder profile of the Company and 
receives comprehensive shareholder reports from the Company's Broker at all 
quarterly board meetings. A post-results programme of visits to major 
shareholders is conducted by the Company's Broker and Investment Adviser. 
 
AIFM Directive 
 
The Company is categorised as an externally managed non-EU AIF under the AIFM 
Directive. The Investment Manager of the Company is its non-EU AIFM. The 
Investment Manager as the AIFM has created a Risk Committee which meets at 
least quarterly to consider the risks faced by the Company and the investment 
process, consistent with the requirements of the AIFM Directive. The AIFM has 
adopted a remuneration policy which accords with the principles established by 
the AIFM Directive. The remuneration policy is in compliance with the 
requirements of the AIFM Directive and the guidance issued by the FCA. The 
Investment Manager as the AIFM does not have any employees. The Directors of 
the AIFM received total aggregate remuneration of GBP20,000 by way of a fixed fee 
for the year ended 30 June 2019. No variable fee elements of remuneration were 
paid to the Directors of the AIFM. 
 
The AIFM Directive outlines the information which has to be made available to 
investors in an AIF and directs that material changes to this information be 
disclosed in the Annual Report of the AIF. All information required to be 
disclosed under the AIFM Directive is either disclosed in this Annual Report or 
on the Company's website www.crystalamber.com. 
 
AEOI Rules 
 
Under AEOI Rules, the Company is registered under FATCA and continues to comply 
with both FATCA and CRS requirements to the extent relevant to the Company. 
 
NMPI 
 
The Board has been advised that the Company would satisfy the criteria for 
being an investment trust if it was resident in the UK. Accordingly, the Board 
has concluded that the Company's Ordinary shares are not non-mainstream pooled 
investments for the purposes of the FCA rules regarding the restrictions on the 
promotion to retail investors of unregulated collective investment schemes and 
close substitutes. This means that the restrictions on promotion imposed by the 
FCA rules do not apply to the Company. It is the Board's intention that the 
Company conducts its affairs so that these restrictions will continue to remain 
inapplicable. 
 
Independent auditor 
 
KPMG has agreed to offer itself for re-appointment as Auditor of the Company 
and a resolution proposing re-appointment and authorising the Directors to 
determine remuneration will be presented at the Annual General Meeting. 
 
Annual General Meeting 
 
The Annual General Meeting of the Company will be held at 10:00am on 22 
November 2019 at the offices of Estera International Fund Managers (Guernsey) 
Limited, Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey. 
 
On behalf of the Board 
 
Nigel Ward                                         Jane Le Maitre 
 
Director                                                           Director 
 
12 September 2019                                                       12 
September 2019 
 
                                   Directors 
 
Christopher Waldron Guernsey Resident, (appointed 1 July 2014) 
 
Non-Executive Chairman (with effect from 23 November 2017) 
 
Christopher Waldron has over 30 years' experience as an investment manager, 
specialising in fixed income, hedging strategies and alternative investment 
mandates and until 2013 was Chief Executive of the Edmond de Rothschild Group 
in the Channel Islands. Prior to joining the Edmond de Rothschild Group in 
1999, Mr Waldron held investment management positions with Bank of Bermuda, the 
Jardine Matheson Group and Fortis but he is now primarily an independent 
non-executive director of a number of listed funds and investment companies. He 
is also a member of the States of Guernsey's Policy and Resources Investment 
and Bond Sub-Committee. He is a Fellow of the Chartered Institute of Securities 
and Investment. 
 
Nigel Ward Guernsey Resident, Non-Executive Director (appointed 22 June 2007*) 
 
Nigel Ward is currently an independent non-executive Director on the board of 
several offshore funds and companies, including London and TISE listings. 
Investment mandates include property, agricultural land, student accommodation, 
UK equities, European SME credit, and distressed debt. He has over 40 years' 
experience of international investment markets, credit and risk analysis, 
corporate and retail banking, corporate governance, compliance and the managed 
funds industry. He spent 20 years at Baring Asset Management, and also at TSB 
Bank, National Westminster Bank and Bank Sarasin. He was a founding 
Commissioner of the Guernsey Police Complaints Commission, is an Associate of 
the Institute of Financial Services, a member of the Institute of Directors and 
holds the IoD Diploma in Company Direction. 
 
Jane Le Maitre, Guernsey Resident, Non-Executive Director (appointed 8 May 
2017) 
 
Jane Le Maitre is a Fellow of the Institute of Chartered Accountants in England 
& Wales, a Chartered Tax Adviser and a member of the Institute of Directors. 
She qualified with Coopers & Lybrand in the UK and joined KPMG (Channel 
Islands) in 1989. She became a Partner in 1995 where she remained until 2000 
before becoming a director in the fiduciary division at Kleinwort Benson. After 
5 years with Kleinwort Benson, she joined the Intertrust Group in Guernsey 
becoming Managing Director of Intertrust Reads Private Clients Limited for a 
period of 6 years. She continues to hold a number of executive positions in 
unlisted property and investment holding entities. 
 
Fred Hervouet, Guernsey Resident, Non-Executive Director (appointed 6 December 
2017) 
 
 
Fred Hervouet has 20 years' experience of working in different areas of the 
Financial Markets and Asset Management Industry. His experience includes Fixed 
Income and Derivatives Markets, Structured Finance/Project Finance, Structured 
Products, and Commodity Markets, Hedge Funds, Trading and Risk Management. 
Prior to moving to Guernsey in December 2013, he was Managing Director and Head 
of Commodity Derivatives Asia for BNP Paribas including Trading, Structuring 
and Sales. He holds a number of non-executive director positions including 
Funding Circle SME Income Fund Limited, and Chenavari Toro Income Fund Limited, 
where he is chairman. He holds a Master Degree in Financial Markets, Commodity 
Markets and Risk Management from University Paris Dauphine and an MSc in 
Applied Mathematics and International Finance. He is a member of the UK 
Institute of Directors, of the UK Association of Investment Companies, of the 
Guernsey Chamber of Commerce and of the Guernsey Investment Fund Association. 
 
In addition to their directorships of the Company, the Directors currently hold 
the following directorships of listed companies; 
 
Nigel Ward                                Christopher Waldron 
 
Acorn Income Fund Limited                 JZ Capital Partners Limited 
 
Fair Oaks Income Fund Limited             UK Mortgages Limited 
 
Hadrian's Wall Secured Investments 
Limited 
 
Fred Hervouet                             Jane Le Maitre 
 
Chenavari Toro Income Fund Limited        None at present 
 
Funding Circle SME Income Fund Limited 
 
 
                         Independent Auditor's Report 
 
                 to the Members of Crystal Amber Fund Limited 
 
Our opinion is unmodified 
 
We have audited the financial statements of Crystal Amber Fund Limited (the 
"Company"), which comprise the statement of financial position as at 30 June 
2019, the statements of profit or loss and other comprehensive income, changes 
in equity and cash flows for the year then ended, and notes, comprising 
significant accounting policies and other explanatory information. 
 
In our opinion, the accompanying financial statements: 
 
  * give a true and fair view of the financial position of the Company as at 30 
    June 2019, and of the Company's financial performance and the Company's 
    cash flows for the year then ended; 
  * are prepared in accordance with International Financial Reporting Standards 
    ("IFRS"); and 
  * comply with the Companies (Guernsey) Law, 2008. 
 
Basis for opinion 
 
We conducted our audit in accordance with International Standards on Auditing 
(UK) ("ISAs (UK)") and applicable law. Our responsibilities are described 
below. We have fulfilled our ethical responsibilities under, and are 
independent of the Company in accordance with, UK ethical requirements 
including FRC Ethical Standards as applied to listed entities. We believe that 
the audit evidence we have obtained is a sufficient and appropriate basis for 
our opinion. 
 
Key audit matters: our assessment of the risks of material misstatement 
 
Key audit matters are those matters that, in our professional judgment, were of 
most significance in the audit of the financial statements and include the most 
significant assessed risks of material misstatement (whether or not due to 
fraud) identified by us, including those which had the greatest effect on: the 
overall audit strategy; the allocation of resources in the audit; and directing 
the efforts of the engagement team. These matters were addressed in the context 
of our audit of the financial statements as a whole, and in forming our opinion 
thereon, and we do not provide a separate opinion on these matters.  In 
arriving at our audit opinion above, the key audit matter, was as follows: 
 
                            The risk                   Our response 
 
 
Valuation of       Basis:                      Our audit procedures 
 financial assets  The Company has invested    included, but were not 
designated at fair 101% of its net assets as   limited to: 
value through      at 30 June 2019 into equity 
profit or loss and investments, debt           Internal controls: 
derivatives held   investments and derivative  We tested the design and 
for trading GBP      financial instruments       implementation of controls 
241,366,149;       (together, the              over the valuation of 
(2018: GBP           "investments")              investments 
249,009,853) 
Refer to the       The Company's listed or     Challenging managements' 
Report of the      quoted equities are valued  assumptions and inputs 
Directors and note based on market prices      including use of KPMG 
1 for the          obtained from a third party valuation specialists: 
Significant        pricing provider while the  For listed investments, we 
Accounting         Company's unlisted          used our own valuation 
Policies and notes derivative financial        specialist to independently 
9 and 14 for the   instruments are valued      price all fair values to a 
disclosures        using a Black Scholes       third party source. 
                   Option valuation technique. 
                                               For derivative financial 
                   The Company's unlisted      instruments, our valuation 
                   equity investment is valued specialist derived valuations 
                   at 30 June 2019 based on a  using a Black Scholes Option 
                   revenue multiples           model to evaluate against the 
                   technique. The unlisted     valuations used by the 
                   debt investment at 30 June  Company. 
                   2019 is valued by the       For the unlisted debt 
                   reference to the market     investment, our valuation 
                   price of the issuer's       specialist derived an 
                   equity had the debt         independent valuation using a 
                   investment been converted   discounted cash flow model to 
                   to equity and valued at the evaluate against the 
                   closing bid price on the    valuation used by the 
                   reporting date.             Company. 
 
                   Risk:                       For the unlisted equity 
                   The valuation of the        investment, we assessed and 
                   Company's investments,      challenged the Investment 
                   given that they represent   Manager's key assumptions 
                   the majority of the net     used in preparing the 
                   assets of the Company is    valuation.  In particular, we 
                   considered to be a          focused on the 
                   significant area of our     appropriateness of the 
                   audit. Of the Company's     valuation basis selected as 
                   investments, the holdings   well as the underlying 
                   in listed or quoted         assumptions and compared key 
                   investments and derivatives underlying financial data 
                   represent 96%, and those    inputs to external sources as 
                   which are subject to        applicable. 
                   estimation risk because 
                   they are unlisted represent Assessing disclosures: 
                   4%.                         We also considered the 
                                               Company's disclosures (see 
                                               Note 1) in relation to the 
                                               use of estimates and 
                                               judgments regarding the 
                                               valuation of investments and 
                                               the Company's valuation 
                                               policies adopted and fair 
                                               value disclosures in Notes 9 
                                               and 14 for compliance with 
                                               IFRS. 
 
Our application of materiality and an overview of the scope audit 
 
Materiality for the financial statements as a whole was set at GBP7,163,000, 
determined with reference to a benchmark of the Company's Net Assets of GBP 
238,775,597, of which it represents approximately 3% (2018: 3%). 
 
We reported to the Audit Committee any corrected or uncorrected identified 
misstatements exceeding GBP358,000, in addition to other identified misstatements 
that warranted reporting on qualitative grounds. 
 
Our audit of the Company was undertaken to the materiality level specified 
above, which has informed our identification of significant risks of material 
misstatement and the associated audit procedures performed in those areas as 
detailed above. 
 
