TIDMOIG
RNS Number : 9289T
Oryx International Growth Fund Ld
23 July 2020
23 JULY 2020
FOR IMMEDIATE RELEASE
RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., GUERNSEY
BRANCH FINAL RESULTS ANNOUNCEMENT
THE BOARD OF DIRECTORS OF ORYX INTERNATIONAL GROWTH FUND LIMITED
ANNOUNCE FINAL RESULTS FOR THE YEARED 31 MARCH 2020
A copy of the Company's Annual Report and Financial Statements
will be available via the following link:
www.oryxinternationalgrowthfund.co.uk
STRATEGIC REPORT
COMPANY OVERVIEW
Key Figures
(GBP in millions, except per share data) At 31 March At 31 March
2020 2019
Net Asset Value ("NAV") attributable to
shareholders
- Ordinary Shares 124.87 133.33
Investments 117.27 125.65
Cash and cash equivalents 7.74 7.93
Net Asset Value per share attributable
to shareholders
- Ordinary Shares 8.80 9.39
Share Price 6.70 7.68
Discount to Net Asset Value (23.86)% (18.21)%
(Loss)/Earnings per share (0.60) 0.57
CHAIRMAN'S STATEMENT
The year under review is a year in two parts; the first half saw
a substantial rise in NAV while the second was adversely affected
by the market maelstrom caused by COVID 19. I am pleased to say
that overall the NAV was only down 6.34% on the year ended 31 March
2020 to GBP8.80 per share. In the three months to 30(th) June, we
have seen a substantial recovery and in the number announced to the
London Stock Exchange on 22 July 2020 the NAV per share has seen a
growth of 29.1% to GBP11.68 based on a mid-price basis.
We take note in a recent survey(1) of smaller company funds
published by our brokers, Winterflood Securities Limited, Oryx was
ranked No 1 over all categories of performance being 1, 3 and 5
years. This is a terrific achievement.
As the investment adviser states below, and is further
demonstrated in the review of our top ten holdings, the portfolio
is not exposed to the areas of the market that are heavily
dependent on the behaviour of the consumer. This, combined with the
philosophy of ensuring the companies in which we invest are
properly financed, has protected us from the devastation that has
permeated some sectors of the stock market. While the outlook
remains deeply uncertain, a good proportion of the portfolio is or
will be able to take advantage of the changed commercial world.
While the Company did not use the authority to buy back shares
during the year, we intend to renew it for a further year at the
AGM to assist, if appropriate, in the management of the discount
and to enhance shareholder value. In line with our stated policy,
the board do not intend to pay a dividend.
In view of the positioning of the portfolio in the market, your
board remain confident that the strategy pursued by Harwood Capital
Management (Gibraltar) Limited and the team led by Mr Christopher
Mills will continue to deliver, over the long term, good returns to
the shareholders. The current turbulence in the market makes any
kind of prediction uncertain but the recent recovery in the NAV
gives us cause for cautious optimism.
Nigel Cayzer
Chairman
23 July 2020
(1) Source: Winterflood Securities, Morningstar, Bloomberg as at
26 June 2020
INVESTMENT ADVISER'S REPORT
It is disappointing that having grown the net asset value at a
satisfactory pace in 2019 this was given up in March 2020. Overall,
the net asset value fell modestly by 6.34% for the year ended 31
March 2020, although this compares very favourably with the
appropriate indices and other quoted UK smaller company investment
trusts, some of which recorded falls in excess of 20%.
Quoted equities:
The net asset value was positively impacted by the 39% increase
in Ergomed Plc, the 56% appreciation of Renalytix AI Plc and 39%
gain in Redcentric Plc. The additions of Circassia Plc and Tribal
Group Plc have shown recent growth and should contribute to the
portfolio performance in 2020. Finally, Augean Plc performed
extremely well in 2019, gaining 43% as management paid the tax
liability owed to the HMRC and grew the core business.
The principal disappointments for the year were NAHL Group Plc
and Benchmark Plc, which declined 61% and 33% in value respectively
as management continue to restructure their operations.
Unquoted equities:
Antler Holdco was the best performer during the period following
excellent operating results. On the other hand, Journey Group was
revalued downwards as a result of the loss of a major customer.
Outlook:
Your Company entered the market meltdown with no debt and a
reasonable level of liquidity. So far, the net asset value of the
Company has recovered well since the March 2020 low. In particular,
some of our life sciences companies have seen large speculative
rises in April 2020 and these have largely now been sold. The COVID
-19 virus has created severe volatility and markets are in our
opinion likely to be tested further as corporate profits come under
severe stress over the balance of the year.
Many, arguably too many, equity valuations are based on the
notion of normalized profitability. We believe this is a dangerous
concept. In our view the economy, weighed down by massive
government debt and further debt incurred by corporations as they
find their survival, will not bounce back to normalcy in the short
term. Indeed, it is also possible that consumer expenditure will
also be constrained as individuals curtail spending as they remain
fearful for the economy and the possibility of a recurrence of
COVID-19 with the attendant loss of income.
Fortunately, many of the larger holdings in your Company are
relatively, but not entirely, immune to the current uncertainty. It
has also been our policy to invest in companies with conservative
balance sheets, often with no or little debt and significant cash
balances. Given these uncertain times, it is not realistic to
comment that we expect a year of further progress in the growth of
our net asset value, though we are hopeful. We do, however, believe
that the underlying value of the businesses we have invested in are
solid and when economies finally normalise there is potential for
good upside from current levels.
Harwood Capital Management (Gibraltar) Limited
23 July 2020
TEN LARGEST HOLDINGS
As at 31 March 2020 As at 31 March 2019
Holding Cost Fair % of Holding Cost Fair % of
Units Value NAV Units Value NAV
------------------------ ----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Augean Plc 8,500,000 3,447,009 11,560,000 9.26% 8,500,000 3,453,810 8,075,000 6.06%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
EKF Diagnostics
Holdings Plc 37,963,591 5,035,101 9,490,898 7.60% 37,963,591 4,317,714 11,996,495 9.00%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Ergomed Plc 2,286,250 3,916,698 9,145,000 7.32% 4,000,000 6,855,833 6,600,000 4.95%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Redcentric Plc 7,875,000 7,351,896 7,796,250 6.24% 7,500,000 7,048,181 5,625,000 4.22%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Renalytix AI
Plc 2,780,001 1,392,417 5,838,000 4.68% 2,780,001 2,138,298 3,753,000 2.81%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Circassia
Pharmaceuticals
Plc 35,000,000 6,550,000 5,792,500 4.64% - - - -
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Tribal Group
Plc 10,000,000 6,008,565 5,500,000 4.40% - - - -
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Gleeson (M.J.)
Group Plc 1,000,000 2,033,867 5,260,000 4.21% 1,000,000 1,959,223 8,040,000 6.03%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Hargreaves Services
Plc 2,500,000 8,074,180 4,900,000 3.92% 2,500,000 8,088,872 7,500,000 5.63%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Bigblu Broadband
Plc 7,000,001 6,938,808 4,620,000 3.70% 7,000,001 6,946,358 7,700,000 5.78%
----------- ---------- ----------- ------ ----------- ---------- ----------- ------
Augean Plc
Augean is the market leader specializing in hazardous waste
management practices, and provides waste management solutions
across the United Kingdom. The group is strategically positioned to
provide compliance and commercial solutions operated through five
business units: Energy & Construction, Radioactive Waste
Services, Industry and Infrastructure, Augean Integrated Services
and Augean North Sea Services.
The group settled with the HMRC, paying all outstanding and
disputed HMRC Landfill tax assessments, totalling GBP40.4m, but
continue to challenge its assessments. In normal circumstances
solid growth is expected in Augean's key markets and the company is
well positioned to deliver strong shareholder returns as cash flow
remains robust. The management team have created significant
shareholder value during their tenure and should continue to do
so.
EKF Diagnostics Holdings Plc
EKF Diagnostics is a global integrated market leader in medical
diagnostics, offering a large range of haemoglobin and diabetes
analysers. It focuses on diagnostics for the Point of Care market,
demonstrating a way to make blood and anaemia screening more
accessible and affordable. The business also has a clinical
laboratory division where its liquid reagents can be used widely in
analysers found in hospital laboratories.
The company has been unaffected by the Covid-19 outbreak and has
recently entered into a contract manufacturing agreement to aid
Covid-19 testing in the US, with an initial order of $1m expected
to grow significantly in the coming months. Net cash of GBP14.3m
provides substantial cover for any cash outlays, including the 1p
dividend that remains on track to be delivered.
Ergomed Plc
Ergomed provides specialized services to the pharmaceutical
industry, which include clinical development and trial management
for drug development companies. The Company undertakes all facets
of clinical trial management, from Phase I to Phase IV, on behalf
of their clients. The group has continued to cut costs while
continuing its path to leadership positions in the attractive Prime
Vigilance and orphan drug development markets and have a strong
order book of GBP124m to underpin growth in 2020.
The company has seen no material impact from the Covid-19
outbreak so far and Prime Vigilance demand is expected to be
largely unaffected in the medium term. Net cash of GBP14.3m and new
credit facility of GBP30m provide ample liquidity for the business
to move forward.
Redcentric Plc
Redcentric is a leading UK IT managed services business that
provides IT and cloud services to meet its customer and client's
needs. The group benefits from an established reputation as an end
to end managed service provider delivering innovative technology to
improve business productivity and efficiency.
The company is implementing a strategic review by cutting the
cost base, consolidating property and systems from its legacy
businesses throughout a challenging business environment. The
operating model has been transformed to migrate more customers to
the cloud. The business has over 90% recurring revenue and 50% of
the non-recurring revenue in the healthcare sector, insulating it
well against COVID-19 related demand uncertainty. The company is
generating GBP10m of FCF and will continue to reduce its net debt
position down from GBP13.5m. As an essential business provider,
Redcentric is able to manage and maintain its operations in the
coming months.
Renalytix AI Plc
Renalytix AI plc was spun out of EKF Diagnostics in 2018. The
company manufactures artificial intelligence-enabled diagnostics
for kidney disease, serving patients on a global scale. The company
has a strong management team and is supported by the Icahn School
of Medicine at Mt Sinai Hospital in New York.
The company recently announced a Provider Network agreement with
Three Rivers Provider Network, the largest proprietary provider
organisation in the US, with access to over 100m lives. This deal
provides a valuable network of payers and patients that can
accelerate coverage discussions and payment for the $950
KidneyIntelX test. This an extremely significant development for
the business and will drive substantial long term value creation
for shareholders in 2020.
Circassia Pharmaceuticals Plc
Circassia is a commercial-stage specialty pharmaceutical company
focused on respiratory diseases. Its core NIOX product provides a
diagnostic FeNO test in asthma. The company is targeting GBP6.7m of
cost savings in 2020 and intends to expand into new territories and
leverage its commercial infrastructure to broaden its products
range.
Ian Johnson has been installed as the group's Executive Chairman
and has taken immediate steps to streamline the business. After a
strategic review, the board terminated the development and
commercialization agreement with AstraZeneca for the Turdoza and
Duaklir products. This transforms Circassia into pure diagnostics
company centred on its NIOX platform and removes the outstanding
debt and accrued interest of $150m it had owed to AstraZeneca. The
measures taken by the board to remove the debt burden and
consolidate the business are extremely positive. The company has no
debt and cash balances of approximately GBP10m.
Tribal Group Plc
Tribal Group is a provider of technology products and services
to the education, learning and training markets in the UK and
overseas. It is active in administrative functions in three fields:
student management services, professional services & analytics
and quality assurance.
The company has a strong market position and its installed base
in SIS will help it navigate through a difficult 2020 outlook.
Management have taken the necessary steps to shore up the balance
sheet by suspending the progressive dividend, adding GBP2.5m to the
balance sheet after closing 2019 with GBP16.5m of net cash. Though
revenues were less than anticipated due to timing issues,
management have significant visibility on future flows going into
2020 and have taken significant cost out of the business, creating
a healthy profit margin. The company has settled its royalties
dispute, paying GBP9m to settle historical liabilities.
Gleeson (M.J.) Group Plc
Gleeson Group operates two divisions, Gleeson Homes and Gleeson
Strategic Land. Gleeson Homes continues to show a strong increase
in revenues from previous years, driven by robust demand for
affordable housing among the group's core northern customer base.
Gleeson Strategic Land has sold three sites and has an additional
four being processed for sale after a temporary delay during the
General Election.
James Thomson has stepped in as CEO and continues the group's
momentum with delivering increased revenues, profits, cash and
margins as management puts in place the infrastructure to deliver
its 2,000-homes a year target by 2022. The company has prudently
raised GBP16.4m in the midst of the COVID-19 crisis to ensure the
business is well placed to rapidly meet pent-up demand from first
time buyers when restrictions are lifted. The company has cash on
hand of GBP83m, leaving it with ample capacity to handle its
GBP3.1m a month cash burn.
Hargreaves Services Plc
Hargreaves Services aims to deliver returns in three key asset
classes: energy, infrastructure and the property sector. The
business has evolved from a traditional model of industrial
services and logistics to incorporate renewable energy, civil
engineering, land restoration and remediation. The Company has
developed a pipeline of opportunities with a land bank of 18,000
acres across the UK, which will have a mixed-use purpose of
residential, commercial property and industrial use.
The company has taken steps to preserve cash by deferring its
dividend and minimising discretionary expenditure. Net debt holds
at GBP25m against borrowing facilities of GBP50m and a strong asset
backing of GBP130m. The business saw margin improvement in 2019 as
lower margin legacy contracts wound down and central costs were
brought down. The management team are confident of positive growth
returning once the COVID-19 crisis retreats to the rear-view
mirror.
Bigblu Broadband Plc
Bigblu Broadband, formerly "Satellite Solutions Worldwide",
operates as a leading global telecommunication offering very fast
broadband to rural communities, which traditional broadband
providers cannot deliver. The company has established a strong
position as an alternative and rural broadband provider across
multiple geographies using satellite, fixed, wireless and 4G/5G
technologies.
The group is becoming the principal alternative broadband
provider in Australia and Europe. There is significant upside to
come through a combination of organic growth, strategic well-placed
acquisitions and joint venture partnerships agreements. Recent
figures show the business capturing 60% of new satellite customers
in Australia and likely similar numbers in Europe. The company has
also entered into Greece, Hungary and Poland in the last 12 months,
which will provide additional uplift to the underlying business.
The group's subsidiary Quickline recently announced that it will
lead a GBP6m project to boost rural connectivity in North Yorkshire
using Government funding, reinforcing Bigblu's reputation as an
innovative provider in delivering superfast rural broadband.
