TIDMCRS
RNS Number : 1888N
Crystal Amber Fund Limited
28 September 2021
28 September 2021
Crystal Amber Fund Limited
Final results for the year ended 30 June 2021
The Company announces its final results for the year ended 30
June 2021.
Key Points
-- Net Asset Value ("NAV") per share grew by 38.5% to 146.81
pence (106.02 pence at 30 June 2020 and 128.99 pence at 31 December
2020); 41.2% after adjusting for dividends paid.
-- Stable portfolio continues to deliver progress, including De
la Rue, GI Dynamics, Equals and Allied Minds.
-- Decisive action was taken to protect shareholder value at
Hurricane Energy, including board changes and successful legal
action against proposed financial restructuring. After the year
end, $22 million of capital and interest saved as a direct result
of the Fund's intervention.
-- Exited several positions upon completion of activist strategy
or on revaluation, including Redde Northgate, STV Group and Kenmare
Resources.
-- Increased cash returns to shareholders, with GBP6.9 million
spent on share buybacks and GBP2.1 million on an interim dividend.
A further dividend of GBP2.1 million was paid in August 2021,
bringing cash returns since July 2020 to GBP11.1 million equivalent
to approximately 13p a share.
For further enquiries please contact:
Crystal Amber Fund Limited
Christopher Waldron (Chairman) Tel: 01481 742
742
Allenby Capital Limited - Nominated Adviser
David Worlidge/Liz Kirchner Tel: 020 3328
5656
Winterflood Investment Trusts - Broker
Joe Winkley/Neil Langford Tel: 020 3100
0160
Crystal Amber Advisers (UK) LLP - Investment
Adviser
Richard Bernstein Tel: 020 7478
9080
(1) All capitalised terms are defined in the Glossary of
Capitalised Defined Terms unless separately defined.
Chairman's Statement
I hereby present the fourteenth annual report of Crystal Amber
Fund Limited ("the Fund"), for the year to 30 June 2021. At the
year end, NAV was GBP122.9 million, compared with an unaudited NAV
of GBP108.9 million at 31 December 2020 and an audited NAV of
GBP97.4 million at 30 June 2020. NAV per share was 146.81 pence at
30 June 2021 compared with 128.99 pence at 31 December 2020 and
106.02 pence at 30 June 2020.
The improvement in NAV from the 2020 lows of below 90 pence has
continued during the period, in line with the broader economic
recovery from the COVID-19 pandemic. Whilst infection rates in the
UK remain relatively high, it is to be hoped that the ongoing
vaccination programme will be sufficient to maintain growth into
2022.
During the year, the Manager has been working hard to maximise
value from the Fund's concentrated portfolio. As an activist
investor, this work takes many forms and generally the Fund's
preference is to engage constructively in private with investee
companies. However, this is not always possible and was certainly
not the case recently with Hurricane Energy, where it was necessary
to take legal action to protect the position of shareholders in the
face of egregious proposals by Hurricane's board. If not opposed,
these would have seen a 95% dilution of shareholders. It's pleasing
to report that the Fund's swift action saw this proposal blocked in
the High Court and the Fund is supportive of Hurricane's
reconstituted board as it seeks to create value for all
stakeholders.
The Fund has also been outspoken in its criticism of Allied
Minds, where we have lost confidence in the Chairman after the poor
handling of its investee companies, and we hope for constructive
changes there.
The continued engagement with Equals, GI Dynamics and De La Rue
has been more in line with the Fund's traditional approach and it
was particularly pleasing to see the progress at De La Rue, where
the current management's focus and clear strategy is in sharp
contrast to its predecessors.
A more detailed review of investee companies is set out below in
the Investment Manager's Report.
During the year, the Fund bought back 8,249,567 of its own
shares at an average price of 83.96 pence as part of its strategy
to limit any substantial discount of the Fund's share price to NAV.
Over the year, the Fund's shares traded at an average month-end
discount to NAV of 24.7%. At the year end, the shares traded at a
discount of 26.1% to NAV. The share buyback programme had a
positive contribution of 5.3% to NAV per share during the year.
The Fund declared an interim dividend of 2.5 pence in December
2020. The Fund did not declare an interim dividend in July 2020 due
to the COVID-19 pandemic. At the 2020 AGM, interim dividends
previously paid were ratified by shareholders.
The Fund has regularly submitted itself to continuation votes
and at this year's AGM an extraordinary resolution will be tabled,
requiring a 75% majority for continuation. It was always intended
that this year's vote would provide a very high hurdle for
continuation and the Manager has been positioning the portfolio
accordingly for some time, with no new positions being opened since
De La Rue was first held in 2018.
We announced on 25 June 2021 that the communication received
from Saba Capital, the Fund's largest shareholder, indicated that
it would not support continuation and should the vote to continue
not pass, the Articles require the Fund to "formulate
proposals...to reorganise, reconstruct, or wind up the
Company."
In that event, the proposals will be the result of consultation
with shareholders. In any event, the Board believes it is in
shareholders' interests for the Manager to continue its current
focus and any proposals are likely to reflect the importance of
accelerating growth in core long term holdings, including provision
for the future funding requirements of GI Dynamics.
Moreover, during the year under review, the Manager's primary
focus has been to position the Fund's strategic holdings to appeal
to trade or financial buyers. In recent months, the Manager has
been able to commence discussions with a number of potential buyers
and we will update market participants as and when appropriate.
Christopher Waldron
Chairman
27 September 2021
Investment Manager's Report
Performance
The Fund's NAV per share grew by 38.5% during the year.
Adjusting for dividends paid, the total return in the Fund's NAV
per share for the year was 41.2%. This compares to the Numis
Smaller Companies Index which grew by 52.3% in the same period.
Positive contributors to performance were De La Rue (19.8%), GI
Dynamics (8.7%), Equals Group (8.6%), Redde Northgate (1.8%) and
Kenmare Resources (1.2%). The detractors were Allied Minds (-6.0%)
and Hurricane Energy (-0.2%).
The Fund did not purchase FTSE put options in the year given the
high cost of portfolio protection.
Portfolio and Strategy
At 30 June 2021, the Fund held equity investments in ten
companies (2020: 15), including three unlisted companies. The Fund
also held a debt instrument in GI Dynamics, an unlisted company at
the year end.
The Fund's month-end average net cash and accruals position was
0.3% of NAV (2020: 2%), meaning that it has remained fully invested
throughout the year. Cash realisations were principally utilised to
fund share buybacks and pay an interim dividend.
The Fund's strategy remains focused on a limited number of
special situations where the Fund believes value can be realised
regardless of market direction. By its nature as an activist fund,
the Fund needs to hold sufficiently large stakes to facilitate
engagement as a significant shareholder. Therefore, the Fund is
exposed to concentration risk but levels of investment in
individual companies are closely monitored and parameters are set
to ensure this risk is managed and kept to an appropriate
level.
As at 30 June 2021, the weighted average market capitalisation
of the Fund's listed investee companies was GBP229 million (30 June
2020: GBP171 million).
The table below lists the Fund's top five shareholdings as at 30
June 2021, the equity stake that those positions represent in the
investee company and their percentage contribution to NAV
performance over the year.
Five largest Percentage of investee Contribution to NAV
shareholdings Pence per share Percentage of NAV equity held performance(1)
-------------------------- ---------------- ------------------ ------------------------- -------------------------
De La Rue plc 53.2 36.2% 12.3% 19.8%
GI Dynamics Inc. 23.9 16.3% (2) 8.7%
Equals Group plc 22.4 15.3% 22.4% 8.6%
Hurricane Energy plc 19.3 13.2% 22.6% (0.2)%
Allied Minds plc 11.4 7.8% 19.0% (6.0)%
Total of five largest
shareholdings 130.2
-------------------------- ----------------
Other investments 15.1
Cash and accruals 1.5
-------------------------- ----------------
Total NAV 146.8
-------------------------- ----------------
(1) Percentage contribution stated for equity holdings only.
Other instruments such as outstanding warrants and debt are
included in the performance contribution calculation in the prior
section of this report.
(2) GI Dynamics Inc. is a private company, and its shares are
not listed on a stock exchange. Therefore, the percentage held is
not disclosed.
The Fund's top five positions as at 30 June 2021 were amongst
the top ten at 30 June 2020. The last new quoted investment
purchase was in April 2018. During the year, GBP9 million was
returned to shareholders through share buybacks and dividends. As
reported last September, the Fund increased its investment in GI
Dynamics with a $10 million Series A investment. This investment
and returns of capital were funded by reducing the Fund's
shareholding in De La Rue and Allied Minds. The holding of 18.3% in
De La Rue decreased to 12.3%. The position in Allied Minds
decreased from 22.5% to 19%. The position in Equals remained
broadly stable, with the Fund increasing its holding last autumn
from around 21% to 25% at approximately 24 pence a share, and
subsequently taking profits on these shares. The position in
Hurricane Energy grew from 6.6% to 22.6% as the Fund successfully
defeated the proposal to restructure in the High Court and was able
to take advantage of the distressed share price to acquire further
shares.
The Fund exited positions in Redde Northgate, Camellia and
Kenmare Resources, which were formerly in the top ten holdings.
Investee companies
Our comments on a number of our principal investments are as
follows:
De La Rue plc ("De la Rue")
De La Rue's Currency Division designs and prints banknotes and
produces related components, including security features. The
Authentication Division supplies tax stamps and products and
software to authenticate and track individual products throughout
their supply chains, and it produces components for inclusion
within individual identity documents such as passports. The Fund's
previous annual reports include additional background information
on this investment.
In July 2020, De La Rue completed a GBP100 million equity
fundraise, which was priced at 110 pence per share. The Fund
participated in the firm placing and open offer elements of the
raise. The company now has an almost debt-free balance sheet, a
vastly improved pension funding schedule, bank facilities extended
until December 2023 and, most significantly, a fully funded
turnaround plan. This is proceeding well, with a reduced cost base
and revised strategy for the currency division focused on polymer
note printing and a renewed focus on authentication
opportunities.
De La Rue published full year results to 31 March 2021 on 26 May
2021 and reported adjusted operating profits of GBP38.1 million.
The Currency Division achieved 100% banknote capacity utilisation
and strong margin progression. Its polymer growth plans also saw
encouraging progress. The Authentication Division secured GBP195
million of expected multi-year contract value.
The Fund continues to believe that De La Rue enjoys a
combination of strong competitive positions in high return
businesses and attractive growth opportunities. It holds a 30%
market share of global commercial banknote printing. Bank notes
will continue to be in demand even in cashless societies as they
are needed for currency reserves and wealth storage. The product
cycle of 7-12 years is mainly driven by counterfeit risks. This
drives the conversion of notes to polymer substrates, which
currently only accounts for 4% of notes in issue. Furthermore, the
company's core market is developing countries where demand for cash
is expected to track economic and demographic growth. De la Rue is
well placed to capitalise on the structural shift towards polymer
notes. Over the year, the company has announced new contracts in
its higher margin Authentication Division. The H2 2021 revenues of
GBP45.9 million suggest that the GBP100 million Authentication
target revenue for FY22 is well underpinned.
