TIDMOIG
RNS Number : 1993D
Oryx International Growth Fund Ld
04 July 2016
04 July 2016
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 2016
A copy of the Company's Annual Report and Financial Statements
will be available via the following link:
www.oryxinternationalgrowthfund.co.uk
COMPANY OVERVIEW
The investment objective of Oryx International Growth Fund
Limited (the "Company") is to seek to generate consistently high
absolute returns whilst seeking to maintain a low level of risk for
shareholders.
The Company principally invests in small and mid-size quoted and
unquoted companies in the United Kingdom and the 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.
The Company's investment policy is set out in the Strategic
Report of this annual report.
Company Oryx International Growth Fund Limited
* Guernsey incorporated, authorised closed-ended
investment company
* Incorporated on 2 December 1994
* Admitted to the Official List of the UK Listing
Authority and to trading on the main market of the
London Stock Exchange on 2 March 1995
* 15,192,125 shares in issue as at 31 March 2016
---------------- ------------------------------------------------------------------
Investment Harwood Capital LLP
Manager (the "Investment Manager" and the
and Investment "Investment Adviser")
Adviser
* A United Kingdom limited liability partnership
incorporated under the Limited Liability Partnerships
Act 2000
* Partnership number OC304213
* Regulated by the Financial Conduct Authority ('FCA')
* Registered as a Small Authorised Alternative
Investment Fund Manager ('AIFM') with the Company
included on its schedule of Alternative Investment
Funds ('AIFs')
---------------- ------------------------------------------------------------------
Key Figures
(GBP in millions, except per At 31 March At 31 March
share data) 2016 2015
Net Asset Value attributable
to shareholders
- Ordinary Shares 104.72 93.07
Net Asset Value per share attributable
to shareholders
- Ordinary Shares GBP6.89 GBP5.69
Investments 85.66 92.42
Cash and Cash Equivalents 19.51 0.99
Share Price 6.13 4.67
Discount to Net Asset Value (based
on published NAV) (12.50)% (19.01)%
Earnings per share 1.14 0.35
CHAIRMAN'S STATEMENT
I am, once again, very pleased to report the results for the
year to end 31 March 2016. It was another very good year with the
net asset value per share increasing by 21.3%. Over the past five
years the per share net asset value has increased by 153.3%. Your
Board believes that the Company is amongst the best performing
small cap investment companies listed in the United Kingdom and has
significantly outperformed its relevant indices.
As you will see from the report from the Investment Adviser
("Harwood"), there have been some notable successes. This excellent
performance is driven by identifying situations, which through
active management can greatly enhance value. This is not an exact
science and it can lead to years where the results are less stellar
but it is interesting to note that over all the periods analysed
above, the Company has greatly exceeded the market indices for
which Christopher Mills and his team at Harwood must be
congratulated.
We continue to acquire shares and during the year the Company
purchased for cancellation 1,179,486 shares at an average discount
of 13.0%. This policy continues to benefit long term
shareholders.
In accordance with our long established policy, the directors
are not recommending a dividend in respect of the year ended March
2016, however we will be seeking authority to continue our
programme of share buy backs when the level of discount warrants
it.
As ever, the portfolio managers are cautiously optimistic about
the coming year. This is a view your Board shares, but it is
dependent on the ability of the portfolio managers to continue to
acquire stakes in businesses at attractive valuations and then sell
them, in due course, at a higher price. Each year, we warn that
this is challenging and I would reiterate that, notwithstanding the
excellent results over the last one, three, five and ten years.
It is the policy of the Board to review the portfolio with the
Investment Manager on a regular basis and this will continue.
Following the Brexit vote, it is not considered that there will be
a material impact on the long term viability of the Company.
Nigel Cayzer
Chairman
1 July 2016
INVESTMENT ADVISER'S REPORT
It is pleasing to note that during the year the net asset value
per share rose by 21.3% as compared to a fall of 0.8% in the AIM
Index and yielded a meaningful out-performance against the other
appropriate indices.
Quoted portfolio
The net asset value of the Company was assisted by the good
performance of a number of the larger holdings held by the Company.
Gleeson's share price rose 50% following better than expected
results, while Journey Group share price rose 46%, following
successful new contracts with Fedex and extensions with United
Airlines and Sky Blue. The Company crystallised significant gains
on exiting Synergy Health which rose nearly 40% as a result of a
takeover bid, while Tangent Communication was taken private at a
significant discount premium to the pre offer price.
Hayward Tyler share price rose 19%, following the announcement
of the acquisition of Peter Brotherhood while undertaking a major
redevelopment of its Luton factory headquarters. OMG has continued
performing well following the disposal of 2d3 sensing. SourceBio
Science share price rose 22%, and has continued to perform well
since the acquisition of Select, which demonstrated that the
business is able to expand into new geographies and enhance its
existing service offerings. Bioquell's share price rose 34% after
undergoing a strategic review process which culminated in the
successful sale of TRaC Global limited.
Minds + Machines and Goals Soccer currently are undergoing a
restructuring exercise, with the focus of building the businesses
where shareholder value can be maximised. The only major
disappointment was EKF Diagnostics which has faced a challenging
year after an acquisition performed significantly below
expectations.
Substantial progress has been made with Assetco, with claims
amounting to GBP38m plus interest against third parties, whilst the
ongoing business continues to perform well.
Unquoted Portfolio
Celsis performed notably well during the period and was sold at
a substantial premium to the 31 March 2015 valuation. Team Rock
however missed forecasts and had to be written down, although this
was more than offset by the excellent performance of Indoor Bowling
which was written up following much better than expected operating
results. It is anticipated that the unquoted portfolio will
continue to add value to the overall portfolio in the current
year.
Outlook
Identifying stocks trading at a discount to market value has
become increasingly more challenging with ever decreasing market
liquidity.
Notwithstanding this, there are a number of catalysts in place
in the quoted portfolio which should support further improvement in
the net asset value of the Company over the coming year, even if
financial markets face some headwinds, particularly as corporate
profits may continue to disappoint.
Harwood Capital LLP
1 July 2016
TEN LARGEST EQUITY HOLDINGS
As at 31 March 2016 As at 31 March 2015
Shares Cost Fair % of Shares Cost Fair % of
Value NAV* Value NAV*
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
MJ Gleeson
Plc 2,000,000 4,067,733 11,920,000 11.38% 3,400,000 6,915,146 13,600,000 14.61%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
OMG Plc 18,000,000 2,601,090 8,010,000 7.65% 17,500,000 4,758,590 7,000,000 7.52%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Source Bioscience
Plc 50,000,000 6,039,846 7,500,000 7.16% 41,767,620 4,900,291 5,116,533 5.50%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Journey Group
Plc 3,327,575 6,690,861 6,156,014 5.88% 2,750,000 5,673,525 3,465,000 3.72%
------------------- ----------- ---------- ----------- ------- -------
Hayward Tyler
Group Plc 6,000,000 4,492,574 4,980,000 4.76% 3,815,000 2,805,074 2,632,350 2.83%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Minds + Machines
Group 54,700,000 4,357,065 4,923,000 4.70% - - - -
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Bioquell
Plc 3,000,000 3,586,360 4,710,000 4.50% 3,000,000 3,586,360 3,510,000 3.77%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
EKF Diagnostics
Holdings
Plc 35,000,000 4,939,395 3,850,000 3.68% 7,485,000 1,628,270 1,497,000 1.61%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Goals Soccer
Centres Plc 3,500,000 4,569,864 3,255,000 3.11% 3,500,000 4,569,864 7,700,000 8.27%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
Assetco Plc 1,050,000 2,600,000 3,202,500 3.06% 1,050,000 2,600,000 2,940,000 3.16%
------------------- ----------- ---------- ----------- ------- ----------- ---------- ----------- -------
*Net Asset Value
MJ Gleeson Plc
The company operates two divisions, Gleeson Homes and Gleeson
Strategic Land. Gleeson Homes showed a strong increase in revenue
from the previous year, driven by increased demand for affordable
housing among the group's core customers based in the North of
England. Strategic Land continues to enjoy continuing success in
securing residential planning permission as well as progressing the
sale of a number of its sites.
OMG Plc
The group operates as a diversified technology service business
with two core divisions, Vicon and Yotta. Vicon operates as a
technology service business providing image capture products and
services for the entertainment, life sciences and engineering
industries. Yotta provides software systems for local authorities
to help improve their management and make informed decisions on
infrastructure assets; it is increasingly becoming the key growth
component of the business as it looks to expand its software
business into new geographies after successful trials in Holland
and Australia. OMG Life has been refocused on a licensing IP model
which has removed sufficient risk and reduced the cost basis
considerably. The company is hopeful that it will sign a
substantial contract in the current year.
Source BioScience Plc
The company is an international laboratory service and products
business supplying healthcare, life science research and biopharma.