We have nothing to report on going concern 
 
We are required to report to you if we have concluded that the use of the going 
concern basis of accounting is inappropriate or there is an undisclosed 
material uncertainty that may cast significant doubt over the use of that basis 
for a period of at least twelve months from the date of approval of the 
financial statements.  We have nothing to report in these respects. 
 
We have nothing to report on the other information in the Annual Report 
 
The directors are responsible for the other information presented in the Annual 
Report together with the financial statements. Our opinion on the financial 
statements does not cover the other information and we do not express an audit 
opinion or any form of assurance conclusion thereon. 
 
Our responsibility is to read the other information and, in doing so, consider 
whether, based on our financial statements audit work, the information therein 
is materially misstated or inconsistent with the financial statements or our 
audit knowledge. Based solely on that work we have not identified material 
misstatements in the other information. 
 
We have nothing to report on other 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: 
 
  * the Company has not kept proper accounting records; or 
  * the financial statements are not in agreement with the accounting records; 
    or 
  * we have not received all the information and explanations, which to the 
    best of our knowledge and belief are necessary for the purpose of our 
    audit. 
 
Respective responsibilities 
 
Directors' responsibilities 
 
As explained more fully in their statement, the Directors are responsible for: 
the preparation of the financial statements including being satisfied that they 
give a true and fair view; such internal control as they determine is necessary 
to enable the preparation of financial statements that are free from material 
misstatement, whether due to fraud or error; assessing the Company's ability to 
continue as a going concern, disclosing, as applicable, matters related to 
going concern; and using the going concern basis of accounting unless they 
either intend to liquidate the Company or to cease operations, or have no 
realistic alternative but to do so. 
 
Auditor's responsibilities 
 
Our objectives are to obtain reasonable assurance about whether the financial 
statements as a whole are free from material misstatement, whether due to fraud 
or error, and to issue our opinion in an auditor's report.  Reasonable 
assurance is a high level of assurance, but does not guarantee that an audit 
conducted in accordance with ISAs (UK) will always detect a material 
misstatement when it exists.  Misstatements can arise from fraud or error and 
are considered material if, individually or in aggregate, they could reasonably 
be expected to influence the economic decisions of users taken on the basis of 
the financial statements. 
 
A fuller description of our responsibilities is provided on the FRC's website 
at www.frc.org.uk/auditorsresponsibilities. 
 
The purpose of this report and restrictions on its use by persons other than 
the Company's members as a body. 
 
This report is made solely to the Company's members, as a body, in accordance 
with section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been 
undertaken so that we might state to the Company's members 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 members, as a body, for our 
audit work, for this report, or for the opinions we have formed. 
 
KPMG Channel Islands Limited 
 
Chartered Accountants, Guernsey 
 
12 September 2019 
 
          Statement of Profit or Loss and Other Comprehensive Income 
 
                        For the year ended 30 June 2019 
 
                                           2019                                 2018 
 
                              Revenue      Capital        Total     Revenue      Capital      Total 
 
                      Notes         GBP            GBP            GBP           GBP            GBP          GBP 
 
Income 
 
Dividend income from        4,177,239            -    4,177,239   3,064,520            -  3,064,520 
listed investments 
 
Interest income from                -            -            -     184,727            -    184,727 
listed debt 
instruments 
 
Arrangement fee                     -            -            -      46,531            -     46,531 
received from debt 
instruments 
 
Interest received               8,357            -        8,357       5,941            -      5,941 
 
                            4,185,596            -    4,185,596   3,301,719            -  3,301,719 
 
Net gains on 
financial assets 
designated at FVTPL 
and derivatives held 
for trading 
 
Equities 
 
Net realised gains      9           -   29,985,091   29,985,091           -   20,374,879 20,374,879 
 
Movement in             9           - (10,119,377) (10,119,377)           -   27,608,248 27,608,248 
unrealised (losses)/ 
gains 
 
Debt instruments 
 
Net realised gains      9           -    2,540,559    2,540,559           -      917,152    917,152 
 
Movement in             9           -      765,302      765,302           -     (86,784)   (86,784) 
unrealised gains/ 
(losses) 
 
Derivative financial 
instruments 
 
Net realised (losses)   9           -  (7,015,764)  (7,015,764)           -    5,402,504  5,402,504 
/gains 
 
Movement in             9           -  (3,830,544)  (3,830,544)           -    4,042,406  4.042,406 
unrealised (losses)/ 
gains 
 
                                    -   12,325,267   12,325,267           -   58,258,405 58,258,405 
 
Total income                4,185,596   12,325,267   16,510,863   3,301,719   58,258,405 61,560,124 
 
 
Expenses 
 
Transaction costs       4           -      545,479      545,479           -      555,047    555,047 
 
Foreign exchange            (247,085)      147,999     (99,086)      96,087      547,884    643,971 
movements on 
revaluation of 
investments and 
working capital 
 
Management fees       15,17 3,476,006            -    3,476,006   3,249,247            -  3,249,247 
 
Performance fees      15,17         -    2,456,957    2,456,957           -   12,095,146 12,095,146 
 
Directors'             16     155,000            -      155,000     155,157            -    155,157 
remuneration 
 
Administration fees    17     267,031            -      267,031     234,486            -    234,486 
 
Custodian fees         17     114,705            -      114,705      98,666            -     98,666 
 
Audit fees                     25,889            -       25,889      23,270            -     23,270 
 
Other expenses                344,100            -      344,100     310,819            -    310,819 
 
                            4,135,646    3,150,435    7,286,081   4,167,732   13,198,077 17,365,809 
 
Return for the year            49,950    9,174,832    9,224,782   (866,013)   45,060,328 44,194,315 
 
Basic and diluted       5        0.05         9.49         9.54      (0.88)                   45.15 
earnings/(loss) per                                                              46.04 
share (pence) 
 
All items in the above statement derive from continuing operations. 
 
The total column of this statement represents the Company's Statement of Profit 
or Loss and Other Comprehensive Income prepared in accordance with IFRS. The 
supplementary information on the allocation between revenue return and capital 
return is presented under guidance published by the AIC. 
 
The Notes to the Financial Statements form an integral part of these Financial 
Statements. 
 
                        Statement of Financial Position 
 
                              As at 30 June 2019 
 
                                                           2019                      2018 
 
Assets                                      Notes             GBP                         GBP 
 
Cash and cash equivalents                     7         931,915                 1,168,729 
 
Trade and other receivables                   8       1,971,390                    57,873 
 
Financial assets designated at FVTPL and      9     241,366,149               249,009,853 
derivatives held for trading 
 
Total assets                                        244,269,454               250,236,455 
 
Liabilities 
 
Trade and other payables                      10      5,493,857                12,158,971 
 
Total liabilities                                     5,493,857                12,158,971 
 
Equity 
 
Capital and reserves attributable to the 
Company's equity shareholders 
 
Share capital                                 11        993,748                   991,248 
 
Treasury shares reserve                       12    (6,895,640)               (3,212,448) 
 
Distributable reserve                                95,310,182               100,156,159 
 
Retained earnings                                   149,367,307               140,142,525 
 
Total equity                                        238,775,597               238,077,484 
 
Total liabilities and equity                        244,269,454               250,236,455 
 
NAV per share (pence)                         6 
                                                         249.12                    244.62 
 
The Financial Statements were approved by the Board of Directors and authorised 
for issue on 12 September 2019. 
 
Nigel Ward                                         Jane Le Maitre 
 
Director 
Director 
 
12 September 2019                                                       12 
September 2019 
 
The Notes to the Financial Statements form an integral part of these Financial 
Statements. 
 
                        Statement of Changes in Equity 
 
                        For the year ended 30 June 2019 
 
                            Share    Treasury Distributable              Retained earnings                    Total 
                                       shares 
 
                    Notes capital     reserve       reserve         Capital      Revenue       Total         equity 
 
                                GBP           GBP             GBP               GBP            GBP           GBP              GBP 
 
Opening balance at        991,248 (3,212,448)   100,156,159     143,277,348  (3,134,823) 140,142,525    238,077,484 
1 July 2018 
 
Issue of Ordinary           2,500           -             -               -            -           -          2,500 
shares 
 
Purchase of          12         - (3,683,192)             -               -            -           -    (3,683,192) 
Ordinary shares 
into Treasury 
 
Dividends paid in    13         -           -   (4,845,977)               -            -           -    (4,845,977) 
the year 
 
Return for the year             -           -             -       9,174,832       49,950   9,224,782      9,224,782 
 
Balance at 30 June 2019   993,748 (6,895,640)    95,310,182     152,452,180  (3,084,873) 149,367,307    238,775,597 
 
                            Share    Treasury Distributable              Retained earnings                    Total 
                                       shares 
 
                    Notes capital     reserve       reserve        Capital      Revenue        Total         equity 
 
                                GBP           GBP             GBP              GBP            GBP            GBP              GBP 
 
Opening balance at        989,998   (972,800)   105,058,397     98,217,020  (2,268,810)   95,948,210    201,023,805 
1 July 2017 
 
Issue of Ordinary           1,250           -             -              -            -            -          1,250 
shares 
 
Purchase of          12         - (2,239,648)             -              -            -            -    (2,239,648) 
Ordinary shares 
into Treasury 
 
Dividends paid in    13         -           -   (4,902,238)              -            -            -    (4,902,238) 
the year 
 
Return for the year             -           -             -     45,060,328    (866,013)   44,194,315     44,194,315 
 
Balance at 30 June 2018   991,248 (3,212,448)   100,156,159    143,277,348  (3,134,823)  140,142,525    238,077,484 
 
 
The Notes to the Financial Statements form an integral part of these Financial 
Statements. 
 
                            Statement of Cash Flows 
 
                        For the year ended 30 June 2019 
 
                                                            2019            2018 
 
                                           Notes               GBP               GBP 
 
Cash flows from operating activities 
 
Dividend income received from listed                   4,176,269       3,063,793 
investments 
 
Bank interest received                                     9,681           3,615 
 
Interest income from listed debt                               -         184,727 
instruments                                              307,596 
Interest received 
 
Arrangement fee received from debt                             -          46,531 
instruments 
 
Management fees paid                                 (2,646,184)     (3,249,247) 
 
Performance fees paid                               (10,964,740)     (3,485,158) 
 
Directors' fees paid                                   (150,000)       (151,912) 
 
Other expenses paid                                    (713,956)       (662,788) 
 
Net cash outflow from operating activities           (9,981,334)     (4,250,439) 
 
Cash flows from investing activities 
 
Purchase of equity investments                      (62,884,085)    (69,638,065) 
 
Sale of equity investments                            88,632,836      73,610,743 
 
Purchase of debt instruments                         (3,120,419)     (7,440,542) 
 
Sale of debt investments                                       -       6,755,428 
 
Purchase of derivative financial                    (11,742,025)    (18,079,220) 
instruments 
 
Sale of derivative financial instruments               7,902,140      19,953,704 
 
Transaction charges on purchase and sale               (517,258)       (560,187) 
of investments 
 
Net cash inflow from investing activities             18,271,189       4,601,861 
 
Cash flows from financing activities 
 
Proceeds from issuance of Ordinary shares                  2,500           1,250 
 
Purchase of Ordinary shares into Treasury            (3,683,192)     (2,239,648) 
 
Dividends paid                                       (4,845,977)     (4,902,238) 
 
Net cash outflow from financing activities           (8,526,669)     (7,140,636) 
 
Net decrease in cash and cash equivalents              (236,814)     (6,789,214) 
during the year 
 
Cash and cash equivalents at beginning of              1,168,729       7,957,943 
year 
 
Cash and cash equivalents at end of year     7                         1,168,729 
                                                         931,915 
 
The Notes to the Financial Statements form an integral part of these Financial 
Statements. 
 