Over the year, the essential management changes instigated by
the Fund continued to bear fruit. Nevertheless, De La Rue's share
price trades on a multiple of just 0.9 of current year revenues and
on a PE multiple of 12 times earnings. On consensus estimates for
the following year, the revenue multiple is forecast at 0.8 and the
PE multiple at 9. The Fund strongly believes that De La Rue's
equity valuation is significantly underpriced. Unless the stock
market is prepared to value De La Rue appropriately, Crystal Amber
anticipates that a trade buyer or buyers are likely to intervene to
acquire the business.
Allied Minds plc ("Allied Minds")
Allied Minds is an IP commercialisation business focused on
early-stage company development within the US technology sector. In
2019, it announced that it would henceforth focus on maximising
returns and shareholder distributions from its existing portfolio,
rather than continuing to invest in new businesses. The portfolio
contains three significant holdings: Federated Wireless, BridgeComm
and Orbital Sidekick, all of which have raised capital from third
parties including strategic investors. As at 30 June 2021, Allied
Minds had cash of $17.8 million, plus three smaller stakes in other
technology and life-sciences companies. The Fund's previous annual
reports include additional background to this investment.
Over the year, the Fund focused on securing further reductions
in parent company costs and improved transparency of progress of
the underlying investments, all of which are unlisted.
In January 2021, the CEO left the business, shortly after Allied
Minds revealed that its investee company Spin Memory faced a
"significant liquidity issue," stating "a down-round financing is
not uncommon in early venture companies." The Fund notes that
Allied Minds commenced its investment in Spin Memory in 2007 and
considers that if Spin Memory was still characterised as an early
venture company some 13 years later, this reflects poorly on the
management of Allied Minds given that Allied Minds is the largest
shareholder of Spin Memory with an interest of 43%. In June 2021,
Allied Minds announced that Spin Memory would be liquidated and
there could be no guarantee that Allied Minds would receive any
return of capital. Allied Minds has invested $50.5 million in Spin
Memory since 2007.
The investments are now managed directly by the three
non-executive board directors.
In August 2021, Allied Minds reported that Federated Wireless
Inc had met its revenue expectations for its first half and was on
track to meet its full year plan. The most encouraging aspect of
last month's update related to Occu Terra Therapeutics Inc ("Occu
Terra Therapeutics"), a clinical stage ophthalmology drug
development company in which Allied Minds has a fully diluted
holding of 13%. This had been a passive holding and had been
provided for in full. Occu Terra Therapeutics has recently closed a
$31.5 million funding round at a post money valuation of $48.9
million.
In May 2021, the Fund voted against the re-election of Chairman
Harry Rein and non-executive director Bruce Failing. At the
meeting, the vote against Harry Rein's re-election was 47.1% and
37.3% against Bruce Failing.
Whilst the Fund believes that the current share price of 23
pence fails to reflect the net asset value of around 45 pence,
realising the inherent value of the portfolio and return of
proceeds to shareholders would be accelerated and enhanced either
by the removal of Harry Rein and Bruce Failing and replacement with
alternative directors, or a corporate solution. Accordingly, the
Fund has commenced discussions with third parties with this
objective in mind.
Equals Group plc ("Equals")
Equals is an e-banking and international payment services
provider. It serves retail and business customers mainly in the
United Kingdom under an e-money licence. Equals provides faster,
cheaper and more convenient money management than traditional
banking services with bank-grade UK domestic clearance. In June
2019, the company rebranded from FairFX to Equals to reflect the
broader range of services it now offers that go beyond foreign
currency. The Fund's previous annual reports include additional
background to this investment.
Inevitably, from March 2020 Equals was adversely affected by the
enormous restrictions on international travel. Shortly after, its
supply chain was temporarily disrupted with the demise of payment
processor Wirecard. These two events impacted Equals after a period
of increased investment in its product suite which also increased
its cost base. Equals successfully dealt with these challenges and
continued its transition towards B2B, growing those revenues by 10%
in 2020. It also improved its supply chain with new payment
processors and user interfaces that will become available across
product lines. Management also realigned its cost base from GBP1.2
million of base pay per month in January 2020 to GBP0.9 million in
June 2021. In 2020, B2C revenues fell by 30% due to the impact of
the pandemic on travel. However, as a result of strong growth
elsewhere in the business, this represented less than 5% of revenue
in Q2 2021.
Equals' proposition to SMEs is compelling relative to that
offered by legacy banks. The Fund believes that better
understanding of the economics of higher lifetime value business
customers will improve perceptions of Equals' prospects. The
company's assets include over one million customers, an upgraded
technology platform and licences and industry relationships built
over many years. With larger players keen to acquire fintech
capabilities, the Fund believes Equals is an attractive takeover
candidate.
On 14 September 2021, Equals reported strong underlying sales
growth, positive operational cash flow and current quarter revenue
up by 58 per cent year on year. As the largest shareholder in
Equals and having worked closely with management over the last 18
months, it is pleasing to report on both the turnaround and the
momentum that the business now enjoys.
Hurricane Energy ("Hurricane")
Hurricane is an oil exploration and production company targeting
naturally fractured basement reservoirs in the West of Shetland.
The Fund's previous annual reports include background information
on this investment. The Fund has been an investor in Hurricane
since 2013 and has to date realised profits of GBP43 million.
For the year under review, our intensive engagement with the
board of directors culminated in the resignation of all five of the
company's non-executive directors. This took place only hours
before the AGM shareholder vote. In their stead, John Wright and
David Craik, two experienced sector specialists who have been
advising the Fund on Hurricane for several years, were appointed.
The general meeting that the Fund had requisitioned to make these
changes was therefore no longer required.
In June 2021 at the High Court, Mr Justice Zacaroli refused to
sanction the Hurricane board's attempt to force through a highly
dilutive debt for equity swap. The board had proposed that $50
million of the $230 million repayable to bondholders in July 2022
be converted into 95% of Hurricane's equity, with the remaining
$180 million debt earning cash interest of 9.4% per annum plus
payment in kind interest of 5% per annum. The coupon on the
existing bonds is 7.5%.
Mr Justice Zacaroli referred in his judgment to the continued
profitable trading at Hurricane and the prospects of that
continuing long into the future. In this regard, Bluewater Energy
Services B.V. (from whom Hurricane leases the FPSO - Floating
Production Storage and Offloading - vessel) made contact directly
with Crystal Amber and stated that it remains very keen to progress
discussions and investigate solutions and proposals to extend the
charter beyond June 2022. Last month, Hurricane confirmed that it
is engaged in positive negotiations on securing an extension.
The threat of massive equity dilution combined with continued
downbeat comments from the previous board with regard to the
company's future prospects, heavily contributed to what has been a
dreadful share price performance. Whilst there is no doubt that the
fall in oil price in 2020 was entirely beyond management's control,
the decision not to use some of its cash to buyback the bonds when
they were trading at a discount of 70%, as urged to do so at the
time by Crystal Amber, has proven extremely costly in addition to
legal costs of $17 million on a restructuring plan that both
Crystal Amber and more importantly the High Court found to be
inappropriate.
The Fund has written to the Hurricane Board under Article 94 of
the company's articles of association to request that a committee
(comprising the non-executive directors) be established with a
mandate to investigate what happened and to engage external
advisers (should that be needed) for the investigation. The
committee would then make a recommendation to the Hurricane
Board.
Whilst the Fund would have preferred not to have had to endure
the past 18 months as a shareholder in Hurricane, the share price
weakness enabled the Fund to take advantage by more than doubling
its shareholding from 1 January 2021 to 30 June 2021 to 22.6% and
it successfully defended the interests of all shareholders on a
crucial point of law. The Fund currently owns more than 25% of
Hurricane and is the largest shareholder.
In August 2021, after a further request from Crystal Amber,
Hurricane finally launched a tender offer for up to 50% of the
outstanding bonds. Allocating up to $80 million of its cash,
initially the tender was priced at up to 72 cents, but this was
increased to 78 cents. Whilst the Fund fails to understand the
amount of time taken by the board to implement the buyback of the
bonds (in early July 2021, the bonds were trading at just 49.25
cents), purchasing just over one third of the bonds in issue has
reduced Hurricane's capital and interest obligations by
approximately $22 million. This represents an important and
material saving. Without the Fund's successful intervention at the
High Court, this would not have happened.
The Fund now believes that Hurricane must secure an extension
with Bluewater Energy Services B.V. (from whom Hurricane leases the
Floating Production Storage and Offloading vessel). This will
secure the prospects of significantly increased free cash flow
generation for equity holders. The Fund believes that a twelve
month extension is required.
Latest production information from Hurricane is that its P6 well
is producing 11,100 barrels per day. This compares well with the
company's production forecasts (released in May 2021) estimating
production for August 2021 at 9,500 barrels per day. Production for
June and July were also ahead of forecast. The latest production
shipment in August 2021 was for 505,000 barrels and it is estimated
that this generated around $34 million of revenue.
At anticipated production levels, the Fund estimates that by
February 2024, 8.3 million barrels will be produced. At a selling
price of $68 a barrel, $570 million of revenues will be achieved.
Based on historic margins, this would deliver operating cash flows
of around $250 million. By the time the bonds are due to be repaid,
the Fund estimates that 3.3 million barrels can be produced,
generating $227 million of revenue and around $110 million of
operating cash flow. These revenues and cash flows are taken from
the current oil producing asset within Hurricane's portfolio. Set
against this context, whilst inevitable production risk remains,
the Fund believes the prospects for Hurricane are far better than
has been presented by its executives.
The Fund notes and welcomes that since the court hearing, actual
production achieved has been running materially ahead of budget and
in August, it exceeded budget by more than 20 per cent at 11,467
barrels a day.
GI Dynamics Inc ("GI Dynamics")
GI Dynamics is the developer of the EndoBarrier, a minimally
invasive therapy for the treatment of Type 2 diabetes and obesity.
EndoBarrier is a temporary bypass sleeve that is endoscopically
delivered to the duodenal intestine. It offers similar effects to
the surgical gastric bypass, without the risks of a major surgical
procedure. The Fund's previous annual reports contain the
background to the company and the Fund's investment.
During the year, GI Dynamics delisted from the Australian stock
exchange. Its board and CEO were replaced with new executives and
directors with medical device experience. As part of a $10 million
investment in preferred stock, the Fund's senior secured loan was
converted, and warrants were cancelled. The Fund currently owns one
$4.9 million convertible loan note, together with preferred and
common stock.