The company is split into three divisions: Healthcare, Lifesciences
and the Stability and Bio Storage division. The Healthcare division
provides diagnostic testing for cancer and infectious disease, for
example, screening for cervical cancer. It also provides discreet
testing for sexually transmitted diseases (predominantly Chlamydia)
as well as selling serology reagents, with opportunities for growth
in the US and Europe. The Life Sciences division provides DNA
sequencing services for a network of laboratories, pharmaceutical
companies and academic research groups. The Stability and Bio
storage division provides services for supporting drug discovery
and clinical trials through to storage facilities for testing under
environmentally controlled conditions. The recent acquisition of
Select provides stability testing storage and testing services with
a strong commercial presence overseas and in the UK, with the
ability for cross selling
opportunities.
Journey Group Plc
The company is a specialist air support business providing
in-flight products, catering and cabin management services to the
airline industry. The group's operations are organised into two
divisions: Watermark Products and Air Fayre (USA). Watermark
Products supplies in-flight products primarily to the international
airline industry on a global basis. The Air Fayre brand provides
in-flight catering to the international and domestic airline
industry in the United States through its patent protected supply
chain.
The company has had a good year. In particular Air Fayre has
benefitted from the start of a five-year contract with FedEx out of
Memphis launched towards the end of last year. Air Fayre has proven
that its model is successful and can be replicated out of
California while maintaining a strong partnership with United
Airlines in the form of a three-year contract extension for
international and domestic flights out of Los Angeles.
Hayward Tyler Group Plc
Hayward Tyler is a world leader in boiler circulation pumps and
is engaged in the manufacturing, design, engineering and service of
fluid filled electric motors and pumps for the energy sector. The
company has a market leading reputation and is an established
player in the Original Equipment and the aftermarket segments. The
company is currently undertaking a major refurbishment of its UK
factory headquarters based in Luton, establishing a leading Centre
of Excellence for specialist manufacturing, which is expected to be
completed by June 2016. This will reduce working capital and
production costs, whilst increasing the capacity of the facility
and the future capability to be able to compete for substantial
nuclear contracts that should become available over the next few
years.
Minds + Machines Group
Mind + Machines targets top level domain names and operates as a
sales and marking led owner. The portfolio is focused around
geography names (.London, .Miami, .Boston), consumer interests
(.Wedding, .Cooking, .Fashion), professional occupations (.Law,
.dds), lifestyle (.Yoga, .Fit, .Surf), generic names (Casa.VIP and
.Work) and also outdoor activities (.Garden and .Fishing). The
group is continuing to grow market share whilst looking to
penetrate new verticals and geographies such as China.
The Group has been through a restructuring process closing down
the registrar business which has led to a re-branding of the
business with new strategic objectives. The company announced a
share buy-back program of upto GBP15m over the next twelve
months.
Bioquell Plc
The company is a manufacturer consisting of bio-decontamination
products and services. The bio-decontamination division develops,
designs and produces specialist surface sterilisation and
filtration technology as a component of life sciences, defence,
chemical, radiological, biological, health care and nuclear
filtration for the defence sector.
The group underwent a strategic review process which culminated
in the successful sale of TRaC Global Limited which followed by
returning cash by way of a tender offer realising substantial
shareholder value. The underlying drivers of growth is in its
Healthcare and Life Sciences divisions.
EKF Diagnostics Holdings Plc
EKF Diagnostics is a global integrated market leader in the
medical diagnostics business, offering the largest range of
hemoglobin and hematocrit analysers. Essentially it focuses
manufacturing diagnostic for the Point of Care market,
demonstrating a way to make blood and anaemia screening more
accessible and more affordable, giving specialists and physicians a
choice of various products between measurement speed and price
options. The company also has a separate focal point as a global
manufacturer of central laboratory products where its liquid
reagents can be used widely in analysers found in hospital
laboratories globally.
The management team completed a strategic review of the business
and intend to build shareholder value by focusing on organic growth
and implementing reductions to the cost base. Various opportunities
remain including product licensing and entry into new markets.
Goals Soccer Centres Plc
Goals is the leading operator of 5-a-side soccer centres across
the United Kingdom, operating 45 centres across the UK. It
currently has 1 centre in Los Angeles, United States, which has
proved to be a continuing good business and is further developing
the pipeline with completion on a second site. The summer of 2015
was a particularly challenging period for Goals with like for like
sales declining by 11.5%, driven by a significant downturn in the
second half of the year, with the new openings of Manchester and
Doncaster trading below their expected forecasts.
The board, under the new appointment of Nick Basing as Executive
Chairman, is currently undertaking an ongoing in-depth strategic
review of all aspects of the business. As part of the review no new
sites will be opened in the UK for the foreseeable future, with the
business model focusing on improving the returns and performance of
the existing 45 centres across the UK. The US market continues to
evolve with significant progress on the US pipeline with 1 site
completing legal and heads of terms and another 4 sites in
advantaged stages.
AssetCo Plc
AssetCo is a Fire and Rescue business, operating in Abu Dhabi.
Recently trading has been good and the company has significant cash
balances coupled with no debt. In addition, it has a substantial
claim, for previous negligence, amounting to GBP38m plus interest
against third parties, which it is actively pursuing.
INVESTMENT SCHEDULE
as at 31 March 2016, expressed in GBP Sterling
Holding Fair Value Proportion
of Net
Assets
GBP %
LISTED INVESTMENTS
Great Britain - Equities
(70.62%, 2015: 81.04%)
365 Agile Group Plc 365,000 240,900 0.23
Access Intelligence Plc 6,500,000 308,750 0.29
Assetco Plc 1,050,000 3,202,500 3.06
Bioquell Plc 3,000,000 4,710,000 4.50
Catalyst Media Group Plc 3,125,000 2,250,000 2.15
Cityfibre Infrastructure
Holdings Plc 1,635,000 784,800 0.75
Coretx Holdings Plc 2,000,000 770,000 0.73
Cyprotex Plc 2,500,000 2,250,000 2.15
Easyhotel Plc 1,174,000 1,080,080 1.03
Eco City Vehicles Plc 19,891,803 547,024 0.52
EKF Diagnostics Holdings
Plc 35,000,000 3,850,000 3.68
Entu UK Plc 1,000,000 600,000 0.57
Goals Soccer Centres Plc 3,500,000 3,255,000 3.11
Harwood Wealth Management
Group Plc 2,345,679 2,111,111 2.02
Hayward Tyler Group Plc 6,000,000 4,980,000 4.76
Instem Plc 350,000 717,500 0.68
Journey Group Plc 3,327,575 6,156,014 5.88
MJ Gleeson Plc 2,000,000 11,920,000 11.38
Netcall Plc 1,500,000 720,000 0.69
Omega Diagnostics Group Plc 4,731,473 674,235 0.64
OMG Plc 18,000,000 8,010,000 7.65
Parallel Media Group Plc 604,829 54,435 0.05
Plastics Capital Plc 950,000 931,000 0.89
Quantum Pharma Plc 4,500,000 2,700,000 2.58
Real Good Food Plc 350,000 157,500 0.15
Safestay Plc 1,600,000 864,000 0.82
Science Group Plc 100,000 138,000 0.13
Scientific Digital Imaging
Plc 4,991,286 499,129 0.48
Scisys Plc 870,455 565,796 0.54
Servelec Group Plc 100,000 380,000 0.36
Source Bioscience Plc 50,000,000 7,500,000 7.16
The Mission Marketing Group
Plc 1,995,000 817,950 0.78
Tp Group Plc 8,000,000 220,000 0.21
-------------------------------- ------------- ------------------ --------------------
73,965,724 70.62
British Virgin Islands - Equities
(5.96%, 2015: 2.93%)
Minds + Machines Group Limited 54,700,000 4,923,000 4.70
Public Service Properties
Investments Limited 2,634,000 1,317,000 1.26
-------------------------------- ------------- ------------------ --------------------
6,240,000 5.96
USA - Equities (0.38%, 2015:
5.58%)
Tyratech Inc 14,285,714 392,857 0.38
-------------------------------- ------------- ------------------ --------------------
392,857 0.38
Total Listed investments 80,598,581 76.96
-------------------------------- ------------- ------------------ --------------------
Holding Fair Value Proportion
of Net
Assets
GBP %
UNLISTED INVESTMENTS
Great Britain - Debt (1.69%,
2015: nil)
Indoor Bowling Equity Limited
Loan Notes 1,768,148 1,768,148 1.69
------------------------------- --------------- -------------------- ---------------------
1,768,148 1.69
Great Britain - Equities
(2.53%, 2015: 8.33%)
Celsis Group Limited 594,276 413,472 0.39
Indoor Bowling Equity Limited 48,039 598,566 0.57
Interactive Investor Plc 5,853 280,944 0.27
IPT Group Limited 112,498 - -
Sinav Limited - 273,662 0.26
Team Rock Limited 1,557,689 1,087,771 1.04
------------------------------- --------------- -------------------- ---------------------
2,654,415 2.53
Great Britain - Limited
Partnership Interest (0.48%,
2015: 0.54%)
Viking Investments 2 LP 500,000 500,000 0.48
------------------------------- --------------- -------------------- ---------------------
500,000 0.48
USA - Convertible Debt
(0.00%, 2015: 0.36%)
Tagos Group, LLC 500,000 - -
------------------------------- --------------- -------------------- ---------------------
- -
USA - Equities (0.14%,
2015: 0.52%)
Catalina Lighting Inc 46,200 38 -
Tagos Group, LLC 7.50% - -
TGS Solutions, LLC 206,500 143,674 0.14
------------------------------- --------------- -------------------- ---------------------
143,712 0.14
Total unlisted investments 5,066,275 4.84
------------------------------- --------------- -------------------- ---------------------
Total investments 85,664,856 81.80
Cash 19,514,960 18.64
Other net current liabilities (462,339) (0.44)
Total net assets 104,717,477 100.00
------------------------------- --------------- -------------------- ---------------------
STRATEGIC REPORT
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.
