TIDMBSRT
RNS Number : 9968K
Baker Steel Resources Trust Ltd
30 August 2012
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
30 August 2012
BAKER STEEL RESOURCES TRUST LTD
(the "Company")
Half-Yearly Report and Unaudited Condensed Interim Financial
Statements
For the period ended 30 June 2012
The Company has today, in accordance with DTR 6.3.5, released
its Half-Yearly Report and Unaudited Condensed Interim Financial
Statements for the period ended 30 June 2012. The Report is
available via www.bakersteelresourcestrust.com and will shortly be
submitted to the National Storage Mechanism and will also shortly
be available for inspection at www.hemscott.com/nsm.do
Further details of the Company and its investments are available
on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
RBC Capital Markets +44 20 7653 4000
Martin Eales
Winterflood Investment Trusts +44 20 3100 0250
James Moseley
Pelham Bell Pottinger
Lorna Spears +44 20 7861 3883
Joanna Boon +44 20 7861 3867
HSBC Securities Services (Guernsey) Limited
Company Secretary +44 (0)1481 707 000
MANAGEMENT AND ADMINISTRATION
DIRECTORS: Howard Myles (Chairman)
Edward Flood
Charles Hansard
Clive Newall
Christopher Sherwell
all of whom are non-executive directors
REGISTERED OFFICE: Arnold House
St. Julian's Avenue
St. Peter Port
Guernsey
Channel Islands
MANAGER: Baker Steel Capital Managers (Cayman) Limited
PO Box 309
George Town
Grand Cayman KY1-1104
Cayman Islands
INVESTMENT MANAGER: Baker Steel Capital Managers LLP
86 Jermyn Street
London SW1Y 6JD
England
United Kingdom
BROKERS: RBC Capital Markets
71 Queen Victoria Street
London EC4V 4DE
United Kingdom
Winterflood Securities Limited
Cannon Bridge House
25 Dowgate Hill
London EC4R 2GA
United Kingdom
SOLICITORS TO THE COMPANY: Simmons & Simmons
(as to English law) CityPoint
One Ropemaker Street
London EC2Y 9SS
United Kingdom
ADVOCATES TO THE COMPANY: Ogier
(as to Guernsey law) Ogier House
St. Julian's Avenue
St. Peter Port
Guernsey GY1 1WA
Channel Islands
ADMINISTRATOR & COMPANY SECRETARY: HSBC Securities Services (Guernsey) Limited
Arnold House
St. Julian's Avenue
St. Peter Port
Guernsey GY1 3NF
Channel Islands
SUB-ADMINISTRATOR TO THE COMPANY: HSBC Securities Services (Ireland) Limited
1 Grand Canal Square
Grand Canal Harbour
Dublin 2
Ireland
CUSTODIAN TO THE COMPANY: HSBC Institutional Trust Services (Ireland) Limited
1 Grand Canal Square
Grand Canal Harbour
Dublin 2
Ireland
AUDITORS: Ernst & Young LLP
Royal Chambers
St. Julian's Avenue
St. Peter Port
Guernsey GY1 4AF
Channel Islands
REGISTRAR: Capita Registrars (Guernsey) Limited
Longue Hougue House
St. Sampson
Guernsey GY2 4JN
Channel Islands
PRINCIPAL BANKER: HSBC Bank plc
8 Canada Square
London E14 5HQ
United Kingdom
DIRECTORS' REPORT
For the period from 1 January 2012 to 30 June 2012
To Shareholders of Baker Steel Resources Trust Limited
The Board is pleased to present the Company's Half-Yearly
Financial Report for the six months to 30 June 2012.
This Directors' Report has been produced solely to provide
additional information to Shareholders as a body, as required by
the UK Listing Authority's Disclosure and Transparency Rules. It
should not be relied upon by Shareholders or any other party for
any other purpose.
This Directors' Report relates to the period for the six months
to 30 June 2012 and contains information that covers this period
and up to the date of publication of this Interim Report. Please
note that more up to date performance information, including the
monthly report for the period ending 31 July 2012, is available on
the Company's website www.bakersteelresourcestrust.com.
The objective of the Company is to seek capital growth over the
long term by investing through a focused global portfolio
consisting principally of the equities, or related instruments, of
natural resources companies. These investments will be
predominantly in private companies with strong development projects
and focused management, but also in listed securities to exploit
value inherent in market inefficiencies.
Financial Performance
The unaudited net asset value per Ordinary Share as at 30 June
2012 was 114.9p per share, down 12.5% over the six months. During
this period the HSBC Global Mining Index was down 9.8%.
For the purpose of calculating the net asset value per share,
unquoted investments are carried at fair value as at 30 June 2012
as determined by the Directors and quoted investments are carried
at last traded price as at 29 June 2012.
Net assets at 30 June 2012 comprised the following:
GBPm % net assets
Unquoted Investments 72.1 94.9
Quoted Investments 5.9 7.7
Net Cash, Equivalents and Accruals (2.0) (2.6)
-------- -------
76.0 100.0
Issue of Shares
The Company was admitted to trading on the London Stock Exchange
on 28 April 2010. On that date, 30,468,865 Ordinary Shares and
6,093,772 Subscription Shares were issued pursuant to a placing and
offer for subscription and 35,554,224 Ordinary Shares and 7,110,822
Subscription Shares were issued pursuant to a scheme of
reorganisation of Genus Capital Fund.
In addition 10,000 Management Ordinary Shares were issued.