While COVID 19 delayed the company's progress in 2020, it
highlighted the need to address the prevalence of Type II diabetes
and obesity. During this year, as a result of the lifting of
COVID19 restrictions and widespread vaccine access in the US, GID
has been able to recommence enrolment to its clinical trial. After
delays due to the COVID 19 surge in India, the I-STEP application
for a randomised clinical trial (to be conducted in conjunction
with Apollo Sugar Clinics) was reviewed by regulators in India in
June 2021. GI Dynamics is in the process of filing its application
to commercialise EndoBarrier under the new Medical Device
Regulations (MDR) which will allow access throughout the EU. The
first milestone toward achieving CE Mark for European regulatory
approval was achieved in November 2020 as GI Dynamics successfully
completed the required ISO Certification audit.
The global pandemic has reaffirmed the importance of gaining
control of the significant risk factors associated with Type II
diabetes and obesity. More than ever, medical professionals and
patients alike are seeking minimally invasive and effective
therapies so help control and resolve these chronic conditions. GI
Dynamics is preparing to meet this large unmet clinical need.
Outlook
The Fund's mature and highly concentrated portfolio of special
situations is well placed to deliver not only value accretion but
importantly the release of value. As the Fund's investee companies
continue to make progress, we have been able to enter discussions
with strategic and corporate buyers of the majority of our
portfolio companies. In the coming weeks and months, we look
forward to providing specific details.
Crystal Amber Asset Management (Guernsey) Limited
27 September 2021
Investment Policy
The Company is an activist fund which aims to identify and
invest in undervalued companies and, where necessary, take steps to
enhance their value. The Company aims to invest in a concentrated
portfolio of undervalued companies which are expected to be
predominantly, but not exclusively, listed or quoted on UK markets
(usually the Official List or AIM) and which have a typical market
capitalisation of between GBP100 million and GBP1 billion.
Following investment, the Company and its advisers will also
typically engage with the management of those companies with a view
to enhancing value for all their shareholders.
Investment objective
The objective of the Company is to provide its shareholders with
an attractive total return, which is expected to comprise primarily
capital growth but with the potential for distributions from
realised distributable reserves, including distributions arising
from the realisation of investments, if this is considered to be in
the best interests of its shareholders.
At the date of signing these Financial Statements, the
investment strategy and investment restrictions which applied to
the Company following Admission and after the passing of Resolution
1 at the EGM held on 15 August 2013, were as follows:
Investment strategy
The Company focuses on investing in companies which it considers
are undervalued and will aim to promote measures to correct the
undervaluation. In particular, it aims to focus on companies which
the Company's Investment Manager and Investment Adviser believe may
have been neglected by fund managers and investment funds due to
their size; where analyst coverage is inadequate or where analysts
have relied on traditional valuation techniques and/or not fully
understood the underlying business. The Company and its advisers
seek the co-operation of the target company's management in
connection with such corrective measures as far as possible. Where
a different ownership structure would enhance value, the Company
will seek to initiate changes to capture such value. The Company
may also seek to introduce measures to modify existing capital
structures and introduce greater leverage and/or seek the sale of
certain businesses or assets of the investee company.
Pending investment of the type referred to above, the Company's
funds will be placed on deposit but the Company also has the
flexibility to make other investments (including money market
instruments) which are considered to be reasonably liquid in order
to ensure that its funds are appropriately deployed. The Company
may, in certain circumstances, acquire stakes in target companies
from investors in exchange for shares in the Company.
Where it considers it to be appropriate, the Company may (i)
utilise leverage for the purpose of investment and enhancing
returns to shareholders and/or (ii) enter into derivative
transactions, for example to provide portfolio protection against
significant falls in the market or for the purposes of efficient
portfolio management, in seeking to manage its exposure to interest
rate and currency fluctuations through the use of currency and
interest rate hedging arrangements, and to acquire exposure to
target companies through contracts for difference.
Investment restrictions
It is not intended that the Company will invest, save in
exceptional circumstances, in:
-- companies with a market capitalisation of less than GBP100 million at the time of investment;
-- pure technology based businesses; or
-- unlisted companies or companies in pre-IPO situations.
It is expected that no single investment in any one company will
represent more than 20% of the Gross Asset Value of the Company at
the time of investment. However, there is no guarantee that this
will be the case after any investment is made, or where the
Investment Manager believes that an investment is particularly
attractive.
Dividend policy
With effect from 1 January 2015, the annual target dividend was
increased to 5 pence per share. The Company's dividend policy is to
distribute a proportion of the income received from the Company's
portfolio holdings to shareholders. In certain circumstances, the
Company may make distribution payments out of realised investments
if considered to be in the best interests of shareholders.
Due to the nature of the Company's investment objectives and
strategy, the timing and amount of investment income cannot be
predicted and is dependent on the composition of the Company's
portfolio. Before recommending any dividend, the Board will
consider the capital and cash positions of the Company, and the
impact on such capital and cash by virtue of paying that dividend,
and will ensure that the Company will satisfy the solvency test, as
prescribed by the Companies Law, immediately after payment of any
dividend. Therefore, there can be no guarantee as to the timing and
amount of any distribution payable by the Company. The projected
dividends set out above are targets only and there can be no
assurance that these targets can, or will, be met. There was no
interim dividend paid in 2020, as a result of COVID-19, which
created uncertainty as to the timing and quantum of dividend
receipts from the Company's portfolio companies. The interim
dividend for 2021 of GBP2,107,375 equating to 2.5 pence per
Ordinary share, was paid on 3 February 2021 to shareholders on the
register on 8 January 2021.
Composition of the portfolio
The Board, Investment Manager and Investment Adviser believe
that the number of potential target companies is high with more
than 2,000 companies quoted on AIM or the Official List and they
consider that a significant number of these are in the Company's
targeted range.
Target investee companies typically operate in one or more of
the following sectors:
-- consumer products;
-- industrial products;
-- retail;
-- support services;
-- healthcare; or
-- financial services.
However, the Company is not restricted to these sectors and
investment decisions are taken based on market conditions and other
investment considerations at the time.
Report of the Directors
Incorporation
The Company was incorporated on 22 June 2007 and was admitted to
trading on AIM on 17 June 2008.
Principal activities
The Company is a Guernsey registered closed ended company
established to provide shareholders with an attractive total
return, which is expected to comprise primarily capital growth and
distributions from accumulated retained earnings taking into
consideration unrealised gains and losses at that time. This will
be achieved through investment in a concentrated portfolio of
companies that are considered to be undervalued and which are
expected to be predominantly, but not exclusively, listed or quoted
on UK markets and which mostly have a market capitalisation of
between GBP100 million and GBP1 billion.
The Company became a member of the AIC on 26 March 2009.
Business review
A review of the business together with likely future
developments is contained in the Chairman's Statement and the
Investment Manager's Report.
Results and dividend
The results for the year are set out in the Statement of Profit
or Loss and Other Comprehensive Income.
The Company has declared dividends twice yearly in the sum of
2.5 pence per share totalling 22.5 pence per share over the last
five years (the exception being the 2020 interim dividend which was
withheld as a result of the emergence of COVID-19, which created
uncertainty as to the timing and quantum of dividend receipts from
the Company's portfolio companies). Traditionally, the dividends
have been largely funded by dividends received from portfolio
companies.
In view of the effects of COVID-19, there is significant
uncertainty as to the timing and quantum of dividend receipts from
the Company's portfolio companies. The Directors are also mindful
that changes in the composition of the portfolio could mean that
there will be lower dividend receipts than in past years.
On 23 December 2020, the Company declared an interim dividend of
GBP2,107,375 equating to 2.5 pence per Ordinary share, which was
paid on 3 February 2021 to shareholders on the register on 8
January 2021.
On 7 July 2021, the Company declared an interim dividend of
GBP2,096,650 equating to 2.5 pence per Ordinary share, which was
paid on 4 August 2021 to shareholders on the register on 16 July
2021.
Continuation vote
The Company has regularly submitted itself to continuation
votes. An extraordinary resolution was passed at the 2019 AGM under
which 75% of the votes would be required to continue as currently
constituted and an extraordinary resolution will be tabled at the
2021 AGM, requiring a 75% majority for continuation.
As announced on 25 June 2021, communication received from Saba
Capital indicated that it would not support continuation. Should
the vote to continue not pass, the Articles require the Company to
"formulate proposals...to reorganise, reconstruct, or wind up the
Company." In that event, the proposals will be the result of
consultation with shareholders.
The Investment Manager is engaging with shareholders in
anticipation of the vote and to explore alternatives to
continuation, such as a company reorganisation and
reconstruction.
Going concern
The Directors are confident that the Company has adequate
resources to continue in operational existence for the foreseeable
future and as a result of this, do not consider there to be any
threat to the going concern status of the Company. As disclosed
further in Note 1, the Directors have considered the potential
impact of the effects of COVID-19 on the Company's activities and
do not consider that this will impact the Company's ability to
operate as a going concern. The Directors have also considered the
continuation vote scheduled for the 2021 AGM and note Saba
Capital's stated intention to vote against continuation. In that
circumstance, the Company will be obliged to return to shareholders
with proposals to either reorganise, restructure or wind up the
Company. Although the wind up option is included within the
Articles amended in 2013, the Directors believe that the nature of
the Company's investments mean that a wind up in the short term
would not be in shareholders' interests. In line with accounting
standards, the Directors are nevertheless obliged to disclose that
this uncertainty exists, which is material and therefore if a wind
up was actioned, may cast doubt on the Company's ability to
continue as a going concern. The Directors also note that no new
investments have been undertaken by the company since April 2018
and that the Investment Manager's focus is currently on optimising
performance of existing investments.
Long term viability
As further disclosed in the corporate governance note in the
Report of the Directors, the Company is a member of the AIC and
complies with the AIC Code. In accordance with the AIC Code, the
Directors have made a robust assessment of the prospects of the
Company over the three year period ending 30 June 2024. The
Directors consider that three years is an appropriate period to
assess the viability of the Company given the average length of
investment in each portfolio company and the time horizon over
which investment decisions are made.
In considering the prospects of the Company, the Directors have
considered the risks facing the Company, giving particular
attention to the principal risks identified below, the
effectiveness of controls over those risks, the process in place
for identifying emerging risks and have evaluated the sensitivities
of the portfolio to market volatility.
The Directors have also considered the Company's income and
expenditure projections over the three year period, the fact that
the Company currently has no borrowings and that most of its
investments comprise readily realisable securities which can be
expected to be sold to meet funding requirements if necessary.
Based on the results of this analysis and mindful of the
continuation vote to take place at the 2021 AGM, the Directors have
a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the
three year period of their assessment.