A review of the Company's activities is given in the Company
Overview, the Chairman's statement and the Investment Adviser's
report. These reports include a review of the business of the
Company and its principal activities, likely future developments of
the business, dividends policy and details of the buyback of shares
for cancellation during the year by the Company. The Company's
investment policy and its approach to achieving the investment
policy and managing the associated risks are set out below and in
Note 17 to the financial statements.
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.
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
Manager is disclosed in Note 17 of the financial statements. An
analysis of the Company's portfolio is disclosed in the Schedule of
Investments including a description of the ten largest equity
investments. At the year end the Company's portfolio consisted of
48 holdings (2015: 45 holdings). The top 10 holdings represented
55.88% (2015: 63.47%) 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 Risks and Uncertainties
The Directors confirm that they have carried out a robust
assessment of the principal 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 risks that have been identified and the steps
taken by the Board to mitigate these are as follows:
Investment activity and performance
An inappropriate investment strategy may result in under
performance against the Company's objectives. The Board manages
these risks by ensuring a diversification of investments. The
Investment Manager operates in accordance with the investment
limits and restrictions policy determined by the Board. The
Directors review the limits and restrictions on a regular basis and
the Administrator monitors adherence to the limits and restrictions
every month and notifies the Board for any breach. The Investment
Manager provides the Board with management information including
performance data and reports, and the Stockbroker provides
shareholder analyses. 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 at each meeting.
Level of discount or premium
A discount or premium to NAV can occur for a variety of reasons,
including market conditions or to the extent investors undervalue
the management activities of the Investment Manager or discount
their valuation methodology and judgement. While the Directors may
seek to mitigate any discount to NAV per Share through share
buybacks, there can be no guarantee that they will do so and the
Directors accept no responsibility for any failure of any such
strategy to effect a reduction in any discount or premium.
Market price risk
The fair value or 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 Directors review and agree policies
for managing these risks which policies have remained substantially
unchanged during the year under review. The Investment Manager
assesses the exposure to market risk when making each investment
decision and monitors the overall level of market price risk on the
investment portfolio on an ongoing basis.
Accounting, legal and regulatory
The Company must comply with the provisions of the Companies
(Guernsey) Law, 2008 (as amended), and, since its shares are
admitted to listing on the Official List of the UK Listing
Authority and to trading on the Main Market of the London Stock
Exchange, the Company is subject to the FCA's Listing, Disclosure
and Transparency Rules. A breach of the legislation could result in
the Company and/or the Directors being fined or subject to criminal
proceedings. A breach of the Listing Rules could result in the
suspension of trading in the Company's shares. The Board relies on
its company secretary and advisers to ensure adherence to the
Guernsey legislation and the FCA's rules. The Investment Manager
and the Administrator are contracted to provide investment, company
secretarial, administration and accounting services through
qualified professionals. The Board receives regular internal
control reports that confirm compliance.
Operational
Disruption to, or the failure of either the Investment Manager's
or the Administrator's accounting, dealings or payment systems, or
the custodians' records could prevent the accurate reporting or
monitoring of the Company's financial position.
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.
Management, Administration and Custody Arrangements
Pursuant to the Management Agreement dated 14 May 2002, which
was novated on 29 December 2003, Harwood Capital LLP provides
management services to the Company. 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.
Please see note 4 for details on the remuneration of the
Investment Manager and the Investment Adviser.
Harwood Capital LLP was authorised by the FCA, on 27 October
2014, as a Small Authorised UK Alternative Investment Fund Manager
('AIFM') under the Alternative Investment Fund Managers Directive
(the 'AIFMD') and the Company has been included in Harwood Capital
LLP's Schedule of Alternative Investment Funds ('AIFs'). As a Small
Authorised UK AIFM, Harwood Capital LLP is not subject to the full
scope of the Directive but must report to the FCA annually on the
Company and the other AIFs that it manages.
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 Capita
Registrars (Guernsey) Limited.
Related Parties
The Investment Adviser and Directors are considered to be
related parties. Please refer to note 19 for further detail.
Financial Review
At 31 March 2016, the net assets of the Ordinary shares was
GBP104,717,477 (2015 - GBP93,065,017). The Net Asset Value per
share was GBP6.89 (2015 - GBP5.69). Details on the share returns
are under Note 15.
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 2016 (2015 - Nil).
The Bribery Act 2010
The Board of the Company has adopted a zero tolerance approach
to instances of bribery and corruption. Accordingly it expressly
prohibits any Director or associated persons when acting on behalf
of the Company, from accepting, soliciting, paying, offering or
promising to pay or authorise any payment, public or private, in
the United Kingdom or abroad to secure any improper benefit for
themselves or for the Company.
The Board insists on the same standards from its service
providers in their activities for the Company.
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: and
-- The Board considers the performance of relevant indices at each quarterly Board meeting.
For and on behalf of the Board
Nigel Cayzer
Chairman
1 July 2016
DIRECTORS' REPORT
The Directors present the financial statements of the Company
and their report for the year ended 31 March 2016.
Share Capital
The Company's issued share capital as at 31 March 2016 consisted
of 15,192,125 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. There are no
special rights attached to the shares in the event that the Company
is wound up.
Since the year end 31 March 2016 the Company has purchased
88,000 Ordinary Shares for cancellation, bringing the issued share
capital to 15,104,125 Ordinary Shares of 50p nominal value
each.
Substantial Share Interests
Based upon information deemed to be reliable as provided by the
Company's registrar, as at 20 June 2016, the following shareholders
owned 5% or more of the issued shares of the Company.
Number of Ordinary Percentage of
shares share class (%)
--------------------------- ------------------- -----------------
The Bank of New York
(Nominees) Limited * 7,934,354 52.46%
--------------------------- ------------------- -----------------
Nortrust Nominees Limited 985,722 6.39%
--------------------------- ------------------- -----------------
* The Bank of New York (Nominees) Limited is nominee for North
Atlantic Smaller Companies Investment Trust plc "NASCIT". NASCIT
has a holding of 7,106,284 Ordinary Shares. NASCIT is a related
party and further information is detailed in note 19
Notifications of Shareholdings
In the period from 1 April 2015 to 20 June 2016 the Company had
been notified in accordance with Chapter 5 of the Disclosure and
Transparency Rules (which covers the acquisition and disposal of
major shareholdings and voting rights), of the following voting
rights as a shareholder of the Company. For non-UK issuers, the
thresholds prescribed under DTR 5.1.2 for notification of holdings
commence at 5%. The table below lists the ordinary shares and
voting rights of shareholders as at 20 June 2016 who have acquired
or disposed of major shareholdings from the period 1 April 2015 to
20 June 2016.
Number of Ordinary Percentage of
shares total voting
rights (%)
----------------------------- ------------------- --------------
1607 Capital Partners
LLC 0 0%
----------------------------- ------------------- --------------
Henderson Global Investors 1,461,209 Below 5%
----------------------------- ------------------- --------------
CG Asset Management Limited 1,039,722 6.85%
----------------------------- ------------------- --------------
Going Concern
Going concern refers to the assumption that the Company has the
resources to continue in operation for the foreseeable future.
After analysing the working capital of the Company, together with
the budget for the next financial year, the Directors believe that
it is appropriate to adopt the going concern basis in preparing
these financial statements. It is further noted that the Company
has a tradable portfolio, as 94% of the investment portfolio is
listed and can therefore be readily sold for cash.
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 foreseeable future. Accordingly, these financial statements
have been prepared on a going concern basis.
The going concern statement required by the Listing Rules and
the UK Corporate Governance Code is set out above and in the
"Directors' Responsibilities Report".
Viability Statement
The Directors are required to 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 risks. The principal risks faced by the Company are
described in the Strategic Report.
The prospects of the Company are driven by its investment
strategy, objectives and policy as summarised in the Strategic
Report, 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 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 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 and the
examination of the areas outlined above, the Directors have
concluded that a period of three years from the Statement of
Financial Positon date is an appropriate period over which to
assess the prospects of the Company. 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 below under "Life of the Company" is not passed
in 2017.
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 and
2015 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 2017 AGM
documents.
Buybacks
At the annual general meeting of the Company held in August
2015, the Directors were granted the general authority to purchase
in the market up to 10.00% of the Ordinary Shares of each class in
issue (as at 14 August 2015). 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.
Disclosure of Information to Auditors
The Directors who were members of the Board at the time of
approving this Report are listed in the Corporate Governance
Report. Each of those Directors confirms that:
-- to the best of his or her knowledge and belief, there is no
information relevant to the preparation of their report of which
the Auditors are unaware; and
-- he or she 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 auditors are 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 2016 (2015: None), nor does it
have responsibility for any other emissions producing sources.