Following the exercise of Subscription Shares at the end of
September 2010, 7,543 Ordinary Shares were issued and as a result,
the Company had 66,030,632 Ordinary Shares and 13,197,051
Subscription Shares in issue at 31 December 2010.
Following the exercise of Subscription Shares at the end of
March 2011, 2,429 Ordinary Shares were issued and as a result,
the
Company had 66,033,061 Ordinary Shares and 13,194,622
Subscription Shares in issue at 31 December 2011.
Following the exercise of 107,549 Subscription Shares at the end
of March 2012, the Company has a total of 66,140,610 Ordinary
Shares and 13,087,073 Subscription Shares in issue.
The Ordinary Shares are currently admitted to the Premium
Listing segment of the Official List. Following the expiry of the
Transitional Provision contained in LR TR 7 of the Listing Rules,
effective 1 June 2012 Subscription Shares of no par value were
assigned to the Standard Segment of the Official List.
Going Concern
The Directors have made an assessment of the Company's ability
to continue as a going concern and are satisfied that it has
the
resources to continue in business for the foreseeable future.
Although payables exceeded cash at 30 June 2012, this was entirely
owing to the accrual of the performance fee due to the Manager. The
Manager has agreed not to seek payment of the performance fee until
the Company has sufficient cash. Furthermore, the Company holds
listed securities that can be realised if necessary to meet
liabilities. The Directors are not aware of any material
uncertainties that may cast significant doubt upon the Company's
ability to continue as a going concern. Therefore, the interim
financial statements have been prepared on a going concern
basis.
Principal Risks and Uncertainties
The principal risks facing the Company relate to the Company's
investment activities. These risks are mainly market risk
(comprising market price risk, currency risk and interest rate
risk), commodity price risk, liquidity risk and credit risk, in
addition to mining development risk, licencing risk and emerging
market risk. An explanation of these risks is contained in the
Company's prospectus dated 31 March 2010 and the Company's Annual
Report and Audited Financial Statements for the period ended 31
December 2011, both available on the Company's website
www.bakersteelresourcestrust.com.
A further risk facing the Company is regulatory risk (that the
loss of the Company's investment status or a breach of the Rules of
the UK Listing Authority, the London Stock Exchange or the Guernsey
Financial Services Commission, could have adverse financial
consequences and cause reputational damage).
The principal risks and uncertainties that the Company is
exposed to through mining and mineral development related markets
have not changed significantly since the publication of the
Company's Annual Report and Audited Financial Statements for the
period ended 31 December 2011 and are not anticipated to change for
the remainder of 2012.
Director' Interests
The Directors' interests in the share capital of the Company at
30 June 2012:
Number of Number of
Ordinary Shares Subscription
Shares
---------------------- ----------------- --------------
Edward Flood 65,000 13,000
---------------------- ----------------- --------------
Christopher Sherwell 25,000 5,000
---------------------- ----------------- --------------
Clive Newall 25,000 5,000
---------------------- ----------------- --------------
Mr Sherwell also has an indirect interest in the shares of the
Company through an investment in another fund managed by the
Manager.
Signed for and on behalf of the Directors
Howard Myles
Chairman
22 August 2012
INVESTMENT MANAGER'S REPORT
For the period from 1 January 2012 to 30 June 2012
Top 10 Holdings - 30 June 2012
% of NAV
Ivanplats Limited* 28.7%
Gobi Coal & Energy Limited* 23.1%
China Polymetallic Mining Limited 8.8%
Ironstone Resources Limited 7.9%
Ferrous Resources Limited 7.2%
Black Pearl Limited Partnership 6.2%
Bilboes Holdings (Private) Limited 5.2%
Polar Silver Resources Limited/Argentum 4.9%
Metals Exploration plc 3.2%
South American Ferro Metals Limited 2.8%
Other Investments 4.6%
Net Cash and Equivalents (2.6%)
31 December 2011
Ivanplats Limited* 25.4%
Gobi Coal & Energy Limited* 20.4%
Ferrous Resources Limited 12.7%
China Polymetallic Mining Limited 8.8%
Ironstone Resources Limited 6.9%
Black Pearl Limited Partnership 5.2%
Bilboes Holdings (Private) Limited 4.5%
Polar Silver Resources Ltd/Argentum 4.1%
Metals Exploration plc 3.9%
South American Ferro Metals
Limited 3.1%
Other Investments 5.9%
Net Cash, Equivalents and Accruals (0.9%)
* represented less than 20% in aggregate of the value of gross
assets as at the date of the last relevant acquisition
Review
At the end of June 2012, Baker Steel Resources Trust Limited was
fully invested. Small top-up investments in Polar Silver Resources
Limited, Bilboes Holdings (Private) Limited and Copperbelt Minerals
Limited have been made during the period totalling less than 0.5%
of net assets.There have been no other new investments or
realisations during the period. During the half, the NAV per share
fell 12.5% to 114.9 pence largely due to decreases in the carrying
values of Ferrous Resources Limited ("Ferrous") and Copperbelt
Minerals Limited as well as falls in the market values of the
listed investments in the portfolio.
The largest contributor to the fall in NAV per share (6.5
percentage points) during the period was from a decision by the
Company to reduce the carrying value of its interest in Ferrous,
following the reported sale of part of its stake in Ferrous by
Harbinger Capital Partners LLC, which had held approximately 26% of
the shares of Ferrous. In February 2012, Ferrous announced the
appointment of a new Chief Executive, Jayme Niccolato Correa, who
was previously with major iron ore producers Vale and CSN. In June
2012, Ferrous announced that following a comprehensive review of
its strategic options and operations by Mr Correa, Ferrous had
decided upon a new strategy for the development of its projects and
since that time, the Investment Manager has met with Mr Correa in
order to understand better the new strategy. The revised plan is
for step-by-step organic growth to production of an initial 5
million tonnes of iron ore per annum from 2013 which will reduce
funding requirements in the short term as opposed to the previous
target of 24 million tonnes per annum. However, following the end
of the period the carrying value was further reduced by 16.7% in
line with significant "grey market" trading.