Principal risks and uncertainties
The Company has implemented a rigorous risk management framework
including a comprehensive risk matrix that is reviewed and updated
regularly. This ensures that procedures are in place to identify
principal risks, mitigate and minimise the impact of those risks
should they crystallise, and to identify emerging risks and
determine whether any action is required. The Investment Manager
has created a Risk Committee from which the Board receives
quarterly reports. Fred Hervouet, one of the Board Directors,
liaises with the Risk Committee and attends its regular meetings to
offer an independent view and to enhance communication between the
committee and the Board. The Directors have carried out a robust
assessment of the principal risk areas relevant to the performance
of the Company including those that would threaten its business
model, future performance, solvency and liquidity and these are
detailed below. As it is not possible to eliminate risks
completely, the purpose of the Investment Manager's risk management
policies and procedures is to reduce and manage risk and to ensure
that the Company is as adequately prepared as reasonably possible
to respond to such risks and to minimise their impact should they
occur.
Continuation
The Company is subject to a continuation vote at its 2021 AGM.
The Investment Manager is engaging with shareholders in
anticipation of the vote and to explore alternatives to
continuation, such as a company reorganisation and reconstruction.
Should the continuation vote not pass, alternatives would be put to
a shareholder vote in accordance with the Articles. The Directors
note the Investment Manager's focus since 2018 has been to optimise
outcomes from existing investments and do not anticipate that this
process will be disrupted. Whilst there is uncertainty surrounding
the outcome of the continuation vote which is material, the
Directors are confident in the company's ability to continue to
operate on a going concern basis.
Regulatory compliance risk
A breach of regulatory rules could lead to a suspension of the
Company's stock exchange listing or financial penalties. The
Company Secretary monitors the Company's compliance with the AIM
Rules in conjunction with the Nominated Adviser and compliance with
these rules is reviewed by the Directors at each Board meeting.
One of the most significant regulatory risks for an activist
investor such as the Company is in relation to market abuse
provisions. The FCA has published guidance stating that in general
it would not consider an activist shareholder's conduct to amount
to market abuse where the shareholder merely carried out
acquisitions of a target company's securities on the basis of the
target company's intentions and the Company's knowledge of the
target company's strategy.
However, the FCA has stated that if, for example, other
shareholders trade in the target's shares on the basis of another
shareholder's strategy, they may view such conduct as amounting to
market abuse. There is no guarantee that other shareholders will
not follow the Company's strategy, and, in certain circumstances
the Company may act with, or be dependent upon, the support of
other shareholders to implement its strategies. There is also no
guarantee that the FCA's guidance will not change. The Company and
its Advisers operate in a highly regulated environment and whilst
they will always seek to take appropriate professional advice,
there is a risk of an inadvertent breach of securities laws or
regulations, or allegations of such breach, taking place.
The following risks, whilst they may affect the performance of
the Company, will not in themselves affect the ability of the
Company to operate.
'Key Man' risk
The Investment Adviser and the Investment Manager rely heavily
on the expertise, knowledge and network of Richard Bernstein when
sourcing investment opportunities. He is a shareholder of the
Company, a director and shareholder of the Investment Manager and a
member of the Investment Adviser and his loss to these service
providers could have an adverse effect on the Company's
performance. In the absence of Richard Bernstein, the Board and
Investment Manager have sufficient relevant experience to manage
the Company's portfolio while considering the future of the
Company.
Portfolio concentration risk
By its very nature as an activist fund, the Company is exposed
to the risk that its portfolio of investee companies is not
sufficiently diversified to absorb the impact of a fall in value of
some of its major investments. As noted in the Investment Policy,
the Company seeks to invest in companies and use activism to unlock
value. An inherent consequence of this policy is a portfolio
concentrated on a number of key investee companies. The Board is
aware of this risk and feels it is a necessary risk to take in
order to provide returns through the investment strategy. Levels of
investment in individual companies are monitored and parameters are
set to ensure that the risk is kept to an acceptable level, while
also ensuring a sufficiently high level of stock is purchased to
allow engagement as a major shareholder, if required.
Underlying investment performance risk
The Company invests in underlying investee companies, the
securities of which are publicly traded or are offered to the
public. The performance of these companies is likely to fluctuate
due to a number of factors beyond the Company's control. The
Investment Manager and Investment Adviser monitor investee company
performance and share price movements on a daily basis. The
Administrator prepares weekly portfolio valuation reports. The
Investment Adviser engages with investee companies through regular
meetings and reports to the Board. The Investment Manager and
Investment Adviser also compare the Company's performance to the
Numis Smaller Companies Index and investigate all underperformance
and unrealised losses of the Company.
Market risk
The Company's investments include investments in companies the
securities of which are publicly traded or are offered to the
public and investments in unlisted companies. The market prices and
values of these securities may be volatile and are likely to
fluctuate due to a number of factors beyond the Company's control.
These include actual and anticipated fluctuations in the quarterly,
half yearly and annual results of the companies in which
investments are made and other companies in the industries in which
they operate and market perceptions concerning the availability of
additional securities for sale.
They also include general economic, social or political
developments, changes in industry conditions, shortfalls in
operating results from levels forecast by securities analysts, the
general state of the securities markets and other material events,
such as significant management changes, refinancings, acquisitions
and disposals. Changes in the values of these investments may
adversely affect the Company's NAV and cause the market price of
the Company's shares to fluctuate. The Company periodically hedges
price risk by holding put options linked to the FTSE index to
provide some protection against a significant market sell-off.
Shareholder concentration risk
A total of 8 investors with holdings of 3% or more each of the
shares of the Company hold a combined total of 79.16% of the voting
rights. A significant shareholder seeking liquidity could have a
negative impact on the Company causing movements in Company share
price through voting at an AGM, or by placing pressure on the Board
to act to realise value in the portfolio at a sub-optimal time and
value. To manage this risk the Investment Manager maintains regular
contact with significant shareholders to discuss the performance of
the Company and any views the shareholder may have.
Liquidity risk
The Company's ability to meet its obligations arising from
financial liabilities could be reliant on its ability to reduce or
exit investment holdings. This could be more difficult with the
Company's less liquid portfolio holdings. To manage this risk, the
cash and trade positions are monitored on a daily basis by the
Investment Adviser and the Administrator. The liquidity of stocks
is also considered at the point of recommendation by the Investment
Adviser and prior to investment.
It is not intended that the Company will invest, save in
exceptional circumstances, in companies with a market
capitalisation of less than GBP100 million at the time of
investment. Companies with a market capitalisation of less than
GBP100 million are in many cases considered to be higher risk and
may also be less liquid than companies with a market capitalisation
of more than GBP100 million. However, the Investment Adviser may,
from time to time, identify exceptional investment opportunities
with a market capitalisation of less than GBP100 million.
The Company's risk of investment in companies with market
capitalisation of less than GBP100 million is mitigated as all
investments are monitored by the Board on a quarterly basis. Any
proposals to invest in companies below GBP100 million market
capitalisation are considered in detail by the Investment Manager
and are recommended in exceptional circumstances only.
Inside information risk
The Company may, from time to time, be exposed to insider
information. A breach of insider trading rules could lead to a
suspension of the Company's stock exchange listing or financial
penalties. This risk is mitigated and managed through continual
monitoring and policy setting, which ensures all employees of the
Investment Adviser clearly understand insider trading rules and
adhere to all relevant procedures.
Implementation risk
The Company's ability to generate attractive returns for
shareholders depends upon the Investment Adviser's ability to
assess future values that may be realised in connection with
investments. The ability to assess future values and the timing
thereof, whether in connection with the making of an investment or
exiting from an investment, may be particularly important in the
case of investments over which the Company has little or no control
on its own. The ability of the Company to exit certain investments
on favourable terms will be dependent (inter alia) upon the
successful implementation of the strategic plans for such investee
company and, in particular, the ability to persuade management to
adopt such strategic plans. It will also depend on the relative
liquidity of the stock of the investee company at that time.
Risks were identified in relation to the ongoing COVID-19
pandemic. Further details including mitigation strategies, are
included within the going concern section of Note 1 to the
Financial Statements.
In summary, the risks noted above are mitigated and managed by
the Board, the Investment Manager and Investment Adviser through
continual review of the portfolio, policy setting and updating the
Company's risk matrix to ensure that procedures are in place to
minimise their impact.
Further detail on the Company's risk factors is set out in the
Company's admission document, available on the Company's website
(www.crystalamber.com) and should be reviewed by shareholders.
Details about the financial risks associated with the Company's
investment portfolio and the way that investments are managed are
given in Note 14 to the Financial Statements.
Ongoing charges
For the year ended 30 June 2021 the ongoing charges ratio of the
Company was 2.07% (2020: 2.13%). The ongoing charges ratio has been
calculated using AIC recommended methodology and is made up as
follows:
2021 2020
-----------------------
GBP GBP
----------------------- ------------- ------------
Ongoing expenses 2,244,051 3,223,790
Weighted average NAV 108,461,324 151,011,706
Ongoing charges ratio 2.07% 2.13%
----------------------- ------------- ------------
Ongoing charges are those expenses of a type which are likely to
recur in the foreseeable future, whether charged to capital or
revenue, and which relate to the operation of the Company as a
collective fund, excluding the costs of acquisition/disposal of
investments, performance fees, financing charges and gains/losses
arising on investments. Ongoing charges are based on costs incurred
in the year as being the best estimate of future costs. The ongoing
charges ratio is calculated by dividing the annualised ongoing
charges by the average NAV for the financial year.
Directors
The Directors of the Company who served during the year and up
to the date of this report are shown on the Directors section.
Biographies of the Directors holding office as at 30 June 2021 and
at the date of signing these Financial Statements are shown on the
Directors section.
Directors' interests
The interests of the Directors in the share capital of the
Company at the year-end are disclosed in Note 16.
Directors' remuneration
The remuneration of the Directors during the year is disclosed
in Note 16.
Directors' responsibilities to stakeholders
Section 172 of the UK Companies Act 2006 applies directly to UK
domiciled companies. Nonetheless the AIC Code requires that the
matters set out in Section 172 are reported by all companies,
irrespective of domicile. This requirement does not conflict with
the Companies Law in Guernsey.
Section 172 recognises that Directors are responsible for acting
in a way that they consider, in good faith, is most likely to
promote the success of the Company for the benefit of all of its
shareholders. In doing so, they are also required to consider the
broader implications of their decisions and operations on other key
stakeholders and their impact of those decisions on the wider
community and the environment.
Key decisions are defined as those that are material to the
Company, but also those that are significant to any of the
Company's key stakeholder groups. The Company's engagement with its
key stakeholders is discussed further in the corporate governance
section of this report.
The Directors made or approved the following key decisions
during the year, with the overall aim of promoting the success of
the Company taking into account the likely impact on its members
and wider stakeholders;
Dividends
The Directors concluded that an interim dividend should be paid
in this financial year, as further disclosed in the Report of the
Directors.
Continuation
As outlined earlier, there is uncertainty as to the outcome of
an upcoming continuation vote, but the Directors are confident in
the company's ability to continue on a going concern basis.