Website
The maintenance and integrity of the Oryx International Growth
Fund Limited website is the responsibility of the directors. The
work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the
financial statements or audit report since they were initially
presented on the website.
For and on behalf of the Board
Nigel Cayzer
Chairman
1 July 2016
CORPORATE GOVERNANCE REPORT
Applicable Corporate Governance Codes
The Board of the Company has considered how the principles and
provisions of The UK Corporate Governance Code ("the Code"),
revised in September 2012 and September 2014, have been applied by
the Company. A copy of the Code can be found at
https://www.frc.org.uk/Our-Work/Codes-Standards/Corporate-governance/UK-Corporate-Governance-Code.
The Board acknowledges and has reported on these revisions to the
Code (and the associated FRC Guidance on Audit Committees).
On 1 January 2012, the Guernsey Financial Services Commission's
("GFSC") "Finance Sector Code of Corporate Governance" ("GFSC
Code") came into effect. The GFSC have stated in the 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 role of the chief executive
Since all the Directors are non-executive and day-to-day
management responsibilities are sub-contracted to the Investment
Manager, the Company does not have a Chief Executive Officer.
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 Financial Conduct Authority (FCA)
Disclosure 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.
The Directors believe that this report and financial statements
presents a fair, balanced and understandable assessment of the
Company's position and prospects, and provides the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
The Board has not deemed it necessary to appoint a Remuneration
or Management Engagement Committee as, being comprised of a
majority of independent Directors, the whole Board considers these
matters on an ongoing basis.
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.
Jamie Brooke
British
Jamie Brooke is a fund manager at Henderson Global Investors. He
has spent over 20 years investing in smaller companies, listed and
private, at all stages of development. He trained as an ACA with
Deloitte.
Sidney Cabessa
French
Sidney Cabessa is also a director of Club-Sagem and
Mercator/Nature et découvertes. Mr Cabessa 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.
Walid Chatila
Canadian
Walid Chatila has more than 11 years of international audit and
special assignment experience in the Middle East and North America.
He is a Certified Public Accountant (Texas 1984) and a Certified
Professional Accountant (Ontario 1991). From 1994 to 2006, he was
the Finance Director of Emirates Holdings in Abu Dhabi, United Arab
Emirates, and between 2006 and 2011, he assumed the role of General
Manager of Al Nowais Investment LLC. He is currently the General
Manager of Arab Development Establishment in Abu Dhabi.
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. Mr Grace 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. Mr Grace graduated from Georgetown
University. Mr Grace 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 International Assets
Holding Corp, Goldcrown Group Limited, Fourth Street Capital Ltd,
Fifth Street Capital Ltd and Vendor Safe Technologies LLC. 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), Jamie Brooke, Sidney
Cabessa, Walid Chatila, Rupert Evans, John Grace,
Christopher Mills and John Radziwill - all independent
non-executive Directors, except Christopher
Mills who is an employee of the Investment Manager
and Sidney Cabessa who is a Director of Harwood
Capital Management Limited.
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)
Jamie Brooke Rupert Evans
Sidney Cabessa John Radziwill
Walid Chatila
Rupert Evans
John Grace
John Radziwill
Responsibilities: Responsibilities:
To ensure the Board comprises The provision of effective
individuals with the necessary governance over the
skills, knowledge and appropriateness of the
experience to ensure that Company's financial
the Board is effective reporting including
in discharging its responsibilities the adequacy of related
and oversight of all matters disclosures, the performance
relating to corporate of the external auditors,
governance. and the management of
the Company's systems
of internal financial
and operating controls
and business risks.
------------------------------------- ------------------------------
Board Independence and Composition
The Board
The Board is comprised of six 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 in
the Corporate Governance Report, 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.
Directors' Appointment and Re-election
No Director has a service contract with the Company. Any
Director may resign in writing to the Board at any time.
The Articles of Incorporation provide that Directors are
initially appointed until the following Annual General Meeting
when, it is required that they be re-elected by shareholders. The
Articles of Incorporation also provide that each year one-third of
the Directors shall retire by rotation. The retiring Directors will
then be eligible for reappointment.
Having served for more than nine years as non-executive
directors and in accordance with the Code, Nigel Cayzer, Sidney
Cabessa, Walid Chatila, Rupert Evans, and John Radziwill are
retiring and, being eligible, will seek re-election to the Board at
the forthcoming AGM.
In accordance with Listing Rule 15.2.13A, which requires
Directors or members of the Investment Manager to be subject to
annual election, Christopher Mills is a member of the Investment
Manager, and accordingly, is retiring and, being eligible, will
seek re-election to the Board.
The Board continues to believe that Mr Cayzer, Mr Chatila, Mr
Evans, and Mr Radziwill 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 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.
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 had a material interest
in any contract, which is significant to the Company's business.
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 March 2016 and was led by the
Chairman. Mr Evans took the lead in the evaluation of the
Chairman's performance.
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 March 2016, 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 Auditors. 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 2015/16 financial year
Board Audit Nomination
Committee Committee
-------------------- ------ ----------- -----------
Number of meetings
during the year 6 3 1
-------------------- ------ ----------- -----------
Nigel Cayzer 4 - 1
-------------------- ------ ----------- -----------
Jamie Brooke 4 - -
-------------------- ------ ----------- -----------
Sidney Cabessa 4 - 1
-------------------- ------ ----------- -----------
Walid Chatila 6 3 1
-------------------- ------ ----------- -----------
Rupert Evans 5 2 1
-------------------- ------ ----------- -----------
Christopher Mills 4 - -
-------------------- ------ ----------- -----------
John Grace 4 - 1
-------------------- ------ ----------- -----------
John Radziwill 4 1 1
-------------------- ------ ----------- -----------
In addition to these meetings, 7 ad-hoc Committee meetings were
held during the year for various matters.
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 in their reports 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)
Jamie Brooke (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 Nominations 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.
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 either an individual's membership of the Board
or their remuneration, 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 once during the year 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
1 July 2016
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, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's performance,
business model and strategy;
-- 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;
-- To analyse the key procedures adopted by the Company's Service Providers; 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.
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"),
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 three 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, is 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 Issues
In relation to the annual report and financial statements for
the year ended 31 March 2016, the following significant issues were
considered by the Audit Committee:
Significant How the Issue was Addressed
Issue
Valuation The Audit Committee received a report
of Investments from the Investment Manager on the valuation
of the portfolio and on the assumptions
used in valuing the unlisted assets in
the portfolio. The Committee analysed
the Investment portfolio of the Company
in terms of investment mix, fair value
hierarchy and valuation. The Committee
has also considered the auditor's approach
to the valuation of the Company's investments.
The Committee has held detailed discussions
with the Investment Manager with regards
to the methodology used in valuing the
unlisted assets in the portfolio. The
Committee discussed in depth with KPMG,
with regards to 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 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 Committee 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 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 2016 financial year the significant audit risks identified were
the valuation of unlisted investments and fraud risk, including
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
2016 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.
Appointment and Independence
The Committee considers the reappointment of KPMG, including the
rotation of the audit engagement partner, and assesses their
independence on an annual basis. KPMG is required to rotate the
engagement partner responsible for the audit every five years. The
current audit engagement partner has been in place for three years.
KPMG has been the Company's external auditors since 31 March 2010.
Due to the Company's incorporation in Guernsey, it is not obliged
to comply with proposed developments in the UK and the EU on audit
tendering. The Committee does however keep under review legislation
from the EU and the Competition Commission in the UK.
The Committee will continue to consider annually the need to go
to tender for audit quality or independence reasons and will be
guided by any changes to the UK Corporate Governance Code. Subject
to the outcome of this process continuing to be satisfactory, it is
currently expected that KPMG will remain in office and a resolution
to reappoint them for the 2017 audit will therefore be proposed at
the AGM. 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
are independent of the Company.
The Committee approved the fees for audit services for 2015/16
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 GBP50,000 for their
services rendered in 2015/16. The entire amount relates to the
year-end audit.
The Committee is satisfied with the effectiveness of the audit
provided by KPMG, and is satisfied with their independence. The
Committee has therefore recommended to the Board that KPMG be
reappointed as external auditor for the year ending 31 March 2017,
and to authorise the Directors to determine their remuneration. The
auditor, KPMG, have indicated their willingness to continue in
office. Accordingly, a resolution proposing the reappointment of
KPMG as the external auditor will be put to the shareholders at the
2016 AGM. There are no contractual obligations restricting the
Committee's choice of external auditor and we do not indemnify our
external auditor.
Non Audit Services
The external auditor and the Directors have agreed a policy for
non-audit services. All non-audit services are prohibited.
Committee Evaluation
The Committee's activities formed part of the Board evaluation
performed in the year. Details of this process can be found under
the "Performance evaluation" section of the Corporate Governance
Report.
Walid Chatila
On behalf of the Audit Committee
1 July 2016
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 custodial
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 Annual General Meeting provides an
appropriate forum for investors to communicate with the Board, and
encourages participation. The Annual General Meeting 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
Annual General Meeting, 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.
2016 Annual General Meeting ("AGM")
The AGM will be held in Guernsey on 25 August 2016 at 10:00 BST.
The notice for the Annual General Meeting 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.