INVESTMENT SCHEDULE
as at 31 March 2020
Holding Fair Value Proportion
Units of Net Assets
GBP %
LISTED INVESTMENTS
Great Britain - Equities (83.80%,
2019: 84.32%)
1Spatial Plc 6,500,000 1,300,000 1.04
Arden Partners Plc 600,000 18,000 0.01
Arena Events Group Plc 15,000,000 1,350,000 1.08
Assetco Plc 1,050,000 3,150,000 2.52
Augean Plc 8,500,000 11,560,000 9.26
Avingtrans Plc 1,650,000 3,465,000 2.77
Benchmark Holdings Plc 9,000,000 2,340,000 1.87
Bigblu Broadband Plc 7,000,000 4,620,000 3.70
Blackbird Plc 1,400,000 147,000 0.12
Bonhill Group Plc 220,000 13,200 0.01
Castleton Technology Plc 1,000,000 650,000 0.52
Catalyst Media Group Plc 3,125,000 1,562,500 1.25
Centaur Media Plc 7,665,000 1,686,300 1.35
Circassia Pharmaceuticals Plc 35,000,000 5,792,500 4.64
EKF Diagnostics Holdings Plc 37,963,591 9,490,898 7.60
Ergomed Plc 2,286,250 9,145,000 7.32
Flowtech Fluidpower Plc 1,500,000 801,000 0.64
Fulcrum Utility Services Ltd 12,615,000 2,018,400 1.62
Hargreaves Services Plc 2,500,000 4,900,000 3.92
Helios Underwriting Plc 200,000 200,000 0.16
Hml Holdings Plc 6,750,000 1,687,500 1.35
Infrastrata Plc 100,000,000 210,000 0.17
Gleeson (M.J.) Group Plc 1,000,000 5,260,000 4.21
Nahl Group Plc 4,750,000 1,862,000 1.49
Omega Diagnostics Group Plc 13,500,000 978,750 0.78
Orchard Funding Group Plc 750,000 562,500 0.45
Photo-Me International Plc 1,000,000 391,000 0.31
Redcentric Plc 7,875,000 7,796,250 6.24
Renalytix Ai Plc 2,780,000 5,838,000 4.68
Share Plc 1,500,000 420,000 0.34
Sportech Plc 10,000,000 1,405,000 1.13
Stobart Group Ltd 6,000,000 2,844,000 2.28
Sureserve Group Plc 10,200,000 3,876,000 3.10
Tekmar Group Plc 750,000 675,000 0.54
The Fulham Shore Plc 750,000 33,750 0.03
Totally Plc 3,000,000 345,000 0.28
Tribal Group Plc 10,000,000 5,500,000 4.40
Yourgene Health Plc 5,000,000 775,000 0.62
104,669,548 83.80
British Virgin Islands - Equities (2.22%, 2019:
2.12%)
Minds + Machines Group Limited 50,450,000 2,774,750 2.22
2,774,750 2.22
USA - Equities (0.76%, 2019: 0.60%)
Maxcyte Inc 85,000 106,250 0.09
Water Intelligence Plc 120,000 324,000 0.26
Spectra Systems Corp 450,000 517,500 0.41
947,750 0.76
Total listed investments 108,392,048 86.78
------------------------------------- ------------------------ -------------------------- --------------------
UNLISTED INVESTMENTS
Great Britain - Debt (2.12%, 2019:
1.90%)
Sherwood Holdings Limited
Loan Notes 10,381,688 882,443 0.71
Loan 523,857 523,857 0.42
Hamsard Limited
Loan Notes 557,424 493,265 0.40
Loan 836,136 739,897 0.59
-------------------------------------- ------------- -------------------- ---------------------
2,639,462 2.12
Great Britain - Equities (2.65%,
2019: 2.21%)
365 Agile Group Plc 305,210 - -
Antler Holdco Limited 5,853 2,584,802 2.07
Celsis Group Limited 7,129 - -
IPT Group Limited 112,498 - -
Hamsard Limited 6,440 5,698 0.00
Sherwood Holdings Limited 8,333,333 - -
Sinav Limited 437,033 176,227 0.14
Tradewise Group of Companies Limited 1,094,528 547,264 0.44
3,313,992 2.65
Great Britain - Limited Partnership Interest
(0.56%, 2019: 0.47%)
BDB1 LLP 1,258 - -
Viking Investments 2 LP 630,118 693,130 0.56
-------------------------------------- ------------- -------------------- ---------------------
693,130 0.56
USA - Equities (0.56%, 2019: 0.60
%)
Jaguar Holdings Limited 665,761 697,992 0.56
697,992 0.56
USA - Debt (1.23%, 2019: 0.00%)
Jaguar Holdings Limited 665,761 1,530,213 1.23
-------------------------------------- ------------- -------------------- ---------------------
1,530,213 1.23
Total unlisted investments 8,874,788 7.11
-------------------------------------- ------------- -------------------- ---------------------
Total investments 117,266,836 93.91
Cash 7,743,607 6.20
Other net current liabilities (138,007) (0.11)
Total net assets 124,872,436 100.00
-------------------------------------- ------------- -------------------- ---------------------
Refer to Note 15 for further information on Segment
Information.
Principal Activities and Business Review
The principal activity of the Company is to carry out business
as an investment company. The Directors do not envisage any changes
in this activity for the foreseeable future.
Structure
The Company is a Guernsey Authorised Closed-Ended Collective
Investment Scheme pursuant to the Protection of Investors
(Bailiwick of Guernsey) Law 1987, as amended, and the Authorised
Closed Ended Investment Scheme Rules 2008 issued by the Guernsey
Financial Services Commission. It was incorporated and registered
with limited liability in Guernsey on 2 December 1994, with
registration number 28917. The Company has a premium listing on the
Main Market of the London Stock Exchange.
Purpose
The purpose of the Company is to generate above-market returns,
as measured against the appropriate index, over the medium and long
term through investment in small and medium size companies.
Investment Policy
The Company principally invests in small and mid-size quoted and
unquoted companies in the United Kingdom and United States. The
Investment Manager targets companies that have fundamentally strong
business models but where there may be specific factors which are
constraining the maximisation or realisation of shareholder value,
which may be realised through the pursuit of an activist
shareholder agenda by the Investment Manager. Dividend income is a
secondary consideration when making investment decisions.
Achieving the Investment Policy
The investment approach of the Investment Manager is
characterised by a rigorous focus on research and financial
analysis of potential investee companies so that a thorough
understanding of their business models is gained prior to
investment. Comprehensive due diligence, including one or more
meetings with management, as well as site visits, are standard
procedures before shares are acquired.
Typically the portfolio will comprise of 40 to 60 holdings (but
without restricting the Company from holding a more or less
concentrated portfolio in the future).
The Company may invest in derivatives, financial instruments,
money market instruments and currencies solely for the purpose of
efficient portfolio management (i.e. solely for the purpose of
reducing, transferring or eliminating investment risk in the
Company's investments, including any technique or instrument used
to provide protection against exchange and credit risks).
The Investment Manager expects that the Company's assets will
normally be fully invested. During periods in which changes in
economic conditions or other factors so warrant, the Company may
reduce its exposure to securities and increase its position in cash
and money market instruments.
A detailed description of the key risk controls employed by the
Investment Manager is disclosed in Note 16 of the financial
statements. An analysis of the Company's portfolio is disclosed
above including a description of the ten largest equity
investments. At the year end the Company's portfolio consisted of
58 holdings (2019: 56 holdings). The top 10 holdings represented
55.97% (2019: 50.68%) of total net assets.
The Board is responsible for determining the gearing strategy
for the Company. Gearing is used selectively to leverage the
Company's portfolio in order to enhance returns where, and to the
extent this is considered appropriate, to do so. Borrowings are
short term and particular care is taken to ensure that any bank
covenants permit maximum flexibility of the investment policy. The
Company does not currently have any borrowings.
The Company may only make material changes to its investment
policy with the approval of shareholders (in the form of an
ordinary resolution).
Investment Restrictions
The Company has adopted the following policies:
(a) it will not invest in securities carrying unlimited liability;
(b) short selling for the purpose of efficient portfolio
management will be permitted provided that the aggregate value of
the securities subject to a contract for sale that has not been
settled and which are not owned by the Company shall not exceed 20
percent of the Net Asset Value. In addition, the Company may engage
in uncollateralised stock lending on normal commercial terms with
counterparties whose ordinary business includes uncollateralised
stock lending provided that the aggregate exposure of the Company
to any single counterparty shall not exceed 20 percent of the Net
Asset Value;
(c) it will not take legal or management control of investments in its portfolio;
(d) it will not buy or sell commodities or commodity contracts
or real estate or interests in real estate although it may purchase
and sell securities which are secured by real estate or commodities
and securities of companies which invest in or deal in real estate
commodities;
(e) it will not invest or lend more than 20 percent of its
assets in securities of any one company or single issuer;
(f) it will not invest more than 35 percent of its assets in
securities not listed or quoted on any recognised stock
exchange;
(g) it will not invest in any company where the investment would
result in the Company holding more than 10 percent of the issued
share capital of that company or any class of that share capital,
unless that company constitutes a trading company (for the purposes
or the relevant United Kingdom legislation) in which case the
company may not make any investment that would result in it holding
50 percent or more of the issued share capital of that company or
of any class of that share capital;
(h) it will not invest more than 5 percent of its assets in
units of unit trusts or shares or other forms of participation in
managed open-ended investment vehicles;
(i) the Company may use options, foreign exchange transactions
on the forward market, futures and contracts for differences for
the purpose of efficient portfolio management provided that:
(1) in the case of options, this is done on a covered basis;
(2) in the case of futures and forward foreign exchange
transactions, the face value of all such contracts does not exceed
100 percent of the Net Asset Value of the Company; or
(3) in the case of contracts for difference (including stock
index future or options) the face value of all such contracts does
not exceed 100 percent of Net Asset Value of the Company.
None of these restrictions, however, require the realisation of
any assets of the Company where any restriction is breached as a
result of an event outside the control of the Investment Manager
which occurs after the investment is made, but no further relevant
assets may be acquired by the Company until the relevant
restriction can again be complied with. In the event of any breach
of these investment restrictions, the Board will as soon as
practicable make an announcement on a Regulatory Information
Service and subsequently write to shareholders if appropriate;
and
(j) the Company will ensure gearing does not exceed 20% of net assets.
Principal and Emerging Risks and Uncertainties
The Directors confirm that they have carried out a robust
assessment of the principal and emerging risks facing the Company,
including those that would threaten its business model, future
performance, solvency, or liquidity.
The Board is responsible for the Company's system of internal
controls and for reviewing its effectiveness. The Board also
monitors the investment limits and restrictions set out in the
Company's investment objective and policy.
The principal and emerging risks that have been identified and
the steps taken by the Board to mitigate these are as follows:
Principal risk Mitigating factor
------------------------------------- -------------------------------------------
Investment activity and performance
------------------------------------- -------------------------------------------
An inappropriate investment strategy The Investment Manager operates
may result in under performance in accordance with the investment
against the Company's objectives. limits and restrictions policy determined
The Board manages these risks by the Board. The Directors review
by ensuring a diversification the limits and restrictions on a
of investments. regular basis and the Administrator
monitors adherence to the limits
and restrictions every month and
notifies the Board of any breach.
The Investment Manager provides
the Board with management information
including performance data and reports,
and the Stockbroker provides shareholder
analysis. The Directors monitor
the implementation and results of
the investment process with the
Investment Manager at each Board
meeting and monitor risk factors
in respect of the portfolio. Investment
strategy is reviewed regularly.
Level of discount or premium
------------------------------------- -------------------------------------------
A discount or premium to NAV While the Directors may seek to
can occur for a variety of reasons, mitigate any discount to NAV per
including market conditions or Share through share buybacks, there
to the extent investors undervalue can be no guarantee that they will
the management activities of do so and the Directors accept no
the Investment Manager or discount responsibility for any failure of
their valuation methodology and any such strategy to effect a reduction
judgement. in any discount or premium.
Market price risk
------------------------------------- -------------------------------------------
The fair value or future cash The Directors review and agree policies
flows of a financial instrument for managing these risks. The policies
held by the Company may fluctuate have remained substantially unchanged
because of changes in market during the year under review. The
prices. This market risk comprises Investment Manager assesses the
currency risk, interest rate exposure to market risk when making
risk and other price risk. each investment decision and monitors
the overall level of market price
risk on the investment portfolio
on an ongoing basis.
Emerging risk Mitigating factor
------------------------------------- -------------------------------------------
COVID-19
------------------------------------- -------------------------------------------
The COVID-19 pandemic has caused The Directors believe that the pandemic
unprecedented disruption to the will persist for the duration of
world economy and the UK is no this year and well into the next.
exception. Significant uncertainty A significant u-shaped recession
exists with regards to the depth will not end before a vaccine or
and length of the recession it an effective treatment is discovered,
may cause. tested, approved and made available
on a sufficiently large scale. The
Directors, however, are confident
that the world will come out of
this pandemic and economic activity
will resume, albeit with changes
to the "old normal".
The Directors take comfort that
the Company's long held strategy
of having no, or minor, borrowings
and its no-dividend policy will
help it withstand short term cash-flow
pressures and not require it to
sell any material part of its investments
under these adverse conditions.
The Directors are also confident
that the fiscal and monetary policy
initiatives being taken by governments
and central bankers worldwide will
lend support to economic activity
and stock markets. Indeed, the partial
recovery in the markets following
the precipitous drop in March 2020
has been notable.
The Directors also have confidence
in the judgement and expertise of
the Investment Manager to monitor
and adjust, on a prompt basis, the
Company's investment portfolio to
minimize risk and continue to outperform
the market.
Details of how the Board monitors the services provided by the
Investment Manager and the Administrator, and the key elements
designed to provide effective internal control are explained
further in the internal controls section of the Corporate
Governance Statement, which is set out below.
Section 172(1) Statement
Although the Company is domiciled in Guernsey, the Board adheres
to the UK Corporate Governance Code and acknowledges its duty to
comply with section 172(1) of the UK Companies Act 2006 to act in a
way that promotes the success of the Company for the benefit of its
members as a whole, having regard to (amongst other things and to
the extent applicable):
a) the likely consequences of any decision in the long-term;
b) the interests of the Company's employees, if any;
c) the need to foster the Company's business relationships with
suppliers, customers and others;
d) the impact of the Company's operations on the community and the environment;
e) the desirability of the Company maintaining a reputation for
high standards of business conduct; and
f) the need to act fairly as between members of the Company.
Who Why we engage How we engage Outcome
------------------ ------------------ ---------------------------------------------------------- ------------------
Shareholders Shareholders The Company engages Shareholders
provide with Shareholders receive
the necessary by: relevant
capital * Publishing monthly NAV RNS announcements information
for the Company allowing them to
to pursue its make informed
purpose * Publishing the Half Yearly Report and Annual Report decisions
and strategy. about their
investments.
* Through interaction at the AGM
Service providers As an investment The Board receives The Board
company with no formal reports receives
employees, the from its key service appropriate and
Company is providers (the timely advice and
reliant Investment Manager, guidance. The
on its service Administrator, Board's
providers to Broker and Registrar) engagement with
conduct at its quarterly its service
its business. board meetings. providers
There is frequent enables it to
informal interaction help
with the Investment facilitate the
Manager outside effective running
of Board meetings. of the Company.
The wider The Company In making investment With every
community recognises decisions, the successful
and environment the benefits to Company, through investment comes
the greater good its Investment profit to the
that will come Advisor, identifies shareholders,
from all small and medium greater
companies sized business employment
being good social enterprises that for the community
citizens. have the potential at large, and
to grow their business growth
but lack the necessary in the innovative
funding or management small and medium
expertise. business sector
of the economy.
Such innovations
have included
advanced
and new products
in the key
healthcare
and medical
equipment
industries.
Management, Administration and Custody Arrangements
On 1 October 2019, the Alternative Investment Fund Management
Agreement, dated 22 July 2014, was restated and amended. The
Alternative Investment Fund Management Restated and Amended
Agreement (the "Restated Agreement"), dated 1 October 2019,
appointed Harwood Capital Management (Gibraltar) Limited as the
Company Investment Manager and Adviser, replacing Harwood Capital
LLP with effect from 1 October 2019. The principal contents of the
Investment Management Agreement are disclosed in Note 4 to these
financial statements. The Management Agreement continues unless
terminated by either party on not less than twelve months' notice,
in writing or may be terminated forthwith as a result of a material
breach of the agreement or the insolvency of either party. No
compensation is payable on termination of the Agreement. The Board
reviews the performance of the Investment Manager, who carries out
the investment decisions for and on behalf of the Company.
In the opinion of the Directors, the continued appointment of
the current Investment Manager on the terms agreed is in the
interests of the Company's shareholders as a whole. The Investment
Manager has wide experience in managing and administering
investment companies.