Despite positive operating results from several companies in the
listed part of the portfolio they suffered significant share price
falls during the period alongside the general malaise in mining
equity markets. China Polymetallic Mining Limited (down 12.6%) has
reported it is well on track to ramp up its Shizishan Silver Lead
Zinc Mine; South American Ferro Metals Limited ("SAFM") (down
18.8%) announced that it has completed construction of a
concentrator at its Ponto Verde iron ore mine in Brazil which will
increase saleable product from Ponto Verde by around 50% at minimal
extra operating cost and therefore will have a materially positive
impact on SAFM's cashflow; Forbes and Manhattan Coal Corp (down
44.1%) announced revenues increased by 124% last year. The
important factor to note with all three of these companies is that
they are in production and generating strong cashflows which means
they do not need to access the current weak markets to fund their
continued development.
The largest company in the portfolio, Ivanplats Limited
("Ivanplats"), has also made good progress at its two major
projects, producing updated NI 43-101 reports for both its Kamoa
copper project in the Democratic Republic of Congo and its Platreef
platinum nickel project in South Africa. Gobi Coal & Energy
Limited ("Gobi") is laying the groundwork to commence production at
its Shinejinst coking coal project in Mongolia, however recent
weakness in global coking coal prices has translated into a
significant reduction in the price of coal delivered to the Chinese
border. This combined with current equity market conditions
indicates a reduced likelihood of Gobi achieving its planned IPO in
the near future and therefore funding for the Phase 2 expansion of
its Shinejinst Mine in Mongolia. Subsequent to the end of the
period, the Company has reduced its carrying value of Gobi by
approximately 23%.
At 30 June 2012 Price / Index % Change in % Change from
Level Six Months Inception
-------------------------------------------- -------------- ------------ --------------
Net Asset Value (pence/share) 114.9 -12.5% +17.4%*
-------------------------------------------- -------------- ------------ --------------
Ordinary Share Price (pence/share) 93.5 +21.0% -6.5%**
-------------------------------------------- -------------- ------------ --------------
Subscription Share Price (pence/share) 13.0 -27.8% n/a
-------------------------------------------- -------------- ------------ --------------
MSCI World Index 312.11 +4.2% +1.3%
-------------------------------------------- -------------- ------------ --------------
HSBC Global Mining Index 1,040.31 -9.8% -20.0%
-------------------------------------------- -------------- ------------ --------------
CRB Index 284.19 -6.9% +4.0%
-------------------------------------------- -------------- ------------ --------------
Chinese Domestic Iron Ore - Hebei/Tangshan
(US$/t) 176 -5.9% -8.3%
-------------------------------------------- -------------- ------------ --------------
Copper (US$/t) 7,691.75 +1.3% +3.2%
-------------------------------------------- -------------- ------------ --------------
Gold (US$/oz) 1,597.40 +2.2% +36.8%
-------------------------------------------- -------------- ------------ --------------
Source: Bloomberg closing 27/4/10, **Issue price 28/4/10, * NAV
30/4/10
Outlook
Prices for metals have remained relatively robust and well above
the long term prices the Company uses in modelling the underlying
projects in its investment portfolio. Equity markets for mining
shares have been weak in the first half of the year with the HSBC
Global Mining Index down 9.8% with investors being in "risk off"
mode as the market waits for a resolution to the sovereign debt
crisis in the Eurozone. This increased "disconnect" between the
prices of mining equities and commodities is unlikely to be
sustained in the longer term and if commodity prices remain strong
the recovery of prices of mining equities could well be marked. It
should be noted that despite slowing economic growth in China, the
strong growth over the past 10 years has provided a much larger
base for the demand of metals and therefore the need for new mining
projects.
One of the key means for the Company to monetise investments is
through IPOs. Although certain of the Company's investments are
sufficiently advanced in their development to be able seek a
listing, most notably Ivanplats, this will only occur once the
general market for IPOs is more receptive.
Baker Steel Capital Managers LLP
July 2012
DIRECTORS' RESPONSIBILITY STATEMENT
For the period from 1 January 2012 to 30 June 2012
The Directors' Report and the Investment Manager's Report
comprise the Half-Yearly Management Report.
To the best of the knowledge of the Directors:
This Half-Yearly Management Report and Condensed Interim
Financial Statements give a true and fair view of the assets,
liabilities, financial position and profit of the Company and have
been prepared in accordance with International Accounting Standard
(IAS) 34 Interim Financial Reporting.
The Half-Yearly Management Report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred in the period
from 1 January 2012 to 30 June 2012 and their impact on the set of
financial statements; and a description of the principal risks and
uncertainties for the remainder of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the period from
1 January 2012 to 30 June 2012 and that have materially affected
the financial position or performance of the entity during that
period.