DIRECTORS' REMUNERATION REPORT
Annual Statement
Dear Shareholder
This report meets the relevant Listing Rules of the Financial
Conduct Authority and the UK Corporate Governance Code and
describes how the Board has applied the principles relating to
Directors' remuneration. An ordinary resolution to ratify this
report will be proposed at the Annual General Meeting on 25 August
2016.
The rest of this report is split into two parts:
-- The Directors' remuneration policy sets out the company's
proposed policy on Directors' remuneration for the year. The
Directors' remuneration policy is subject to annual review.
-- The annual report on remuneration sets out payments made to the Directors.
Changes to the Board
There were no changes to the Board during the year.
Conclusion
We have provided an at a glance summary of 2015/16 remuneration
immediately after this letter. The Annual Report on Remuneration
provides further details and the Directors' Remuneration Policy
sets out how we are building for the future.
I hope that we can rely on your vote in favour of the Annual
Report.
At a Glance
Single total figure for Directors for 2015/16
Director Fees Other Total
GBP Fees GBP
GBP
================ ======= ====== =======
Nigel Cayzer 25,000 - 25,000
Jamie Brooke 18,000 - 18,000
Sidney Cabessa 18,000 - 18,000
Walid Chatila 18,000 - 18,000
Rupert Evans 18,000 - 18,000
Christopher
Mills 18,000 - 18,000
John Grace 18,000 - 18,000
John Radziwill 18,000 - 18,000
Single total figure for Directors for 2014/15
Director Fees Other Total
GBP Fees GBP
GBP
================ ======= ====== =======
Nigel Cayzer 25,000 - 25,000
Jamie Brooke 18,000 - 18,000
Sidney Cabessa 18,000 - 18,000
Walid Chatila 18,000 - 18,000
Rupert Evans 18,000 - 18,000
Christopher
Mills 18,000 - 18,000
John Grace 18,000 - 18,000
John Radziwill 18,000 - 18,000
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 2015. No Director is to be 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 2015/16, the policy was for the Chairman of the
Board to be paid a higher fee 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.
Policy Table
Directors' Fees Policy
Element Undertaking Maximum Potential Performance
in relation Value Metrics Used
to the Element
========================== ==================== ===================== =======================
Fees
To recognise Directors' Current fee Directors
time spent fees are set levels are are not remunerated
and the responsibilities by the Board. shown in the based on
borne and to Annual fees remuneration performance
attract high are paid quarterly report. and are not
calibre candidates in arrears. eligible
who have the The Company's to participate
necessary experience Fees are reviewed current Articles in any performance
and skills. against those of Incorporation related arrangements.
for Directors limit the aggregate
in companies fees payable
of similar to the Board
scale and of Directors
complexity. to a total
Fees were of GBP200,000
last reviewed per annum.
in 2015
Directors
do not receive
benefits and
do not participate
in any incentive
or pension
plans.
========================== ==================== ===================== =======================
Service Contracts and Policy on Payment of Loss of Office
Directors are appointed with the expectation that they are
initially appointed until the following Annual General Meeting
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 be
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 Corporate Governance
Report.
Dates of Directors' Appointment
Director Date of Appointment
================== ====================
Nigel Cayzer 3 December
1994
Jamie Brooke 5 September
2013
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
================== ====================
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 2016 31 March 2015
Ordinary Shares Ordinary Shares
------------------- ----------------- -----------------
Christopher Mills 328,716 328,716
------------------- ----------------- -----------------
John Radziwill
* 419,000 419,000
------------------- ----------------- -----------------
John Grace ** 130,000 130,000
346,607 346,607
------------------- ----------------- -----------------
* John Radziwill is a Director of a fund, held by his family
trust, that holds 419,000 Ordinary Shares and which is managed by
an independent fund manager.
** 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, the Investment Manager and Investment Adviser.
Harwood Capital LLP is entitled to fees as detailed in Notes 4 and
5. 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 GBP35,746 (2015:
GBP32,299).
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
1 July 2016
DIRECTORS' RESPONSIBILITIES REPORT
The Directors are responsible for preparing financial statements
for each financial year which give a true and fair view, in
accordance with applicable Guernsey law and International Financial
Reporting Standards ('IFRS') as adopted by the European Union, of
the state of affairs of the Company and of the profit or loss for
the period.
In preparing those financial statements, the Directors are
required to:
-- Select suitable accounting policies and apply them consistently;
-- Make judgements and estimates that are reasonable and prudent;
-- State whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting
records, which disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that
the financial statements comply with the Companies (Guernsey) Law,
2008, as amended.
The Directors are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors confirm to the best of their knowledge that:
-- The financial statements which have been prepared in
accordance with IFRS as adopted by the European Union give a true
and fair view of the assets, liabilities, financial position and
profit of the Company, taken as a whole as required by DTR 4.1.6,
and are in compliance with the requirements set out in the
Companies (Guernsey) Law, 2008 as amended;
-- The Annual Report includes a fair review of the information
required by DTR 4.1.8R and DTR 4.1.11R, which provides an
indication of important events and a description of principal risks
and uncertainties which face the Company.
-- The Investment Adviser's Report, together with the Director's
report, includes a fair review of the information required by DTR
4.1.12R.
-- The Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for Shareholders to assess the company's performance,
business model and strategy.
The Directors are also considered to be related parties and
their fees are disclosed in the Statement of Comprehensive
Income.
By order of the Board
Walid Chatila Rupert Evans
Director Director
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF ORYX INTERNATIONAL
GROWTH FUND LIMITED
Opinions and conclusions arising from our audit
Opinion on financial statements
We have audited the financial statements of Oryx International
Growth Fund Limited (the "Company") for the year ended 31 March
2016 which comprise the statement of comprehensive income, the
statement of financial position, the statement of changes in
equity, the statement of cash flows and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as adopted by the European Union ('EU'). In our opinion,
the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 March 2016 and of its total comprehensive income
for the year then ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the EU; and
-- comply with the Companies (Guernsey) Law, 2008.
Our assessment of risks of material misstatement
The risks of material misstatement detailed in this section of
this report are those risks that we have deemed, in our
professional judgement, to have had the greatest effect on: the
overall audit strategy; the allocation of resources in our audit;
and directing the efforts of the engagement team. Our audit
procedures relating to these risks were designed in the context of
our audit of the financial statements as a whole. Our opinion on
the financial statements is not modified with respect to any of
these risks, and we do not express an opinion on these individual
risks.
In arriving at our audit opinion above on the financial
statements, the risk of material misstatement that had the greatest
effect on our audit was as follows:
Valuation of investments (GBP85,664,856)
Refer to the Audit Committee section of the Corporate Governance
Report, Note 2(b) (use of estimates and judgements), Note 2(e)
(financial assets), Note 18 (fair value hierarchy)
-- The risk - As at 31 March 2016 the Company had invested 82%
of its net assets in equities, debt, convertible debt and a limited
partnership interest (together, "investments") in listed and
unlisted small and mid-size entities. As described in the Audit
Committee section of the Corporate Governance Report, the valuation
of the Company's investments, given that it represents the majority
of the Company's net assets, is a significant area of our audit.
The Company's holdings in listed investments (representing 77% of
net assets) are valued based on the bid prices as at 31 March 2016.
The Company's holdings in unlisted investments (representing 5% of
net assets) are valued based on the International Private Equity
and Venture Capital (IPEV) valuation guidelines, which requires the
use of significant judgement.
-- Our response - Our audit procedures in respect of the
Company's investments included, but were not limited to, evaluating
the design and implementation of controls over the valuation of
both listed and unlisted investments and testing the effectiveness
of the controls over the valuation of listed investments. We used
our own valuation specialist to independently price listed
investments to a third party source and assess the trading volumes
behind such prices. For unlisted investments, we assessed the
appropriateness of the techniques used to value the unlisted
investments. We challenged the Investment Manager's key assumptions
used in preparing these valuations. In particular, we focused on
the appropriateness of the valuation basis selected as well as the
underlying assumptions, such as the choice of benchmark for
earnings multiples, the validity of the price of recent investment
being used to value a holding, and discount provisions. We
corroborated key underlying financial data inputs to external
sources, investee company audited accounts and management
information as applicable.
We also considered the Company's disclosures (see Note 2(b)) in
relation to the use of estimates and judgements in determining the
fair value of investments and the Company's investment valuation
policies adopted and fair value disclosures in Note 2(e) and Note
18 for compliance with International Financial Reporting Standards
as adopted by the EU.
Our application of materiality and an overview of the scope of
our audit
Materiality is a term used to describe the acceptable level of
precision in financial statements. Auditing standards describe a
misstatement or an omission as "material" if it could reasonably be
expected to influence the economic decisions of users taken on the
basis of the financial statements. The auditor has to apply
judgement in identifying whether a misstatement or omission is
material and to do so the auditor identifies a monetary amount as
"materiality for the financial statements as a whole".
The materiality for the financial statements as a whole was set
at GBP3,000,000. This has been calculated using a benchmark of the
Company's net asset value (of which it represents approximately 3%)
which we believe is the most appropriate benchmark as net asset
value is considered to be one of the principal considerations for
members of the Company in assessing the financial performance of
the Company.