                       Notes to the Financial Statements 
 
                        For the year ended 30 June 2019 
 
General information 
 
Crystal Amber Fund Limited (the "Company") was incorporated and registered in 
Guernsey on 22 June 2007 and is governed in accordance with the provisions of 
the Companies Law. The registered office address is PO Box 286, Floor 2, 
Trafalgar Court, Les Banques, St Peter Port, Guernsey, GYI 4LY. The Company was 
established to provide shareholders with an attractive total return, which is 
expected to comprise primarily capital growth with the potential for 
distributions of up to 5 pence per share per annum following consideration of 
the accumulated retained earnings as well as the unrealised gains and losses at 
that time. The Company seeks to achieve this through investment in a 
concentrated portfolio of undervalued companies, which are expected to be 
predominantly, but not exclusively, listed or quoted on UK markets and which 
have a typical market capitalisation of between GBP100 million and GBP1,000 
million. 
 
GI Dynamics Inc., is a subsidiary of the Company and was incorporated in 
Delaware. It has five wholly-owned subsidiaries and its principal place of 
business is Boston. Refer to Note 15 for further information. 
 
The Company's Ordinary shares were listed and admitted to trading on AIM, on 17 
June 2008. The Company is also a member of the AIC. 
 
All capitalised terms are defined in the Glossary of Capitalised Defined Terms 
unless separately defined. 
 
1.   SIGNIFICANT ACCOUNTING POLICIES 
 
The principal accounting policies applied in the preparation of the Financial 
Statements are set out below. These policies have been consistently applied to 
those balances considered material to the Financial Statements throughout the 
current year, unless otherwise stated. 
 
Basis of preparation 
 
The Financial Statements have been prepared to give a true and fair view, are 
in accordance with IFRS and the SORP "Financial Statements of Investment Trust 
Companies and Venture Capital Trusts" issued by the AIC in November 2014 and 
updated in January 2017 to the extent to which it is consistent with IFRS, and 
comply with the Companies Law. The Financial Statements are presented in 
Sterling, the Company's functional and presentational currency. 
 
The Financial Statements have been prepared under the historical cost 
convention with the exception of financial assets designated at fair value 
through profit or loss ("FVTPL") and derivatives held for trading which are 
measured at fair value. 
 
The Company has adopted the Investment Entity Amendments to IFRS 10, IFRS 12 
and IAS 27 which define investment entities together with disclosure 
requirements. 
 
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) 
 
The Company meets the definition of an investment entity on the basis of the 
following criteria. 
 
  * The Company obtains funds from multiple investors for the purpose of 
    providing those investors with investment management services; 
  * The Company commits to its investors that its business purpose is to invest 
    funds solely for returns from capital appreciation, investment income, or 
    both; and 
  * The Company measures and evaluates the performance of substantially all of 
    its investments on a fair value basis. 
 
To determine that the Company meets the definition of an investment entity, 
further consideration is given to the characteristics of an investment entity 
that are demonstrated by the Company. 
 
As the Company has met the definition of an investment entity under IFRS 10, it 
is exempt from preparing consolidated financial statements. 
 
Going concern 
 
The Directors are confident that the Company has adequate resources to continue 
in operational existence for the foreseeable future and do not consider there 
to be any threat to the going concern status of the Company. 
 
Discontinuation vote 
 
The Company is subject to a discontinuation vote scheduled to occur every two 
years. Following the results of the 2018 AGM, an extraordinary resolution was 
passed under which 75% of votes would be required to cease to continue as 
currently constituted. The next discontinuation vote will be proposed at the 
2019 AGM. Following due inquiry, the Directors have no reason to doubt that 
shareholders will vote to enable the Company to continue as constituted at the 
2019 AGM. 
 
Use of estimates and judgements 
 
The preparation of the Financial Statements in conformity with IFRS requires 
management to make judgements, estimates and assumptions that affect the 
application of the reported amounts in these Financial Statements. The 
determination that the Company is an investment entity is a critical judgement, 
as discussed above. The estimates and associated assumptions are based on 
historical experience and various other factors that are believed to be 
reasonable under the circumstances. Actual results may differ from these 
estimates. The Black Scholes option valuation technique has been utilised to 
value warrant instruments and uses certain assumptions related to risk-free 
interest rates, expected volatility, expected life and future dividends as 
disclosed below. The unquoted equity and debt securities have been valued based 
on unobservable inputs (see Note 14). 
 
Segmental reporting 
 
Operating segments are reported in a manner consistent with internal reporting 
provided to the chief operating decision maker. The chief operating decision 
maker, who is responsible for allocating resources and assessing performance of 
the operating segments, has been identified as the Board as a whole. The key 
measure of performance used by the Board to assess the Company's performance 
and to allocate resources is the total return on the Company's NAV, as 
calculated under IFRS, and therefore no reconciliation is required between the 
measure of profit or loss used by the Board and that contained in these 
Financial Statements. 
 
For management purposes, the Company is domiciled in Guernsey and is engaged in 
a single segment of business mainly in one geographical area, being investment 
mainly in UK equity instruments, and therefore the Company has only one single 
operating segment. 
 
Foreign currency translation 
 
Monetary assets and liabilities are translated from currencies other than 
Sterling ('foreign currencies') to Sterling (the 'functional currency') at the 
rate prevailing on the reporting date. Income and expenses are translated from 
foreign currencies to Sterling at the rate prevailing at the date of the 
transaction. Exchange differences are recognised in the profit or loss section 
of the Statement of Profit or Loss and Other Comprehensive Income. 
 
Financial instruments 
 
Financial instruments comprise investments in equity, debt instruments, 
derivatives, trade and other receivables, cash and cash equivalents, and trade 
and other payables. Financial instruments are recognised initially at cost, 
which is deemed to be fair value. Subsequent to initial recognition financial 
instruments are measured as described below. 
 
Financial assets designated at FVTPL 
 
All the Company's investments including debt instruments and derivative 
financial instruments are held at FVTPL. They are initially recognised at cost 
at acquisition, which is deemed to be their fair value. Transaction costs are 
expensed in the profit or loss section of the Statement of Profit or Loss and 
Other Comprehensive Income. Gains and losses arising from changes in fair value 
are presented in the profit or loss section of the Statement of Profit or Loss 
and Other Comprehensive Income in the period in which they arise. 
 
Purchases and sales of investments are recognised using trade date accounting. 
Quoted investments are valued at bid price on the reporting date or at 
realisable value if the Company has entered into an irrevocable commitment 
prior to the reporting date to sell the investment. Where investments are 
listed on more than one securities market, the price used is that quoted on the 
most advantageous market, which is deemed to be the market on which the 
security was originally purchased. If the price is not available as at the 
accounting date, the last available price is used. The valuation methodology 
adopted is in accordance with IFRS 13. 
 
Loan notes are classified as debt instruments and are recognised initially at 
cost incurred in their acquisition. Subsequent to initial recognition, loan 
notes are valued at fair value. 
 
Convertible bonds are classified as debt instruments and are recognised 
initially at cost incurred in their acquisition, which is deemed to be their 
fair value. Subsequent to initial recognition, quoted convertible bonds are 
valued at bid price on the reporting date. If the price is not available as at 
the accounting date, the last available price is used. 
 
In the absence of an active market, the Company determines fair value of its 
unquoted investments by taking into account the International Private Equity 
and Venture Capital ("IPEV") guidelines. 
 
Derivatives held for trading 
 
When considered appropriate the Company will enter into derivative contracts to 
manage its price risk and provide protection against the volatility of the 
market. 
 
Quoted derivatives are valued at bid price on the reporting date. Where 
derivatives are listed on more than one securities market, the price used is 
that quoted on the most advantageous market, which is deemed to be the market 
on which the security was originally purchased. If the price is not available 
as at the accounting date, the last available price is used. Gains and losses 
arising from changes in fair value are presented in the profit or loss section 
of the Statement of Profit or Loss and Other Comprehensive Income in the period 
in which they arise. 
 
Warrant instruments which are unlisted are valued at the reporting date using a 
Black Scholes option valuation technique, which uses certain assumptions 
related to risk-free interest rates, expected volatility, expected life and 
future dividends. Gains and losses arising from changes in fair value are 
presented in the profit or loss section of the Statement of Profit or Loss and 
Other Comprehensive Income in the period in which they arise. 
 
De-recognition of financial instruments 
 
The Company de-recognises a financial asset when the contractual rights to the 
cash flows from the asset expire, or it transfers the rights to receive the 
contractual cash flows in a transaction in which substantially all the risks 
and rewards of ownership of the financial asset are transferred. 
 
On de-recognition of a financial asset, the difference between the carrying 
amount of the asset (or the carrying amount allocated to the portion of the 
asset de-recognised), and consideration received (including any new asset 
obtained less any new liability assumed) is recognised in the profit or loss 
section of the Statement of Profit or Loss and Other Comprehensive Income. 
 
The Company de-recognises a financial liability when its contractual 
obligations are discharged, cancelled or expire. Any gain or loss on 
de-recognition is recognised in the profit or loss section of the Statement of 
Profit or Loss and Other Comprehensive Income. 
 
Cash and cash equivalents 
 
The Company considers all highly liquid investments with original maturities of 
less than 90 days when acquired to be cash equivalents. 
 
Share issue expenses 
 
Share issue expenses of the Company directly attributable to the issue and 
listing of its own shares are charged to the distributable reserve. 
 
Share capital 
 
Ordinary shares are classified as equity where there is no obligation to 
transfer cash or other assets. 
 
Dividends 
 
Dividends paid during the year from distributable reserves are disclosed in the 
Statement of Changes in Equity. Dividends declared post year end are disclosed 
in the Notes to the Financial Statements. 
 
Distributable reserves 
 
Distributable reserves represent the amount transferred from the share premium 
account, approved by the Royal Court of Guernsey on 18 July 2008, and amounts 
transferred to distributable reserves in relation to the sale of Treasury 
shares above cost. 
 
Income 
 
Investment income and interest income have been accounted for on an accruals 
basis using the effective interest method. Dividends receivable are recognised 
in the profit or loss section of the Statement of Profit or Loss and Other 
Comprehensive Income when the relevant security is quoted ex-dividend. The 
Company currently incurs withholding tax imposed by countries other than the UK 
on dividend income; these dividends are recorded gross of withholding tax in 
the profit or loss section of the Statement of Profit or Loss and Other 
Comprehensive Income. 
 
Expenses 
 
All expenses are accounted for on an accruals basis. In respect of the analysis 
between revenue and capital items presented within the Statement of Profit or 
Loss and Other Comprehensive Income, all expenses have been presented as 
revenue items except as follows: 
 
  * expenses which are incidental to the acquisition and disposal of an 
    investment are charged to capital; and 
 
  * expenses are split and presented partly as capital items where a connection 
    with the maintenance or enhancement of the value of the investments held 
    can be demonstrated. Accordingly the performance fee is charged to capital, 
    reflecting the Directors' expected long-term view of the nature of the 
    investment returns of the Company. 
 
Treasury shares reserve 
 
The Company has adopted the principles outlined in IAS 32 'Financial 
Instruments: Presentation' and treats consideration paid including directly 
attributable incremental cost for the repurchase of Company shares held in 
Treasury as a deduction from equity attributable to the Company's equity 
holders until the shares are cancelled, reissued or disposed of. No gain or 
loss is recognised within the statement of Profit or Loss and Other 
Comprehensive Income on the purchase, sale, issue or cancellation of the 
Company's own equity investments. 
 
Any consideration received, net of any directly attributable incremental 
transaction costs upon sale or re-issue of such shares, is included in equity 
attributable to the Company's equity holders. 
 