Signed on behalf of the Board of Directors by:
Howard Myles Christopher Sherwell
22 August 2012
UNAUDITED PORTFOLIO STATEMENT
AT 30 JUNE 2012
Shares Investments Fair value % of Net
/Warrants/ GBP equivalent assets
Nominal
Listed equity shares
Australian Dollars
20,560,122 South American Ferro Metals Limited 2,146,526 2.82
Australian Dollars Total 2,146,526 2.82
--------------- ---------
Canadian Dollars
3,383,333 BacTech Environmental Corporation 306,600 0.40
1,100,000 Forbes & Manhattan Coal Corporation 687,468 0.91
1,931,667 REBgold Corporation 301,809 0.40
Canadian Dollars Total 1,295,877 1.71
--------------- ---------
Great Britain Pounds
27,815,933 Metals Exploration Plc 2,433,894 3.20
Great Britain Pounds Total 2,433,894 3.20
--------------- ---------
Total investment in listed equity shares 5,876,297 7.73
--------------- ---------
Fixed Income instruments
United States Dollars
5,100,000 Argentum Convertible Note @ 0.1% 25/01/2013 3,251,100 4.28
200,000 Bilboes Holdings Convertible Note 127,494 0.17
780,000 Polar Silver Convertible Note 497,227 0.65
United States Dollars Total 3,875,821 5.10
--------------- ---------
Total investment in Fixed Income Instruments 3,875,821 5.10
--------------- ---------
Unlisted equity shares and warrants
Canadian Dollars
6,666,667 BacTech Mining Corporation Warrants 06/08/2013 2,500 -
10,250,000 BacTech Mining Corporation Warrants 17/06/2015 29,467 0.04
6,282,341 Ironstone Resources Limited 5,889,422 7.75
3,036,605 Ironstone Resources Limited Warrants 30/09/2013 131,931 0.17
2,400,000 REBgold Corporation Warrants 20/11/2016 1,200 -
Canadian Dollars Total 6,054,520 7.96
--------------- ---------
Great Britain Pounds
1,594,646 Celadon Mining Limited 143,518 0.19
Great Britain Pounds Total 143,518 0.19
--------------- ---------
United States Dollars
3,034,734 Archipelago Metals Limited 386,911 0.51
451,445 Bilboes Holdings (Private) Limited 3,824,836 5.03
7,000,000 Black Pearl Limited Partnership 4,746,394 6.24
6,576,192 China Polymetallic Mining Limited 6,685,829 8.79
338,469 Copperbelt Minerals Limited 1,510,348 1.99
5,713,642 Ferrous Resources Limited 5,463,417 7.19
4,244,550 Gobi Coal and Energy Limited 17,587,541 23.14
9,787,495 Ivanplats Limited 21,837,338 28.73
1,070 Polar Silver Resources Limited 682 -
United States Dollars Total 62,043,296 81.62
--------------- ---------
Total unlisted equity shares and warrants 68,241,334 89.77
=============== =========
Financial assets held at fair value through
profit or loss 77,993,452 102.60
--------------- ---------
Other assets & liabilities (1,974,061) (2.60)
--------------- ---------
Total equity 76,019,391 100.00
=============== =========
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012
Unaudited Audited
30 June 31 December
2012 2011
Notes GBP GBP
Assets
Cash and cash equivalents 8 454,711 1,629,044
Tax refund receivable 5 1,387,249 1,402,642
Other receivables 8,271 12,111
Financial assets held at fair value through
profit or loss
(Cost: GBP63,900,162 (2011: GBP63,535,547)) 3 77,993,452 87,540,484
Total assets 79,843,683 90,584,281
----------- ---------------
Equity and Liabilities
Liabilities
Performance fees payable 7 3,651,275 3,651,275
Management fees payable 7 90,549 84,635
Directors' fees payable 36,192 36,000
Audit fees payable 19,111 40,000
Administration fees payable 6 6,900 27,443
Other payables 20,265 21,278
Total liabilities 3,824,292 3,860,631
----------- ---------------
Equity
Management Ordinary Shares 9 10,000 10,000
Ordinary Shares 9 64,765,133 64,657,584
Profit and loss account 11,244,258 22,056,066
Total equity 76,019,391 86,723,650
----------- ---------------
Total equity and liabilities 79,843,683 90,584,281
=========== ===============
Ordinary Shares in issue 9 66,150,610 66,043,061
Net asset value per Ordinary Share (in Pence)
- Basic 4 114.9 131.3
These financial statements were approved by the Board of Directors
on 22 August 2012 and signed on its behalf by:
Howard Myles Christopher Sherwell
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 JANUARY 2012 TO 30 JUNE 2012
Unaudited Unaudited Unaudited
period ended period ended period ended
30 June 30 June 30 June
2012 2012 2012
Revenue Capital Total
Notes GBP GBP GBP
Income
Net loss on financial assets and
liabilities at fair value through
profit or loss - (9,911,647) (9,911,647)
Net foreign exchange loss - (18,710) (18,710)
Net loss - (9,930,357) (9,930,357)
-------------- -------------- --------------
Expenses
Performance fees 7 - - -
Management fees 7 608,334 - 608,334
Directors' fees and expenses 70,000 - 70,000
Audit fees 20,000 - 20,000
Administration fees 6 50,665 - 50,665
Custody fees 26,032 - 26,032
Other expenses 106,420 - 106,420
Total expenses 881,451 - 881,451
-------------- -------------- --------------
Total comprehensive expense for
the period (881,451) (9,930,357) (10,811,808)
============== ============== ==============
Net expense for the period per Ordinary
Share:
Basic and diluted (in pence) 4 (1.4) (15.0) (16.4)
Weighted Average Number of Ordinary
Shares Outstanding:
Basic and diluted 4 66,096,836
In the period ended 30 June 2012 there were no gains or losses other than those recognised
above.
The Directors consider all results to derive from continuing activities.