Charitable shares
During the year, the Company approved the issue of 125,000
shares to five separate charitable organisations in accordance with
the authority granted to the Company by shareholders at the 2019
AGM. As disclosed within the Chairman's Statement, the Company
issued 125,000 shares on 25 September 2020 split equally amongst
the following five charitable organisations: St Andrews Clinic for
Children, Cancer Research UK, Feis Ceoil, James' Place and
Sentable. The Directors recognise that more recently, the
shareholder base has changed significantly and consequently, the
Directors have decided that in recognition of the views articulated
by newer shareholders, the Fund will suspend future share issues to
charities at this time.
Substantial interests
As at 26 August 2021, the Company had been notified of the
following voting rights of 3% or more of its total voting
rights:
Number of Ordinary shares Total
voting rights
Saba Capital Management 21,754,592 25.98%
Wirral BC 12,938,214 15.45%
1607 Capital Partners 10,008,714 11.95%
Crystal Amber Asset Management (Guernsey) 6,904,330 8.25%
Rath Dhu 5,050,000 6.03%
Noble Grossart Investments 4,000,000 4.78%
Charles Stanley 2,833,143 3.38%
CG Asset Management 2,800,000 3.34%
Total 66,288,993 79.16%
------------------------------------------- -------------------------- ---------------
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors'
Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the Financial Statements in accordance with
International Financial Reporting Standards, as issued by the IASB,
and applicable law.
The financial statements are required by law to give a true and
fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies (Guernsey) Law,
2008. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website (www.crystalamber.com), and for the preparation
and dissemination of financial statements. Legislation in the
United Kingdom and Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Disclosure of information to the Auditor
The Directors each confirm that they have complied with the
above requirements in preparing the Financial Statements. They also
confirm that so far as they are each aware, there is no relevant
audit information of which the Company's auditor is unaware and
that they have taken all the steps they ought to have taken as
Directors to make themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
Corporate governance
As a Guernsey registered company, the share capital of which is
admitted to trading on AIM, the Company is not required to comply
with the FRC Code. However, the Directors recognise the value of
sound corporate governance and it is the Company's policy to comply
with best practice on good corporate governance that is applicable
to investment companies.
The Board has considered the principles and provisions of the
AIC Code. The AIC addresses the principles and provisions set out
in the FRC Code and includes additional provisions on issues that
are of specific relevance to the Company. The Board considers that
reporting against the principles and provisions of the AIC Code,
which has been endorsed by the FRC and the Guernsey Financial
Services Commission, provides more relevant information to
shareholders. The Company has complied with the principles and
provisions of the AIC Code. The AIC Code is available on the AIC's
website, www.theaic.co.uk , which includes an explanation of how
the AIC Code adapts the principles and provisions set out in the
FRC Code to make them relevant for investment companies. The FRC
Code is available on the FRC's website, www.frc.org.uk .
The GFSC Code came into force in Guernsey on 1 January 2012.
Under the GFSC Code, the Company is deemed to satisfy the GFSC Code
provided that it continues to conduct its governance in accordance
with the requirements of the AIC Code.
The Company adheres to a Stewardship Code adopted from 14 June
2016. The Company's Stewardship Code incorporates the principles of
the UK Stewardship Code. A copy of the Stewardship Code is
available on the Company's website.
Environmental, social and governance report
As an investment company, the Company's activities only have a
limited impact on the environment in which it operates. The Company
has no employees and its registered office is based in Guernsey,
where all of the Directors reside, thus minimising the need for
extensive travel to attend Board or other meetings, with associated
environmental impact.
Responsible investment principles have been applied to each of
the investments made. These policies require the Company to make
reasonable endeavours to procure the ongoing compliance of its
portfolio companies with its own policies on responsible
investment. The Company is an activist fund which aims to identify
and invest in undervalued companies and, where necessary, take
steps to enhance their value. Following investment, the Company and
its advisers will also typically engage with the management of
those companies with a view to enhancing value for all their
shareholders, in line with the UK Stewardship Code.
Purpose, culture and values
The Company's purpose remains clear: to provide its shareholders
with an attractive total return, which is expected to arise
primarily from capital growth but with the potential for
distributions from realised distributable reserves, including
distributions arising from the realisation of investments, if this
is considered to be in the best interests of its shareholders.
The Board has considered the Company's culture and values. As an
investment company with no employees, it is considered that the
culture and values of the Board are aligned with those of the
Investment Manager and Investment Adviser, with a focus on long
term relationships with the Company's key stakeholders.
The Board
The Company is led and controlled by a Board of Directors, which
is collectively responsible for the long-term success of the
Company. The Company believes that the composition of the Board is
a fundamental driver of its success as the Board must provide
strong and effective leadership of the Company. The current Board
was selected, as their biographies illustrate, to bring a breadth
of knowledge, skills and business experience to the Company.
As at the date of this report, the Board comprises three
Non-Executive Directors (2020: three), all of whom are considered
to be independent of the Investment Manager and Investment Adviser
and free from any business or other relationship that could
materially interfere with the exercise of their judgement. Board
appointments are considered by all members of the Board and have
been made based on merit against objective criteria.
The Chairman of the Board is Christopher Waldron. The Board has
taken note of the provisions of the AIC Code relating to
independence and has determined that Mr Waldron is an independent
director. The Company has no employees and therefore there is no
requirement for a Chief Executive, nor has it established a Senior
Independent Director due to the size of the Board and the Company.
The Board is satisfied that any relevant issues that arise can be
properly considered by the Board.
A biography for the Chairman and all the other Directors follows
in the next section, which sets out the range of investment,
financial and business skills and experience they bring to the
Board. The Directors believe that the current mix of skills,
experience and length of service represented on the Board are
appropriate for the requirements of the Company.
In view of the Board's non-executive nature and the requirement
of the Articles of Incorporation that one third of Directors retire
by rotation at least every three years, the Board considers that it
is not appropriate for Directors to be appointed for a specified
term as recommended by principle 3 of the AIC Code. In accordance
with the recent publication of the 2019 AIC Code, which the Board
adopted from 1 July 2019, all Directors will be subject to annual
re-election.
None of the Directors has a contract of service with the
Company. The Company has no executive Directors and no employees.
However, the Board has engaged external companies to undertake the
investment management, administrative and custodial activities of
the Company. Clearly documented contractual arrangements are in
place with these companies which define the areas where the Board
has delegated certain responsibilities to them, but the Board
retains accountability for all delegated responsibilities.
Chair tenure policy
The Company has adopted a chair tenure policy, whereby the Chair
should normally serve no longer than nine years as a Director and
Chair but, where it is considered to be in the best interests of
the Company, its shareholders and stakeholders, the Chair may serve
for a limited time beyond that. In such circumstances, the
independence of the other Directors will ensure that the Board as a
whole remains independent.
The Company's view is that the continuity and experience of its
Directors are important and that a suitable balance needs to be
struck between the need for independence and refreshing the skills
and expertise of the Board. The Company believes that some limited
flexibility in its approach to Chair tenure will enable it to
manage succession planning more effectively.
Diversity policy
The Company monitors developments in corporate governance to
ensure the Board remains aligned with best practice with respect to
the increased focus on diversity. The Company has a Board diversity
policy, which acknowledges the importance of diversity, including
gender, for the effective functioning of the Board and commits to
supporting diversity in the boardroom. It is the Board's ongoing
aspiration to have a well-diversified membership. In addition to
gender diversity, the Board also values diversity of business
skills, knowledge and experience which bring a wide range of
perspectives to the Company.
Performance and evaluation
Internal evaluation of the Board, the Committees and individual
Directors is undertaken on an annual basis in the form of
questionnaires, peer appraisal, and discussions to determine
effectiveness and performance in various areas as well as the
Directors' continued independence.
New Directors receive an induction on joining the Board, and all
Directors receive other relevant training as necessary. Directors
have regular contact with the Investment Manager to ensure that the
Board remains regularly updated on all issues. All members of the
Board are members of professional bodies and serve on other Boards,
which ensures they are kept abreast of the latest technical
developments in their areas of expertise.
Board responsibilities
The Board is responsible to shareholders for the overall
management of the Company. The Board has adopted a set of reserved
powers which set out the particular duties of the Board. Such
reserved powers include decisions relating to the determination of
investment policy and oversight of the Investment Manager and their
advisers, strategy, risk assessment, Board composition, capital
raising, statutory obligations and public disclosure, financial
reporting and entering into any material contracts by the
Company.
The Directors have access to the advice and services of the
Administrator and Secretary, who are responsible to the Board for
ensuring that Board procedures are followed and that it complies
with the Companies Law and applicable rules and regulations of the
GFSC and the London Stock Exchange. Where necessary, in carrying
out their duties, the Directors may seek independent professional
advice at the expense of the Company.
The Company maintains appropriate directors' and officers'
liability insurance in respect of legal action against its
Directors on an ongoing basis. Investment Advisory services are
provided to the Company by Crystal Amber Advisers (UK) LLP through
the Investment Manager. The Board is responsible for setting the
overall investment policy and has delegated day to day
implementation of the Company's strategy to the Investment Manager
but retains responsibility to ensure that adequate resources of the
Company are directed in accordance with their decisions. The Board
monitors the actions of the Investment Adviser and Investment
Manager at regular Board meetings. The Board has also delegated
administration and company secretarial services to Ocorian
Administration (Guernsey) Limited but retains accountability for
all functions it delegates.
The Directors are responsible for ensuring the effectiveness of
the internal controls of the Company which are designed to ensure
that proper accounting records are maintained, the financial
information on which business decisions are made and which is
issued for publication is reliable, and the assets of the Company
are safeguarded. A formal review of the effectiveness of the
Company's risk management and internal control systems is conducted
at least once a year and this was completed successfully during the
year under review. The Investment Manager has established a Risk
Committee to monitor and manage risks faced by the Company.
The Board meets at least four times a year for regular,
scheduled meetings and should the nature of the business of the
Company require it, additional meetings may be held, some at short
notice. Prior to each of its quarterly meetings, the Board receives
reports from the Investment Adviser and Administrator covering
activities during the period, performance of relevant markets,
performance of the Company's assets, finance, compliance matters,
working capital position and other areas of relevance to the Board.
The Board also considers from time to time reports provided by the
Investment Manager and other service providers. The Board also
receives quarterly reports from the Risk Committee. There is
regular contact between the Board, the Investment Manager and the
Administrator. The Directors maintain overall control and
supervision of the Company's affairs.
There may be a requirement to hold Board meetings outside the
scheduled quarterly meetings in order to review and consider
investment opportunities and/or formal execution of documents and
to consider ad hoc business.
Between meetings there is regular contact with the Investment
Manager and the Administrator, and the Board requires information
to be supplied in a timely manner by the Investment Manager, the
Company Secretary and other advisers in a form and of a quality to
enable it to discharge its duties.