On 1 October 2019, the Alternative Investment Fund Management
Agreement, dated 22 July 2014, was restated and amended. The
Alternative Investment Fund Management Restated and Amended
Agreement (the "Restated Agreement"), dated 1 October 2019,
appointed Harwood Capital Management (Gibraltar) Limited as the
Company's Investment Manager and Adviser, replacing Harwood Capital
LLP with effect from 1 October 2019. Under the Restated Agreement,
no changes were made to the basis for determining the management
fee and supplementary management fee.
Harwood Capital Management (Gibraltar) Limited is an authorised
manager by the Gibraltar Financial Services Commission as a small
scheme funds to manage Alternative Investment Funds under the
Alternative Investment Managers Regulations 2013.
Refer to Note 4 for further details on the remuneration of the
Investment Manager and the Investment Adviser.
Administration, Custodian and Company Secretarial Services are
provided to the Company by BNP Paribas Securities Services S.C.A.,
Guernsey Branch.
Registrar services are provided by Link Market Services
(Guernsey) Limited.
Related Parties
The Investment Adviser and Directors are considered related
parties. Please refer to Note 18 of the Financial Statements for
further detail.
Financial Review
At 31 March 2020, the net assets of the Company were
GBP124,872,436 (2019: GBP133,325,898). The Net Asset Value per
Ordinary Share was GBP8.80 (2019: GBP9.39). Details on the net
asset value and basic and diluted loss/earnings per Ordinary Share
are under Note 14 of the Financial Statements.
Dividend Policy
To the extent that any dividends are paid they will be paid in
accordance with any applicable laws and regulations of the UK
Listing Rules and the requirements of the Companies (Guernsey) Law,
2008 (as amended). The Directors do not propose payment of a
dividend for the year ended 31 March 2020 (2019: Nil).
Performance Measurement and Key Performance Indicators
In order to measure the success of the Company in meeting its
objectives and to evaluate the performance of the Investment
Manager, the Directors take into account the following performance
indicators:
-- Returns and NAV - The Board reviews at each meeting the
performance of the portfolio as well as the NAV and share price of
the Company.
For and on behalf of the Board
Nigel Cayzer
Chairman
23 July 2020
DIRECTORS' REPORT
The Directors present their report and the financial statements
of the Company for the year ended 31 March 2020.
Share Capital
The Company's issued share capital as at 31 March 2020 consisted
of 14,192,125 Ordinary Shares of 50p nominal value each. All shares
hold equal rights with no restrictions and no shares carry special
rights with regard to the control of the Company.
During the year ended 31 March 2020 and up to the date of
approval of these financial statements the Company has not
purchased any Ordinary Shares for cancellation.
Buybacks
At the Annual General Meeting ("AGM") of the Company held in
August 2019, the Directors were granted the general authority to
purchase in the market up to 10% of the Ordinary Shares of each
class in issue (as at 28 August 2019). This authority will expire
at the forthcoming AGM. The Directors intend to seek annual renewal
of this authority from the shareholders.
Pursuant to this authority, and subject to the Companies
(Guernsey) Law, 2008 and the discretion of the Directors, the
Company may purchase Ordinary Shares of a particular class in the
market on an ongoing basis with a view to addressing any imbalance
between the supply of and demand for Ordinary Shares of such class,
thereby increasing the Net Asset Value per Ordinary Share of that
class and assisting in controlling the discount to Net Asset Value
per Ordinary Share of that class in relation to the price at which
the Ordinary Shares of such class may be trading.
Notifications of Shareholdings
As at 31 March 2020, the Company had been notified in accordance
with Chapter 5 of the Disclosure Guidance and Transparency Rules
(which covers the acquisition and disposal of major shareholdings
and voting rights), of the following shareholders that had an
interest of greater than 5% in the Company's issued share
capital.
Number of Shares Percentage of total
voting rights (%)
------------------------- ----------------- --------------------
Harwood Capital LLP (1) 7,372,500 51.95%
Between 1 April 2020 and approval date of the financial
statements, no additional notifications were received.
(1) Harwood Capital LLP as Investment Manager of North Atlantic
Smaller Companies Investment Trust plc ("NASCIT") made the
notification of shareholding. However the 7,372,500 shares are held
by NASCIT.
Life of the Company
The Company does not have a fixed life. However, under Article
51 of the Articles of Incorporation, the Directors shall give due
notice of and propose or cause to be proposed a special resolution
that the Company be wound up at the AGM of the Company every two
years from 2011 onwards. Notices were tabled at the 2011, 2013,
2015, 2017 and 2019 AGMs, and in each case were not carried. This
was in line with the Board's recommendation to shareholders to vote
against these resolutions. The next notice will be given in the
2021 AGM documents, where the Board will recommend that
shareholders vote against this resolution.
Going Concern
The Directors have considered the Company's investment objective
and risk management policy, its assets and the expected income and
return from its investments while factoring in the current economic
conditions caused by the outbreak of COVID-19. The Directors are of
the opinion that the Company is able to meet its liabilities and
ongoing expenses as they fall due and they have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. The Directors
have a reasonable expectation that the special resolution outlined
in Article 51 of the Articles of Incorporation and under "Life of
the Company" will not be passed at the AGM in 2021. Accordingly,
these financial statements have been prepared on a going concern
basis and the Directors believe it is appropriate to continue to
adopt this basis for a period of at least 12 months from the date
of approval of these financial statements.
Viability Statement
At least once a year the Directors are required to carry out a
robust assessment of the principal and emerging risks and make a
statement which explains how they have assessed the prospects of
the Company, over what period they have done so and why they
consider that period to be appropriate, taking into account the
Company's current position and principal and emerging risks. The
principal and emerging risks faced by the Company are described
above.
The prospects of the Company are driven by its investment
strategy, objectives and policy as summarised above, and also by
the conditions in the markets in which the Company invests and the
financial market in general.
In assessing the prospects of the Company, the Directors have,
in addition to taking into account the principal and emerging risks
facing the Company, taken into account the Company's current
position, which has included a process encompassing an examination
of:
(i) the Investment Manager's view of the market conditions,
including the potential impact of COVID-19 and investment
opportunities in the market to which the Company is exposed, taking
into consideration the financial markets generally;
(ii) the liquidity and prospects of the underlying positions of the Company;
(iii) the extent to which the Company directly or indirectly uses gearing; and
(iv) the liquidity of the companies in which the Company invests.
Based on the results of their assessment process, the Directors
have concluded that a period of three years from the Statement of
Financial Position date is an appropriate period over which to
assess the prospects of the Company. Three years is deemed an
appropriate time period given the expected holding period needed to
realize the Company's investment thesis from individual
investments, the general economic outlook, and the time needed for
realization of contingencies or claims. Consideration was also
given to the absence of bank borrowings as well as the Company
being a closed end investment company. Based on this, combined with
the level of cash held and listed investment holdings, the
Directors have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall
due within this period of assessment. This three year time period
assumes that the special resolution outlined in Article 51 of the
Articles of Incorporation, and under "Life of the Company" is not
passed at the AGM in 2021.
Disclosure of Information to Auditors
The Directors who were members of the Board at the time of
approving this Report are listed below.
Each of those Directors confirms that:
-- to the best of his knowledge and belief, there is no
information relevant to the preparation of their report of which
the Auditor is unaware; and
-- he has taken all steps a Director might reasonably be
expected to have taken to be aware of relevant audit information
and to establish that the Company's Auditor is aware of that
information.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from its
operations for the year to 31 March 2020 (2019: none), nor does it
have responsibility for any other emissions producing sources.
For and on behalf of the Board
Nigel Cayzer
Chairman
23 July 2020
CORPORATE GOVERNANCE REPORT
Applicable Corporate Governance Codes
The Board has considered how the principles and provisions of
The UK Corporate Governance Code 2018 ("the Code"), which became
effective for accounting periods beginning on or after 1 January
2019, have been applied by the Company and has reported against
this Code (and the associated FRC Guidance on Audit Committees) for
the first time this year. A copy of the Code can be found at
www.frc.org.uk.
The Guernsey Financial Services Commission ("GFSC") have stated
in the "Finance Sector Code of Corporate Governance" ("GFSC Code")
that companies which report against the UK Corporate Governance
Code are deemed to meet the GFSC Code, and need take no further
action.
Corporate Governance Statement
The Company has complied with the recommendations of the Code,
except as set out below and elsewhere in the Corporate Governance
Report.
The Chairman should not remain in post beyond nine years from
the date of their first appointment to the board.
The Chairman of the Board has been the Chairman continuously
since the Company was founded 25 years ago. The shareholders have
given the Chairman their approval for his re-election at every
Annual General Meeting held since the Company's formation and
always with a high percentage of the shareholders voting in favour
of his re-election. Furthermore, the Directors have very high
regard for the Chairman's integrity, professionalism, and business
expertise. These considerations, combined with the excellent
performance of the Company over the past 25 years, are key in the
overwhelming support the Chairman has from shareholders and
Directors to continue in his role.
Remuneration Committee
The Board has not deemed it necessary to appoint a Remuneration
Committee as, being comprised of a majority of independent
Directors; the whole Board considers these matters on an ongoing
basis.
Executive directors' remuneration
As the Board has no executive directors, it is not required to
comply with the principles of the Code in respect of executive
directors' remuneration. Directors' fees are detailed in the
Directors' Remuneration Report .
Internal audit function
As the Company delegates to third parties its day-to-day
operations and has no employees, the Board has determined that
there is no requirement for an internal audit function. The
Directors review annually whether a function equivalent to an
internal audit is needed and will continue to monitor its systems
of internal controls in order to provide assurance that they
operate as intended.
The Company complies with the corporate governance statement
requirements pursuant to the FCA's Disclosure Guidance and
Transparency Rules by virtue of the information included in the
Corporate Governance section of the Annual Report together with
information contained in the Strategic Report and the Directors'
Report.
As the Company does not have any employees, the Board or Audit
Committee have not established arrangements by which staff of the
Company may, in confidence, raise concerns about possible
improprieties in matters of financial reporting or other
matters.
Directors
Nigel Cayzer (Chairman)
British
Nigel Cayzer is Chairman of Aberdeen Asian Smaller Companies
Investment Trust PLC. He is also a director of a number of private
companies. He has been Chairman or a director of a number of
Investment Companies and was Chairman of Maggie's, a leading cancer
charity, from 2005 until 2014.
Sidney Cabessa
French
Sidney Cabessa is also a director of Club-Sagem and
Mercator/Nature et découvertes. He was Chairman of CIC Finance, an
Investment Fund and a subsidiary of French banking group, CIC -
Credit Mutuel and was previously a Director of other investment
companies. He has previously been Senior Adviser with Rothschild
and Co (2012 to 2017); and is now Senior Adviser at Essling
Capital. He is also a director of Harwood Capital Management
Limited.
Walid Chatila
Canadian
Walid Chatila is a retired Certified Public Accountant (Texas
1984) and a Certified Professional Accountant (Ontario 1991). His
career includes international audit and special assignment
experience mostly in financial services in the Middle East and
North America from 1983 to 1993. A resident of Abu Dhabi, United
Arab Emirates, since 1993, he was the Finance Director of Emirates
Holdings from 1994 to 2006, and between 2006 and 2011, he assumed
the role of General Manager of Al Nowais Investment LLC. He was
also the General Manager of Arab Development Establishment until
June 2017.
Rupert Evans
British
Rupert Evans is a Guernsey Advocate and was a partner in the
firm of Ozannes between 1982 and 2003, since then he has been a
consultant to Ozannes (now Mourant Ozannes). He is a non-executive
director of a number of other investment companies some of which
are quoted on recognised stock exchanges. He is a Guernsey
resident.
Christopher Mills
British
Christopher Mills is a Partner and the Chief Executive Officer
of Harwood Capital LLP. He is also Chief Investment Officer of
North Atlantic Smaller Companies Investment Trust plc ("NASCIT").
NASCIT is the winner of numerous Micropal and S&P Investment
Trust awards. In addition, he is a non-executive director of
numerous UK companies which are either currently, or have in the
past five years been, publicly quoted.
John Grace
New Zealander
John Grace is actively involved in the management of several
global businesses including asset management, financial services,
and real estate. He is a Director and Founder of Sterling Grace
International Ltd. Sterling Grace and its affiliates manage
investments for high net-worth investors, institutions and
investment partnerships. The Company is active in global money
management, financial services, private equity and real estate
investments. He is also Chairman of Trustees Executors Holdings
Ltd, owner of the premier and oldest New Zealand trust company
established in 1882. It is the market leader in the corporate trust
business. Its clients include government divisions, corporations
and banks. The Company is active in wholesale financial services
including trust accounting, securities custody and mutual fund
registry. It is also actively engaged in the personal trust
business. He graduated from Georgetown University. He has served as
a director of numerous public companies and charities. He currently
supports genetic research and education initiatives in science at
the University of Lausanne, EPFL École polytechnique fédérale de
Lausanne and CERN, the European Organization for Nuclear
Research.
John Radziwill
British
John Radziwill is currently a director of StoneX Group Inc.
(known as INTL FCStone Inc. up to 5 July 2020), Goldcrown Group
Limited, Fourth Street Capital Ltd, Fifth Street Capital Ltd and
Netsurion Ltd. In the past ten years, he also served as a director
of Acquisitor Plc and Acquisitor Holdings (Bermuda) Ltd, Air
Express International Corp., Radix Ventures Inc, Baltimore Capital
Plc, Lionheart Group Inc, USA Micro Cap Value Co Ltd and Radix
Organisation Inc. Mr Radziwill is a member of the Bar of England
and Wales.
Our Governance Framework
Chairman
Nigel Cayzer
Responsibilities:
The leadership, operation and governance of the Board, ensuring effectiveness,
and setting the agenda for the Board.
--------------------------------------------------------------------------------------
The Board Members of Oryx International Growth Fund Limited:
Nigel Cayzer (Chairman), Sidney Cabessa, Walid Chatila, Rupert Evans,
John Grace, Christopher Mills and John Radziwill.
The Board members, except for Christopher Mills who is a Partner
of the Investment Manager and Sidney Cabessa who is a Director of
Harwood Capital Management Limited, are all independent Directors.
Additionally, the Board members are all non-executive Directors.
Responsibilities:
Overall conduct of the Company's business and setting the Company's
strategy.
More details below.
--------------------------------------------------------------------------------------
Nomination Committee Audit Committee
Members: Members:
Nigel Cayzer (Chairman) Walid Chatila (Chairman)
Sidney Cabessa Rupert Evans
Walid Chatila John Radziwill
Rupert Evans Responsibilities:
John Grace The provision of effective governance
John Radziwill over the appropriateness of the
Responsibilities: Company's financial reporting including
To ensure the Board comprises individuals the adequacy of related disclosures,
with the necessary skills, knowledge the performance of the external
and experience to ensure that the auditors, and the management of
Board is effective in discharging the Company's systems of internal
its responsibilities and oversight financial and operating controls
of all matters relating to corporate and business risks.
governance. More details below.
More details below.
------------------------------------------- -----------------------------------------
Board Independence and Composition
The Board
The Board is comprised of five independent non-executive
Directors including the Chairman Nigel Cayzer and two
non-independent Directors, Christopher Mills who is an employee of
the Investment Manager and Sidney Cabessa who is a Director of
Harwood Capital Management Limited. The biographical details of the
Directors holding office at the date of this report are listed
above, and demonstrate a breadth of investment, accounting and
professional experience. The Board does not consider it necessary
to appoint a Senior Independent Director, as it is considered that
all the Directors have different qualities and areas of expertise
on which they may lead where issues arise and to whom concerns can
be conveyed. The performance of the Company is considered in detail
at each board meeting. An evaluation of Directors' performance,
their independence and the work of the Board as a whole and its
committees is reviewed annually by the Nominations Committee. The
Directors also review the Chairman's performance, without the
Chairman present. The Board considers that independence is not
compromised by the length of tenure and that it has the appropriate
balance of skills, experience, ages and length of service in the
circumstances. The majority of the Board is considered to be
independent.