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 JANUARY 2011 TO 30 JUNE 2011
Unaudited Unaudited Unaudited
period ended period ended period ended
30 June 30 June 30 June
2011 2011 2011
Revenue Capital Total
Notes GBP GBP GBP
Income
Interest income 71,324 - 71,324
Net gain on financial assets and
liabilities at fair value through
profit or loss - 11,801,907 11,801,907
Net foreign exchange loss - (52,889) (52,889)
Other income 112 - 112
-------------- -------------- --------------
Net income 71,436 11,749,018 11,820,454
-------------- -------------- --------------
Expenses
Performance fees 7 1,978,050 - 1,978,050
Management fees 7 554,807 - 554,807
Directors' fees and expenses 70,000 - 70,000
Audit fees 20,000 - 20,000
Administration fees 6 42,767 - 42,767
Custody fees 24,576 - 24,576
Other expenses 164,942 - 164,942
Total expenses 2,855,142 - 2,855,142
-------------- -------------- --------------
Total comprehensive (expense)/income
for the period (2,783,706) 11,749,018 8,965,312
============== ============== ==============
Net (expense)/earnings for the period
per Ordinary Share:
Basic and diluted (in pence) 4 (4.2) 17.8 13.6
Weighted Average Number of Ordinary
Shares Outstanding:
Basic and diluted 4 66,041,847
In the period ended 30 June 2011 there were no gains or losses other than those recognised
above.
The Directors consider all results to derive from continuing activities.
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 1 JANUARY 2012 TO 30 JUNE 2012
Management
Ordinary Ordinary Profit and Period ended
Shares Shares loss account 2012
GBP GBP GBP GBP
Balance as at 1 January
2012 10,000 64,657,584 22,056,066 86,723,650
Proceeds on issue of Ordinary
Shares - 107,549 - 107,549
Net expense for the period - - (10,811,808) (10,811,808)
Balance as at 30 June 2012 10,000 64,765,133 11,244,258 76,019,391
=========== =========== =============== =============
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 1 JANUARY 2011 TO 30 JUNE 2011
Management
Ordinary Ordinary Profit and Period Ended
Shares Shares loss account 2011
GBP GBP GBP GBP
Balance at 1 January 2011 10,000 64,655,155 3,609,143 68,274,298
Proceeds on issue of Ordinary
Shares - 2,429 - 2,429
Net income for the period - - 8,965,312 8,965,312
Balance as at 30 June 2011 10,000 64,657,584 12,574,455 77,242,039
=========== =========== =============== =============
CONDENSED INTERIM STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM 1 JANUARY 2012 TO 30 JUNE 2012
Period ended Period ended
30 June 30 June
2012 2011
Notes GBP GBP
Cash flows from operating activities
Net (expense)/income for the period (10,811,808) 8,965,312
Adjustments to reconcile income for the
period to net cash used in operating activities:
Net change in fair value of financial
assets at fair value through profit or
loss 9,911,647 (11,801,907)
Net decrease in other receivables 19,233 1,447
Net (decrease)/increase in other payables (36,339) 1,968,289
------------- -------------
Net cash used in operating activities (917,267) (866,859)
------------- -------------
Cash flows from investing activities
Purchase of financial assets at fair value
through profit or loss (364,615) (12,813,034)
Sale of financial assets at fair value
through profit or loss - 14,882,961
Net cash (used in)/provided by investing
activities (364,615) 2,069,927
------------- -------------
Cash flows from financing activities
Proceeds from shares issued 9 107,549 2,429
Net cash provided by financing activities 107,549 2,429
------------- -------------
Net (decrease)/increase in cash and cash
equivalents (1,174,333) 1,205,497
Cash and cash equivalents at the beginning
of the period 1,629,044 1,013,506
Cash and cash equivalents at the end of
the period 8 454,711 2,219,003
============= =============
Represented by:
Cash and cash equivalents 454,711 2,219,003
Cash and cash equivalents at the end of
the period 8 454,711 2,219,003
============= =============
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 JANUARY 2012 TO 30 JUNE 2012
1. GENERAL INFORMATION
Baker Steel Resources Trust Limited (the "Company") is a
closed-ended investment company with limited liability incorporated
on 9 March 2010 in Guernsey under the Companies (Guernsey) Law,
2008 with registration number 51576. The Company is a registered
closed-ended investment scheme registered pursuant to the POI Law
and the Registered Collective Investment Scheme Rules 2008 issued
by the Guernsey Financial Services Commission (GFSC). On 28 April
2010 the Ordinary Shares and Subscription Shares of the Company
were admitted to the Official List of the UK Listing Authority and
to trading on the Main Market of the London Stock Exchange. The
Company's Ordinary and Subscription Shares were admitted to the
Premium Listing Segment of the Official List on 28 April 2010.
Effective 1 June 2012 the Subscription Shares are assigned to the
Standard Segment of the Offical List.
The Company's portfolio is managed by Baker Steel Capital
Managers (Cayman) Limited (the "Manager"). The Manager has
appointed Baker Steel Capital Managers LLP (the "Investment
Manager") as the Investment Manager to carry out certain duties.
The Company's investment objective is to seek capital growth over
the long-term through a focused, global portfolio consisting
principally of the equities, or related instruments, of natural
resources companies. The Company invests predominantly in unlisted
companies (i.e. those companies which have not yet made an initial
public offering or "IPO") and also in listed securities (including
special situations opportunities and less liquid securities) with a
view to exploiting value inherent in market inefficiencies and
pricing anomalies.