The Board, through the Remuneration and Management Engagement
Committee, is responsible for the appointment and monitoring of all
service providers including the Investment Manager. It conducts a
formal review of all service providers on an annual basis and
confirms that such a review has taken place during the year.
Audit committee
Due to the size of the Board, all Directors are members of the
Audit Committee. Jane Le Maitre acts as Chairman of the Committee.
The responsibilities of the Committee include reviewing the Annual
Report and Audited Financial Statements, the Interim Report and
Financial Statements, the system of internal controls and risk
management, and the terms of appointment and remuneration of the
Auditor. It is also the forum through which the Auditor reports to
the Board.
The Committee met twice in the year ended 30 June 2021. Matters
considered at these meetings included but were not limited to:
-- review of the accounting policies and format of the financial statements;
-- review of the Annual Report and Audited Financial Statements
for the year ended 30 June 2020;
-- review of the Interim Report and Unaudited Interim Condensed
Financial Statements for the six months ended 31 December 2020;
-- review of the audit plan and timetable for the preparation of
the Annual Report and Audited Financial Statements for the year
ended 30 June 2021;
-- discussions and approval of the fee for the external audit;
-- assessment of the effectiveness of the external audit process as described below;
-- review of the Company's significant risks and internal controls;
-- review and consideration of the AIC Code, the GFSC Code and the Stewardship Code; and
-- detailed review of the 2021 Annual Report in relation to the
AIC Code and determining the period of assessment for the long term
viability of the Company.
The Committee considers the valuation of investments to be a
significant matter in relation to these Financial Statements. The
Company's accounting policy is to value investments as designated
at fair value through profit or loss or as derivatives held for
trading, and to recognise sales and purchases of those investments
using trade date accounting. This is significant as the Company's
investments and derivatives amount to 98.9% (30 June 2020: 91.4%)
of the NAV. The Committee has satisfied itself that the sources
used for pricing the Company's investments are appropriate and
reliable.
The Committee also reviews the objectivity and independence of
the Auditor. The Board considers KPMG Channel Islands Limited
("KPMG") to be independent of the Company. The audit fees disclosed
in the profit or loss section of the Statement of Profit or Loss
and Other Comprehensive Income are in relation to the audit of the
Financial Statements. During the year, KPMG did not receive any
remuneration from the Company for non-audit services.
The Committee assessed the effectiveness of the audit process by
considering KPMG's fulfilment of the agreed audit plan through the
reporting presented to the Committee by KPMG and discussions at
Committee meetings which highlighted the major issues that arose
during the course of the audit. In addition, the Committee also
sought feedback from the Investment Manager and the Administrator
on the effectiveness of the audit process. The Committee was
satisfied that there had been appropriate focus and challenge on
the primary areas of audit risk and assessed the quality of the
audit process to be good.
The external audit was initially put out to tender in 2008 when
the Company's shares were listed and admitted to trading on AIM and
KPMG was appointed. The lead audit partner changed in 2010 and
2015. The current lead audit partner took charge in 2020, and will
change again by rotation in 2025. There are no obligations to
restrict the Company's choice of external auditor. The external
audit was put out to tender in 2017. Following a robust competitive
tender process, the Committee concluded that the interests of the
Company and its shareholders would be best served by retaining the
services of KPMG to provide a consistent audit approach.
The Board considers that an internal audit function specific to
the Company is unnecessary and that the systems and procedures
employed by the Investment Manager and the Administrator, including
their own internal control functions, provide sufficient assurance
that a sound system of internal control is maintained, which
safeguards the Company's assets. Formal terms of reference for the
Committee are available on the Company's website
www.crystalamber.com .
Other committees
Although the AIC Code recommends that companies appoint a
Nomination Committee, as the Board is wholly comprised of
non-executive Directors the Board has not deemed this necessary and
as such all matters are considered by the full Board.
The Board has established a Remuneration and Management
Engagement Committee. Due to the size of the Board, all Directors
are members of this committee. With effect from 22 November 2019,
Fred Hervouet (previously Nigel Ward who retired from the Board
with effect from 22 November 2019) acts as Chairman of the
committee. The Remuneration and Management Engagement Committee
meets at least once a year pursuant to its terms of reference. It
provides a formal mechanism for the review of the remuneration of
the Chairman and Directors and review of the performance and
remuneration of the Investment Manager, Investment Adviser and
other service providers.
Remuneration policy
The Company aims to ensure remuneration is competitive, aligned
with shareholder interests, relatively simple and transparent, and
compatible with the aim of attracting, recruiting and retaining
suitably qualified and experienced directors.
In addition, the Board reviews the arrangements for the
provision of management and other services to the Company on an
ongoing basis. The Company receives regular reporting from the
Investment Adviser and regular valuations of the Company's
investments, which allows the Board to form a judgement as to the
performance of its portfolio.
Board meetings, Committee meetings and Directors' attendance
One of the key criteria the Company uses when selecting
Directors is their confirmation prior to their appointment that
they will be able to allocate sufficient time to the Company to
discharge their responsibilities in a timely and effective
manner.
The Board formally met four times during the year and other ad
hoc Board committee meetings were called in relation to specific
events or to issue approvals, often at short notice and did not
necessarily require full attendance. Directors are encouraged to
give the Chairman their views and comments on matters to be
discussed, in advance when they are unable to attend a meeting.
Attendance at the quarterly Board meetings is further set out
below:
Remuneration and Management Engagement
Board Audit Committee Committee Tenure as at 30 June 2021
-------------------- ------- ---------------- ----------------------------------------- --------------------------
Christopher Waldron 4 of 4 2 of 2 1 of 1 7 years
Jane Le Maitre 4 of 4 2 of 2 1 of 1 4 years, 2 months
Fred Hervouet 4 of 4 2 of 2 1 of 1 3 years, 7 months
In addition to the above, there were two additional Board
committee meetings during the year.
Engagement with stakeholders
The Company is committed to maintaining good communications and
building positive relationships with all stakeholders, including
shareholders, suppliers, investee companies, and the wider
community and environment in which the Company and its investee
companies operate. This includes regular engagement with the
Company's shareholders and other stakeholders by the Board, the
Investment Manager, Investment Adviser and the Administrator.
Regular feedback is provided to Board members to ensure they
understand the views of stakeholders.
Relations with shareholders
The Board welcomes the views of shareholders and places great
importance on communication with its shareholders. Senior members
of the Investment Adviser make themselves available to meet with
principal shareholders and key sector analysts. The Chairman and
other Directors are also available to meet with shareholders, if
required.
All shareholders have the opportunity to ask questions of the
Company at its registered office. The Annual General Meeting of the
Company provides a forum for shareholders to meet and discuss
issues with the Directors and Investment Adviser. Company
information is also available to shareholders on the Company's
website www.crystalamber.com .
The Board regularly monitors the shareholder profile of the
Company and receives comprehensive shareholder reports from the
Company's Broker at all quarterly board meetings.
Relations with other stakeholders
The Company recognises that relationships with suppliers are
enhanced by prompt payment and the Company's Administrator ensures
all payments are processed within the contractual terms agreed with
individual suppliers.
During the year, the Company created and issued 125,000 shares
split equally between five charities: St Andrews Clinic for
Children, Cancer Research UK, Feis Ceoil, James' Place and
Sentable. The Directors were delighted to assist so many worthy
causes and seek to make a positive difference. However, the
Directors recognise that more recently, the shareholder base has
changed significantly and consequently, the Directors have decided
that in recognition of the views articulated by newer shareholders,
the Fund will suspend future share issues to charities at this
time.
Key decisions made or approved by the Directors during the year
and the impact of those decisions on the Company's shareholders and
wider stakeholders is disclosed further above.
Whistleblowing
The Board has considered the AIC Code recommendations in respect
of arrangements by which staff of the Investment Adviser or
Administrator may, in confidence, raise concerns within their
respective organisations about possible improprieties in matters of
financial reporting or other issues. It has concluded that adequate
arrangements are in place for the proportionate and independent
investigation of such matters and, where necessary, for appropriate
follow up action to be taken within their respective
organisations.
AIFM Directive
The Company is categorised as an externally managed non-EU AIF
under the AIFM Directive. The Investment Manager of the Company is
its non-EU AIFM. The Investment Manager as the AIFM has created a
Risk Committee which meets at least quarterly to consider the risks
faced by the Company and the investment process, consistent with
the requirements of the AIFM Directive. The AIFM has adopted a
remuneration policy which accords with the principles established
by the AIFM Directive. The remuneration policy is in compliance
with the requirements of the AIFM Directive and the guidance issued
by the FCA. The Investment Manager as the AIFM does not have any
employees. Mark Huntley and Laurence McNairn of Crystal Amber Asset
Management (Guernsey) Limited and as directors of the AIFM received
total aggregate remuneration of GBP20,000 by way of a fixed fee for
the year ended 30 June 2021. No variable fee elements of
remuneration were paid to the Directors of the AIFM.
The AIFM Directive outlines the information which has to be made
available to investors in an AIF and directs that material changes
to this information be disclosed in the Annual Report of the AIF.
All information required to be disclosed under the AIFM Directive
is either disclosed in this Annual Report or on the Company's
website www.crystalamber.com.
AEOI Rules
Under AEOI Rules, the Company is registered under FATCA and
continues to comply with both FATCA and CRS requirements to the
extent relevant to the Company.
NMPI
The Board has been advised that the Company would satisfy the
criteria for being an investment trust if it was resident in the
UK. Accordingly, the Board has concluded that the Company's
Ordinary shares are not non-mainstream pooled investments for the
purposes of the FCA rules regarding the restrictions on the
promotion to retail investors of unregulated collective investment
schemes and close substitutes. This means that the restrictions on
promotion imposed by the FCA rules do not apply to the Company. It
is the Board's intention that the Company conducts its affairs so
that these restrictions will continue to remain inapplicable.
Independent auditor
KPMG has agreed to offer itself for re-appointment as Auditor of
the Company and a resolution proposing re-appointment and
authorising the Directors to determine remuneration will be
presented at the Annual General Meeting.
Annual General Meeting
The Annual General Meeting of the Company will be held at
10:00am on 22 November 2021 at the offices of Ocorian
Administration (Guernsey) Limited, Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey.
On behalf of the Board
Christopher Waldron Jane Le Maitre
Chairman Director
27 September 2021 27 September 2021
Directors
Christopher Waldron Guernsey Resident, (appointed 1 July
2014)
Non-Executive Chairman (with effect from 23 November 2017)
Christopher Waldron has over 30 years' experience as an
investment manager, specialising in fixed income, hedging
strategies and alternative investment mandates and until 2013 was
Chief Executive of the Edmond de Rothschild Group in the Channel
Islands. Prior to joining the Edmond de Rothschild Group in 1999,
Mr Waldron held investment management positions with Bank of
Bermuda, the Jardine Matheson Group and Fortis but he is now
primarily an independent non-executive director of a number of
listed funds and investment companies. From 2014 to 2020 he was a
member of the States of Guernsey's Investment and Bond
Sub-Committee. He is a Fellow of the Chartered Institute of
Securities and Investment.