The Investment Manager takes decisions as to the purchase and
sale of individual investments. The Directors have access to the
advice and services of the Company Secretary through its appointed
representatives who are responsible to the Board for ensuring that
Board procedures are followed and that applicable rules and
regulations are complied with. Directors are able to have access to
independent professional advice at the Company's expense if they
judge it necessary to discharge their responsibilities as
directors. To enable the Board to function effectively and allow
Directors to discharge their responsibilities, full and timely
access is given to all relevant information.
The Company Secretary, BNP Paribas Securities Services S.C.A.,
Guernsey Branch through its representative, acts as Secretary to
the Board and Committees and in doing so it:
-- assists the Chairman in ensuring that all Directors have full
and timely access to all relevant documentation;
-- organises induction of new Directors; and
-- is responsible for ensuring that the correct Board procedures
are followed and advises the Board on corporate governance
matters.
The culture and values of the Board
The Board is comprised of seven directors from four different
nationalities and with diverse backgrounds and skill sets in key
areas including investment, business management, accountancy,
finance and law. The culture of the Board is to discuss all matters
in an open and professional manner. All members of the board have
proven competence and a history of success in their business
ventures and careers. All are well regarded in their communities
and all acknowledge the responsibility placed on them and the need
to be ethical, professional and assertive in executing their
duties.
Directors' Appointment and Re-election
Director Date of Appointment
------------------ --------------------
Nigel Cayzer 3 December 1994
Sidney Cabessa 3 June 2003
Walid Chatila 27 September 2005
Rupert Evans 3 December 1994
John Grace 8 March 2011
Christopher Mills 3 December 1994
John Radziwill 1 May 2007
------------------ --------------------
No Director has a service contract with the Company. Any
Director may resign in writing to the Board at any time.
In accordance with the Code, all directors seek annual
re-election to the Board at the AGM.
The Board continues to believe that Mr Cayzer, Mr Chatila, Mr
Evans, Mr Radziwill and Mr Grace are independent and that all
Directors standing for re-election make an effective and valuable
contribution to the Board and that the Company should support their
re-election.
Responsibilities
The Board meets at least four times each year and deals with the
important aspects of the Company's affairs including the setting
and monitoring of investment strategy, and the review of investment
performance. The Investment Manager takes decisions as to the
purchase and sale of individual investments, in line with the
investment policy and strategy set by the Board. The Investment
Manager together with the Company Secretary also ensures that all
Directors receive, in a timely manner, all relevant management,
regulatory and financial information relating to the Company and
its portfolio of investments. A representative of the Investment
Manager attends each quarterly Board meeting, enabling Directors to
question any matters of concern or seek clarification on certain
issues. Matters specifically reserved for decision by the full
Board have been defined and a procedure adopted for Directors in
the furtherance of their duties to take independent professional
advice at the expense of the Company.
Tenure
The Board has adopted a policy on tenure that is considered
appropriate for an investment company. The Board does not believe
that length of service, by itself, leads to a closer relationship
with the Investment Manager or necessarily affects a Director's
independence. The Board's tenure and succession policy seeks to
ensure that the Board is well-balanced and will be refreshed from
time to time by the appointment of new Directors with the skills
and experience necessary to replace those lost by Directors'
retirements. Directors must be able to demonstrate their commitment
to the Company. The Board seeks to encompass relevant past and
current experience of various areas relevant to the Company's
business.
Relationship with the Investment Manager and the
Administrator
The Board has delegated various duties to external parties
including the management of the investment portfolio, the custodian
services (including the safeguarding of assets), the registration
services and the day-to-day company secretarial, administration and
accounting services.
The Board receives and considers reports regularly from the
Investment Manager and ad hoc reports and information are supplied
to the Board as required. The Investment Manager takes decisions as
to the purchase and sale of individual investments. The Investment
Manager and Administrator also ensure that all Directors receive,
in a timely manner, all relevant management, regulatory and
financial information. Representatives of the Investment Manager
and Administrator attend each Board meeting enabling the Directors
to probe further on matters of concern. A formal schedule of
matters specifically reserved for decision by the full Board has
been defined and a procedure adopted for Directors. The Directors
have access to the advice and service of the corporate Company
Secretary through its appointed representative who is responsible
to the Board for ensuring that Board procedures are followed and
that applicable rules and regulations are complied with.
Shareholder Engagement
Communications with shareholders
The Board believes that the maintenance of good relations with
shareholders is important for the long-term prospects of the
Company. Where appropriate the Chairman, and other Directors are
available for discussion about governance and strategy with major
shareholders and the Chairman ensures communication of
shareholders' views to the Board. The Board receives feedback on
the views of shareholders from the Investment Manager and
Broker.
The Board believes that the AGM provides an appropriate forum
for investors to communicate with the Board, and encourages
participation. The AGM will be attended by at least one Director.
Details of proxy votes received in respect of each resolution will
be made available to shareholders at the meeting and will be posted
on the Company's website following the meeting.
The Annual and Half-year Reports are available to all
shareholders. The Board considers the format of the annual and
interim reports so as to ensure they are useful to all shareholders
and others taking an interest in the Company. In accordance with
best practice, the Annual Report, including the Notice of the AGM,
will be sent to shareholders at least 20 working days before the
meeting.
Institutional Investors - use of voting rights
The Investment Manager, in the absence of explicit instructions
from the Board, are empowered to exercise discretion in the use of
the Company's voting rights in respect of investments and then to
report to the Board, where appropriate, regarding decisions taken.
The Board has considered whether it was appropriate to adopt a
voting policy and an investment policy with regard to social,
ethical and environmental issues and concluded that it was not
appropriate to change the existing arrangements.
2020 Annual General Meeting
The AGM will be held in Guernsey on 28 August 2020 at 10:00 BST.
The notice for the AGM set out in the Shareholder Circular
accompanying this Annual Report sets out the ordinary and special
resolutions to be proposed at the meeting. Separate resolutions are
proposed for each substantive issue.
Conflict of Interests
Directors are required to disclose all actual and potential
conflicts of interest to the Board as they arise for consideration
and the Board may impose restrictions or refuse to authorise
conflicts if deemed appropriate. The Directors have undertaken to
notify the Company Secretary as soon as they become aware of any
new potential conflicts of interest that would need to be approved
by the Board. Only Directors who have no material interest in the
matter being considered will be able to participate in the Board
approval process.
It has also been agreed that the Directors will advise the
Chairman and the Company Secretary in advance of any proposed
external appointment. None of the Directors, except Christopher
Mills, had a material interest in any contract, which is
significant to the Company's business. Note 18 provides further
details on the material interests of Christopher Mills. The
Directors' Remuneration Report provides information on the
remuneration and interests of the Directors.
Performance evaluation
The Board has adopted a formal annual evaluation of its own
performance and that of its Committees and individual Directors.
The last evaluation took place in 2020 and was led by the Chairman.
The Chairman was not involved in the evaluation of his own
performance.
The evaluation is conducted utilising a questionnaire. The Board
has developed criteria for use at the evaluation, which focuses on
the individual contribution to the Board and its Committees made by
each Director and the Chairman, each Director's independence and
the responsibilities, composition and agenda of the Committees and
of the Board itself. A review of Board composition and balance,
including succession planning for appointments to the Board, is
included as part of the annual performance evaluation. The
non-executive Directors also meet without the Chairman present to
appraise his performance.
During the annual Board evaluation in 2020, it was concluded
that all Directors with the exception of Messer's Mills and Cabessa
were independent. It was confirmed that the Chairman and all
Directors felt well prepared and able to participate fully at Board
meetings, with a good understanding of the markets and investments
of the Company. It was agreed that all relevant topics were fully
discussed at effective Board meetings, with the Board having a good
range of competencies and skills.
The Board will continue to review its procedures, its
effectiveness and development in the year ahead.
Induction/Information and Professional Development
Directors are provided, on a regular basis, with key information
on the Company's policies, regulatory requirements and its internal
controls. Regulatory and legislative changes affecting Directors'
responsibilities are advised to the Board as they arise, along with
changes to best practice from, amongst others, the Company
Secretary and the Auditor. Advisers to the Company also prepare
reports for the Board from time to time on relevant topics and
issues.
When a new Director is appointed to the Board, they will be
provided with all relevant information regarding the Company and
their respective duties and responsibilities as a Director. In
addition, a new Director will also spend time with representatives
of the Investment Manager in order to learn more about their
processes and procedures.
Independent Advice
The Board recognises that there may be occasions when one or
more of the Directors feels it is necessary to take independent
legal advice at the Company's expense. A procedure has been adopted
to enable them to do so, which is managed by the Company
Secretary.
Directors' Indemnity
To the extent permitted by Guernsey law, the Company's Articles
of Incorporation provide an indemnity for the Directors against any
liability except such (if any) as they shall incur by or through
their own breach of trust, breach of duty or negligence.
During the year the Company has maintained insurance cover for
its Directors and Officers under a Directors' and Officers'
liability insurance policy.
Board Meetings
The Board meets at least quarterly. Certain matters are
considered at all Board meetings including the performance of the
investments, NAV and share price and associated matters such as
asset allocation and investor relations. Consideration is also
given to administration and corporate governance matters, and where
applicable, reports are received from the Board committees.
Directors unable to attend a Board meeting are provided with the
Board papers and can discuss issues arising in the meeting with the
Chairman or another non-executive Director.
Attendance at scheduled meetings of the Board and its committees
in the 2019/20 financial year
Board Audit Nomination Committee
Committee
-------------------- ------ ----------- ---------------------
Number of meetings
during the year 4 4 2
-------------------- ------ ----------- ---------------------
Nigel Cayzer 4 - 2
Sidney Cabessa 3 - 2
Walid Chatila 4 4 2
Rupert Evans 4 4 2
Christopher Mills 4 - -
John Grace 4 - 1
John Radziwill 4 4 2
-------------------- ------ ----------- ---------------------
Board Committees
The Board has established a Nomination and an Audit Committee
with defined terms of reference and duties. Further details of
these committees can be found below. The terms of reference for
each committee can be found on the Company's website
www.oryxinternationalgrowthfund.co.uk
Nomination Committee
Membership:
Nigel Cayzer - Chairman (Independent non-executive Director)
Sidney Cabessa (Non-executive Director)
Walid Chatila (Independent non-executive Director)
Rupert Evans (Independent non-executive Director)
John Grace (Independent non-executive Director)
John Radziwill (Independent non-executive Director)
The Board believes it is appropriate for the Company Chairman to
also be Chairman of the Nomination Committee as he is an
independent non-executive Director.
Key Objectives
To evaluate the effectiveness of the Board and its Committees
and to evaluate the balance of skills, knowledge and experience on
the Board and the division of responsibilities between the Board
and the Investment Manager. The Nomination Committee also meets as
and when appropriate to replace Directors who retire from the
Board, leading the process for Board appointments and making
recommendations to the Board.
Responsibilities
-- Regularly reviews and makes recommendations in relation to
the structure, size and composition of the board including the
diversity and balance of skills, knowledge and experience, and the
independence of the non-executive Directors;
-- Oversees the performance evaluation of the Board, its committees and individual Directors;
-- Reviews the tenure of each of the non-executive Directors;
-- Leads the process for identifying and making recommendations
to the Board regarding candidates for appointment as Directors,
giving full consideration to succession planning and the leadership
needs of the Company;
-- Makes recommendations to the Board on the composition of the Board's committees; and
-- Is responsible for the oversight of all matters relating to
corporate governance, bringing any issues to the attention of the
Board.
Nomination Committee Meetings
Only members of the Nomination Committee have the right to
attend Committee meetings. Representatives of the Investment
Manager and Administrator are invited by the Nomination Committee
to attend meetings as and when appropriate. In the event of matters
arising concerning an individual's membership of the Board, they
would absent themselves from the meeting as required and another
independent non-executive Director would take the Chair, if this
applied to the Committee Chairman.
Main Activities during the Year
The Committee met to consider and review the results of the
annual Board evaluation and considered that the balance of
experience, skills, independence and knowledge of the Company was
appropriate.
There is a formal, rigorous and transparent procedure for the
appointment of new Directors. Candidates are identified and
selected on merit against objective criteria and with due regard to
the benefits of diversity on the Board.
The Board continues to focus on encouraging diversity of
business skills and experience, recognising that Directors with
diverse skills sets, capabilities and experience gained from
different backgrounds enhance the Board. The Board considers that
its members have a balance of skills and experience which are
relevant to the Company. The Board believes in the value and
importance of diversity in the boardroom but it does not consider
it appropriate or in the interests of the Company and its
shareholders to set prescriptive targets for gender or nationality
on the Board.
Nigel Cayzer
On behalf of the Nomination Committee
23 July 2020
AUDIT COMMITTEE REPORT
Audit Committee
Membership:
Walid Chatila - Chairman (Independent non-executive
Director)
Rupert Evans (Independent non-executive Director)
John Radziwill (Independent non-executive Director)
Key Objectives
The provision of effective governance over the appropriateness
of the Company's financial reporting including the adequacy of
related disclosures, the performance of the external auditors, and
the management of the Company's systems of internal financial and
operating controls and business risks.
Responsibilities
-- Reviewing the Company's internal financial controls;
-- Reviewing the Company's financial results announcements,
financial statements and monitoring compliance with relevant
statutory and listing requirements;
-- Reporting to the Board on the appropriateness of the
Company's accounting policies and practices including critical
accounting policies and practices;
-- Advising the Board on whether the Audit Committee believes
the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's performance;
-- Overseeing the relationship with the external auditor;
-- Considering the financial and other implications on the
independence of the auditor arising from any non-audit services
provided by the auditors; and
-- Compile a report on its activities to be included in the Company's annual report.
The Committee members have a wide range of financial and
commercial expertise necessary to fulfil the Committee's
duties.
Audit Committee Meetings
The Committee meets at least three times a year. Only members of
the Audit Committee have the right to attend Audit Committee
meetings. Representatives of the Investment Manager and
Administrator will be invited to attend Audit Committee meetings on
a regular basis and other non-members may be invited to attend all
or part of the meeting as and when appropriate and necessary. The
Company's external auditor, KPMG Channel Islands Limited ("KPMG" or
the "Auditor"), is also invited whenever it is appropriate. The
Committee is also able to meet separately with KPMG without the
Investment Manager being present.
Main Activities during the Year
The Committee assists the Board in carrying out its
responsibilities in relation to financial reporting requirements,
risk management and the assessment of internal financial and
operating controls. It also manages the Company's relationship with
the external auditor. Meetings of the Committee generally take
place prior to a Company Board meeting. The Committee reports to
the Board, as part of a separate agenda item, on the activity of
the Committee and matters of particular relevance to the Board in
the conduct of their work.
The Committee advises the Board on whether it believes the
annual report and financial statements, taken as a whole, are fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Company's performance, business
model and strategy. The Committee's terms of reference can be found
on the Company's website www.oryxinternationalgrowthfund.co.uk.
At its meetings during the year, the Committee focused on:
Financial Reporting
The primary role of the Committee in relation to financial
reporting is to review in conjunction with the Investment Manager
and the Administrator the appropriateness of the half-year and the
audited annual financial statements concentrating on, amongst other
matters:
-- The quality and acceptability of accounting policies and practices;
-- The clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance reporting
requirements;
-- Material areas in which significant judgements have been
applied or there has been discussion with the external auditor;
-- Whether the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy; and
-- Any correspondence from regulators in relation to the quality of our financial reporting.
To aid its review, the Committee considers reports from the
Investment Manager, Administrator and also reports from the
external auditor on the outcome of their annual audit.