The Half-yearly financial report has not been audited or
reviewed by the auditors pursuant to the Auditing Practices Board
guidance on review Interim Financial Information
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The unaudited condensed interim financial statements of the
Company have been prepared in accordance with International
Accounting Standards (IAS) 34: Interim Financial Reporting.
The financial statements have been prepared on a historic cost
basis except for financial assets and financial liabilities at fair
value through profit or loss, which are designated at fair value
through profit or loss.
The accounting policies used in the preparation of these
financial statements are consistent with those used in the
Company's most recent annual financial statements for the year
ended 31 December 2011. There have been no changes to the Company's
accounting policies since the date of the Company's last annual
financial statements, for the year ended 31 December 2011. The
format of these financial statements differs in some respects from
that of the most recent annual financial statements, in that the
notes to the financial statements are presented in summary
form.
The Company's functional currency is the Great Britain pound
sterling ("GBP"), being the currency in which its Ordinary Shares
and Subscription Shares are issued and in which returns are made to
shareholders. The presentation currency is the same as the
functional currency. The Company invests in companies around the
world whose shares are denominated in various currencies. Currently
the majority of the portfolio is denominated in US Dollars but this
will not necessarily remain the case as the portfolio develops.
The statement of comprehensive income is presented in accordance
with the Statement of Recommended Practice 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued in
January 2009 by the Association of Investment Companies, to the
extent that it does not conflict with International Financial
Reporting Standards (IFRS).
3. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Listed equity
30 June 2012 shares Unlisted equity shares Fixed income instruments Warrants Total
GBP GBP GBP GBP GBP
Financial assets at fair value
through profit or loss
Cost 9,006,135 51,047,761 3,846,266 - 63,900,162
Unrealised gain/(loss) (3,129,838) 17,028,475 29,555 165,098 14,093,290
Market value at 30 June 2012 5,876,297 68,076,236 3,875,821 165,098 77,993,452
============= ====================== ======================== ======== ==========
Listed equity
31 December 2011 shares Unlisted equity shares Fixed income instruments Warrants Total
GBP GBP GBP GBP GBP
Financial assets at fair value
through profit or loss
Cost 9,006,135 51,020,003 3,509,409 - 63,535,547
Unrealised gain/(loss) (873,563) 24,620,875 56,513 201,112 24,004,937
Market value at 31 December
2011 8,132,572 75,640,878 3,565,922 201,112 87,540,484
============= ====================== ======================== ======== ==========
The following table analyses investments by type and by level
within the fair valuation hierarchy at 30 June 2012.
Quoted prices
in active Quoted market Unobservable
markets based observables inputs
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Financial assets at fair
value through profit
or loss
Listed equity shares 5,876,297 - - 5,876,297
Unlisted equity shares - - 68,076,236 68,076,236
Warrants - - 165,098 165,098
Fixed income instruments - - 3,875,821 3,875,821
------------- ------------------ ------------ ----------
5,876,297 - 72,117,155 77,993,452
============= ================== ============ ==========
The following table analyses investments by type and by level
within the fair valuation hierarchy at 31 December 2011.
Quoted prices
in active Quoted market Unobservable
markets based observables inputs
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Financial assets at fair
value through profit
or loss
Listed equity shares 8,132,572 - - 8,132,572
Unlisted equity shares - - 75,640,878 75,640,878
Warrants - - 201,112 201,112
Fixed income instruments - - 3,565,922 3,565,922
------------- ------------------ ------------ ----------
8,132,572 - 79,407,912 87,540,484
============= ================== ============ ==========
The table below shows a reconciliation of beginning to ending
fair value balances for Level 3 investments and the amount of total
gains or losses for the year included in earnings attributable to
the change in unrealised gains or losses relating to assets and
liabilities held at 30 June 2012.
Fixed income
Total Equities instruments Warrants
GBP GBP GBP GBP
Opening balance 1 January
2012 79,407,912 75,640,878 3,565,922 201,112
Purchases of investments 364,615 27,758 336,857 -
Change in net unrealised
appreciation/(depreciation) (7,655,372) (7,592,400) (26,958) (36,014)
------------ ------------ ------------- ---------
Closing balance 30
June 2012 72,117,155 68,076,236 3,875,821 165,098
============ ============ ============= =========
The table below shows a reconciliation of beginning to ending
fair value balances for Level 3 investments and the amount of total
gains or losses for the year included in earnings attributable to
the change in unrealised gains or losses relating to assets and
liabilities held at 31 December 2011.
Fixed income
Total Equities instruments Warrants
GBP GBP GBP GBP
Opening balance 1 January
2011 47,402,510 35,188,512 - 12,213,998
Purchases of investments 17,599,108 14,089,699 3,509,409 -
Investment option converted
and
exercised (8,408,187) - - (8,408,187)
Change in net unrealised
appreciation/(depreciation) 22,814,481 26,362,667 56,513 (3,604,699)
-------------- ----------- ------------- ------------
Closing balance 31
December 2011 79,407,912 75,640,878 3,565,922 201,112
============== =========== ============= ============
In determining an investment's placement within the fair value
hierarchy, the Directors take into consideration the following
factors:
Investments whose values are based on quoted market prices in
active markets are classified within level 1. These include listed
equities with observable market price. The Directors do not adjust
the quoted price for such instruments, even in situations where the
Company holds a large position and a sale could reasonably impact
the quoted price.
Investments that trade in markets that are not considered to be
active but are valued based on quoted market prices, dealer
quotations or alternative pricing sources supported by observable
inputs, are classified within level 2. These include certain less
liquid listed equities. As level 2 investments include positions
that are not traded in active markets and/or are subject to
transfer restrictions, valuations may be adjusted to reflect
illiquidity and/or non-transferability, which are generally based
on available market information. The Company did not hold any such
investments at 30 June 2012.