Jane Le Maitre, Guernsey Resident, Non-Executive Director
(appointed 8 May 2017)
Jane Le Maitre has over 30 years' experience in the Finance
Industry in the UK and Guernsey. She is a Fellow of the Institute
of Chartered Accountants in England & Wales, a Chartered Tax
Adviser and a member of the Institute of Directors. She trained in
audit with Coopers & Lybrand in the UK and joined the tax and
fiduciary division of KPMG (Channel Islands) in 1989. She became a
Partner in 1995 where she remained until 2000 before becoming a
director in the fiduciary division at Kleinwort Benson. After 5
years with Kleinwort Benson, she joined the Intertrust Group in
Guernsey becoming Managing Director of Intertrust Reads Private
Clients Limited for a period of 6 years. She continues to hold a
number of executive positions in unlisted property and investment
holding entities.
Fred Hervouet, Guernsey Resident, Non-Executive Director
(appointed 6 December 2017)
Fred Hervouet has over 20 years' experience of working in
different areas of the Financial Markets and Asset Management
Industry. His experience includes Fixed Income and Derivatives
Markets, Structured Finance, Structured Products, Trading and Risk
Management. Prior to moving to Guernsey in December 2013, he was
Managing Director and Head of Commodity Derivatives Asia for BNP
Paribas. He holds a number of non-executive director positions on
LSE listed funds and Private Equity funds including Chenavari Toro
Income Fund Limited, where he is chairman. He holds a Masters'
Degree in Financial Markets, Commodity Markets and Risk Management
from University Paris Dauphine and an MSc in Applied Mathematics
and International Finance. He is a member of the UK Institute of
Directors and the UK Association of Investment Companies.
In addition to their directorships of the Company, the Directors
currently hold the following directorships of listed companies;
Christopher Waldron Jane Le Maitre
UK Mortgages Limited None at present
Fred Hervouet
Chenavari Toro Income Fund Limited
SCRF SME Income Fund Limited
Independent Auditor's Report
to the Members of Crystal Amber Fund Limited
Our opinion is unmodified
We have audited the financial statements of Crystal Amber Fund
Limited (the "Company"), which comprise the statement of financial
position as at 30 June 2021, the statements of profit or loss and
other comprehensive income, changes in equity and cash flows for
the year then ended, and notes, comprising significant accounting
policies and other explanatory information.
In our opinion, the accompanying financial statements:
-- give a true and fair view of the financial position of the
Company as at 30 June 2021, and of the Company's financial
performance and cash flows for the year then ended;
-- are prepared in accordance with International Financial Reporting Standards; and
-- comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Company in
accordance with, UK ethical requirements including FRC Ethical
Standards, as applied to listed entities. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion.
Material uncertainty relating to going concern
The risk Our response
-------------------------------------- -------------------------------------- --------------------------------------
Going concern: Disclosure quality: Assessing disclosures:
Refer to the Report of the Directors. The financial statements explain how We considered whether the going
We draw attention to note 1 to the the Directors have formed a judgment concern disclosure in note 1 to the
financial statements which indicates that it is appropriate financial statements gives
that the Fund is obliged to adopt the going concern basis of a full and accurate description of
to hold a continuation vote at the preparation for the Fund. the directors' assessment of the
forthcoming 2021 Annual General That judgment is based on an going concern basis of
Meeting of Shareholders. evaluation of the inherent risks to preparation for the Company,
The Directors have been formally the Fund's business model including the identified risks and
notified by a significant shareholder and how those risks might affect the dependencies.
of their intention Fund's financial resources or ability Our assessment of management's going
to vote against continuation of the to continue operations concern assessment also included:
Fund and would therefore not meet the over a period of at least a year from We obtained and inspected a Board
75% threshold needed the date of approval of the financial approved written assessment of the
to continue the Fund as currently statements, in going concern basis of
constituted. In the event this vote particular in relation to the preparation for the Fund and
is not passed, the Directors continuation vote and the proposals corroborated their assessment with
are required to formulate proposals which will need to be formulated our knowledge of the business.
to reorganise, reconstruct or wind up and put to the shareholders for their We considered the Board's assessment
(the "proposals") approval. of the future proposals available to
the Fund. There is little judgement involved in the Fund and how
These events and conditions the Directors' conclusion that the they could affect the Fund for at
constitute a material uncertainty risks and circumstances least a year from the date of
that may cast doubt about the described in note 1 to the financial approval of the financial
Fund's ability to continue as a going statements represent a material statements ("going concern period")
concern. uncertainty over the by inspecting minutes of meetings
Our opinion is not modified in ability of the Fund to continue as a held by the directors,
respect of this matter. going concern for a period of at inquiring with management as to their
least a year from the discussions with key shareholders and
date of approval of the financial considering key
statements. financial metrics including the
However, clear and full disclosure of discount of the Fund's share price
the facts and the Directors' against its net asset value.
rationale for the use of
the going concern basis of
preparation, including that there is
a related material uncertainty,
is a key financial statement
disclosure and so was the focus of
our audit in this area. Auditing
standards require that to be reported
as a key audit matter.
-------------------------------------- -------------------------------------- --------------------------------------
Key audit matters: our assessment of the risks of material
misstatement
Other key audit matters are those matters that, in our
professional judgment, were of most significance in the audit of
the financial statements and include the most significant assessed
risks of material misstatement (whether or not due to fraud)
identified by us, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. Going
concern is a significant key audit matter and is described in the
'Material uncertainty relating to going concern' section of our
report. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the other key audit matter
was as follows (unchanged from 2020):
The Our
risk response
----------------- ------------------ -------------------------------------------------------------
Valuation Basis: Our
of The audit
financial Fund procedures
assets has included:
designated invested Internal
at 98.9% Controls:
fair of We
value its tested
through net the
profit assets design
and as and
loss at implementation
GBP121,642,713; 30 of
(2020: June control
GBP89,066,925) 2021 over
Refer into the
to equity valuation
the investments of
Report (GBP117,965,568) investments.
of and Challenging
the debt managements'
Directors, investments assumptions
note (GBP3,677,145) and
1 (together, inputs
accounting the including
policies "investments"). use
and The of
note Fund's a
9 listed KPMG
and or valuation
14 quoted specialist:
disclosures equities For
(GBP92,610,384) listed
are or
valued quoted
based investments,
on we
market used
prices our
obtained own
from valuation
a specialist
third-party to
pricing independently
provider. price
The all
Fund's fair
unlisted values
investments, to
with a
a third
value party
of source.
GBP29,032,329 We
are compared
valued our
by independent
using price
recognised to
valuation the
methodologies price
and as
models, utilised
in by
accordance the
with Fund.
the For
International the
Private unlisted
Equity investments
and we:
Venture * assessed the appropriateness of the valuation
Capital methodology applied to each investment and where
Valuation relevant, derived an independent reference price;
Guidelines.
Risk:
The * compared the assumptions used in the valuation to
valuation observable market data (where possible) or supporting
of documentation;
the
investments,
given * corroborated significant investee company inputs used
that in the valuation models to supporting documentation;
they
represent
the * assessed the effect of the investee entity's
majority financial performance upon the fair value; and
of
the
net * considered the impact of COVID-19 on their
assets valuations.
of
the
Fund,
is
considered Assessing
to disclosures:
be
a We
significant also
area considered
of the
our Fund's
audit. disclosures
Of (see
the note
investments 1)
which in
are relation
unlisted to
(representing the
23.6% use
of of
net estimates
assets), and
these judgments
investment regarding
valuations the
are valuation
subject of
to investments
a and
risk the
of Fund's
fraud valuation
and policies
error adopted
given and
the fair
high value
level disclosures
of in
subjectivity, notes
estimation 9
uncertainty and
and 14
complexity for
when compliance
deriving with
a IFRS.
fair
value.
----------------- ------------------ -------------------------------------------------------------
Our application of materiality and an overview of the scope of
our audit
Materiality for the financial statements as a whole was set at
GBP2,177,000, determined with reference to a benchmark of net
assets of GBP122,931,988, of which it represents approximately 1.8%
(2020: 2.0%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material
amount across the financial statements as a whole. Performance
materiality for the Company was set at 75% (2020: 75%) of
materiality for the financial statements as a whole, which equates
to GBP1,632,000. We applied this percentage in our determination of
performance materiality because we did not identify any factors
indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding GBP108,000, in addition to other
identified misstatements that warranted reporting on qualitative
grounds.
Our audit of the Company was undertaken to the materiality level
specified above, which has informed our identification of
significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Fund or
to cease its operations, and as they have concluded that the Fund's
financial position means that this is realistic over the going
concern period. As stated in the 'material uncertainty relating to
going concern' section of our report, they have also concluded that
there is a material uncertainty relating to going concern.
An explanation of how we evaluated the directors' assessment is
set out in the 'material uncertainty relating to going concern'
section of our report.
Our conclusions based on this work:
-- we consider that the directors' use of the going concern
basis of accounting in the preparation of the financial statements
is appropriate.
Fraud and breaches of laws and regulations - ability to
detect
Identifying and responding to risks of material misstatement due
to fraud
To identify risks of material misstatement due to fraud ("fraud
risks") we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
-- enquiring of management as to the Company's policies and
procedures to prevent and detect fraud as well as enquiring whether
management have knowledge of any actual, suspected or alleged
fraud;
-- reading minutes of meetings of those charged with governance; and
-- using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, and taking into account
possible incentives or pressures to misstate performance and our
overall knowledge of the control environment, we perform procedures
to address the risk of management override of controls, in
particular the risk that management may be in a position to make
inappropriate accounting entries. On this audit we do not believe
there is a fraud risk related to revenue recognition because the
Company's revenue streams are simple in nature with respect to
accounting policy choice, and are easily verifiable to external
data sources or agreements with little or no requirement for
estimation from management. We also identified a fraud risk related
to valuation of financial assets designated at fair value through
profit and loss in response to high level of subjectivity,
estimation uncertainty and complexity when deriving a fair value.
Further detail in respect of valuation of financial assets
designated at fair value through profit and loss is set out in the
key audit matter section of this report.
We performed procedures including:
-- identifying journal entries and other adjustments to test
based on risk criteria and comparing any identified entries to
supporting documentation;
-- incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussion with
management (as required by auditing standards), and from inspection
of the Company's regulatory and legal correspondence, if any, and
discussed with management the policies and procedures regarding
compliance with laws and regulations. As the Company is regulated,
our assessment of risks involved gaining an understanding of the
control environment including the entity's procedures for complying
with regulatory requirements.
The Company is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our
procedures on the related financial statement items.