Significant Accounting Matters
In relation to the annual report and financial statements for
the year ended 31 March 2020, the following significant issues were
considered by the Audit Committee:
Significant How Addressed
Area
Valuation The Board periodically receive a report from the Investment
of Investments Manager on the valuation of the portfolio and on the
assumptions used in valuing the unlisted assets in the
portfolio. The Board regularly analyses the investment
portfolio of the Company in terms of investment mix,
fair value hierarchy and valuation. The Board has held
discussions with the Investment Manager with regards
to the methodology used in valuing the unlisted assets
in the portfolio. The Board has considered the risk
due to COVID-19 in detail as part of its periodic viability
and risk assessments. The Board has also considered
the auditor's approach to assess the valuation of the
Company's investments and discussed with KPMG, their
approach to testing the appropriateness and robustness
of the valuation methodology applied by the Investment
Manager to the Company's portfolio. The members of the
Audit Committee had a meeting with KPMG, where the audit
findings were reported. KPMG did not report any significant
differences between the valuations used by the Company
and the work performed during their testing process.
Based on their above review and analysis the Board confirmed
that they are satisfied with the valuation of the investments.
Internal Controls
The Board is responsible for the Company's system of internal
control and for reviewing its effectiveness, which was in place up
to the date the financial statements were signed. The Board has
delegated the responsibility of regularly reviewing the
effectiveness of the systems of internal controls in place to the
Audit Committee. The Audit Committee believes that the key risks
identified and implementation of the system to monitor, and manage
those risks, are appropriate to the Company's business as an
investment company.
The ongoing risk assessment includes the monitoring of the
financial, operational and compliance risks as well as an
evaluation of the scope and quality of the system of internal
control adopted by the third party service providers. The Audit
Committee regularly reviews the delegated services to ensure their
continued competitiveness and effectiveness. The system is designed
to ensure regular communication of the results of monitoring by the
third parties to the Board and the incidence of any significant
control failings or weaknesses that have been identified and the
extent to which they have resulted in unforeseen outcomes or
contingences that may have a material impact on the Company's
performance or operations. The Audit Committee believes that,
although robust, the Company's system of internal controls is
designed to manage rather than eliminate the risk of failure to
achieve business objectives.
The Committee is responsible overall for the Company's system of
internal financial and operating controls and for reviewing its
effectiveness. Such a system, however, is designed to manage rather
than eliminate risks of failure to achieve the Company's business
objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss. The Board receives
each year a report from the Administrator on its internal controls
which includes a report from the Administrator's auditors on the
control policies and procedures in operation.
The Investment Manager has established an internal control
framework to provide reasonable but not absolute assurance on the
effectiveness of the internal controls operated on behalf of its
clients. The effectiveness of the internal controls is assessed by
the Investment Manager's compliance and risk department on an
ongoing basis.
In respect of the Company's system of internal controls and
reviewing its effectiveness, the Directors are satisfied that a
robust assessment of the principal and emerging risks facing the
Company has been carried out (as outlined above) and that having
reviewed the effectiveness of the risk management and internal
control systems including material financial, operational and
compliance controls (including those relating to the financial
reporting process) no significant failings or weaknesses were
identified.
External Audit
The effectiveness of the external audit process is dependent on
appropriate audit risk identification at the start of the audit
cycle. The Committee received a detailed audit plan from KPMG
identifying their assessment of the significant audit risks. For
the 2020 financial year the significant audit risks identified were
the valuation of unlisted investments and fraud risk, resulting
from management override of controls. The significant risks were
tracked through the year and the Committee reviewed the procedures
performed by the auditors to test management override of controls
and in addition the audit work undertaken in respect of valuations
of unlisted investments. The Committee assess the effectiveness of
the audit process in addressing these matters through the reporting
received from KPMG in relation to the year-end. In addition, the
Committee seeks feedback from the Investment Manager and the
Administrator on the effectiveness of the audit process. For the
2020 financial year, the Committee was satisfied that there had
been appropriate focus and challenge on the significant and other
key areas of audit risk and assessed the quality of the audit
process to be good.
Independence
The Committee considers the independence of the external auditor
on an annual basis. In its assessment of the independence of the
external auditors, the Committee receives details of any
relationships between the Company and KPMG that may have a bearing
on their independence and receives confirmation that the external
auditor is independent of the Company.
Tender
KPMG are in their 10(th) year as the Company's external auditor.
The Audit Committee has recommended that the audit be put out to
tender after the finalisation of the 2020 Annual Report and
Financial Statements. The Company will therefore obtain proposals
from a range of potential appointees and consider changing the
auditor on completion of the current audit cycle. An update on the
conclusion of the audit tender process will be included within the
half-yearly financial report. Accordingly, the Board will request
shareholder approval for the Board to have discretion to appoint
the auditor for the 2021 audit and determine their
remuneration.
Non Audit Services
The external auditor and the Directors have agreed a policy for
non-audit services. All non-audit services are prohibited.
Auditor's Remuneration
The Committee approved the fees for audit services for 2019/20
after a review of the level and nature of work to be performed, and
after being satisfied by KPMG that the fees were appropriate for
the scope of the work required. The external auditor was
remunerated GBP60,600 for their services rendered in 2019/20. This
entire amount relates to the year-end audit.
Committee Evaluation
The Committee's activities formed part of the Board evaluation
performed in the year. Details of this process can be found under
"Performance evaluation".
Walid Chatila
On behalf of the Audit Committee
23 July 2020
DIRECTORS' REMUNERATION REPORT
The Directors' remuneration for the year is as follows:
Director Year Ended 31 March 2020 Year Ended 31 March 2019
GBP GBP
------------------- ------------------------- -------------------------
Nigel Cayzer 27,500 27,500
Sidney Cabessa 20,000 20,000
Walid Chatila 25,000 25,000
Rupert Evans 20,000 20,000
Christopher Mills 20,000 20,000
John Grace 20,000 20,000
John Radziwill 20,000 20,000
------------------- ------------------------- -------------------------
Remuneration Policy
The determination of the Directors' fees is a matter dealt with
by the Board. The Board has not sought the advice or services by
any outside person in respect of its consideration of the
Directors' remuneration, although the Directors reviewed the fees
paid to the Boards of Directors of similar investment companies
during 2016 and revised the remuneration of the Chairmen and
Directors in 2017. No Director is involved in decisions relating to
their own remuneration.
No Director has a service contract with the Company and
Directors' appointments may be terminated at any time by one
month's written notice with no compensation payable at
termination.
The Company's policy is for the Directors to be remunerated in
the form of fees, payable quarterly in arrears. No Director has any
entitlement to a pension, and the Company has not awarded any share
options or long-term performance incentives to any of the
Directors. No element of the Directors' remuneration is performance
related. Directors are authorised to claim reasonable expenses from
the Company in relation to the performance of their duties.
The Company's policy is that the fees payable to the Directors
should reflect the time spent by the Board on the Company's affairs
and the responsibilities borne by the Directors and should be
sufficient to enable high calibre candidates to be recruited.
During the year 2019/20, the policy was for the Chairmen of the
Board and the Audit Committee to be paid higher fees than the other
Directors in recognition of their more onerous role and more time
spent. The Board may amend the level of remuneration paid within
the limits of the Company's Articles of Incorporation.
Service Contracts and Policy on Payment of Loss of Office
Directors are appointed with the expectation that they are
initially appointed until the following AGM when, it is required
that they be re-elected by shareholders. Directors will initially
serve for a period of three years, and will stand for re-election
every three years. In accordance with the Code, Directors who have
served for more than nine years as non-executive directors will
retire annually and seek re-election to the Board. Directors or
members of the Investment Manager are subject to annual election,
in accordance with Listing Rule 15.2.13A.
The names and biographies of the Directors holding office at the
date of this report are listed in the Annual Report above.
Directors' Interests
The Company has not set any requirements or guidelines for
Directors to own shares in the Company. The beneficial interests of
the Directors and their connected persons in the Company's shares
are shown in the table below:
31 March 2020 31 March 2019
Ordinary Shares Ordinary Shares
------------------- ----------------- -----------------
Christopher Mills 350,000 350,000
John Grace * 130,000 130,000
346,607 346,607
------------------- ----------------- -----------------
* John Grace holds a beneficial interest of 130,000 Ordinary
Shares. Mr Grace is also a member of a class of beneficiaries which
holds an interest in 346,607 Ordinary Shares.
Christopher Mills is a Partner and Chief Executive Officer of
Harwood Capital LLP and a director of Harwood Capital Management
(Gibraltar) Limited, the Company's Investment Manager and
Investment Adviser. Harwood Capital Management (Gibraltar) Limited
is entitled to fees as detailed in Notes 4 and 5 of the Financial
Statements. Rupert Evans is a consultant to the law firm Mourant
Ozannes, the legal adviser to the Company.
No fees were paid or are payable to Harwood Capital Management
Limited where Sidney Cabessa is a director.
Other than fees payable in the ordinary course of business,
there have been no material transactions with these related
parties.
Annual Report on Remuneration
Other than as shown above, no other remuneration or compensation
was paid or payable by the Company during the year to any of the
Directors, other than travel expenses of GBP14,560 (2019:
GBP36,856).
Advisers to the Remunerations Committee
The Board has not sought the advice or services by any outside
person in respect of its consideration of the Directors'
remuneration.
Nigel Cayzer
On behalf of the Board
23 July 2020
Statement of directors' responsibilities in respect of the
Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report
and 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 are
required to prepare the financial statements in accordance with
International Financial Reporting Standards as adopted by the EU
and applicable law.
Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of its profit or
loss 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, relevant and reliable;
-- 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 that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its 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. Legislation in Guernsey governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the
Annual Report and financial statements
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company; and
-- the Annual Report includes a fair review of the development
and performance of the business and the position of the issuer,
together with a description of the principal and emerging risks and
uncertainties that they face.
We consider the Annual Report and financial statements, taken as
a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
By order of the Board
Walid Chatila Rupert Evans
Director Director
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF ORYX INTERNATIONAL
GROWTH FUND LIMITED
Our opinion is unmodified
We have audited the financial statements of Oryx International
Growth Fund Limited (the "Company"), which comprise the statement
of financial position as at 31 March 2020, the statements of
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 31 March 2020, and of the Company's financial
performance and cash flows for the year then ended;
- are prepared in accordance with International Financial
Reporting Standards as adopted by the EU; 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 matter: 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 (unchanged
from 2019):
Valuation of listed Basis: Our audit procedures included:
and unlisted investments As at 31 March 2020 Controls evaluation:
(together "the Investments") 94% (2019: 94%) of the We assessed the design and
designated at fair Company's net assets implementation of controls
value through profit comprised of Investments. over the valuation of Investments.
or loss The Company's holdings
GBP117,266,836; in listed investments Challenging managements'
(2019: GBP125,645,171) (representing 87% of assumptions and inputs including
Refer to the Audit net assets by value) use of KPMG valuation specialists:
Committee Report, are measured at fair For listed investments, we
note 2(b) (use of value based on quoted used our KPMG valuation specialist
estimates and judgments), bid prices. to independently price all
note 2(d) (financial The Company's holdings holdings to a third party
assets), note 10 in unlisted investments pricing source.
(Investments at (representing 7% of
fair value through net assets by value) For material unlisted investments,
profit and loss) are measured at fair we assessed and challenged
and note 17 (fair value based on the International the Investment Manager's
value hierarchy) Private Equity and Venture key assumptions used in preparing
Capital (IPEV) valuation the valuations. In particular,
guidelines. The primary we focused on the appropriateness
measurement techniques of the valuation basis selected
employed at 31 March as well as the underlying
2020 were earnings multiples assumptions, such as earnings,
and observable price. comparable company multiples
Risk: and observable price. We
The valuation of the compared key underlying financial
Company's Investments data inputs to external sources,
is considered a significant investee company audited
area of our audit given accounts and management information
that it represents the where available.
majority of the net For the remaining unlisted
assets of the Company investments we performed
and in view of the significance sensitivity analysis to key
of estimates and judgments, valuation inputs used to
including the impact assess the likelihood of
of COVID-19 thereon, material misstatement.
that may be involved
in the determination Assessing disclosures:
of the fair value of We also considered the Company's
unlisted investments. disclosures (see note 2(b))
in relation to the use of
estimates and judgments regarding
the fair value of Investments
and the Company's investment
valuation policies adopted
and fair value disclosures
in note 2(d), note 10 (Investments
at fair value through profit
and loss) and note 17 for
compliance with IFRS as adopted
by the EU.
=============================== =================================== ======================================
Our application of materiality and an overview of the scope of
our audit
Materiality for the financial statements as a whole was set at
GBP2.5 million, determined with reference to a benchmark of net
assets of GBP124.9 million, of which it represents approximately 2%
(2019: 3%).
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding GBP125,000, 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
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the
Company's financial position means that this is realistic. They
have also concluded that there are no material uncertainties that
could have cast significant doubt over its ability to continue as a
going concern for at least a year from the date of approval of the
financial statements ("the going concern period").
In our evaluation of the directors' conclusions, we considered
the inherent risks to the Company's activities including where
relevant the impact of the COVID-19 pandemic and the requirements
of the applicable financial reporting framework. We analysed how
those risks might affect the Company's financial resources or
ability to continue operations over the going concern period,
including challenging the underlying data and key assumptions used
to make the assessment, and evaluated the directors' plans for
future actions in relation to their going concern assessment.
Based on this work, we are required to report to you if we have
anything material to add or draw attention to in relation to the
directors' statement in note 2(a) to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Company's
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.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report but does not include the financial statements and our
auditor's report thereon. 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.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Disclosures of emerging and principal risks and longer term
viability
Based on the knowledge we acquired during our financial
statements audit, we have nothing material to add or draw attention
to in relation to:
-- the directors' confirmation within the Viability Statement
that they have carried out a robust assessment of the emerging and
principal risks facing the Company, including those that would
threaten its business model, future performance, solvency or
liquidity;
-- the Principal and Emerging Risks and Uncertainties
disclosures describing these risks and explaining how they are
being managed or mitigated;
-- the directors' explanation in the Viability Statement as to
how they have assessed the prospects of the Company, over what
period they have done so and why they consider that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Corporate governance disclosures
We are required to report to you if:
-- we have identified material inconsistencies between the
knowledge we acquired during our financial statements audit and the
directors' statement that they consider that the annual report and
financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy; or
-- the section of the annual report describing the work of the
Audit Committee does not appropriately address matters communicated
by us to the Audit Committee.
We are required to report to you if the Corporate Governance
Statement does not properly disclose a departure from the
provisions of the UK Corporate Governance Code specified by the
Listing Rules for our review.
We have nothing to report to you in these respects.
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 set out above, 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.
Neale Jehan
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors, Guernsey
23 July 2020
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2020
2020 2019
Notes GBP GBP
------------------------------------------------------------------ ------ -------------- ---------------
Income
Dividends 3 1,855,144 2,998,767
Net realised gains on investments 10 5,040,757 6,912,250
Unrealised (losses)/gains on revaluation of investments 10 (12,776,120) 495,540
Net losses on foreign currency translation (23) (4,596)
---------------------------------------------------------------------- ------ -------------- ---------------
Total income (5,880,242) 10,401,961
---------------------------------------------------------------------- ------ -------------- ---------------
Expenses
Investment management and adviser's fee 4 (1,555,536) (1,379,791)
Directors' fees and expenses 8 (167,060) (189,356)
Legal and professional fees (52,262) (91,761)
Supplementary management fee 5 (300,000) (250,000)
Transaction costs (113,312) (69,905)
Administration fees 7 (143,491) (116,098)
Audit fees (62,483) (53,800)
Custodian fees 6 (32,102) (31,251)
Insurance (5,639) (5,115)
Registrar and transfer agent fees (23,121) (26,819)
Printing costs (35,308) (21,310)
Interest and similar expense - (74)
Other expenses (72,169) (70,917)
---------------------------------------------------------------------- ------ -------------- ---------------
Total expenses (2,562,483) (2,306,197)
---------------------------------------------------------------------- ------ -------------- ---------------
Total (loss)/profit for the year before taxation (8,442,725) 8,095,764
---------------------------------------------------------------------- ------ -------------- ---------------
Withholding tax on dividends 9 (10,737) (11,379)
(Loss)/profit and total comprehensive (loss)/income for the year (8,453,462) 8,084,385
---------------------------------------------------------------------- ------ -------------- ---------------
(Loss)/earnings per Ordinary Share - basic and diluted 14 (GBP0.60) GBP0.57
---------------------------------------------------------------------- ------ -------------- ---------------
All items in the above statement are derived from continuing
operations.