2.   NEW STANDARDS AND INTERPRETATIONS 
 
In the preparation of these Financial Statements, the Company followed the same 
accounting policies and methods of computation as compared with those applied 
in the previous year. 
 
IFRS 9 Financial Instruments 
 
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition 
and Measurement for annual periods beginning on or after 1 January 2018, 
bringing together all three aspects of the accounting for financial instruments 
being classification and measurement, impairment and hedge accounting. 
 
The Company has applied IFRS 9 retrospectively, with an initial application 
date of 1 January 2018 and has adjusted the comparative information for the 
period beginning 1 July 2017. There was no financial impact and no change to 
the comparative information due to the application of IFRS 9. 
 
(a)        Classification and measurement 
 
The Company continues to classify its investments at fair value through profit 
or loss under IFRS 9.  The Company continues to classify its trade receivables 
and payables at amortised cost under IFRS 9. The classification is based on two 
criteria: the Company's business model for managing the assets; and whether the 
instruments' contractual cash flows represent solely payments of principal and 
interest on the principal amount outstanding (the "SPPI criterion"). 
 
(b)        Impairment 
 
The adoption of IFRS 9 has fundamentally changed the Company's accounting for 
impairment losses for financial assets by replacing IAS 39's incurred loss 
approach with a forward-looking expected credit loss (ECL) approach. 
 
ECLs are based on the difference between the contractual cash flows due in 
accordance with the contract and all the cash flows that the Company expects to 
receive. The shortfall is then discounted at an approximation to the asset's 
original effective interest rate. 
 
The only assets subject to the ECL model are trade and other receivables. The 
Company has applied the standard's simplified approach and has calculated ECLs 
based on lifetime expected credit losses. The adoption of the ECL model has not 
given rise to a material change in impairment. 
 
(c) Hedge accounting 
 
The Company does not use hedge accounting. 
 
(d) Transition disclosures 
 
The application of IFRS 9 did not change the measurement and presentation of 
the current financial instruments and therefore there is no impact on the 
Financial Statements. 
 
None of the other new standards or amendments to existing standards and 
interpretations, effective from 1 January 2018, had a material impact on the 
Company's Financial Statements. 
 
At the date of authorisation of these Financial Statements, the following 
standards and interpretations, which have not been applied in these Financial 
Statements, had been issued but were not yet effective: 
 
Amended standards and interpretations                           Effective for 
                                                            periods beginning 
                                                                  on or after 
 
IFRS 3    Definition of a Business                             1 January 2020 
 
IFRS 9    Financial Instruments (Amendments regarding          1 January 2019 
          prepayment features with negative compensation 
          and modifications of financial liabilities) 
 
IFRS 11   Joint arrangements (Amendments resulting from        1 January 2019 
          Annual Improvements 2015 - 2017 Cycle) 
 
IFRS 16   Leases                                               1 January 2019 
 
IFRS 17   Insurance Contracts                                  1 January 2021 
 
IAS 1     Presentation of Financial statements (Amendments     1 January 2020 
          regarding the definition of material) 
 
IAS 8     Accounting policies, Changes in Accounting           1 January 2020 
          Estimates and Errors (Amendments regarding the 
          definition of material) 
 
IAS 12    Income Taxes (Amendments resulting from Annual       1 January 2019 
          Improvements 2015 - 2017 Cycle) 
 
IFRIC 23  Uncertainty over Income Tax Treatments               1 January 2019 
 
The Directors anticipate that the adoption of the amended standards and 
interpretations in future periods will not have a material impact on the 
Financial Statements of the Company. 
 
3.   TAXATION 
 
The Company is exempt from taxation in Guernsey under the provisions of the 
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual 
fee of GBP1,200 (2018: GBP1,200). 
 
4.   TRANSACTION COSTS 
 
The transaction charges incurred in relation to the acquisition and disposal of 
investments during the year were as follows: 
 
                                                                  2019             2018 
 
                                                                     GBP                GBP 
 
Stamp duty                                                     199,715          234,290 
 
Commissions and custodian transaction charges: 
 
In respect of purchases                                        233,483          208,436 
 
In respect of sales                                            112,281          112,321 
 
                                                               545,479          555,047 
 
5.   BASIC AND DILUTED EARNINGS PER SHARE 
 
Earnings per share is based on the following data: 
 
                                                                 2019              2018 
 
Return for the year                                        GBP9,224,782       GBP44,194,315 
 
Weighted average number of issued Ordinary shares          96,693,152        97,875,863 
 
Basic and diluted earnings per share (pence)                     9.54             45.15 
 
6.   NAV PER SHARE 
 
NAV per share is based on the following data: 
 
                                                                 2019              2018 
 
NAV per Statement of Financial Position                  GBP238,775,597      GBP238,077,484 
 
Total number of issued Ordinary shares (excluding          95,846,980        97,325,780 
Treasury shares) at 30 June 
 
NAV per share (pence)                                          249.12            244.62 
 
7.   CASH AND CASH EQUIVALENTS 
 
Cash and cash equivalents comprise cash held by the Company available on 
demand. Cash and cash equivalents were as follows: 
 
                                                                 2019              2018 
 
                                                                    GBP                 GBP 
 
Cash available on demand                                      931,915         1,168,729 
 
                                                              931,915         1,168,729 
 
8.   TRADE AND OTHER RECEIVABLES 
 
                                                                 2019              2018 
 
                                                                    GBP                 GBP 
 
Current assets: 
 
Unsettled trade sales                                       1,923,459                 - 
 
Trade receivables                                              25,737            26,091 
 
Prepayments                                                    22,194            31,782 
 
                                                            1,971,390            57,873 
 
There were no past due or impaired receivable balances outstanding at the year 
end (2018: GBPNil). 
 
9.   FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS AND 
DERIVATIVES HELD FOR TRADING 
 
                                                                                          2019            2018 
 
                                                                                             GBP               GBP 
 
Equity investments                                                                 230,330,507     229,682,729 
 
Debt instruments                                                                     4,035,127       5,320,186 
 
Financial assets designated at FVTPL                                               234,365,634     235,002,915 
 
Derivative financial instruments held for trading                                    7,000,515      14,006,938 
 
Total financial assets designated at FVTPL and derivatives                         241,366,149     249,009,853 
held for trading 
 
Equity investments 
 
Cost brought forward                                                               172,761,740     156,798,987 
 
Purchases                                                                           71,094,830      69,198,617 
 
Sales                                                                             (90,557,836)    (73,610,743) 
 
Net realised gains                                                                  29,985,091      20,374,879 
 
Cost carried forward                                                               183,283,825     172,761,740 
 
Unrealised gains brought forward                                                    57,316,659      29,708,411 
 
Movement in unrealised (losses)/gains                                             (10,119,377)      27,608,248 
 
Unrealised gains carried forward                                                    47,197,282      57,316,659 
 
Effect of exchange rate movements on revaluation                                     (150,600)       (395,670) 
 
Fair value of equity investments                                                   230,330,507     229,682,729 
 
Debt instruments 
 
Cost brought forward                                                                 5,547,350       9,318,984 
 
Purchases                                                                            3,120,419       2,066,642 
 
Sales                                                                                        -     (6,755,428) 
 
Conversion of loans                                                                (7,257,760)               - 
 
Net realised gains                                                                   2,540,559         917,152 
 
Cost carried forward                                                                 3,950,568       5,547,350 
 
Unrealised gains brought forward                                                       203,233         290,017 
 
Movement in unrealised gains/(losses)                                                  765,302        (86,784) 
 
Unrealised gains carried forward                                                       968,535         203,233 
 
Effect of exchange rate movements on revaluation                                     (883,976)       (430,397) 
 
Fair value of debt instruments                                                       4,035,127       5,320,186 
 
Total financial assets designated at FVTPL                                         234,365,634     235,002,915 
 
Derivative financial instruments held for trading 
 
Cost brought forward                                                                 3,888,021         360,001 
 
Purchases                                                                           11,742,025      18,079,220 
 
Sales                                                                              (7,902,140)    (19,953,704) 
 
Net realised (losses)/gains                                                        (7,015,764)       5,402,504 
 
Cost carried forward                                                                   712,142       3,888,021 
 
Unrealised gains brought forward                                                    10,118,917       6,076,511 
 
Movement in unrealised (losses)/gains                                              (3,830,544)       4,042,406 
 
Unrealised gains carried forward                                                    6,288,373       10,118,917 
 
Fair value of derivatives held for trading                                           7,000,515      14,006,938 
 
Total derivative financial instruments held for trading                              7,000,515      14,006,938 
 
 
 
Total financial assets designated at FVTPL and derivatives                         241,366,149     249,009,853 
held for trading 
 
Total realised gains and losses and unrealised gains and losses in the 
Company's equity, debt and derivative financial instruments are made up of the 
following gain and loss elements: 
 
                                                                 2019             2018 
 
                                                                    GBP                GBP 
 
Realised gains                                             37,215,339       36,636,873 
 
Realised losses                                          (11,705,453)      (9,942,338) 
 
Net realised gains in financial assets designated at       25,509,886       26,694,535 
FVTPL and derivatives held for trading 
 
Movement in unrealised gains                                  409,802       37,869,919 
 
Movement in unrealised losses                            (13,594,421)      (6,306,049) 
 
Net movement in unrealised (losses)/gains in             (13,184,619)       31,563,870 
financial assets designated at FVTPL and derivatives 
held for trading 
 
The following table details the Company's positions in derivative financial 
instruments: 
 
                                                       Nominal amount            Value 
 
30 June 2019                                                                         GBP 
 
Derivative financial instruments 
 
Puts on FTSE100 Index P7100 (expiry: July 2019)                 5,000          225,000 
 
Puts on FTSE100 Index P7000 (expiry: August 2019)               1,000          190,000 
 
GI Dynamics Inc. warrant (Expiry: May 2023)                97,222,200        1,546,564 
 
GI Dynamics Inc. warrant (Expiry: June 2024)               78,984,823        1,262,671 
 
GI Dynamics Inc. warrant (Expiry: July 2024)              236,220,480        3,776,280 
 
                                                          412,433,503        7,000,515 
 
 
 
                                                       Nominal amount            Value 
 
30 June 2018                                                                         GBP 
 
Derivative financial instruments 
 
Puts on FTSE100 Index P7200 (expiry: July 2018)                 2,000          180,000 
 
Puts on FTSE100 Index P7400 (expiry: July 2018)                 4,000          900,000 
 
FairFX warrant instrument                                   6,000,000        5,259,942 
 
Hurricane warrant instrument                               23,333,333        6,511,213 
 
GI Dynamics Inc. warrant instrument                        97,222,200        1,155,783 
 
                                                          126,561,533       14,006,938 
 
10.   TRADE AND OTHER PAYABLES 
 
                                                               2019               2018 
 
                                                                  GBP                  GBP 
 
Current liabilities: 
 
Accruals                                                  1,076,190            213,188 
 
Unsettled trade purchases                                 1,960,710            981,043 
 
Performance fee accrual                                   2,456,957         10,964,740 
 
                                                          5,493,857         12,158,971 
 
The carrying amount of trade payables approximates to their fair value. 
 
11.   SHARE CAPITAL AND RESERVES 
 
The authorised share capital of the Company is GBP3,000,000 divided into 300 
million Ordinary shares of GBP0.01 each. 
 
The issued share capital of the Company, including Treasury shares, is 
comprised as follows: 
 
                                          2019                     2018 
 
                                       Number        GBP         Number         GBP 
 
Opening balance                    99,124,762  991,248     98,999,762   989,998 
 
Ordinary shares issued during the     250,000    2,500        125,000     1,250 
year 
 
Issued, called up and fully paid   99,374,762  993,748     99,124,762   991,248 
Ordinary shares of GBP0.01 each 
 
Capital risk management 
 
The Company's objectives when managing capital are to safeguard the Company's 
ability to continue as a going concern in order to provide returns to 
shareholders and to maintain an optimal capital structure to reduce the cost of 
capital. 
 