Investments classified within Level 3 have significant
unobservable inputs. They include unlisted fixed income
instruments, unlisted equity shares and warrants. Level 3
investments are valued using valuation techniques explained in the
Company's accounting policies. The inputs used by the Directors in
estimating the value of Level 3 investments include the original
transaction price, recent transactions in the same or similar
instruments if representative in volume and nature, completed or
pending third-party transactions in the underlying investment of
comparable issuers, subsequent rounds of financing,
recapitalisations and other transactions across the capital
structure, offerings in the equity or debt capital markets, and
changes in financial ratios or cash flows. Level 3 investments may
also be adjusted to reflect illiquidity and/or non-transferability,
with the amount of such discount estimated by the Directors in the
absence of market information. In cases where there have been no
relevant transactions during the year, the Directors will take due
consideration of the change in Development Risk Adjusted Net
Present Values of the assets underlying the investments, prepared
by the Investment Manager, since the last change in valuation and
of whether such change is indicative of a change in fair value.
4. NET ASSET VALUE PER SHARE AND EARNINGS PER SHARE
Basic net asset value per share is based on the net assets of
GBP76,019,391 (31 December 2011: GBP86,723,650) and 66,150,610 (31
December 2011: 66,043,061) Ordinary Shares, being the number of
shares in issue at the period end. The Subscription Shares are
entitled to be converted to Ordinary Shares at 100p per share. The
calculation for basic net asset value is as below:-
30 June 2012 31 December 2011
Ordinary Subscription Ordinary Subscription
Shares Shares Shares Shares
Net assets at the period end
(GBP) 76,019,391 13,087,073 86,723,650 13,194,622
Number of shares 66,150,610 13,087,073 66,043,061 13,194,622
Basic net asset value per share
(in pence) 114.9 131.3
The basic earnings per share is based on the net loss for the
period of the Company of GBP10,811,808 (net gain for the year ended
31 December 2011: GBP18,446,923) and on 66,096,836 (31 December
2011: 66,042,454) Ordinary Shares, being the weighted average
number of Ordinary Shares in issue during the period. Although the
average market share price during the period of 105.16p is higher
than the exercise price of 100p, basic and diluted earnings per
share are the same due to the fact that the conversion of
subscription shares to ordinary shares would decrease the loss per
share, hence subscription shares are anti-dilutive. This
calculation is prepared in accordance with IFRS.
5. TAXATION
The Company is a Guernsey Exempt Company and is therefore not
subject to taxation on its income under the Income Tax (Exempt
Bodies) (Guernsey) Ordinance, 1989. An annual exempt fee of GBP600
has been paid. The acquisition of First Coal by Xstrata Coal during
the financial year ended 31 December 2011 gave rise to Canadian
withholding tax of 25% of the gross proceeds of sale. The Company's
withholding tax obligation has been reduced as it has filed a
Canadian tax return. The tax refund receivable of GBP1,387,249 (31
December 2011: GBP1,402,642) represents the Canadian tax refund
that is due to the Company. The Company expects to receive the tax
refund in September 2012.
6. ADMINISTRATION FEES
The Administrator, HSBC Securities Services (Guernsey) Limited,
is paid fees for acting as administrator of the Company at the rate
of 7 basis points of gross asset value up to US$250 million; the
rate reduces to 5 basis points of gross asset value above US$250
million. The Administrator is also reimbursed by the Company for
reasonable out-of-pocket expenses. These fees accrue and are
calculated as at the last Business Day of each month and paid
monthly in arrears.
The Administrator is also entitled to a fee for its provision of
corporate secretarial services provided to the Company on a time
spent basis and subject to a minimum annual fee of GBP40,000. The
Company is also responsible for any sub-administration fees as
agreed in writing from time to time, and reasonable out-of-pocket
expenses. The Administrator is also entitled to fees of EUR5,000
for preparation of the financial statements of the Company.
The administration fees paid for the period ended 30 June 2012
were GBP50,665 (30 June 2011: GBP42,767) of which GBP6,900 was
payable at 30 June 2012 (31 December 2011: GBP27,443). HSBC
Securities Services (Ireland) Limited, the sub-administrator, is
paid a portion of these fees by the Administrator.
7. MANAGEMENT AND PERFORMANCE FEES
The Manager was appointed pursuant to a management agreement
with the Company dated 31 March 2010 (the "Management Agreement").
The Company pays to the Manager a management fee which is equal to
1/12th of 1.75% of the total market capitalisation of the Company
per month. The management fee is calculated and accrued as at the
last Business Day of each month and is paid monthly in arrears.
The Manager may in certain circumstances also be entitled to be
paid a performance fee if the Net Asset Value at the end of any
Performance Period exceeds the Hurdle as at the end of the
Performance Period. The first performance period commenced on the
date of Admission and ended 31 December 2010 and thereafter, is
each 12 month period ending on 31 December in each year (the
"Performance Period"). In respect of the first Performance Period
which was less than a full 12 months, the Hurdle was applied pro
rata. For this purpose the "Hurdle" means an amount equal to the
Issue Price of GBP1 per Ordinary Share multiplied by the number of
Shares in issue as at Admission, as increased at a rate of 8% per
annum compounded to the end of the relevant Performance Period. In
respect of the first Performance Period and any other Performance
Period which is less than a full 12 months, the Hurdle will be
applied pro rata. The performance fee is subject to adjustments for
any issue and/or repurchase of Ordinary Shares.