The accompanying notes form an integral part of these financial
statements.
STATEMENT OF FINANCIAL POSITION
as at 31 March 2020
2020 2019
Notes GBP GBP
--------------------------------------------------------------------------- ------ -------------- --------------
Non-current assets
Listed investments at fair value through profit or loss (Cost -
GBP110,366,131 (2019 - GBP99,771,365)) 108,392,048 116,042,185
Unlisted investments at fair value through profit or loss (Cost -
GBP6,208,720 (2019 - GBP12,405,701)) 8,874,788 9,602,986
---------------------------------------------------------------------------- ------ -------------- --------------
10 117,266,836 125,645,171
--------------------------------------------------------------------------- ------ -------------- --------------
Current assets
Cash and cash equivalents 7,743,607 7,934,548
Amounts due from brokers 314,075 -
Dividends receivable 118,500 210,500
Prepayments 9,274 16,633
---------------------------------------------------------------------------- ------ -------------- --------------
8,185,456 8,161,681
--------------------------------------------------------------------------- ------ -------------- --------------
Total assets 125,452,292 133,806,852
---------------------------------------------------------------------------- ------ -------------- --------------
Current liabilities
Other payables and accrued expenses (577,452) (370,787)
Amounts due to brokers (2,404) (110,167)
---------------------------------------------------------------------------- ------ -------------- --------------
(579,856) (480,954)
--------------------------------------------------------------------------- ------ -------------- --------------
Net assets 124,872,436 133,325,898
---------------------------------------------------------------------------- ------ -------------- --------------
Shareholders' equity
Share capital 11 49,789,346 49,789,346
Capital redemption reserve 1,246,500 1,246,500
Other reserves 73,836,590 82,290,052
---------------------------------------------------------------------------- ------ -------------- --------------
Total shareholders' equity 124,872,436 133,325,898
---------------------------------------------------------------------------- ------ -------------- --------------
NAV per Ordinary Share 13,14 GBP8.80 GBP9.39
---------------------------------------------------------------------------- ------ -------------- --------------
The financial statements were approved by the Board of Directors
on 23 July 2020 and are signed on its behalf by:
Walid Chatila Rupert Evans
Director Director
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2020
Capital redemption
Share capital reserve Other reserves Total
GBP GBP GBP GBP
--------------------- -------------- ------------------- --------------- ------------
Balance at 1 April
2019 49,789,346 1,246,500 82,290,052 133,325,898
Total comprehensive
loss for the year - - (8,453,462) (8,453,462)
---------------------- -------------- ------------------- --------------- ------------
Balance at 31 March
2020 49,789,346 1,246,500 73,836,590 124,872,436
---------------------- -------------- ------------------- --------------- ------------
Capital redemption
Share capital reserve Other reserves Total
GBP GBP GBP GBP
---------------------- -------------- ------------------- --------------- ------------
Balance at 1 April
2018 49,789,346 1,246,500 74,205,667 125,241,513
Total comprehensive
income for the year - - 8,084,385 8,084,385
----------------------- -------------- ------------------- --------------- ------------
Balance at 31 March
2019 49,789,346 1,246,500 82,290,052 133,325,898
----------------------- -------------- ------------------- --------------- ------------
STATEMENT OF CASH FLOWS
for the year ended 31 March 2020
2020 2019
GBP GBP
---------------------------------------- ----------------- ----------------
Cash flows from Operating Activities
(Loss)/profit after taxation
and total comprehensive (loss)/income
for
the year (8,453,462) 8,084,385
Adjustments to reconcile (loss)/profit
after taxation to net cash flows:
-Net realised gains on investments (5,040,757) (6,912,250)
-Unrealised losses/(gains) on
investments 12,776,120 (495,540)
-Net losses on foreign currency
translation 23 4,596
Purchase of financial assets
designated at fair value through
profit or loss(2) (40,366,029)(4) (39,015,646)(4)
Proceeds from sale of financial
assets designated at fair value
through profit or loss(3) 40,587,163(4) 27,549,515(4)
Changes in working capital
Decrease/(increase) in dividends
receivable(1) 92,000 (29,459)
Decrease/(increase) in prepayments 7,359 (2,219)
Increase in other payables and
accrued expenses 206,665 19,489
Net cash outflow from operating
activities (190,918) (10,797,129)
------------------------------------------ ----------------- ----------------
Net decrease in cash and cash
equivalents (190,918) (10,797,129)
Cash and cash equivalents at
beginning of year 7,934,548 18,736,273
Effect of exchange rate fluctuations
on cash and cash equivalents (23) (4,596)
Cash and cash equivalents at
end of year 7,743,607 7,934,548
------------------------------------------ ----------------- ----------------
(1) - For the year ended 31 March 2020, cash received from
dividends net withholding taxes was GBP1,936,407 (2019:
GBP2,957,928)
(2) - Payables outstanding at 31 March 2020 relating to
purchases of financial assets designated at fair value through
profit amounted to GBP2,404 (31 March 2019: GBP110,167).
(3) - Receivables outstanding at 31 March 2020 relating to sales
of financial assets designated at fair value through profit
amounted to GBP314,075 (31 March 2019: GBPNil).
(4) - Purchase and proceeds from sale of financial assets
designated at fair value through profit or loss include amounts due
to/from brokers.
NOTES TO THE FINANCIAL STATEMENTS
1. General
The Company was registered in Guernsey on 2 December 1994 and
commenced activities on 3 March 1995. The Company was listed on the
London Stock Exchange on 3 March 1995.
The Company is a Guernsey Authorised Closed-Ended Investment
Scheme and is subject to the Authorised Closed-Ended Investment
Scheme Rules 2008.
The investment activities of the Company are managed by Harwood
Capital Management (Gibraltar) Limited (the "Investment Manager")
and the administration of the Company is delegated to BNP Paribas
Securities Services S.C.A., Guernsey Branch (the
"Administrator").
Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
2. Accounting policies
Basis of preparation
The financial statements of the Company, which give a true and
fair view, and comply with the Companies (Guernsey) Law, 2008 (the
;"Law"), have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), as adopted by the European
Union ("EU"). This comprises standards and interpretations approved
by the International Accounting Standards Board, and International
Accounting Standards and Standing Interpretations Committee
interpretations approved by the International Accounting Standards
Committee that remain in effect.
The financial statements have been prepared on the historical
cost basis except for the inclusion at fair value of certain
financial instruments. The principal accounting policies are set
out below.
The Company adopted for the first time IFRS 16 - Leases and
IFRIC 23 - Uncertainty over Income Tax Treatments, which became
effective on 1 January 2019. As the Company does not participate in
leasing arrangements and the Directors have determined that, as at
31 March 2020, the Company has no uncertain tax positions, these
standards/interpretations do not have an impact on the Company's
financial statements.
Standards, amendments and interpretations issued but not yet
effective
There are no new standards, amendments and interpretations which
have been issued but are not yet effective and not early adopted,
that will affect the Company's financial statements.
a) Going concern
Going concern refers to the assumption that the Company has the
resources to continue in operation for the next 12 months from the
date of approval of these financial statements. After analysing the
following, the Directors believe that it is appropriate to adopt
the going concern basis in preparing these financial
statements:
-- Working capital - as at 31 March 2020, there was a working
capital surplus of GBP7,605,600 (2019: GBP7,680,727). The Directors
noted that as at 31 March 2020 (i) the total comprehensive loss for
the period from 1 April 2019 to 31 March 2020 was GBP8,453,462
(2019: income of GBP8,084,385) which is mainly due to the impact of
COVID-19 that affected the Company during the month of March 2020.
However, as noted below, the fair value of the listed investments
has recovered post year end and (ii) the Company had no borrowings,
as such it has sufficient capital in hand to cover all expenses
(which mainly consist of Investment Manager's fees, Administration
fees and Professional fees) and to meet all of its obligations as
they fall due.
-- Closed-ended Company --- The Company has been authorised by
the Guernsey Financial Services Commission as an Authorised
Closed-ended Collective Investment Scheme, as such there cannot be
any shareholder redemptions, and therefore no cash flows out of the
Company in this respect.
-- Investments - The Company has a tradable portfolio, as 86% of
the investments are listed and can therefore be readily sold for
cash. The fair value of the listed investments has recovered and
increased as at 30 April 2020 and 31 May 2020 from 31 March
2020.
Under Article 51 of the Articles of Incorporation, the Directors
shall give due notice of and propose or cause to be proposed a
special resolution that the Company be wound up at the Annual
General Meeting ("AGM") of the Company every two years. The next
notice will be given in the 2021 AGM documents (the previous notice
was given at the 2019 AGM where the special resolution was not
passed) where the Board will recommend that shareholders vote
against resolution. The Directors, based on discussions with the
Company's most significant shareholder, have a reasonable
expectation that the special resolution outlined in Article 51 of
the Articles of Incorporation and under "Life of the Company" will
not be passed at the AGM in 2021.
Based on the above assessments, the Directors are of the opinion
that the Company is able to meet its liabilities as they fall due
for payment because it has and is expected to maintain adequate
cash resources. Given the nature of the Company's business, the
Directors have a reasonable expectation that the Company has
adequate financial resources to continue in operational existence
for the next 12 months from the date of approval of these financial
statements. Accordingly, these financial statements have been
prepared on a going concern basis.
b) Use of estimates and judgements
The preparation of financial statements in accordance with IFRS
as adopted by the EU requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. These estimates and associated assumptions are based
on historical experience and other factors that are considered to
be relevant. Actual results may vary from these estimates.
Judgement is exercised in terms of whether the price of recent
transaction remains the best indicator of fair value for financial
instruments at the statement of financial position date.
The Investment Manager reviews sector and market information and
the circumstances of the investee company to determine if the
valuation adopted at the statement of financial position date
remains the best indicator of fair value. The estimates and
underlying assumptions are reviewed on an on-going basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in
the period of the revision and future periods, if the revision
affects both current and future periods.
Information about areas of critical judgements in applying
accounting policies that have the most significant effect on the
amounts recognised in the financial statements are set out in note
2(d). Information about significant areas of estimation uncertainty
that have the most significant effects on the amounts recognised in
the financial statements are set out in notes 16 and 17.
c) Dividend income
Dividend income is recognised when the right to receive income
is established. This is the ex-dividend date for equity securities.
All income is shown gross of any applicable withholding tax.
d) Financial assets
Classification
All investments of the Company are designated as financial
assets at fair value through profit or loss. The investments are
purchased mainly for their capital growth and the portfolio is
managed, and performance evaluated, on a fair value basis in
accordance with the Company's documented investment strategy,
therefore the Directors consider that this is the most appropriate
classification.
Initial recognition
Financial assets are measured initially at fair value being the
transaction price. Subsequent to initial recognition on trade date,
all assets classified as fair value through profit or loss are
measured at fair value with changes in their fair value recognised
in profit or loss in the Statement of Comprehensive Income.
Transaction costs are separately disclosed in profit or loss in the
Statement of Comprehensive Income.
Fair value measurement principles
Listed investments have been valued at the bid market price
ruling at the reporting date. In the absence of the bid market
price, the closing price has been taken, or, in either case, if the
market is closed on the financial reporting date, the bid market or
closing price on the preceding business day.
Fair value of unlisted investments is derived in accordance with
the International Private Equity and Venture Capital (IPEV)
valuation guidelines. Their valuation includes all factors that
market participants would consider in setting a price. The primary
valuation techniques employed to value the unlisted investments are
earnings multiples and the net asset basis. Cost (as indicator of
initial fair value) is considered appropriate for early stage
investments. The relevance of this methodology is eroded over time
and in these cases the carrying values will be adjusted to reflect
fair value.
For certain of the Company's financial instruments, including
cash and cash equivalents, dividends receivable and amounts due
from brokers, the carrying amounts approximate fair value due to
their immediate or short-term maturity.
Derecognition
Derecognition of financial assets occurs when the rights to
receive cash flows from financial instruments expire or are
transferred and substantially all of the risks and rewards of
ownership have been transferred.
Fair value hierarchy
Fair value measurement should be determined based on assumptions
that market participants would use in pricing an asset or
liability. As a basis for considering market participant
assumptions, IFRS 13 - "Fair Value measurement" (IFRS 13),
establishes a fair value hierarchy that gives the highest priority
to unadjusted quoted prices in active markets (Level 1) and lowest
priority to unobservable inputs (Level 3). The three levels of the
value hierarchy are as follows:
Level 1: Inputs that reflect unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has
the ability to access at the measurement date;
Level 2: Inputs reflect quoted prices of similar assets and
liabilities in active markets and quoted prices of identical assets
and liabilities in markets that are considered to be inactive, as
well as inputs other than quoted prices within level 1 that are
observable for the asset or liability either directly or
indirectly; and
Level 3: Inputs that are unobservable for the asset or liability
and reflect the Investment Manager's own assumptions in accordance
with the accounting policies disclosed within note 2 to the
financial statements.
e) Prepayments, amounts due from brokers and dividends receivable
Prepayments do not carry any interest and are short term in
nature and are accordingly stated at their amortised cost.
Amounts due from brokers and dividends receivable are measured
at amortised cost and reduced by any lifetime expected credit
losses.
f) Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and short term
deposits in banks with original maturities of less than three
months.
g) Other payables and accrued expenses
Other payables and accrued expenses are non-interest bearing and
are stated at their amortised cost.
h) Foreign currency translation
Items included in the Company's financial statements are
measured using the currency of the primary economic environment in
which it operates (the "functional currency"). This is Pound
Sterling which reflects the Company's activity of investing in
predominantly Sterling securities. The Company's shares are also
issued in Pound Sterling. Foreign currency monetary assets and
liabilities have been translated at the exchange rates ruling at
the statement of financial position date. Transactions in foreign
currency during the period have been translated into Pound Sterling
at the spot exchange rate in effect at the date of the transaction.
Realised and unrealised gains and losses on currency translation
are recognised in profit or loss in the Statement of Comprehensive
Income.
i) Realised and unrealised gains and losses
Realised gains and losses arising on the disposal of investments
are calculated by reference to the cost attributable to those
investments and the sales proceeds, and are included in profit or
loss in the Statement of Comprehensive Income. The change in
unrealised gains and losses arising on investments held at the
financial reporting date are also included in profit or loss in the
Statement of Comprehensive Income. The cost of investments partly
disposed is determined using the weighted average method.
j) Financial liabilities
Financial liabilities include other payables and accrued
expenses, amounts due to brokers and amounts due on redemption of
Ordinary Shares which are held at amortised cost using the
effective interest rate method. Amounts due to brokers represent
payables for investments that have been contracted for but not yet
settled or delivered at the year end.
Financial liabilities are recognised initially at fair value,
net of transaction costs incurred and are subsequently carried at
amortised cost using the effective interest rate method. Financial
liabilities are derecognised when the obligation specified in the
contract is discharged, cancelled or expires.
k) Equity
Share capital represents the nominal value of equity shares and
the excess of the paid up capital over the nominal value.
Other reserves and the capital redemption reserve include all
current and prior results as disclosed in the Statement of
Comprehensive Income. Other reserves also include the deduction for
the excess of consideration paid over nominal value on share
buybacks.
l) Expenses
Expenses are recognised in profit or loss in the Statement of
Comprehensive Income upon utilisation of the service or at the date
they are incurred.
m) Segmental reporting
Operating segments are reported in the manner consistent with
the internal reporting used by the chief operating decision-maker
('CODM'). The CODM, who is responsible for allocating resources and
assessing performance of the operating segments, has been
identified as the Board of Directors who makes strategic decisions
regarding the investments of the Company. Other than as disclosed
in note 15, the CODM does not consider necessary to provide further
analysis for the Company.