In order to maintain or adjust the capital structure, the Company may adjust 
the amount of dividends paid to shareholders, return capital to shareholders, 
issue new shares or sell assets. 
 
As per the Company's Memorandum and Articles of Incorporation the retained 
earnings are distributable by way of dividend in addition to the distributable 
reserve shown in the Company's Statement of Financial Position at the year end. 
 
The Company may carry the returns of the Company to the distributable reserve 
or use them for any purpose to which the returns of the Company may be properly 
applied and either employed in the business of the Company or be invested, in 
accordance with applicable law. The distributable reserve includes the amount 
transferred from the share premium account which was approved by the Royal 
Court of Guernsey on 18 July 2008. 
 
During the year ended 30 June 2019, the Company paid dividends of GBP4,845,977 
(2018: GBP4,902,238) from distributable reserves, as disclosed in Note 13. 
 
Externally imposed capital requirement 
 
There are no capital requirements imposed on the Company. 
 
Rights attaching to shares 
 
The Ordinary shares carry the right to vote at general meetings and the 
entitlement to receive any dividends and surplus assets of the Company on a 
winding up. 
 
12.   TREASURY SHARES RESERVE 
 
                                           2019                          2018 
 
                                        Number            GBP          Number            GBP 
 
Opening balance                    (1,798,982)  (3,212,448)       (635,000)    (972,800) 
 
Treasury shares purchased                                       (1,163,982)  (2,239,648) 
during the year                    (1,728,800)  (3,683,192) 
 
 
Closing balance                    (3,527,782)  (6,895,640)     (1,798,982)  (3,212,448) 
 
During the year ended 30 June 2019, 1,728,800 (2018: 1,163,982) Treasury shares 
were purchased at an average price of 213.05 pence per share (2018: 192.41 
pence per share), representing an average discount to NAV at the time of 
purchase of 9.6% (2018: 3.7%). 
 
13.   DIVIDS 
 
On 06 July 2018, the Company declared an interim dividend of GBP2,433,145 
equating to 2.5 pence per Ordinary share, which was paid on 17 August 2018 to 
shareholders on the register on 20 July 2018. 
 
On 13 December 2018, the Company declared an interim dividend of GBP2,412,832 
equating to 2.5 pence per Ordinary share, which was paid on 18 January 2019 to 
shareholders on the register on 21 December 2018. 
 
Subsequent to the year end, on 10 July 2019, the Company declared an interim 
dividend of GBP2,369,550, equating to 2.5 pence per Ordinary share, which was 
paid on 19 August 2019 to shareholders on the register on 19 July 2019. 
 
14.   FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS 
 
Financial risk management objectives 
 
The Investment Manager, Crystal Amber Asset Management (Guernsey) Limited and 
the Administrator, Estera International Fund Managers (Guernsey) Limited 
provide advice to the Company which allows it to monitor and manage financial 
risks relating to its operations through internal risk reports which analyse 
exposures by degree and magnitude of risks. The Investment Manager and the 
Administrator report to the Board on a quarterly basis. The risks relating to 
the Company's operations include credit risk, liquidity risk, and the market 
risks of interest rate risk, price risk and foreign currency risk. The Board 
has considered the sensitivity of the Company's financial assets and monitors 
the range of reasonably possible changes in the significant observable inputs 
on a regular basis and has deemed no changes are required from prior years. 
 
Credit risk 
 
Credit risk is the risk that the counterparty to a financial instrument will 
default on its contractual obligations that it has with the Company, resulting 
in financial loss to the Company. At 30 June 2019 the major financial assets 
which were exposed to credit risk included financial assets designated at 
FVTPL, derivatives held for trading and cash and cash equivalents. 
 
The carrying amounts of financial assets best represent the maximum credit risk 
exposure at 30 June 2019. The Company's credit risk on liquid funds is 
minimised because the counterparties are banks with high credit ratings 
assigned by an international credit-rating agency. 
 
The table below shows the cash balances at the Statement of Financial Position 
date and the S&P credit rating for each counterparty at that date. 
 
                                   Location   Rating        Cash         Cash 
                                                         Balance      Balance 
 
                                                            2019         2018 
 
                                                               GBP            GBP 
 
ABN AMRO (Guernsey) Limited*       Guernsey   A          920,009      965,789 
 
Barclays Bank plc - Isle of Man    Isle of    A           11,906      202,940 
Branch                             Man 
 
                                                         931,915    1,168,729 
 
*Effective from 15 July 2019, Butterfield Bank (Channel Islands) Limited with a 
credit rating of BBB+, acquired ABN AMRO (Guernsey) Limited. 
 
The credit ratings disclosed above are the credit ratings of the parent 
entities of each of the counterparties being ABN AMRO Bank N.V. (effective from 
15 July 2019, The Bank of N. T. Butterfield & Son Limited) and Barclays Bank 
plc. 
 
The Company's credit risk on financial assets designated at FVTPL and 
derivatives held for trading is considered acceptable as these assets consist 
mainly of quoted equities or are linked to quoted equities. The Company is also 
exposed to credit risk on financial assets with its brokers for unsettled 
transactions. This risk is considered minimal due to the short settlement 
period involved and the high credit quality of the brokers used. There are no 
credit ratings available for the debt instruments held by the Company. At 30 
June 2019 GBP231,250,515 (2018: GBP230,648,518) of the financial assets of the 
Company were held by the Custodian, ABN AMRO (Guernsey) Limited. 
 
Bankruptcy or insolvency of the Custodian may cause the Company's rights with 
respect to financial assets held by the Custodian to be delayed or limited. 94% 
(2018: 92%) of the Company's financial assets are held by the Custodian in 
segregated accounts. The Company monitors its risk by monitoring the credit 
quality and financial position of the Custodian. The parent of the Custodian 
has an S&P credit rating of A (2018: A). The remaining balance of financial 
assets of GBP13,018,939 (2018: GBP19,587,937) includes GBP6,585,515 (2018: GBP 
12,969,938) warrant instruments, GBP4,035,128 (2018: GBP5,320,186) loan notes 
issued by GI Dynamics Inc., GBP415,000 (2018: GBP1,080,000) put derivative options 
held by the option broker, GBP11,906 (2018: GBP202,940) cash held by Barclays Bank 
plc and the remaining GBP1,971,390 (2018: GBP57,873) held as trade receivables. 
 
Liquidity risk 
 
Liquidity risk is the risk that the Company will be unable to meet its 
obligations arising from financial liabilities. Ultimate responsibility for 
liquidity risk management rests with the Board of Directors, which has built an 
appropriate framework for the management of the Company's liquidity 
requirements. 
 
The Company adopts a prudent approach to liquidity risk management and 
maintains sufficient cash reserves to meet its obligations. All the Company's 
Level 1 investments are listed and are subject to a settlement period of three 
days. 
 
The following tables detail the Company's expected maturity for its financial 
assets and liabilities: 
 
2019                            Weighted    Less than 1 1-5 years      5+         Total 
                                 average           year             years 
                                interest 
                                    rate 
 
Assets                                                GBP         GBP       GBP             GBP 
 
Non-interest bearing                        239,314,317         -       -   239,314,317 
 
Variable interest rate             0.45%        920,009         -       -       920,009 
instruments 
 
Fixed interest rate                5.00%      4,035,128         -       -     4,035,128 
instruments 
 
Liabilities 
 
Non-interest bearing                        (5,493,857)         -       -   (5,493,857) 
 
                                            238,775,597         -       -   238,775,597 
 
 
 
2018                            Weighted    Less than 1 1-5 years      5+          Total 
                                 average           year             years 
                                interest 
                                    rate 
 
Assets                                                GBP         GBP       GBP              GBP 
 
Non-interest bearing                        243,950,480       -         -    243,950,480 
 
Variable interest rate             0.19%        965,789       -         -        965,789 
instruments 
 
Fixed interest rate                5.00%    3,983,468           -       -      3,983,468 
instruments 
 
Fixed interest rate               10.00%              - 1,336,718       -      1,336,718 
instruments 
 
Liabilities 
 
Non-interest bearing                       (12,158,971)       -         -   (12,158,971) 
 
                                            236,740,766 1,336,718     -      238,077,484 
 
Market risk 
 
The Company is exposed through its operations to market risk which encompasses 
interest rate risk, price risk and foreign exchange risk. 
 
Interest rate risk 
 
Interest rate risk is the risk that the value of financial instruments will 
fluctuate due to changes in market interest rates. The Company is exposed to 
interest rate risk as it has current account balances with variable interest 
rates. The Company's exposure to interest rates is detailed in the liquidity 
risk section of this note. Interest rate repricing dates are consistent with 
the maturities stated in the liquidity risk section of this note. 
 
The Investment Manager monitors market interest rates and will place interest 
bearing assets at best available rates but also taking into consideration the 
counterparty's credit rating and financial position. 
 
Interest rate sensitivity analysis 
 
The sensitivity analysis below has been based on the exposure to interest rates 
for financial assets held at the Statement of Financial Position date. An 
increase/decrease of 0.45 percentage points (2018: 0.15 percentage points) 
represents management's assessment of the effect of a possible change in 
interest rates due to the weighted average interest rate for variable interest 
rate instruments increasing from 0.19% to 0.45% for the year ended 30 June 
2019. If interest rates had been 0.45 percentage points (2018: 0.15 percentage 
points) higher/lower and all other variables were held constant: 
 
  * the Company's return for the year ended 30 June 2019 would have increased 
    by GBP16,714 (2018: GBP10,577); 
  * the Company's return for the year ended 30 June 2019 would have decreased 
    by GBPNil (2018: GBP1,305); 
  * there would have been no impact on equity reserves other than retained 
    earnings. 
 
Price risk 
 
Price risk is the risk that the fair value of investments will fluctuate as a 
result of changes in market prices. This risk is managed through 
diversification of the investment portfolio across business sectors. Generally 
the Company will not invest more than 20% of the Company's gross assets in any 
single investment at the time of investment. However, there is no guarantee 
that this will be the case after any investment is made, particularly where it 
is believed that an investment is exceptionally attractive. 
 
During the year to 30 June 2019 the Company entered into various index put 
derivative option contracts to protect the Company's value against a 
significant fall in the market. At 30 June 2019 GBP415,000 (2018: GBP1,080,000) of 
these contracts were outstanding. 
 
Refer to the tables in Note 9 for the Company's positions in derivative 
financial instruments. 
 
The following tables detail the Company's equity investments as at 30 June 
2019. 
 
2019                         Sector                              Value    Percentage of Company's 
Equity Investments                                                   GBP               Gross Assets 
 
Hurricane Energy plc         Oil and Gas                    52,610,205 
                                                                                               22 
 
Equals Group plc (formerly   Financial Services             47,702,796                         20 
'FairFX Group plc') 
 
Northgate plc                Transportation                 35,199,130 
                             Services                                                          14 
 
De La Rue plc                Consumer                       20,071,111                          8 
 
Leaf Clean Energy Company    Financial Services             17,286,537 
                                                                                               7 
 
STV Group plc                Media                          15,417,505                          6 
 
GI Dynamics Inc.             Medical Technology             14,799,550                          6 
 
Allied Minds plc             Financial Services              8,735,787                          4 
 
Other                        Various                        18,507,886                          8 
 
Total                                                      230,330,507 
                                                                                              95 
 
 
 
2018                         Sector                             Value       Percentage of Company's 
Equity Investments                                                  GBP                  Gross Assets 
 
Hurricane Energy plc         Oil and Gas                   60,425,938                            24 
 
Northgate plc                Transportation                34,323,506                            14 
                             Services 
 
FairFX Group plc             Financial Services            33,925,629                            14 
 
STV Group plc                Media                         31,211,184                            12 
 
De La Rue plc                Consumer                      18,321,963 
                                                                                                  7 
 
Woodford Patient Capital     Financial Services            15,477,592                             6 
Trust 
 
Leaf Clean Energy Company    Financial Services             8,639,177   3 
 
 
Other                        Various                       27,357,740                            11 
 
Total                                                     229,682,729                            91 
 
The following tables detail the investments in which the Company holds a 
greater than 20% holding in the underlying entities. These have been recognised 
at fair value as the Company is regarded as an investment entity as set out in 
Note 1. 
 