The amount of the performance fee (if any) is 15 per cent of the
total increase in the Net Asset Value, if the Hurdle has been met,
at the end of the relevant Performance Period over the highest
previously recorded Net Asset Value as at the end of a Performance
Period in respect of which a performance fee was last accrued, (or
the Issue Price multiplied by the number of shares in issue as at
Admission, if no performance fee has been so accrued) having made
adjustments for numbers of Ordinary Shares issued and/or
repurchased as described above. In addition, the performance fee
will only become payable if there have been sufficient net realised
gains. The Manager has agreed not to seek payment of the
performance fee until the Company has sufficient cash.
If the Company wishes to terminate the Management Agreement
without cause it is required to give the Manager 12 months' prior
notice or pay to the Manager an amount equal to: (a) the aggregate
investment management fee which would otherwise have been payable
during the 12 months following the date of such notice (such amount
to be calculated for the whole of such period by reference to the
Market Capitalisation prevailing on the Valuation Day on or
immediately prior to the date of such notice); and (b) any
performance fee accrued at the end of any Performance Period which
ended on or prior to termination and which remains unpaid at the
date of termination which shall be payable as soon as, and to the
extent that, sufficient cash or other liquid assets are available
to the Company (as determined in good faith by the Directors),
provided that such accrued performance fee shall be paid prior to
the Company making any new investment or settling any other
liabilities; and (c) where termination does not occur at 31
December in any year, any performance fee accrued at the date of
termination shall be payable as soon as and to the extent that
sufficient cash or other liquid assets are available to the Company
(as determined in good faith by the Directors), provided that such
accrued performance fee shall be paid prior to the Company making
any new investment or settling any other liabilities. At the period
end the Manager was due GBP3,651,275 relating to the performance
period up to 31 December 2011. No further performance fee will be
accrued or paid until the Net Asset Value exceeds GBP86,831,199
(131.3p per share) as adjusted for further issues and repurchases
of shares.
8. CASH AND CASH EQUIVALENTS
30 June 31 December
2012 2011
GBP GBP
Deposits at HSBC Bank plc 454,711 1,629,044
======== ============
9. SHARE CAPITAL
The share capital of the Company on incorporation was
represented by an unlimited number of Ordinary Shares of no par
value. The Company may issue an unlimited number of shares of a
nominal or par value and/or of no par value or a combination of
both.
Following the exercise of 107,549 Subscription Shares at the end
of March 2012, the Company has a total of 66,140,610 Ordinary
Shares and 13,087,073 Subscription Shares in issue. In addition,
the Company has 10,000 Management Ordinary Shares in issue, which
are held by the Investment Manager.
The Ordinary Shares are currently admitted to the Premium
Listing segment of the Official List. Following the expiry of the
Transitional Provision contained in LR TR 7 of the Listing Rules,
effective 1 June 2012 Subscription Shares of no par value are
assigned to the Standard Segment of the Official List.
The details of issued share capital of the Company are as
follows:
30 June 2012 31 December 2011
Issued and fully paid share capital
Ordinary Shares of no par value* 66,150,610 66,033,061
Subscription Shares of no par value 13,087,073 13,194,622
============= =================
The issue of Ordinary Shares during the period ended 30 June
2012 took place as follows:
Subscription
Ordinary Shares Shares
Balance at 1 January 2012 66,043,061 13,194,622
Conversion of Subscription Shares 107,549 (107,549)
Balance at 30 June 2012 66,150,610 13,087,073
================ =============
The issue of Ordinary Shares during the year ended 31 December
2011 took place as follows:
Subscription
Ordinary Shares Shares
Balance at 1 January 2011 66,040,632 13,197,051
Conversion of Subscription Shares 2,429 (2,429)
Balance at 31 December 2011 66,043,061 13,194,622
================ =============
*Includes 10,000 Management Ordinary shares. On 9 March 2010, 1
Management Ordinary Share was issued and on 26 March 2010, 9,999
Management Ordinary Shares were issued.
10. RELATED PARTY TRANSACTIONS
The Directors' interests in the share capital of the Company at
30 June 2012 and 31 December 2011 were as follows:
Number of Number of
Ordinary Shares Subscription Shares
Edward Flood 65,000 13,000
Christopher Sherwell 25,000 5,000
Clive Newall 25,000 5,000
Mr Sherwell also has an indirect interest in the shares of the
Company through an investment in another fund managed by the
Manager.
The Manager, Baker Steel Capital Managers (Cayman) Limited, had
an interest in 504,832 Ordinary Shares and 100,876 Subscription
Shares at 30 June 2012 and 31 Dec 2011.
The Investment Manager, Baker Steel Capital Managers LLP, had an
interest in 10,000 Management Ordinary Shares at 30 June 2012 and
31 Dec 2011.
11. SUBSEQUENT EVENTS
Due mainly to the reduction in fair values of Gobi and Ferrous
the net asset value of the Company decreased by 6.2% in July 2012.
The net asset value of the Company at 31 July 2012 was
GBP71,324,741.
There have been no other subsequent events since the period
end.
12. APPROVAL OF HALF-YEARLY REPORT AND UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
The Half-Yearly Report and Unaudited Condensed Interim Financial
Statements to 30 June 2012 were approved by the Board of Directors
on 22 August 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGZRGLNGZZM
Baker Steel Resources (LSE:BSRT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Baker Steel Resources (LSE:BSRT)
Historical Stock Chart
From Jul 2023 to Jul 2024