3. Income
2020 2019
GBP GBP
Dividends 1,855,144 2,998,767
---------- ----------
4. Investment Manager and Adviser's fee
On 1 October 2019, the Alternative Investment Fund Management
Agreement, dated 22 July 2014, was restated and amended. The
Alternative Investment Fund Management Restated and Amended
Agreement (the "Restated Agreement"), dated 1 October 2019,
appointed Harwood Capital Management (Gibraltar) Limited as the
Company Investment Manager and Adviser, replacing Harwood Capital
LLP with effect from 1 October 2019. Under the Restated Agreement,
no changes were made to the basis for determining the management
fee and supplementary management fee.
The following terms were applicable to Harwood Capital LLP from
1 April 2019 to 30 September 2019 and to Harwood Capital Management
(Gibraltar) Limited from 1 October 2019 to 31 March 2020.
The Investment Manager and Investment Adviser, is entitled to an
annual fee of 1.25% on the first GBP15 million of the Net Asset
Value of the Company, and 1% of any excess, payable monthly in
arrears. The agreement can be terminated giving 12 months' notice
or immediately should the Investment Manager be placed into
receivership or liquidation. The Investment Manager is entitled to
all the fees accrued and due up to the date of such termination but
is not entitled to compensation in respect of any termination.
The fees incurred for the year ended 31 March 2020 were
GBP1,555,536 (2019: GBP1,379,791) and as at the reporting date an
amount of GBP390,866 was still payable to the Investment Manager
(2019: GBP226,351). This amount is included in other payables and
accrued expenses.
5. Supplementary Management fee
During a meeting of the Board of Directors on 12 December 2019,
a payment of GBP300,000 (2019: GBP250,000) was recommended by the
Chairman in respect of the 2019 supplementary management fee. This
was approved by the Board of Directors on 12 December 2019 and paid
on 18 December 2019. The supplementary management fee is paid
annually in arrears.
6. Custodian fees
BNP Paribas Securities Services S.C.A., Guernsey Branch was
appointed as custodian on 1 April 2007 and is entitled to an annual
safekeeping fee based upon the value of investments held plus
transactions fees, subject to a minimum of GBP4,000 per annum. The
fees due for the year ended 31 March 2020 are GBP32,102 (2019:
GBP31,251) and as at the reporting date an amount of GBP7,500 was
still payable to the custodian (2019: GBP4,774). This amount is
included in other payables and accrued expenses.
7. Administration fees
BNP Paribas Securities Services S.C.A., Guernsey Branch was
appointed as secretary and administrator on 1 April 2007 and is
entitled to an annual fee at a rate of 0.125% on the first GBP20
million, 0.10% on the next GBP20 million and 0.075% of any excess
of the total assets, subject to a minimum of GBP50,000 per annum.
The fees due for the year ended 31 March 2020 are GBP143,491 (2019:
GBP116,098) and as at the reporting date an amount of GBP42,500
(2019: GBP18,617) was still payable to the administrator. This
amount is included in other payables and accrued expenses.
8. Directors' fees and expenses
Effective 1 January 2017, each Director is entitled to a fee of
GBP20,000 per annum, with the exception of the Chairman who is
entitled to a fee of GBP27,500 and the Audit Committee Chairman who
is entitled to a fee of GBP25,000. In addition, all Directors are
entitled to reimbursement of travel, hotel and other expenses
incurred by them in course of their duties relating to the Company.
The Directors' fees and expenses due for the year ended 31 March
2020 are GBP167,060 (2019: GBP189,356) and as at 31 March 2020 an
amount of GBP38,125 (2019: GBP38,125) was still payable to the
Directors. This amount is included in other payables and accrued
expenses.
9. Taxation
The Company is eligible for exemption from taxation in Guernsey
under the provisions of the Income Tax (Exempt Bodies) (Guernsey)
Ordinance, 1989. As such, the Company is only liable to pay a fixed
annual fee, currently GBP1,200 (2019: GBP1,200). The withholding
tax of GBP10,737 (2019: GBP11,379) in the Statement of
Comprehensive Income relates to overseas dividends received or
receivable and is irrecoverable.
10. Investments at fair value through profit or loss
2020 2019
GBP GBP
Cost at beginning of year 112,177,066 94,414,272
Additions 40,258,266 38,400,059
Disposals (40,901,238) (27,549,515)
Net realised gains on investments 5,040,757 6,912,250
------------- -------------
Cost at end of year 116,574,851 112,177,066
Unrealised gains on investments 691,985 13,468,105
------------- -------------
Fair value at end of the year 117,266,836 125,645,171
------------- -------------
Representing:
2020 2019
GBP GBP
Listed Equities 108,392,048 116,042,185
Unlisted Equities and Debt 8,874,788 9,602,986
------------ ------------
117,266,836 125,645,171
------------ ------------
The net unrealised losses on revaluation of the investment for
the year is GBP12,776,120 (2019: GBP495,540 gains), that consists
of unrealised losses worth GBP37,592,716 (2019:-18,054,670) and
unrealised gains worth GBP24,816,596 (2019:18,550,210).
11. Share capital
Authorised Share capital
Number of Shares GBP
Authorised:
Ordinary Shares of
50p each 90,000,000 45,000,000
----------------- -----------
Ordinary Shares - 1 April 2019 to 31 March 2020
Ordinary Shares of 50p each Number of Shares Share capital
GBP
At 1 April 2019 14,192,125 49,789,346
At 31 March 2020 14,192,125 49,789,346
----------------- --------------
Ordinary Shares - 1 April 2018 to 31 March 2019
Ordinary Shares of 50p each Number of Shares Share capital
GBP
At 1 April 2018 14,192,125 49,789,346
At 31 March 2019 14,192,125 49,789,346
----------------- --------------
Rights attributable to Ordinary Shares
In a winding-up, the holders of Ordinary Shares are entitled to
the repayment of the nominal amount paid up on their shares. In
addition, they have the right to receive surplus assets available
for distribution. The shares confer the right to dividends, and at
general meetings, on a poll, confer the right to one vote in
respect of each Ordinary Share held.
12. Share buybacks
In accordance with section 315 of the Law, the Company has been
granted authority to make one or more market acquisitions (as
defined in section 316 of the Law, of Ordinary Shares of 50 pence
each in the capital of the Company (the "Ordinary Shares") on such
terms and in such manner as the Directors of the Company may from
time to time determine, provided that:
a) the maximum aggregate number of Ordinary Shares authorised to
be acquired does not exceed 10 per cent. of the issued Ordinary
Share capital of the Company on the date the shareholders'
resolution is passed;
b) the minimum price (exclusive of expenses) payable by the
Company for each Ordinary Share is 50 pence and the maximum price
payable by the Company for each Ordinary Share is an amount equal
to 105 per cent of the average of the middle market quotations for
an Ordinary Share as derived from The London Stock Exchange Daily
Official List for the five business days immediately preceding the
day on which that Ordinary Share is purchased and that stipulated
by Article 5(1) of the Buyback and Stabilisation Regulation being
the higher of the price of the last independent trade and the
highest current independent bid available in the market;
c) subject to paragraph (d), this authority shall expire (unless
previously renewed or revoked) at the earlier of the conclusion of
the next annual general meeting of the Company or on the date which
is 18 months from the date of the previous shareholders'
resolution;
d) notwithstanding paragraph (c), the Company may make a
contract to purchase Ordinary Shares under the authority from the
shareholders' before its expiry which will or may be executed
wholly or partly after the expiry of the authority and may make a
purchase of Ordinary Shares in pursuance of any such contract after
such expiry; and
e) the price payable for any Ordinary Shares so purchased may be
paid by the Company to the fullest extent permitted by the Law.
A renewal of the authority to make purchases of the Company's
own Ordinary Shares will be sought from existing shareholders at
each annual general meeting of the Company. Between 1 April 2019
and 31 March 2020, the Company carried out no share buybacks.
13. Reconciliation of net asset value to published net asset value
2020 2019
GBP GBP per GBP GBP per
share share
Published net asset value 128,446,303 9.05 135,880,966 9.57
Unrealised loss on revaluation
of investments at bid / mid-price (3,573,867) (0.25) (2,546,871) (0.18)
Adjustment - accrued expenses - - (8,197) (0.00)
------------- -------- ------------- --------
Net asset value attributable
to shareholders 124,872,436 8.80 133,325,898 9.39
------------- -------- ------------- --------
14. Loss/earnings per Ordinary Share and net asset value per Ordinary Share
The calculation of basic loss/earnings per share for the
Ordinary Share is based on net loss GBP8,453,462 (2019: income of
GBP8,084,385) and the weighted average number of shares in issue
during the year of 14,192,125 shares (2019: 14,192,125 shares). At
31 March 2020 there was no difference in the diluted earnings per
share calculation for the Ordinary Shares.
The calculation of Net Asset Value per Ordinary Share is based
on a Net Asset Value of GBP124,872,436 (2019: GBP133,325,898) and
the number of shares in issue at the year-end of 14,192,125 shares
(2019: 14,192,125 shares).
15. Segment information
The Chief Operating Decision Makers ("CODM") of the Company are
the Board of Directors. The Company has one reportable segment. The
Board of Directors review internal management reports on a
quarterly basis.
Information on realised gains and losses derived from sales of
investments are disclosed in note 10 to the financial
statements.
The Company is domiciled in Guernsey. All of the Company's
income from investments is from underlying companies. The majority
of these companies are incorporated in countries other than
Guernsey (mainly Great Britain).
The geographical breakdown of the Company's investment portfolio
is set out in the Annual Report.
The Company has no non-financial assets classified as
non-current assets. The Company also has a diversified shareholder
population and the significant holdings of 5% or more are disclosed
in the Annual Report.
16. Financial risk management
The main risks arising from the Company's activities are:
(i) market risk, including currency risk, interest rate risk and other price risk;
(ii) liquidity risk; and
(iii) credit risk
The Company Secretary, in close co-operation with the Board of
Directors and the Investment Manager, coordinates the Company's
risk management. The policies for managing each of these risks are
summarised below and have been applied throughout the year.
i) Market risk
The fair value of future cash flows of a financial instrument
held by the Company may fluctuate because of changes in market
prices. This market risk comprises currency risk, interest rate
risk and other price risk. The Board of Directors reviews and
agrees policies for managing these risks.
Currency risk
The functional and presentation currency of the company is Pound
Sterling and, therefore, the Company's principal exposure to
foreign currency risk comprises investments priced in other
currencies, principally US Dollars. The Investment Manager monitors
the Company's exposure to foreign currencies and reports to the
Board on a regular basis. The Investment Manager measures the risk
to the Company of the foreign currency exposure by considering the
effect on the net asset value and income of a movement in the rates
of exchange to which the Company's assets, liabilities, income and
expenses are exposed.
At 31 March 2020 the currency profile of those financial assets
and liabilities was:
GBP EUR USD Total
GBP GBP GBP
Investments
at fair
value
through
profit or
loss 113,623,544 1,238,860 2,404,432 117,266,836
Dividends -
receivable 118,500 - 118,500
Cash and -
cash
equivalents 7,743,607 - 7,743,607
Trade and (579,856) - - (579,856)
other
payables
Total net
foreign
currency
exposure 120,905,795 1,238,860 2,404,432 124,549,087
-------------------------------------------------- -------------------------------------------------- ------------------------------------------------ --------------------------------------------------
At 31 March 2019 the currency profile of those financial assets
and liabilities was:
GBP EUR USD Total
GBP GBP GBP GBP
Investments
at fair
value
through
profit or
loss 120,771,296 1,206,380 3,667,495 125,645,171
Dividends -
and interest
receivable 210,500 - 210,500
Cash and -
cash
equivalents 7,934,533 15 7,934,548
Trade and (480,954) - - (480,954)
other
payables
Total net
foreign
currency
exposure 128,435,375 1,206,380 3,667,510 133,309,265
-------------------------------------------------- -------------------------------------------------- ------------------------------------------------ --------------------------------------------------
Sensitivity analysis is based on the Company's monetary foreign
currency instruments held at each balance sheet date.
31 March 2020 31 March 2019
---------- ----------------- ----------------------------------------- -----------------------------------------
Currency Increase/ Impact on Impact on Impact on Impact on
(decrease) Total Comprehensive Net Assets Total Comprehensive Net Assets
in the exchange Income Income
rate
GBP GBP GBP GBP
---------- ----------------- --------------------- ------------------ --------------------- ------------------
(331,208)
USD/EUR 10%/(10%) / 404,810 (331,208)/404,810 (443,080)/541,542 (443,080)/541,542
---------- ----------------- --------------------- ------------------ --------------------- ------------------
Interest rate risk
Interest rate movements may affect:
-- the fair value of the investments in fixed rate securities;
-- the level of income receivable on cash deposits and floating rate debt instruments; and
-- the interest payable on the Company 's variable rate borrowings, if any.
The possible effects on fair value and cash flows that could
arise as a result of changes in interest rates
are taken into account when making investment decisions and
borrowings, if any. The Board reviews on a regular basis the values
of the unquoted loans and preferred shares to companies in which
private equity investment is made. Interest rate risk is not
significant to the Company as it has no significant fixed income
investments or borrowings.
Other price risk
Other price risks (i.e. changes in market prices other than
those arising from currency risk or interest rate risk) may affect
the value of investments.
The Company's exposure to price risk comprises mainly of
movements in the value of the Company's investments. As at the
year-end, the spread of the Company's investment portfolio is
detailed above.
The Board of Directors manages the market price risks inherent
in the investment portfolio by ensuring full and timely access to
relevant investment information from the Investment Manager. The
Board meets regularly and at each meeting reviews investment
performance. The Board monitors the Investment Manager's compliance
with the Company's objectives and is directly responsible for
investment strategy and asset allocation.
The Company's exposure to other changes in market prices at 31
March 2020 on its investments was as follows:
2020 2019
GBP GBP
Financial
assets at
fair value
through
profit or
loss
-
Non-current
investments
at fair
value
through
profit or
loss 117,266,836 125,645,171
-------------------------------------------------------- ------------------------------------------------------
The following table illustrates the sensitivity of the profit
and net assets to an increase or decrease of 15% (2019:10%) in the
fair values of the Company's investments. This level of change is
considered to be reasonably possible based on observation of
current market conditions. The sensitivity analysis is based on the
Company's investments at each balance sheet date, with all other
variables held constant.
2020 2019
Increase Increase Decrease
in fair Decrease in fair in fair
value in fair value value value
GBP GBP GBP GBP
Statement of
Comprehensive
Income
Profit/(loss)
for the 12,564,5
year 17,590,025 (17,590,025) 17 (12,564,517)
-------------------------------------------------- ---------------------------------------------------- ------------------------------------------------ ---------------------------------------------------
Net assets 12,564,5
17,590,025 (17,590,025) 17 (12,564,517)
-------------------------------------------------- ---------------------------------------------------- ------------------------------------------------ ---------------------------------------------------
ii) Liquidity risk
This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
The Company is faced with some level of liquidity risk as 5% of
the Company's investments are in unlisted equities and other
investments that may not be readily realisable.
In accordance with the Company's policy, the Investment Manager
monitors the Company's liquidity risk, and the Board of Directors
has overall responsibility.
The table below shows the split of investments with maturity
dates of less than a year and investments with no maturity
date.