2019                         Place of Business  Place of            Percentage Ownership 
Equity Investments                              Incorporation                   Interest 
 
GI Dynamics Inc.             United States      United States                       65.1 
 
Leaf Clean Energy Company    United States      Cayman Islands                      25.3 
 
Equals Group plc             United Kingdom     United Kingdom                      23.5 
 
 
 
 
2018                         Place of Business  Place of            Percentage Ownership 
Equity Investments                              Incorporation                   Interest 
 
GI Dynamics Inc.             United States      United States                       48.3 
 
Leaf Clean Energy Company    United States      Cayman Islands                      29.9 
 
At the year end and assuming all other variables are held constant: 
 
  * If market prices of listed equity, debt and derivative financial 
    instruments had been 25% higher (2018: 25% higher), the Company's return 
    and net assets for the year ended 30 June 2019 would have increased by GBP 
    44,628,853, net of any impact on performance fee accrual (2018: GBP 
    44,331,322); 
  * If market prices of listed equity, debt and derivative financial 
    instruments had been 25% lower (2018: 25% lower), the Company's return and 
    net assets for the year ended 30 June 2019 would have increased by GBP 
    27,395,147, net of any impact on performance fee accrual (2018: increased 
    by GBP30,996,678), reflecting the effect of the derivative financial 
    instruments held at the reporting date; and 
  * There would have been no impact on the other equity reserves. 
 
Foreign exchange risk 
 
Foreign exchange risk is the risk that the value of financial instruments will 
fluctuate due to changes in foreign exchange rates and arises when the Company 
invests in financial instruments and enters into transactions that are 
denominated in currencies other than its functional currency. During the year 
the Company was exposed to foreign exchange risk arising from equity and debt 
investments and derivative financial instruments held in Australian Dollars, 
Euro and US Dollars (2018: Australian Dollars, Euro and US Dollars). 
 
The table below illustrates the Company's exposure to foreign exchange risk at 
30 June 2019: 
 
                                                                2019               2018 
 
                                                                   GBP                  GBP 
 
Financial assets designated at FVTPL: 
 
Listed equity investments denominated in                  14,799,550          4,176,092 
Australian Dollars 
 
Listed equity investments denominated in Euro                874,281                  - 
 
Debt instruments denominated in US Dollars                 4,035,127          5,320,186 
 
Warrant instruments denominated in US Dollars              6,585,514          1,155,782 
 
Total assets                                              26,294,472         10,652,060 
 
If the Australian Dollar weakened/strengthened by 10% (2018: 10%) against 
Sterling with all other variables held constant, the fair value of equity 
investments would increase/decrease by GBP1,479,955 (2018: GBP417,609). 
 
If the Euro weakened/strengthened by 10% against Sterling with all other 
variables held constant, the fair value of equity investments would increase/ 
decrease by GBP87,428. 
 
If the US Dollar weakened/strengthened by 10% (2018: 10%) against Sterling with 
all other variables held constant, the fair value of debt instruments would 
increase/decrease by GBP403,513 (2018: GBP532,019) and the fair value of the 
derivative financial instruments would increase/decrease by GBP658,551 (2018: GBP 
115,578). 
 
Fair value measurements 
 
The Company measures fair values using the following fair value hierarchy that 
prioritises the inputs to valuation techniques used to measure fair value. The 
hierarchy gives the highest priority to unadjusted quoted prices in active 
markets for identical assets or liabilities (Level 1 measurements) and the 
lowest priority to unobservable inputs (Level 3 measurements). The three levels 
of the fair value hierarchy under IFRS 13 are as follows: 
 
Level 1:    Quoted price (unadjusted) in an active market for an identical 
instrument. 
 
Level 2:    Valuation techniques based on observable inputs, either directly 
(i.e. as prices) or indirectly (i.e. derived from prices). This category 
includes instruments valued using: quoted prices in active markets for similar 
instruments; quoted prices for identical or similar instruments in markets that 
are considered less than active; or other valuation techniques for which all 
significant inputs are directly or indirectly observable from market data. 
 
Level 3:    Valuation techniques using significant unobservable inputs. This 
category includes all instruments for which the valuation technique includes 
inputs not based on observable data and the unobservable inputs have a 
significant effect on the instrument's valuation. This category includes 
instruments that are valued based on quoted prices for similar instruments for 
which significant unobservable adjustments or assumptions are required to 
reflect differences between the instruments. 
 
The level in the fair value hierarchy within which the fair value measurement 
is categorised in its entirety is determined on the basis of the lowest level 
input that is significant to the fair value measurement. For this purpose, the 
significance of an input is assessed against the fair value measurement in its 
entirety. If a fair value measurement uses observable inputs that require 
significant adjustment based on unobservable inputs, that measurement is a 
Level 3 measurement. Assessing the significance of a particular input to the 
fair value measurement in its entirety requires judgement, considering factors 
specific to the asset or liability. 
 
The determination of what constitutes 'observable' requires significant 
judgement by the Company. The Company considers observable data to be that 
market data that is readily available, regularly distributed or updated, 
reliable and verifiable, not proprietary, and provided by independent sources 
that are actively involved in the relevant market. 
 
The objective of the valuation techniques used is to arrive at a fair value 
measurement that reflects the price that would be received to sell an asset or 
transfer a liability in an orderly transaction between market participants at 
the measurement date. 
 
The following tables analyse within the fair value hierarchy the Company's 
financial assets measured at fair value at 30 June 2019 and 30 June 2018: 
 
                                            Level 1      Level 2    Level 3        Total 
 
2019                                              GBP            GBP          GBP            GBP 
 
Financial assets designated at FVTPL 
and derivatives held for trading: 
 
Equities - listed equity investments    224,804,265            -        -    224,804,265 
 
Equities - unlisted equity                        -            -  5,526,242    5,526,242 
investments 
 
Debt - loan notes                               -            -    4,035,127    4,035,127 
 
Derivatives - listed derivative             415,000          -          -        415,000 
instruments 
 
Derivatives - warrant instruments               -      6,585,515        -      6,585,515 
 
                                        225,219,265    6,585,515  9,561,369  241,366,149 
 
 
 
                                           Level 1      Level 2    Level 3        Total 
 
2018                                             GBP            GBP          GBP            GBP 
 
Financial assets designated at FVTPL 
and derivatives held for trading: 
 
Equities - listed equity investments   225,976,612          -          -    225,976,612 
 
 
Equities- unlisted equity investments            -            -  3,706,117    3,706,117 
 
Debt - loan notes                              -            -    5,320,186    5,320,186 
 
Derivatives - listed derivative          1,080,000          -          -      1,080,000 
instruments 
 
Derivatives - warrant instruments              -     12,926,938        -     12,926,938 
 
                                       227,056,612   12,926,938  9,026,303  249,009,853 
 
The Level 1 equity investments were valued by reference to the closing bid 
prices in each investee company on the reporting date. Johnston Press plc 
appointed administrators in November 2018 and accordingly the value of the 
investment was written down (2018: valued at GBP0.4 million). 
 
The Level 2 derivative instruments were valued using a Black Scholes valuation 
technique. 
 
The Level 3 equity investment in Board Intelligence was valued by reference to 
the valuation multiples of publicly-listed cloud software companies, after 
applying a discount equivalent to that which prevailed at the time of 
investment in March 2018, resulting in a write-up of GBP1,820,125. The loan notes 
were classified as Level 3 debt instruments as there was no observable market 
data. The Board has concluded that fair value is approximate to the share 
market price had the loan notes been converted to equity and valued at the 
closing bid price on the reporting date. 
 
For financial instruments not measured at FVTPL, the carrying amount is 
approximate to their fair value. 
 
Fair value hierarchy - Level 3 
 
The following table shows a reconciliation from the opening balances to the 
closing balances for fair value measurements in Level 3 of the fair value 
hierarchy: 
 
                                                                   2019             2018 
 
                                                                      GBP                GBP 
 
Opening balance at 1 July                                     9,026,303        3,846,387 
 
Purchases                                                     3,120,419        5,772,759 
 
Movement in unrealised gain                                   2,585,427           83,324 
 
Sales                                                                 -        (744,491) 
 
Conversion of loans                                         (7,257,760)                - 
 
Net realised gain                                             2,540,559          115,666 
 
Effect of exchange rate movements                             (453,579)         (47,342) 
 
Closing balance at 30 June                                    9,561,369        9,026,303 
 
The Company recognises transfers between levels of the fair value hierarchy on 
the date of the event of change in circumstances that caused the transfer. 
 
During the year ended 30 June 2019, GBP4,717,201 of loan notes were converted 
into listed equity investments at a value of GBP7,257,760, resulting in a 
transfer from Level 3 to Level 1. 
 
At the year end and assuming all other variables are held constant: 
 
  * If unobservable inputs in Level 3 debt investments had been 5% higher/lower 
    (2018: 5% higher/lower), the Company's return and net assets for the year 
    ended 30 June 2019 would have increased/decreased by GBP161,405 (2018: GBP 
    212,807), net of any impact on performance fee accrual in each case; 
  * If the comparable revenue multiples used in the valuation of Level 3 equity 
    investments had been 25% higher/lower, while all other inputs remained 
    constant, the Company's return and net assets for the year ended 30 June 
    2019 would have increased/decreased by GBP971,387, net of any impact on 
    performance fee accrual in each case. If the discount to comparable 
    multiples used in the valuation of Level 3 equity investments had been 25% 
    lower/higher, while all other inputs remained constant, the Company's 
    return and net assets for the year ended 30 June 2019 would have increased/ 
    decreased by GBP995,617, net of any impact on performance fee accrual in each 
    case; and 
 
  * There would have been no impact on the other equity reserves. 
 
The table below sets out information about significant unobservable inputs used 
at 30 June 2019 in measuring equity financial instruments categorised as Level 
3 in the fair value hierarchy. 
 
Valuation     Fair Value at Unobservable inputs  Factor       Sensitivity to changes in 
Method         30 June 2019                             significant unobservable inputs 
 
Discount to       5,526,242  Comparable Revenue    9.2x  The estimated fair value would 
Comparable                             multiple                            increase if: 
Company 
Multiples 
 
                                    Discount to   50.5%    - the Discount was decreased 
                            comparable multiple 
 
 
 
Valuation     Fair Value at Unobservable inputs  Factor       Sensitivity to changes in 
Method         30 June 2018                             significant unobservable inputs 
 
Price of          3,706,117                 n/a     n/a 
Recent 
Investment 
 
15.   RELATED PARTIES 
 
Richard Bernstein is a director and a member of the Investment Manager, a 
member of the Investment Adviser and a holder of 10,000 (2018: 10,000) Ordinary 
shares in the Company, representing 0.01% (2018: 0.01%) of the voting share 
capital of the Company at the year end. 
 