We agreed with the audit committee to report to it all corrected
and uncorrected audit misstatements we identified through our audit
with a value in excess of GBP150,000, in addition to other audit
misstatements below that threshold that we believe 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.
Whilst the audit process is designed to provide reasonable
assurance of identifying material misstatements or omissions it is
not guaranteed to do so. Rather we plan the audit to determine the
extent of testing needed to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected
misstatements does not exceed materiality for the financial
statements as a whole. This testing requires us to conduct
significant depth of work on a broad range of assets, liabilities,
income and expense as well as devoting significant time of the most
experienced members of the audit team, in particular the
Responsible Individual, to subjective areas of the accounting and
reporting process.
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies
are appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Board of Directors;
and the overall presentation of the financial statements. In
addition, we read all the financial and non-financial information
in the Annual Report to identify material inconsistencies with the
audited financial statements and to identify any information that
is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Disclosures of principal risks
Based on the knowledge we acquired during our audit, we have
nothing material to add or draw attention to in relation to:
-- the directors' Viability Statement, concerning the principal
risks, their management, and, based on that, the directors'
assessment and expectations of the Company continuing in operation
over the 3 years to 2019; or
-- the disclosures in Note 2(a) of the financial statements
concerning the use of the going concern basis of accounting.
Matters on which we are required to report by exception
Under International Standards on Auditing (UK and Ireland) we
are required to report to you if, based on the knowledge we
acquired during our audit, we have identified other information in
the Annual Report that contains a material inconsistency with
either that knowledge or the financial statements, a material
misstatement of fact, or that is otherwise misleading.
In particular, we are required to report to you if:
-- we have identified material inconsistencies between the
knowledge we acquired during our 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
performance, business model and strategy; or
-- the audit committee report does not appropriately address
matters communicated by us to the audit committee.
Under the Companies (Guernsey) Law, 2008, we are required 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.
Under the Listing Rules we are required to review the part of
the Corporate Governance Statement relating to the Company's
compliance with the eleven provisions of the UK Corporate
Governance Code specified for our review.
We have nothing to report in respect of the above
responsibilities.
Scope of report and responsibilities
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 and, in respect of any further matters on which we have agreed
to report, on terms we have agreed with the Company. 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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities
Report, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit, and express an
opinion on, the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the UK Ethical Standards for
Auditors.
Lee C Clark
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Glategny Court, Glategny Esplanade,
St Peter Port, Guernsey
GY1 1WR
1 July 2016
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2016, expressed in GBP Sterling
2016 2015
Notes GBP GBP
Income
Dividends 3 1,160,205 1,155,662
Interest and other income 3 44,372 22,707
1,204,577 1,178,369
Realised gains on investments 10 19,625,032 9,955,720
Unrealised loss on revaluation of investments 10 (500,497) (3,581,682)
Net loss on foreign currency translation (64,266) (4,460)
Total revenue 19,060,269 6,369,578
----------- ------------
Expenses
Management and investment adviser's fee 4 1,074,626 933,806
Directors' fees and expenses 8 191,598 190,213
Legal and professional fees 91,799 130,134
Supplementary management fee 5 200,000 150,000
Transaction costs 309,975 92,918
Advisory fees 250,536 10,000
Administration fees 7 92,939 83,211
Audit fees 50,942 43,711
Custodian fees 6 24,042 22,979
Insurance 5,269 4,988
Registrar and transfer agent fees 22,503 21,118
Printing costs 18,512 14,715
Other expenses 42,963 17,587
Total expenses 2,375,704 1,715,380
----------- ------------
Total profit for the year before taxation 17,889,142 5,832,567
Withholding tax on dividends 9 74,700 71,100
Total comprehensive income for the year 17,814,442 5,761,467
----------- ------------
Earnings per share - basic and diluted:
Ordinary 15 GBP1.14 GBP0.35
----------- ------------
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 2016, expressed in GBP Sterling
2016 2015
Notes GBP GBP
Non-current assets
Listed investments designated at fair value through profit or loss (Cost -
GBP65,345,587 (2015
- GBP73,744,583)) 80,598,581 83,348,998
Unlisted investments designated at fair value through profit or loss (Cost -
GBP4,979,007
(2015 - GBP2,831,710)) 5,066,275 9,068,055
10 85,664,856 92,417,053
------------- -------------
Current assets
Cash and cash equivalents 19,514,960 992,864
Amounts due from brokers 379,239 -
Dividends and interest receivable 90,000 91,800
Other receivables 10,396 4,721
19,994,595 1,089,385
------------- -------------
Total assets 105,659,451 93,506,438
------------- -------------
Current liabilities
Other payables and accrued expenses 320,733 261,099
Amounts due to brokers 621,241 180,322
941,974 441,421
------------- -------------
Net assets 104,717,477 93,065,017
------------- -------------
Shareholders' equity
Called up share capital 11 50,289,346 50,879,089
Capital redemption reserve 1,246,500 1,246,500
Other reserves 53,181,631 40,939,428
Total equity shareholders' funds 104,717,477 93,065,017
Net Asset Value per Share - basic and diluted 14 GBP6.89 GBP5.69
------------- -------------
The financial statements were approved by the Board of Directors
on 1 July 2016 and are signed on its behalf by:
Walid Chatila Rupert Evans
Director Director
The accompanying Notes form an integral part of these financial
statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016, expressed in GBP Sterling
Capital
Share redemption Other
Notes Capital reserve reserves Total
GBP GBP GBP GBP
-------------------- ------ ----------- ------------ ------------ ------------
Balance at 1
April 2015 50,879,089 1,246,500 40,939,428 93,065,017
Total comprehensive
income for the year - - 17,814,442 17,814,442
---------------------------- ----------- ------------ ------------ ------------
Transactions
with owners,
recorded directly
in equity
Contributions,
redemptions
and distributions
to shareholders
- Cancellation
of shares 11 (589,743) - (5,572,239) (6,161,982)
-------------------- ------ ----------- ------------ ------------ ------------
Total transactions
with owners (589,743) - (5,572,239) (6,161,982)
-------------------- ------ ----------- ------------ ------------ ------------
Balance at 31
March 2016 50,289,346 1,246,500 53,181,631 104,717,477
-------------------- ------ ----------- ------------ ------------ ------------
Capital
Share redemption Other
Notes Capital reserve reserves Total
GBP GBP GBP GBP
-------------------- ------ ----------- ------------ ------------ ------------
Balance at 1
April 2014 51,018,780 1,246,500 36,232,101 88,497,381
Total comprehensive
income for the year - - 5,761,467 5,761,467
---------------------------- ----------- ------------ ------------ ------------
Transactions
with owners,
recorded directly
in equity
Contributions,
redemptions
and distributions
to shareholders
- Cancellation
of shares 11 (139,691) - (1,054,140) (1,193,831)
-------------------- ------ ----------- ------------ ------------ ------------
Total transactions
with owners (139,691) - (1,054,140) (1,193,831)
-------------------- ------ ----------- ------------ ------------ ------------
Balance at 31
March 2015 50,879,089 1,246,500 40,939,428 93,065,017
-------------------- ------ ----------- ------------ ------------ ------------
The accompanying Notes form an integral part of these financial
statements.
STATEMENT OF CASH FLOWS
for the year ended 31 March 2016, expressed in GBP Sterling
2016 2015
Notes GBP GBP
Net cash inflow/(outflow) from operating activities 13 24,748,344 (457,370)
------------- --------------
Financing Activities
Cancellation of shares (6,161,982) (1,193,829)
Cash outflow from financing activities (6,161,982) (1,193,829)
------------- --------------
Net increase/(decrease) in cash and cash equivalents 18,586,362 (1,651,199)
Cash and cash equivalents at beginning of year 992,864 2,648,523
Effect of exchange rate fluctuations on cash and cash equivalents (64,266) (4,460)
Cash and cash equivalents at end of year 19,514,960 992,864
------------- --------------
For the year ended 31 March 2016, cash received from dividends
was GBP1,162,005 (2015: GBP1,129,262) and interest received was
GBP2,596 (2015: GBP22,707).
The accompanying Notes form an integral part of these financial
statements.
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 LLP ('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 (as
amended), have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), as adopted by the European
Union ("EU"). This comprises of standards and interpretations
approved by the International Accounting Standards Board (the
"IASB"), and International Accounting Standards and Standing
Interpretations Committee interpretations approved by the
International Accounting Standards Committee ("IASC") 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.
a) Going concern
Going concern refers to the assumption that the Company has the
resources to continue in operation for the foreseeable future.
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 2016, there was a working
capital surplus of GBP19,052,621. The Directors noted that as at 31
March 2016 (i) the gross investment income for the period from 1
April 2015 to 31 March 2016 was GBP17,814,442 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 94% of
the investments are listed and can therefore be readily sold for
cash.
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 foreseeable future. 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
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 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(e). 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 17 and 18.
c) New standards, amendments and interpretations adopted in
these financial statements
A number of new standards, amendments to standards and
interpretations that are not yet effective have not been applied in
preparing these financial statements. None of these are expected to
have a material impact on the Company, with the exception of IFRS 9
as detailed below:
IFRS 9,'Financial Instruments', includes requirements for
recognition and measurement, impairment, derecognition and general
hedge accounting. IFRS 9 was issued on 24 July 2014 and replaces
the parts of IAS 39 'Financial Instruments: Recognition and
Measurement' that relate to the classification and measurement of
financial instruments.