31 March 2020 31 March 2019
Less Greater No Less Greater No
than than maturity Total than than 1 maturity Total
1 1 year date 1 year date
year year
GBP GBP GBP GBP GBP GBP GBP GBP
Listed - - 108,392,048 108,392,048 - - 116,042,185 116,042,185
Unlisted - 2,639,462 6,235,326 8,874,788 - 2,533,290 7,069,696 9,602,986
-------------------------------------------- ------------------------------------------------ ----------------------------------------------- --------------------------------------------- ------------------------------------------- --------------------------------------------- ---------------------------------------------- ---------------------------------------------
- 2,639,462 114,627,374 117,266,836 - 2,533,290 123,111,881 125,645,171
------------------------------------------------------- ------------------------------------------------ ----------------------------------------------- --------------------------------------------- ------------------------------------------- --------------------------------------------- ---------------------------------------------- ---------------------------------------------
The Company's financial liabilities are due to mature within one
year from the Statement of Financial Position date. The contractual
maturities of these financial liabilities equal their carrying
amount on the Statement of Financial Position. As the Company is in
a net current asset position, the Directors are satisfied that
there are adequate resources to meet these obligations as they fall
due.
iii) Credit risk
The Company does not have any significant exposure to credit
risk arising from any one individual party. Credit risk is spread
across a number of counterparties, each having an immaterial effect
on the Company's cash flows, should a default happen. The Company's
maximum credit risk exposure at the statement of financial position
date is represented by the respective carrying amounts of the
financial assets in the Statement of Financial Position.
There is a risk that the custodian and bank used by the Company
to hold assets and cash balances could fail and that the Company's
assets may not be returned.
Associated with this is the additional risk of fraud or theft by
employees of those third parties. The Board manages this risk
through the Investment Manager monitoring the financial position of
those custodians and banks used by the Company.
The credit rating of the custodian and the bank, BNP Paribas
Securities Services S.C.A., Guernsey Branch, is A with Standard
& Poor's.
iv) Operational risk
Operational risk is the risk of direct or indirect loss arising
from a wide variety of causes associated with the processes,
technology and infrastructure supporting the Company's activities
with financial instruments either internally within the Company or
externally at the Company's service providers, and from external
factors other than credit, market and liquidity risks such as those
arising from legal and regulatory requirements and generally
accepted standards of investment management behaviour.
The Company's objective is to manage operational risk so as to
balance limiting of financial losses and damage to its reputation
with achieving its investment objective.
Capital management policies and procedures
The Company's capital management objectives are:
- to ensure that the Company will be able to continue as a going concern; and
- to maximise the income and capital return to its equity
shareholders through an appropriate balance of equity capital and
long-term debt. The policy is that gearing should not exceed 20% of
net assets.
The Company's capital at 31 March comprises:
2020 2019
Equity GBP GBP
Share
capital 49,789,346 49,789,346
Capital 1,246,500 1,246,500
redemption
reserve
and other
reserves
Other 73,836,590 82,290,052
reserves
--------------------------------------------------- --------------------------------------------------
124,872,436 133,325,898
------------------------------------------------------------------------------------------------------ --------------------------------------------------
The Company does not have any long term debt outstanding as at
31 March 2020 and 31 March 2019.
The Board, with the assistance of the Investment Manager,
monitors and reviews the broad structure of the Company's capital
on an ongoing basis. This review includes:
- the planned level of gearing, which takes account of the
Investment Manager's views on the market;
- the need to buy back equity shares for cancellation, which
takes account of the difference between the net asset value per
share and the share price (i.e. the level of share price discount
or premium);
- the need for new issues of equity shares; and
- the extent to which revenue in excess of that which is
required to be distributed should be retained.
The Company's objectives, policies and processes for managing
capital are unchanged from the preceding accounting period and
there are no imposed capital requirements.
17. Fair value hierarchy
Where an asset or liability's value is determined based on
inputs from different levels of the hierarchy, the level in the
fair value hierarchy assumed for the valuation assessment is the
lowest level input significant to the fair value measurement in its
entirety.
Investments whose values are based on quoted market prices in
active markets, and therefore classified within level 1, include
active listed equities. The Company does not adjust the quoted
price for these instruments.
Financial instruments 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. 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.
Investments classified within level 3 have significant
unobservable inputs. Level 3 instruments consists of private equity
positions. As observable prices are not available for these
securities, the Company has used valuation techniques to derive the
fair value. For certain investments, the Company utilises
comparable trading multiples and recent transactions in arriving at
the valuation for these positions. The Investment Manager
determines comparable public companies (peers) based on industry,
size, developmental stage and strategy.
Management then calculates a trading multiple for each
comparable company identified. The multiple is calculated by
dividing the enterprise value of the comparable company by its
earnings before interest, taxes, depreciation and amortisation
(EBITDA). The trading multiple is then discounted for
considerations such as illiquidity and differences between the
comparable companies based on company-specific facts and
circumstances. New investments are initially carried at cost, for a
limited period, being the fair value of the most recent investment
in the investee company.
In accordance with IPEV valuation guidelines, changes and events
since the acquisition date are monitored to assess the impact on
the fair value of the investment and the valuation derived from
investment cost is adjusted
if necessary. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date.
The table below analyses financial instruments measured at fair
value at the end of the reporting period by the level in the fair
value hierarchy into which the fair value measurement is
categorised.
31 March
2020 Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
Financial
assets at
fair
value
through
profit or
loss
Listed
securities 101,229,548 7,162,500 - 108,392,048
Unlisted
securities - - 8,874,788 8,874,788
------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------
101,229,548 7,162,500 8,874,788 117,266,836
------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------
31 March 2019
Financial assets at
fair value
through profit or loss
Listed securities 107,412,185 8,630,000 - 116,042,185
Unlisted securities - - 9,602,986 9,602,986
------------ ---------- ---------- ------------
107,412,185 8,630,000 9,602,986 125,645,171
------------ ---------- ---------- ------------
The following table summarises the changes in fair value of the
Company's Level 3 investments for the year ended 31 March 2020.
2020 2019
GBP GBP
Balance at 1 April 9,602,986 5,048,764
Net realised
(losses)/gains on
investments (6,088,982) (228,908)
Unrealised
gains/(losses) on
investments 5,468,784 (23,021)
Purchase of investments - 1,294,600
Sale of investments (108,000) -
Transfers from level 1
into level 3 - 3,511,551
------------------------------------------- -------------------------------------------
Balance at 31 March 8,874,788 9,602,986
------------------------------------------- -------------------------------------------
Change in unrealised
losses on investments
included in Statement
of Comprehensive
Income for Level 3
investments held 5,468,784 (23,021)
------------------------------------------- -------------------------------------------
During the year ended 31 March 2020, there were no transfers to
and from level 3 (31 March 2019: there was one transfer from level
1 to level 3 resulting from an investee company's listing being
suspended ). There was one transfer from Level 1 to Level 2 as a
result of low market activity.
Transfers between levels are determined based on changes to the
significant inputs used in the fair value estimation. The directors
have selected an accounting policy to apply transfers between
levels in the fair value hierarchy at the beginning of the relevant
reporting period.
The table below sets out sensitivity to the earnings multiples
used at 31 March 2020 in measuring material investments categorised
as Level 3 in the fair value hierarchy and measured based on
comparable multiples approach.
Fair Value Sensitivity to changes
at 31 March Unobservable in significant unobservable
Valuation Method 2020 (GBP) inputs Factor inputs
-------------------- ------------- ------------- ------- -----------------------------
The estimated fair value
Earnings would increase if:
Comparable (EBITDA) - the Earnings (EBITDA)
Company Multiples 1,406,300 multiple 14.5x multiple was increased
The estimated fair value
Earnings would increase if:
Comparable (EBITDA) - the Earnings (EBITDA)
Company Multiples 2,228,205 multiple 7x multiple was increased
-------------------- ------------- ------------- ------- -----------------------------
Fair Value Sensitivity to changes
at 31 March Unobservable in significant unobservable
Valuation Method 2019 (GBP) inputs Factor inputs
The estimated fair value
Earnings would increase if:
Comparable (EBITDA) - the Earnings (EBITDA)
Company Multiples 1,332,459 multiple 15.1x multiple was increased
-------------------- ------------- ------------- ------- -----------------------------
The estimated fair value
Earnings would increase if:
Comparable (EBITDA) - the Earnings (EBITDA)
Company Multiples 3,499,800 multiple 7.5x multiple was increased
-------------------- ------------- ------------- ------- -----------------------------
The remaining investments classified as Level 3 have not been
included in the above analysis as they have either a fair value
that either approximates a recent transaction price or is cash held
in escrow pending the outcome of certain post sale conditions (i.e.
warranties).
Although the Company believes that its estimates of fair value
are appropriate, the use of different methodologies or assumptions
could lead to different measurements of fair value. For fair value
measurements in Level 3, changing one or more of the assumptions
used to reasonably possible alternative assumptions would have the
following effects on the net assets attributable to the
shareholders.
As at 31 March 2020
Valuation Method Input Sensitivity used GBP
-------------------- ------------------- ---------------------- ------------------
Comparable Company Earnings (EBITDA)
Multiples multiple +/- 1.0x (15.5/13.5) 60,940/(53,060)
-------------------- ------------------- ---------------------- ------------------
Comparable Company Earnings (EBITDA)
Multiples multiple +/- 10.0% (7.7/6.3) 226,424/(226,424)
-------------------- ------------------- ---------------------- ------------------
As at 31 March 2019
Valuation Method Input Sensitivity used GBP
-------------------- ------------------- ---------------------- ------------------
Comparable Company Earnings (EBITDA)
Multiples multiple +/- 1.0x (16.1/15.1) 117,758/(98,384)
-------------------- ------------------- ---------------------- ------------------
Comparable Company Earnings (EBITDA)
Multiples multiple +/- 10.0% (8.3/6.8) 387,267/(387,267)
-------------------- ------------------- ---------------------- ------------------
A sensitivity of 1.0x and 10% has been considered appropriate
given the earnings (EBITDA) multiple for comparable company
multiples lies within this range.
18. Related parties
All transactions with related parties are carried out at arm's
length and the prices reflect the prevailing fair market value of
the assets on the date of the transaction.
The Investment Manager and Investment Adviser are considered to
be related parties. The fees paid are included in the Statement of
Comprehensive Income and further detailed in notes 4 and 5.
The Directors are also considered related parties and their fees
are disclosed in the Statement of Comprehensive Income and note 8.
At 31 March 2020, GBP38,125 (2018: GBP38,125) included in other
accruals and payables was payable to the Directors.
Christopher Mills is a Director and shareholder of Oryx
International Growth Fund Limited. He is also a director of Harwood
Capital Management (Gibraltar) Limited, the Company's Investment
Manager and Investment Adviser and Chief Investment Officer of
North Atlantic Smaller Companies Investment Trust plc ("NASCIT"),
which is a substantial shareholder of Oryx as detailed above and
note 19 of the Annual Report.
Rupert Evans is a consultant to the law firm Mourant Ozannes,
the legal adviser to the Company. The Company did not receive any
legal services from Mourant Ozannes during the year, nor did it
receive any services in the prior year.
As at 31 March 2020, the Company did not hold shares in Harwood
Wealth Management Group (2019: 2,500,000 shares valued at
GBP3,250,000). The Company considered Harwood Wealth Management
Group a related party, until it was disposed, as Mr Christopher
Mills, a non-executive director of Harwood Wealth Management Group,
is also a member of key management personnel of the Company.
During the year ended 31 March 2020, the Company entered into an
agreement for an unsecured loan facility from Harwood Holdco
Limited. The purpose of this loan was to provide short term funding
to the company to enable it to make new investments with settlement
due by 30 April 2020, unless otherwise extended by Harwood Holdco
Limited. The transactions that occurred on this facility included
GBP750,000 withdrawn by the Company on 17 January 2020 and repaid
on 11 February 2020. The terms of this loan included 2.50% interest
per annum using 365 days and when the short term loan was repaid in
25 days Harwood Holdco Limited waived the interest due.
The facility remained available to the Company subsequent to 30
April 2020.
Sidney Cabessa is a director of Harwood Capital Management
Limited, the parent company of Harwood Capital Management
(Gibraltar) Limited. No fees were paid or are payable to Harwood
Capital Management Limited.
19. Majority Shareholder
NASCIT holds 51.95% of the Ordinary shares of the Company.
20. Subsequent Events
There have been no significant events subsequent to the year
end, which, in the opinion of the Directors, may have had an impact
on the financial statements for the year ended 31 March 2020.
ALTERNATIVE PERFORMANCE MEASURES
NAV per Ordinary Share
NAV per Ordinary Share means an amount equal to, as at the
relevant date, the NAV attributable to Ordinary Shares divided by
the number of Ordinary Shares in issue as at such date.
Reason for use
Common industry performance benchmark for calculating the Total
Return and Share Price (Discount)/Premium to NAV per Ordinary
Share.
Recalculation
NAV per Ordinary Share is calculated as follows:
31 March 2020 31 March 2019
------------------------------------ --------------- ---------------
Net Assets as per Statement of GBP124,872,436 GBP133,325,898
Financial Position
Number of Ordinary Shares in issue
at year 14,192,125 14,192,125
------------------------------------ --------------- ---------------
NAV per Ordinary Share GBP8.80 GBP9.39
------------------------------------ --------------- ---------------
Share Price Discount to NAV per Ordinary Share
Closing price as at such date as published on the London Stock
Exchange divided by the NAV per Ordinary Share.
Reason for use
Common industry measure to understand the price of the Company's
shares relative to its net asset valuation.
Recalculation
31 March 2020 31 March 2019
----------------------------------------- -------------- --------------
Closing price as at 31 March as GBP6.70 GBP7.68
published on the London Stock Exchange
NAV per Ordinary Share GBP8.80 GBP9.39
----------------------------------------- -------------- --------------
Share Price Discount (23.86)% (18.21)%
----------------------------------------- -------------- --------------
COMPANY INFORMATION
Registered Office
BNP Paribas House,
St Julian's Avenue,
St Peter Port, Guernsey, GY1 1WA
Investment Manager and Investment Adviser
(Resigned 1 October 2019)
Harwood Capital LLP
6 Stratton Street, Mayfair, London, W1J 8LD
Investment Manager and Investment Adviser
(Effective 1 October 2019)
Harwood Capital Management (Gibraltar) Limited LLP
Suite 827 Europort, Europort Road, Gibraltar
Custodian
BNP Paribas Securities Services S.C.A., Guernsey Branch
BNP Paribas House, St Julian's Avenue,
St Peter Port, Guernsey, GY1 1WA
Secretary and Administration
BNP Paribas Securities Services S.C.A., Guernsey Branch
BNP Paribas House, St Julian's Avenue,
St Peter Port, Guernsey, GY1 1WA
Registrars
Link Market Services (Guernsey) Limited
PO Box 627, St Sampson, Guernsey, GY1 4PP
Stockbroker
Winterflood Securities Limited
The Atrium Building, Cannon Bridge House
25 Dowgate, Hill, London, EC4R 2GA
Independent Auditor
KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade
St Peter Port, Guernsey, GY1 1WR
Legal Advisers
To the Company as to Guernsey law:
Mourant Ozannes
Royal Chambers, St. Julian's Avenue, St Peter Port,
Guernsey, Channel Islands, GY1 4HP
To the Company as to English law:
Bircham Dyson Bell
50 Broadway
London, SW1H 0BL
Website
www.oryxinternationalgrowthfund.co.uk
Enquiries:
Jasper Cross
BNP Paribas Securities Services S.C.A., Guernsey Branch
Tel: +44 (0) 1481 750 859
A copy of the Company's Annual Report and Financial Statements
is available from the Company Secretary, (BNP Paribas Securities
Services S.C.A., Guernsey Branch, St Julian's Avenue, St Peter
Port, Guernsey,GY1 1WA), or on the Company's website (
www.oryxinternationalgrowthfund.co.uk ).
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FLFSVDRIVFII
(END) Dow Jones Newswires
July 23, 2020 09:55 ET (13:55 GMT)
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From Sep 2024 to Oct 2024
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From Oct 2023 to Oct 2024