During the year the Company incurred management fees of GBP3,476,006 (2018: GBP 
3,249,247) of which GBP829,822 were outstanding at the year end (2018: GBPNil). The 
Company also incurred performance fees of GBP2,456,957 (2018: GBP12,095,146) of 
which GBP2,456,957 were outstanding and are included in trade and other payables 
as at 30 June 2019 (2018: GBP10,964,740). 
 
As at 30 June 2019 the Investment Manager held 6,313,326 Ordinary shares (2018: 
3,530,930) of the Company, representing 6.54% (2018: 3.63%) of the voting share 
capital. 
 
Following the conversion to listed equity of GI Dynamics' loans, the Company 
now holds 65.1% of the voting rights, causing GID to become an unconsolidated 
subsidiary. There is no restriction on the ability of GI Dynamics to pay cash 
dividends or repay loans, but it is unlikely that GID will make any 
distribution or loan repayments given its current strategy. During the year the 
Company participated in an equity placing and purchased convertible loan notes 
(neither of which were driven by a contractual obligation) for the purpose of 
supporting GID in pursuing its strategy. Subsequent to the year end, the 
Company committed to a further investment of $10 million. 
 
GI Dynamics Inc. was incorporated in Delaware, has five wholly-owned 
subsidiaries and its principal place of business is Boston. The five 
subsidiaries are as follows: 
 
  * GI Dynamics Securities Corporation, a Massachusetts-incorporated nontrading 
    entity; 
  * GID Europe Holding B.V., a Netherlands-incorporated nontrading holding 
    company; 
  * GID Europe B.V., a Netherlands-incorporated company that conducts certain 
    European business operations; 
  * GID Germany GmbH, a German-incorporated company that conducts certain 
    European business operations; and 
  * GI Dynamics Australia Pty Ltd, an Australia-incorporated company that 
    conducts Australian business operations. 
 
16.   DIRECTORS' INTERESTS AND REMUNERATION 
 
The interests of the Directors in the share capital of the Company at the year 
end and as at the date of this report are as follows: 
 
                              2019                           2018 
 
                         Number of       Total          Number of       Total 
                   Ordinary shares      voting    Ordinary shares      voting 
                                        rights                         rights 
 
Christopher                 15,000       0.02%             10,000       0.01% 
Waldron(2) 
 
Jane Le Maitre(1)            6,000       0.01%                  -           - 
 
Total                       21,000       0.03%             10,000       0.01% 
 
(1) Ordinary shares held indirectly 
 
(2) On 22 July 2019, Chris Waldron purchased a further 5,000 Ordinary shares. 
Following the purchase, the total number of Ordinary shares held by Chris 
Waldron was 20,000. 
 
During the year the Directors earned the following remuneration in the form of 
Directors' fees from the Company: 
 
                                                               2019                2018 
 
                                                                  GBP                   GBP 
 
William Collins(1)                                                -              16,753 
 
Sarah Evans(2)                                                    -              17,808 
 
Nigel Ward                                                   37,500              33,750 
 
Christopher Waldron(3)                                       45,000              36,741 
 
Jane Le Maitre(4)                                            40,000              32,985 
 
Fred Hervouet(5)                                             32,500              17,120 
 
Total                                                       155,000             155,157 
 
(1) Resigned 23 November 2017 
 
(2) Resigned 4 January 2018 
 
(3) Chairman of the Company with effect from 23 November 2017 
 
(4) Chairman of Audit Committee with effect from 4 January 2018 
 
(5) Appointed 6 December 2017 
 
The level of remuneration of the Directors reflects the time commitment and 
responsibilities of their roles. Following a review of the Directors' 
remuneration for similar AIM listed investment companies and, after 
benchmarking these against the current fees and recognising the level of 
activity of the Company and increased regulatory obligations on the Company, 
the Board concluded in September 2017 that the Directors' fees should be 
increased with effect from 1 January 2019. Following this review, the Chairman 
is entitled to annual remuneration of GBP47,500 (2018: GBP42,500). The Chairman of 
the Audit Committee is entitled to annual remuneration of GBP42,500 (2018: GBP 
37,500) and the Chairman of the Remuneration and Management Engagement 
Committee is entitled to annual remuneration of GBP40,000 (2018: GBP35,000), of 
which GBP2,500 relates to representing the Board at the Risk Committee meetings 
of the Investment Manager. Independent Directors are entitled to annual 
remuneration of GBP35,000 (2018: GBP30,000). 
 
At 30 June 2019, Directors' fees of GBP41,250 (2018: GBP36,250) were accrued within 
trade and other payables. 
 
17.   MATERIAL AGREEMENTS 
 
The Company has entered into the following material agreements: 
 
Crystal Amber Asset Management (Guernsey) Limited 
 
Under the management agreement, the Investment Manager receives a management 
fee of 2% applied to the Market Capitalisation of the Company at 30 June 2013 
(GBP73.5 million) (the "Base Amount"). To the extent that an amount equal to the 
lower of the Company's NAV and market capitalisation, at the relevant time of 
calculation, exceeds the Base Amount (the "Excess Amount"), the applicable fee 
rate on the Excess Amount will be 1.5%. 
 
The Investment Manager is entitled to a performance fee in certain 
circumstances. This fee is calculated by reference to the increase in NAV per 
Ordinary share over the course of each performance period. 
 
Payment of the performance fee is subject to: 
 
1.        the achievement of a performance hurdle condition: the NAV per 
Ordinary share at the end of the relevant performance period must exceed an 
amount equal to the placing price, increased at a rate of; (i) 7% per annum on 
an annual compounding basis in respect of that part of the performance period 
which falls from (and including) the date of Admission up to (but not 
including) the date of the 2013 Admission; (ii) 8% per annum on an annual 
compounding basis in respect of that part of the performance period which falls 
from (and including) the date of the 2013 Admission up to (but not including) 
the date of the 2015 Admission; and (iii) 10% per annum on an annual 
compounding basis in respect of that part of the performance period which falls 
from (and including) the date of the 2015 Admission up to the end of the 
relevant performance period (with all dividends and other distributions paid in 
respect of all outstanding Ordinary shares (on a per share basis) during any 
performance period being deducted on their respective payment dates (and after 
compounding the distribution amount per share at the relevant annual rate or 
rates for the period from and including the payment date to the end of the 
performance period) ("the Basic Performance Hurdle"). Such Basic Performance 
Hurdle at the end of a Performance Period is compounded at the relevant annual 
rate to calculate the initial per share hurdle level for the next performance 
period, which will subsequently be adjusted for any dividends or other 
distributions paid in respect of all outstanding Ordinary shares during that 
performance period; and 
 
2.        the achievement of a "high-water mark": the NAV per Ordinary share at 
the end of the relevant performance period must be higher than the highest 
previously reported NAV per Ordinary share at the end of a performance period 
in relation to which a performance fee, if any, was last earned (less any 
dividends or other distributions in respect of all outstanding Ordinary shares 
declared (on a per share basis) since the end of the performance period in 
relation to which a performance fee was last earned). 
 
If the Basic Performance Hurdle is met, and the high-water mark exceeded, the 
performance fee is an amount equal to 20% of the excess of the NAV per Ordinary 
share at the end of the relevant performance period over the higher of: 
 
1.        the Basic Performance Hurdle; 
 
2.        the NAV per Ordinary share at the start of the relevant performance 
period (less any dividends or other distributions in respect of all outstanding 
Ordinary shares declared (on a per share basis) since then; and 
 
3.        the high-water mark (in each case on a per Ordinary share basis) 
multiplied by the time weighted average of the number of Ordinary Shares in 
issue in the Performance Period. 
 
The excess is multiplied by the time weighted average of the number of Ordinary 
shares in issue in the performance period, which shall only include such number 
of Ordinary shares as reduced by the number of any Ordinary shares redeemed or 
repurchased by the Company. If the Company issues new shares during a relevant 
performance period, the performance fee in respect of that period shall be 
adjusted in such manner to be fair and reasonable to take account of the new 
issue of shares. If a time-weighted number of shares calculation is applied to 
a new pot of shares issued, then the denominator for the calculation shall be 
the number of days from the date of such issuance until the end of the relevant 
Performance Period, inclusive. During 2019, the Company agreed that performance 
fees accruing in respect of the current year be calculated as if no charitable 
shares had been issued during that year. 
 
Depending on whether the Ordinary shares are trading at a discount or a premium 
to the Company's NAV per share when the performance fee becomes payable, the 
performance fee will be either payable in cash (subject to the restrictions set 
out below) or satisfied by the sale of Ordinary shares out of Treasury or by 
the issue of new fully paid Ordinary shares (the number of which shall be 
calculated as set out below): 
 
  * If Ordinary shares are trading at a discount to the NAV per Ordinary share 
    when the performance fee becomes payable, the performance fee shall be 
    payable in cash. Within a period of one calendar month after receipt of 
    such cash payment, the Investment Manager shall be required to purchase 
    Ordinary shares in the market of a value equal to such cash payment. 
 
  * If Ordinary shares are trading at, or at a premium to, the NAV per Ordinary 
    share when the performance fee becomes payable, the performance fee shall 
    be satisfied by the sale of Ordinary shares out of Treasury or by the issue 
    of new fully paid Ordinary shares. The number of Ordinary shares that shall 
    become payable shall be a number equal to the performance fee payable 
    divided by the closing mid-market price per Ordinary share on the date on 
    which such performance fee became payable. 
 
Performance fee for year ended 30 June 2019 
 
As a result of the issues of Ordinary shares on 2 August 2018 and 14 March 
2019, the performance fee calculation has been accrued for 30 June 2019 based 
on the weighted average number of ordinary shares outstanding excluding 
charitable shares. At 30 June 2019, the Basic Performance Hurdle was 214.53 
pence (as adjusted for all dividends paid during the performance period on 
their respective payment dates, compounded at the applicable annual rate) 
(2018: 200.13 pence), and the high-water mark (adjusted for dividends) was 
239.62 pence. 
 
The NAV per share before any accrual for the performance fee payable in respect 
of the year was 252.34 pence and the time weighted average number of shares was 
96,542,152, excluding the issuance of charitable shares in each case. 
Accordingly, a performance fee was payable equating to 20% of the excess of NAV 
per share (excluding the impact of charitable issuance during the year) over 
the high-water mark, multiplied by the time weighted average number of shares 
excluding charitable shares. The performance fee for the year ended 30 June 
2019 amounted, in aggregate, to GBP2,456,957 (2018: GBP12,095,146) of which GBP 
2,456,957 was payable at 30 June 2019 (2018: GBP10,964,740). 
 
Estera International Fund Managers (Guernsey) Limited 
 
The Administrator provides administration and company secretarial services to 
the Company. For these services, the Administrator is paid an annual fee of 
0.12% (2018: 0.12%) of that part of the NAV of the Company up to GBP150 million 
and 0.1% (2018: 0.1%) of that part of the NAV over GBP150 million (subject to a 
minimum of GBP75,000 per annum). During the year, the Company incurred 
administration fees of GBP267,031 (2018: GBP234,486). 
 
ABN AMRO (Guernsey) Limited* 
 
Under the custodian agreement, the Custodian receives a fee, calculated and 
payable quarterly in arrears at the annual rate of 0.05% (2018: 0.05%) of the 
NAV per annum, subject to a minimum fee of GBP25,000 per annum. Transaction 
charges of GBP100 per trade for the first 200 trades processed in a calendar year 
and GBP75 per trade thereafter are also payable. During the year, the Company 
incurred custodian fees of GBP114,705 (2018: GBP98,666). 
 
*Effective from 15 July 2019, Butterfield Bank (Channel Islands) Limited 
acquired ABN AMRO (Guernsey) Limited. 
 
18.   ULTIMATE CONTROLLING PARTY 
 
In the opinion of the Directors, on the basis of the shareholdings advised to 
them, the Company has no ultimate controlling party. 
 