IFRS 9 requires financial assets to be classified into two
measurement categories: those measured as at fair value and those
measured at amortised cost. The determination is made at initial
recognition. The classification depends on the entity's business
model for managing its financial instruments and the contractual
cash flow characteristics of the instrument. For financial
liabilities, the standard retains most of the IAS 39 requirements.
The main change is that, in cases where the fair value option is
taken for financial liabilities, the part of a fair value change
due to an entity's own credit risk is recorded in other
comprehensive income rather than the income statement, unless this
creates an accounting mismatch.
IFRS 9 does not replace the requirements for portfolio fair
value hedge accounting for interest rate risk (often referred to as
the 'macro hedge accounting' requirements) since this phase of the
project was separated from the IFRS 9 project due to the longer
term nature of the macro hedging project which is currently at the
discussion paper phase of the due process. In April 2014, the IASB
published a Discussion Paper Accounting for Dynamic Risk
management: a Portfolio Revaluation Approach to Macro Hedging.
Consequently, the exception in IAS 39 for a fair value hedge of an
interest rate exposure of a portfolio of financial assets or
financial liabilities continues to apply
The Company has yet to assess IFRS 9's full impact and intends
to adopt IFRS 9 at such time as the standard comes into effect.
The version of IFRS 9 issued in 2014 supersedes all previous
versions and is mandatorily effective for periods beginning on or
after 1 January 2018 with early adoption permitted (subject to
local endorsement requirements).
The EU has yet to endorse IFRS 9, however, this is expected in
the second half of 2016.
d) Income recognition
Dividend income is recognised when the right to receive income
is established. Usually this is the ex-dividend date for equity
securities. Deposit interest is accrued on a day-to-day basis. Loan
interest is accounted for using the effective interest method. All
income is shown gross of any applicable withholding tax.
e) Financial assets
Classification
All investments of the Company, are designated into the
financial assets at fair value through profit or loss category. 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 the Statement of Comprehensive Income. Transaction costs are
separately disclosed 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 are 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, recent transactions and the net asset basis.
Cost is considered appropriate for early stage investments. The
relevance of this methodology can be 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 and interest receivable and
amounts due to and from broker, 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.
f) Other receivables
Other receivables do not carry any interest and are short term
in nature and are accordingly stated at their amortised cost as
reduced by appropriate allowances for impairment.
g) 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.
h) Other payables and accrued expenses
Other payables and accrued expenses are non-interest bearing and
are stated at their amortised cost.
i) 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 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 Pounds
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 the Statement of Comprehensive
Income.
j) 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 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 the Statement of Comprehensive Income.
The cost of investments partly disposed is determined using the
weighted average method.
k) Financial liabilities
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 include trade payables and other
payables which are held at amortised cost using the effective
interest rate method.
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.
l) 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 includes the deduction
for the excess of consideration paid over nominal value on share
buy-backs.
m) Expenses
Expenses are recognised in the Statement of Comprehensive Income
upon utilisation of the service or at the date they are
incurred.
n) 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 16, the CODM does not consider necessary to provide further
analysis for the Company.
3. Income
2016 2015
GBP GBP
Dividends 1,160,205 1,155,662
Interest income 2,596 22,707
Other income 41,776 -
---------- ----------
1,204,577 1,178,369
---------- ----------
4. Investment Manager and Investment Adviser's fee
Harwood Capital LLP, 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 due for the year ended 31 March 2016
are GBP1,074,626 (2015: GBP933,806) and as at the reporting date an
amount of GBP93,634 was still payable to the Investment Manager
(2015: GBP83,335). This amount is included in other payables and
accrued expenses.
5. Supplementary Management fee
The Investment Manager agreed to waive its right to exercise
management options to subscribe for ordinary shares in exchange for
a discretionary bonus (supplementary management fee).
During a meeting of the Board of Directors on 3 December 2015, a
payment of GBP200,000 was recommended by the Chairman in respect of
the 2015 supplementary management fee. This was approved by the
Board of Directors and paid during December 2015. The supplementary
management fee is paid annually in arrears.
6. Custodian fee
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 2016 are GBP24,042 (2015:
GBP22,979) and as at the reporting date an amount of GBP3,624 was
still payable to the custodian (2015 : GBP3,682). 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 2016 are GBP92,939 (2015:
GBP83,211) and as at the reporting date an amount of GBP28,901
(2015: GBP26,030) was still payable to the administrator. This
amount is included in other payables and accrued expenses.
8. Directors' fees and expenses
With the exception of the Chairman, who is entitled to a fee of
GBP25,000 per annum, each Director is entitled to GBP18,000 per
annum from the Company. 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. As at 31 March
2016 an amount of GBP37,750 (2015: GBP37,750) 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. The withheld tax shown in the
Statement of Comprehensive Income account relates to overseas
dividends received or receivable.
10. Investments at fair value through profit or loss
2016 2015
GBP GBP
Cost at beginning of year 76,576,293 66,615,229
Additions 43,359,865 37,762,591
Disposals (69,236,597) (37,757,247)
Realised gains on investments 19,625,032 9,955,720
------------- -------------
Cost at end of year 70,324,593 76,576,293
Unrealised gain on investments 15,340,263 15,840,760
------------- -------------
Fair value at end of the year 85,664,856 92,417,053
------------- -------------
Representing:
2016 2015
GBP GBP
Listed Equities 80,598,581 83,348,998
Unlisted Equities 5,066,275 9,068,055
----------- -----------
85,664,856 92,417,053
----------- -----------
11. Share Capital
Authorised Share Capital
Number GBP
of Shares
Authorised:
Ordinary shares
of 50p each 90,000,000 45,000,000
----------- -----------
Ordinary Shares Issued - 1 April 2015 to 31 March 2016
Ordinary Shares Number Share Capital
of 50p each of Shares GBP
At 1 April
2015 16,371,611 50,879,089
Cancellation
of shares (1,179,486) (589,743)
------------ --------------
At 31 March
2016 15,192,125 50,289,346
------------ --------------
Ordinary Shares Issued - 1 April 2014 to 31 March 2015
Ordinary Shares Number Share Capital
of 50p each of Shares GBP
At 1 April
2014 16,650,992 51,018,780
Cancellation
of shares (279,381) (139,691)
----------- --------------
At 31 March
2015 16,371,611 50,879,089
----------- --------------
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 Companies (Guernsey) Law
2008, (as amended) (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 ("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 Buy-back 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
Companies 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 2015 and 31 March 2016, the Company carried out
6 share buybacks, resulting in a total reduction of 1,179,486
shares for a cost of GBP6,161,982. These shares were subsequently
cancelled.
13. Cash flows from operating activities
2016 2015
GBP GBP
Total comprehensive income
for the year 17,814,442 5,761,467
------------- -------------
Realised gains on investments (19,625,032) (9,955,720)
Unrealised loss on revaluation
of investments 500,497 3,581,682
Net loss on foreign currency
translation 64,266 4,460
(19,060,269) (6,369,578)
------------- -------------
Purchase of investments (43,359,865) (37,762,591)
Proceeds from sale of investments 69,236,597 37,757,245
25,876,732 (5,346)
------------- -------------
Decrease/(increase) in dividends
receivable 1,800 (26,400)
(Increase)/decrease in other
receivables (5,675) 1,995
(Increase)/decrease in amounts
due from brokers (379,239) 80,737
Increase in amounts due
to brokers 440,919 155,649
Increase/(decrease) in manager's
fees payable 10,299 (67,135)
Increase/(decrease) in other
payables and accrued expenses 49,335 11,241
------------- -------------
117,439 156,087
------------- -------------
24,748,344 (457,370)
------------- -------------
14. Reconciliation of net asset value to published net asset
value
2016 2015
GBP GBP GBP GBP
Ordinary Shares per per
share share
Published net asset value 106,402,946 7.00 94,286,473 5.76
Unrealised loss on revaluation
of investments at bid /
mid-price (1,685,469) (0.11) (1,696,656) (0.10)
Adjustment to Accumuli Plc's
valuation based on the transaction
price agreed with NCC Group
Plc to acquire Accumuli
Plc - - 475,200 0.03
Net asset value attributable
to shareholders 104,717,477 6.89 93,065,017 5.69
-------------- --------- -------------- ---------
15. Earnings per Share and net asset value per share
The calculation of basic earnings per share for the Ordinary
Share is based on net income of GBP17,814,442 (2015: GBP5,761,467)
and the weighted average number of shares in issue during the year
of 15,610,370 shares (2015: 16,589,534 shares). At 31 March 2016
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 GBP104,717,477 (2015: GBP93,065,017) and
the number of shares in issue at the year-end of 15,192,125 shares
(2015: 16,371,611 shares).
16. 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 prepared in accordance with IFRS, as adopted by the
EU.
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 Investment Schedule of 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
Corporate Governance Report.
17. Financial risk management
The Company's financial assets mainly comprise equity
investments, trade receivables and cash balances. Note 2 sets out
the accounting policies, including criteria for recognition and the
basis for measurement, applied to significant financial assets and
liabilities.
Note 2 also includes the basis on which income and expenses
arising from financial assets and liabilities are recognised.
The Company finances its investment activities through the
Company's Ordinary Share capital, reserves and, if required,
borrowings. The Company's financial liabilities comprise trade
payables and expense accruals.
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 cooperation 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 presentational 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 2016 the currency profile of those financial assets
and liabilities was:
GBP USD Total
GBP GBP GBP
Investments at
fair value through
profit or loss 84,834,010 830,846 85,664,856
Dividends and interest
receivable 90,000 - 90,000
Cash and cash equivalents 19,514,986 (26) 19,514,960
Trade and other
receivables 389,635 - 389,635
Trade and other
payables (941,974) - (941,974)
Total net foreign
currency exposure 103,886,657 830,820 104,717,477
------------ -------- ------------
At 31 March 2015 the currency profile of those financial assets
and liabilities was:
GBP USD NZD Total
GBP GBP GBP GBP
Investments at fair
value through profit
or loss 82,235,914 7,087,206 3,093,933 92,417,053
Dividends and interest
receivable 91,800 - - 91,800
Cash and cash equivalents 992,889 (25) - 992,864
Trade and other receivables 4,721 - - 4,721
Trade and other payables (441,421) - - (441,421)
Total net foreign
currency exposure 82,883,903 7,087,181 3,093,933 93,065,017
------------- ---------- ---------- -------------
Sensitivity analysis is based on the Company's monetary foreign
currency instruments held at each balance sheet date.
31 March 2016 31 March 2015
Impact Impact
on Total Impact on Total Impact
Comprehensive on Net Comprehensive on Net
Income Assets Income Assets
---------- --------------------
Increase/(decrease) GBP GBP GBP GBP
in the
exchange
Currency rate
---------- -------------------- ---------------- ---------------- ------------------ ------------------
USD 10%/(10%) 92,322/(75,522) 92,322/(75,522) 787,468/(644,290) 787,468/(644,290)
NZD 10%/(10%) - - 343,770/(281,267) 343,770/(281,267)
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 in the Investment Schedule.
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 2016 on its investments was as
follows:
2016 2015
GBP GBP
Financial assets at fair
value through profit or loss
- Non current investments
at fair value through profit
or loss 85,664,856 92,417,053
------------- -------------
The following table illustrates the sensitivity of the profit
and net assets to an increase or decrease of 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.
2016 2015
Increase Decrease Increase Decrease
in fair in fair in fair in fair
value value value value
GBP GBP GBP GBP
Income statement
Profit / (loss)
for the year 8,566,486 (8,566,486) 9,241,705 (9,241,705)
---------- ------------ ---------- ------------
Net assets 8,566,486 (8,566,486) 9,241,705 (9,241,705)
---------- ------------ ---------- ------------
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 6% 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 2016 31 March 2015
Less No maturity Less No maturity
than date Total than date Total
1year 1year
GBP GBP GBP GBP GBP GBP
Listed - 80,598,581 80,598,581 - 83,348,998 83,348,998
Unlisted - 5,066,275 5,066,275 264,948 8,803,107 9,068,055
-------- ------------ ----------- -------- ------------
- 85,664,856 85,664,856 264,948 92,152,105 92,417,053
------------------- ------------ ----------- -------- ------------ -----------
The Company's financial liabilities are due to mature within one
year from the balance sheet date and because 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, 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:
2016 2015
GBP GBP
Long-term Debt - -
------------ -----------
Equity
Equity share capital 50,289,346 50,879,089
Retained earnings and other
reserves 54,428,131 42,185,928
------------ -----------
104,717,477 93,065,017
Long-term Debt as a % of - -
net assets
------------ -----------
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.
18. 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 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 price 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
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.
Level Level Level
31 March 2016 1 2 3 Total
GBP GBP GBP GBP
Financial assets
at fair value
through profit
or loss
Listed securities 80,598,581 - - 80,598,581
Unlisted securities - - 5,066,275 5,066,275
80,598,581 - 5,066,275 85,664,856
----------- ------ ---------- -----------
31 March 2015
Financial assets
at fair value
through profit
or loss
Listed securities 80,101,798 3,247,200 - 83,348,998
Unlisted securities - - 9,068,055 9,068,055
80,101,798 3,247,200 9,068,055 92,417,053
----------- ---------- ---------- -----------
The following table summarises the changes in fair value of the
Company's Level 3 investments for the year ended 31 March 2016.
2016 2015
GBP GBP
Balance at 1 April 9,068,055 9,416,195
Net realised gain on investments 8,455,850 3,082,179
Unrealised (loss)/gain on
investments (6,614,894) 354,439
Purchase of investments 250,000 1,671,019
Sale of investments (8,459,488) (5,455,777)
Transfers into/(out of) level
3 2,366,752 -
Balance at 31 March 5,066,275 9,068,055
------------ ------------
Change in unrealised gain
on investments included in
Statement of Comprehensive
Income for Level 3 investments
held (3,632,271) 2,539,843
------------ ------------
There were two transfers from level 1 to level 3 in the year
ended 31 March 2016, one resulting from a de-listing and the other
from acquisition by a non-listed entity (31 March 2015: None).
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 information about significant
unobservable inputs used at 31 March 2016 in measuring financial
instruments categorised as Level 3 in fair value hierarchy.
Fair Value Sensitivity to changes
Valuation at 31 March Unobservable in significant unobservable
Method 2016 (GBP) inputs Factor inputs
The estimated fair
value would increase
Comparative if:
Company Earnings - the Earnings
Multiples 598,566 multiple 4.0x multiple was increased
--------------- ------------- ------------- ------- -----------------------------
The table below sets out information about significant
unobservable inputs used at 31 March 2015 in measuring financial
instruments categorised as Level 3 in fair value hierarchy
Fair Value Sensitivity to changes
Valuation at 31 March Unobservable in significant unobservable
Method 2015 (GBP) inputs Factor inputs
The estimated fair
value would increase
Comparative if:
Company Earnings - the Earnings
Multiples 6,004,595 multiple 9.5x multiple was increased
--------------- ------------- ------------- ------- -----------------------------
The rest of the 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 2016
Valuation Method Input Sensitivity GBP
used
--------------------- ---------- ------------------ ------------------
Comparative Company
Multiples Multiple +/-10% (4.4/3.6) 258,580/(258,580)
--------------------- ---------- ------------------ ------------------
As at 31 March 2015
Valuation Method Input Sensitivity GBP
used
--------------------- ---------- --------------------- ------------------
Comparative Company
Multiples Multiple +/-10% (10.45/8.55) 740,735/(606,752)
--------------------- ---------- --------------------- ------------------
19. 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 Adviser is considered to be a related party. The
fees paid are included in the Statement of Comprehensive Income and
further detailed in Notes 4 and 5.
The Directors are also considered to be related parties and
their fees are disclosed in the Statement of Comprehensive Income.
At 31 March 2016, GBP37,647 (2015: GBP32,795) 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 Partner and the
Chief Executive of Harwood Capital LLP, 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 in the
Corporate Governance Report.
Rupert Evans is a consultant to the law firm Mourant Ozannes,
the legal adviser to the Company. The Company neither paid fees to
Mourant Ozannes during the year, nor had any dues outstanding at
the Statement of Financial Position date (2015: Nil).
During the year, the Company acquired 2,345,679 shares in
Harwood Wealth Management Group, valued at GBP2,111,111 as at 31
March 2016. The Company considers Harwood Wealth Management Group a
related party as Mr Christopher Mills, a non-executive director of
Harwood Wealth Management Group, is also a member of key management
personnel of the Company.
Sidney Cabessa is a Director of Harwood Capital Management
Limited, the parent company of Harwood Capital LLP. No fees were
paid or are payable to Harwood Capital Management Limited.
20. Subsequent Events
During the period 1 April 2016 to 1 July 2016, the Company
carried out two share buybacks resulting in a total reduction of
88,000 Ordinary Shares at a cost of GBP513,750. These Ordinary
Shares were subsequently cancelled and the ordinary shares in issue
is now 15,104,125.
ADMINISTRATION
Registered Office
BNP Paribas House,
St Julian's Avenue,
St Peter Port, Guernsey, GY1 1WA
Investment Manager
Harwood Capital LLP
6 Stratton Street, Mayfair, London, W1J 8LD
Investment Adviser
Harwood Capital LLP
6 Stratton Street, Mayfair, London, W1J 8LD
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
Capita Registrars (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
1, Le Marchant Street, St Peter Port,
Guernsey, Channel Islands, GY1 4HP
To the Company as to English law:
Bircham Dyson Bell
50 Broadway
London, SW1H 0BL
Ends
Enquiries:
Sarah Hendry
BNP Paribas Securities Services SCA, Guernsey Branch
Tel: 01481 750822
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 at BNP Paribas House, 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 company news service from the London Stock Exchange
END
ACSSSUFILFMSEIW
(END) Dow Jones Newswires
July 04, 2016 12:01 ET (16:01 GMT)
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From Apr 2024 to May 2024
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From May 2023 to May 2024