19.   POST BALANCE SHEET EVENTS 
 
On 10 July 2019, the Company declared an interim dividend of GBP2,369,550, 
equating to 2.5 pence per Ordinary share, which was paid on 19 August 2019 to 
shareholders on the register on 19 July 2019. 
 
On 22 July 2019, Chris Waldron purchased a further 5,000 Ordinary shares. 
Following the purchase, the total number of Ordinary shares held by Chris 
Waldron was 20,000. 
 
On 9 August 2019, the Company reported that its unaudited NAV at 31 July 2019 
was 234.81 pence per Ordinary share. 
 
On 10 September 2019, the Company reported that its unaudited NAV at 31 August 
2019 was 224.06 pence per Ordinary share. 
 
On 11 September 2019, the Company approved a further issue of 125,000 shares to 
five separate charitable organisations. 
 
The Company purchased 1,115,000 of its own Ordinary shares during the period 
between 1 July 2019 and 11 September 2019, which were held as Treasury shares. 
Following these purchases, the total number of Ordinary shares held as Treasury 
shares by the Company was 4,642,782. 
 
                     Glossary of Capitalised Defined Terms 
 
"Admission" means admission of the Ordinary shares on 17 June 2008, to the 
Official List and/or admission to trading on the Alternative Investment Market 
of the London Stock Exchange, as the context may require; 
 
"AEOI Rules" means the Automatic Exchange of Information Rules; 
 
"AGM" or "Annual General Meeting" means the annual general meeting of the 
Company; 
 
"AIF" means Alternative Investment Funds; 
 
"AIFM" means AIF Manager; 
 
"AIFM Directive" means the EU Alternative Investment Fund Managers Directive 
(no. 2011/61/EU); 
 
"AIC" means the Association of Investment Companies; 
 
"AIC Code" means the AIC Code of Corporate Governance; 
 
"AIC Guide" means the AIC's Corporate Governance Guide for Investment 
Companies, dated July 2016; 
 
"AIM" means the Alternative Investment Market of the London Stock Exchange; 
 
"Annual Report" means the annual publication of the Company to the shareholders 
to describe its operations and financial conditions, together with the 
Company's financial statements; 
 
"ARR" means annual recurring revenue; 
 
"Articles of Incorporation" or "Articles" means the articles of incorporation 
of the Company; 
 
"Audited Financial Statements" or "Financial Statements" means the audited 
annual financial statements of the Company, including the Statement of Profit 
or Loss and Other Comprehensive Income, the Statement of Financial Position, 
the Statement of Changes in Equity, the Statement of Cash Flows and associated 
notes; 
 
"Australian Stock Exchange" means the Australian Stock Exchange Limited; 
 
"Bank of England" means the Bank of England, the central bank of the UK; 
 
"Black Scholes" means the Black Scholes model, a mathematical model of a 
financial market containing derivative instruments; 
 
"Board" or "Directors" or "Board of Directors" means the directors of the 
Company; 
 
"BOE" means barrels of oil equivalent; 
 
"Brexit" means the departure of the UK from the European Union; 
 
"CEO" means chief executive officer; 
 
"CE Mark" means a certification mark that indicates conformity with health, 
safety, and environmental protection standards; 
 
"Chancery Court" or "Court of Chancery" means a court that is authorised to 
apply principles of equity, as opposed to those of law, to cases brought before 
it; 
 
"Channel 3" means the British commercial network legally named Channel 3; 
 
"Committee" means the Audit Committee of the Company; 
 
"Company" or "Fund" means Crystal Amber Fund Limited; 
 
"Companies Law" means the Companies (Guernsey) Law, 2008, (as amended); 
 
"CRS" means Common Reporting Standard; 
 
"EBITDA" means earnings before interest, taxes, depreciation and amortisation; 
 
"EGM" or "Extraordinary General Meeting" means an extraordinary general meeting 
of the Company; 
 
"EndoBarrier" means a minimally invasive medical device for treatment of type 2 
diabetes; 
 
"EPS" means Early Production System; 
 
"Equals" means Equals Group plc; 
 
"FATCA" means Foreign Account Tax Compliance Act; 
 
"FCA" means the Financial Conduct Authority; 
 
"FDA" means the United States Food and Drug Administration; 
 
"Floating Production and Storage" means a floating vessel used by the offshore 
oil and gas industry; 
 
"FRC" means the Financial Reporting Council; 
 
"FRC Code" means the UK Corporate Governance Code published by the FRC; 
 
"FTSE" means the Financial Times Stock Exchange; 
 
"FVTPL" means Fair Value Through Profit or Loss; 
 
"General Counsel" means the main lawyer who gives legal advice to a company; 
 
"GFSC" means the Guernsey Financial Services Commission; 
 
"GFSC Code" means the GFSC Finance Sector Code of Corporate Governance; 
 
"GID" means GI Dynamics, Inc.; 
 
"Gross Asset Value" means the value of the assets of the Company, before 
deducting its liabilities, and is expressed in Pounds Sterling; 
 
"HbA1c" means average blood sugar levels test; 
 
"HQ" means headquarters; 
 
"IAS" means international accounting standards as issued by the Board of the 
International Accounting Standards Committee; 
 
"IASB" means the International Accounting Standards Board; 
 
"IFRIC" means the IFRS Interpretations Committee, which issues IFRIC 
interpretations following approval by the IASB; 
 
"IFRS" means the International Financial Reporting Standards, being the 
principles-based accounting standards, interpretations and the framework by 
that name issued by the International Accounting Standards Board; 
 
"Interim Financial Statements" means the unaudited condensed interim financial 
statements of the Company, including the Condensed Statement of Profit or Loss 
and Other Comprehensive Income, the Condensed Statement of Financial Position, 
the Condensed Statement of Changes in Equity, the Condensed Statement of Cash 
Flows and associated notes; 
 
"Interim Report" means the Company's interim report and unaudited condensed 
financial statements for the period ended 31 December; 
 
"Investment Management Agreement" means the agreement between the Company and 
the Investment Manager, dated 16 June 2008, as amended on 21 August 2013, 
further amended on 27 January 2015 and further amended on 12 June 2018; 
 
"iOS" means a mobile operating system created and developed by Apple Inc.; 
 
"IPEV Capital Valuation Guidelines" means the International Private Equity and 
Venture Capital Valuation Guidelines on the valuation of financial assets; 
 
"ITV" means a British free-to-air television channel; 
 
"Kay Review" means the Kay Review of UK equity markets and long-term decision 
making as published by the UK Government's Department for Business, Innovation 
and Skills; 
 
"KPMG" means KPMG Channel Islands Limited; 
 
"LSE" or "London Stock Exchange" means the London Stock Exchange plc; 
 
"Market Capitalisation" means the total number of Ordinary shares of the 
Company multiplied by the closing share price; 
 
"MW" means megawatt; 
 
"NAV" or "Net Asset Value" means the value of the assets of the Company less 
its liabilities as calculated in accordance with the Company's valuation 
policies and expressed in Pounds Sterling; 
 
"NAV per share" means the Net Asset Value per Ordinary share of the Company and 
is expressed in pence; 
 
"NMPI" means Non-Mainstream Pooled Investments; 
 
"Official List" is the list maintained by the Financial Conduct Authority 
(acting in its capacity as the UK Listing Authority) in accordance with Section 
74(1) of the Financial Services and Markets Act 2000; 
 
"Ordinary share" means an allotted, called up and fully paid Ordinary share of 
the Company of GBP0.01 each; 
 
"Phantom Plan" means the practice within Allied Minds plc of paying to 
executives 10% of gains arising from any successful individual investment 
independent of the scale of losses incurred on other investments; 
 
"R&D" means research and development; 
 
"Risk Committee" means the Risk Committee of the Investment Manager; 
 
"S&P" means Standard & Poor's Credit Market Services Europe Limited, a credit 
rating agency registered in accordance with Regulation (EC) No 1060/2009 with 
effect from 31 October 2011; 
 
"SaaS" means a Software-as-a-Service; 
 
"Smaller Companies Index" means an index of small market capitalisation 
companies; 
 
"SME" means small and medium sized enterprises; 
 
"SORP" means Statement of Recommended Practice; 
 
"SPS" means Spectrum Payment Services Ltd; 
 
"STEP-1" means the US clinical trial of the EndoBarrier due to be undertaken by 
GI Dynamics Inc.; 
 
"Stewardship Code" means the Stewardship Code of the Company adopted from 14 
June 2016, as published on the Company's website www.crystalamber.com; 
 
"Supreme Court" means the highest court in the federal judiciary of the US; 
 
"Target Multiple" means the maximum multiple of the original investment that 
could be paid, given value drivers, and receive a desired return on investment; 
 
"TISE" means The International Stock Exchange; 
 
"Treasury" means the reserve of Ordinary shares that have been repurchased by 
the Company; 
 
"Treasury shares" means Ordinary shares in the Company that have been 
repurchased by the Company and are held as Treasury shares; 
 
"Trustpilot" means a consumer review website; 
 
"TV" means television; 
 
"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern 
Ireland; 
 
"UK Stewardship Code" means the UK Stewardship Code published by the FRC in 
July 2010 and revised in September 2012; 
 
"US" means the means the United States of America, its territories and 
possessions, any state of the United States and the District of Columbia; 
 
"US$" or "$" means United States dollars. 
 
"US Federal Reserve" means the Federal Reserve System, the central banking 
system of the US; 
 
"UTV" means a British free-to-air television channel; and 
 
"GBP" or "Pounds Sterling" or "Sterling" means British pounds sterling and 
"pence" means British pence. 
 
                       Directors and General Information 
 
Directors                                   Investment Manager 
Christopher Waldron (Chairman)              Crystal Amber Asset Management (Guernsey) 
Fred Hervouet                               Limited 
Jane Le Maitre (Chairman of Audit           PO Box 286 
Committee)                                  Floor 2, Trafalgar Court 
Nigel Ward (Chairman of Remuneration and    Les Banques, St Peter Port 
Management Engagement Committee)            Guernsey GYI 4LY 
 
Investment Adviser                          Nominated Adviser 
Crystal Amber Advisers (UK) LLP             Allenby Capital Limited 
17c Curzon Street                           5 St. Helen's Place 
London W1J 5HU                              London EC3A 6AB 
 
Administrator and Secretary                 Legal Advisers to the Company 
Estera International Fund Managers          As to English Law 
(Guernsey) Limited                          Norton Rose Fulbright LLP 
PO Box 286                                  3 More London Riverside 
Floor 2, Trafalgar Court                    London SE1 2AQ 
Les Banques, St Peter Port 
Guernsey GYI 4LY                            As to Guernsey Law 
                                            Carey Olsen 
Broker                                      PO Box 98 
Winterflood Investment Trusts               Carey House 
The Atrium Building                         Les Banques 
Cannon Bridge House                         St. Peter Port 
25 Dowgate Hill                             Guernsey GY1 4BZ 
London EC4R 2GA 
                                            Custodian 
Independent Auditor                         Butterfield Bank (Channel Islands) Limited 
KPMG Channel Islands Limited                PO Box 253 
Glategny Court                              Martello Court 
Glategny Esplanade                          Admiral Park 
St. Peter Port                              St. Peter Port 
Guernsey GY1 1WR                            Guernsey GY1 3QJ 
 
Registered Office                           Registrar 
PO Box 286                                  Link Asset Services 
Floor 2, Trafalgar Court                    65 Gresham Street 
Les Banques, St Peter Port                  London 
Guernsey GYI 4LY                            EC2V 7NQ 
 
Identifiers 
ISIN: GG00B1Z2SL48 
Sedol: B1Z2SL4 
Ticker: CRS 
Website: crystalamber.com 
 
 
 
END 
 

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