The Company is subject to other laws and regulations where the
consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance
through the imposition of fines or litigation or impacts on the
Company's ability to operate. We identified financial services
regulation as being the area most likely to have such an effect,
recognising the regulated nature of the Company's activities and
its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and
regulations to enquiry of management and inspection of regulatory
and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance
with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remains a higher risk of
non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report but does not include the financial statements and our
auditor's report thereon. Our opinion on the financial statements
does not cover the other information and we do not express an audit
opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
We have nothing to report on other matters on which we are
required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law, 2008 requires us to report to
you if, in our opinion:
-- the Fund has not kept proper accounting records; or
-- the financial statements are not in agreement with the accounting records; or
-- we have not received all the information and explanations,
which to the best of our knowledge and belief are necessary for the
purpose of our audit.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement, the directors are
responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going
concern basis of accounting unless they either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions on its use by
persons other than the Company's members, as a body
This report is made solely to the Company's members, as a body,
in accordance with section 262 of the Companies (Guernsey) Law,
2008. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members, as a body, for our audit work, for this report, or for the
opinions we have formed.
Rachid Frihmat
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
Guernsey
27 September 2021
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
2021 2020
Revenue Capital Total Revenue Capital Total
Notes GBP GBP GBP GBP GBP GBP
Income
Dividend income
from listed
investments 288,935 - 288,935 3,274,032 - 3,274,032
Interest received - - - 6,563 - 6,563
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
288,935 - 288,935 3,280,595 - 3,280,595
Net gains/(losses)
on financial assets
designated at FVTPL
and derivatives
held for trading
Equities
Net realised
(losses)/gains 9 - (14,412,551) (14,412,551) - 1,870,189 1,870,189
Movement in
unrealised
gains/(losses) 9 - 50,646,556 50,646,556 - (131,440,682) (131,440,682)
Debt instruments
Movement in
unrealised
gains/(losses) 9 - 3,259,261 3,259,261 - (2,665,613) (2,665,613)
Derivative
financial
instruments
Net realised gains 9 - - - - 7,142,026 7,142,026
Movement in
unrealised gains 9 - (21,080) (21,080) - (6,267,293) (6,267,293)
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
- 39,472,186 39,472,186 - (131,361,373) (131,361,373)
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
Total income
/(expense) 288,935 39,472,186 39,761,121 3,280,595 (131,361,373) (128,080,778)
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
Expenses
Transaction costs 4 - 89,266 89,266 - 489,012 489,012
Foreign exchange
movements on
revaluation of
investments and
working capital 584,291 1,909,832 2,494,123 (325,282) (217,697) (542,979)
Management fees 15,17 1,586,269 - 1,586,269 2,489,201 - 2,489,201
Directors'
remuneration 16 130,000 - 130,000 143,809 - 143,809
Administration fees 17 134,392 - 134,392 157,059 - 157,059
Custodian fees 17 55,465 - 55,465 69,696 - 69,696
Audit fees 34,050 - 34,050 30,975 - 30,975
Facility fees 18 316,925 - 316,925 - - -
Other expenses 351,440 - 351,440 365,151 - 365,151
3,192,832 1,999,098 5,191,930 2,930,609 271,315 3,201,924
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
Return/(loss) for
the year (2,903,897) 37,473,088 34,569,191 349,986 (131,632,688) (131,282,702)
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
Basic and diluted
earnings/(loss)
per share (pence) 5 (3.34) 43.25 39.91 0.38 (140.38) (140.00)
-------------------- ------ ------------ ------------- ------------- ---------- -------------- --------------
All items in the above statement derive from continuing
operations.
The total column of this statement represents the Company's
Statement of Profit or Loss and Other Comprehensive Income prepared
in accordance with IFRS. The supplementary information on the
allocation between revenue return and capital return is presented
under guidance published by the AIC.
The Notes to the Financial Statements form an integral part of
these Financial Statements.
Statement of Financial Position
As at 30 June 2021
2021 2020
Assets Notes GBP GBP
Cash and cash equivalents 7 5,447,571 5,916,155
Trade and other receivables 8 406,272 2,610,053
Financial assets designated at FVTPL
and derivatives held for trading 9 121,642,713 89,066,925
Total assets 127,496,556 97,593,133
--------------------------------------- ------ -------------------------- -------------
Liabilities
Trade and other payables 10 4,564,568 198,172
Total liabilities 4,564,568 198,172
--------------------------------------- ------ -------------------------- -------------
Equity
Capital and reserves attributable
to the Company's equity shareholders
Share capital 11 997,498 996,248
Treasury shares reserve 12 (19,191,639) (12,265,601)
Distributable reserve 88,472,333 90,579,709
Retained earnings 52,653,796 18,084,605
Total equity 122,931,988 97,394,961
--------------------------------------- ------ -------------------------- -------------
Total liabilities and equity 127,496,556 97,593,133
--------------------------------------- ------ -------------------------- -------------
NAV per share (pence) 6 146.81 106.02
--------------------------------------- ------ -------------------------- -------------
The Financial Statements were approved by the Board of Directors
and authorised for issue on 27 September 2021.
Christopher Waldron Jane Le Maitre
Chairman Director
27 September 2021 27 September 2021
The Notes to the Financial Statements form an integral part of
these Financial Statements.
Statement of Changes in Equity
For the year ended 30 June 2021
Treasury
Share shares Distributable Retained earnings Total
Notes capital reserve reserve Capital Revenue Total equity
GBP GBP GBP GBP GBP GBP GBP
Opening
balance
at 1 July
2020 996,248 (12,265,601) 90,579,709 20,511,896 (2,427,291) 18,084,605 97,394,961
Issue of
Ordinary
shares 1,250 - - - - - 1,250
Purchase
of
Ordinary
shares
into
Treasury 12 - (6,926,038) - - - - (6,926,038)
Dividends
paid
in the
year 13 - - (2,107,376) - - - (2,107,376)
Profit for
the
year - - - 37,473,088 (2,903,897) 34,569,191 34,569,191
Balance at 30 June
2021 997,498 (19,191,639) 88,472,333 57,984,984 (5,331,188) 52,653,796 122,931,988
------------------- -------- ------------- -------------- -------------- ------------ -------------- --------------
Treasury
Share shares Distributable Retained earnings Total
Notes capital reserve reserve Capital Revenue Total Equity
GBP GBP GBP GBP GBP GBP GBP
Opening
balance
at 1 July
2019 993,748 (6,895,640) 95,310,182 152,144,584 (2,777,277) 149,367,307 238,775,597
Issue of
Ordinary
shares 2,500 - - - - - 2,500
Purchase
of
Ordinary
shares
into
Treasury 12 - (5,369,961) - - - - (5,369,961)
Dividends
paid
in the
year 13 - - (4,730,473) - - - (4,730,473)
Loss for
the
year - - - (131,632,688) 349,986 (131,282,702) (131,282,702)
Balance at 30 June
2020 996,248 (12,265,601) 90,579,709 20,511,896 (2,427,291) 18,084,605 97,394,961
------------------- -------- ------------- -------------- -------------- ------------ -------------- --------------
The Notes to the Financial Statements form an integral part of
these Financial Statements.
Statement of Cash Flows
For the year ended 30 June 2021
2021 2020
Notes GBP GBP
Cash flows from operating activities
Dividend income received from
listed investments 288,935 3,298,767
Bank interest received - 7,565
Management fees paid (1,586,269) (3,319,023)
Performance fees paid - (2,456,957)
Directors' fees paid (130,000) (152,559)
Other expenses paid (943,672) (680,398)
-------------------------------------- ------ ------------- -------------
Net cash outflow from operating
activities (2,371,006) (3,302,605)
Cash flows from investing activities
Purchase of equity investments (6,949,972) (61,373,003)
Sale of equity investments 31,476,434 76,560,511
Purchase of debt instruments (4,056,625) (4,153,747)
Purchase of derivative financial
instruments (33,238,926) (6,237,568)
Sale of derivative financial
instruments 23,991,363 14,091,736
Transaction charges on purchase
and sale of investments (69,305) (517,258)
-------------------------------------- ------ ------------- -------------
Net cash inflow from investing
activities 11,152,969 18,370,671
Cash flows from financing activities
Proceeds from loan facility 22,785,705 -
Repayments of loan facility (23,125,126) -
Proceeds from issuance of Ordinary
shares 1,250 2,500
Purchase of Ordinary shares
into Treasury (6,805,000) (5,355,853)
Dividends paid (2,107,376) (4,730,473)
-------------------------------------- ------ ------------- -------------
Net cash outflow from financing
activities (9,250,547) (10,083,826)
Net (decrease)/increase in cash
and cash equivalents during
the year (468,584) 4,984,240
Cash and cash equivalents at
beginning of year 5,916,155 931,915
Cash and cash equivalents at
end of year 7 5,447,571 5,916,155
-------------------------------------- ------ ------------- -------------
The Notes to the Financial Statements form an integral part of
these Financial Statements.
Notes to the Financial Statements
For the year ended 30 June 2021
General information
Crystal Amber Fund Limited (the "Company") was incorporated and
registered in Guernsey on 22 June 2007 and is governed in
accordance with the provisions of the Companies Law. The registered
office address is PO Box 286, Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey, GYI 4LY. The Company was
established to provide shareholders with an attractive total
return, which is expected to comprise primarily capital growth with
the potential for distributions of up to 5 pence per share per
annum following consideration of the accumulated retained earnings
as well as the unrealised gains and losses at that time. The
Company seeks to achieve this through investment in a concentrated
portfolio of undervalued companies, which are expected to be
predominantly, but not exclusively, listed or quoted on UK markets
and which have a typical market capitalisation of between GBP100
million and GBP1,000 million.
GI Dynamics Inc. ("GID"), is an unconsolidated subsidiary of the
Company and was incorporated in Delaware. As at 30 June 2021, it
had five wholly-owned subsidiaries and its principal place of
business is Boston. Refer to Note 15 for further information.
The Company's Ordinary shares were listed and admitted to
trading on AIM, on 17 June 2008. The Company is also a member of
the AIC.
All capitalised terms are defined in the Glossary of Capitalised
Defined Terms unless separately defined.
1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
the Financial Statements are set out below. These policies have
been consistently applied to those balances considered material to
the Financial Statements throughout the current year, unless
otherwise stated.
Basis of preparation
The Financial Statements have been prepared to give a true and
fair view, are in accordance with IFRS and the SORP "Financial
Statements of Investment Trust Companies and Venture Capital
Trusts" issued by the AIC in November 2014 and updated in January
2017 to the extent to which it is consistent with IFRS, and comply
with the Companies Law. The Financial Statements are presented in
Sterling, the Company's functional currency.
The Financial Statements have been prepared under the historical
cost convention with the exception of financial assets designated
at fair value through profit or loss ("FVTPL") and derivatives held
for trading which are measured at fair value.
The Company has adopted the Investment Entity Amendments to IFRS
10, IFRS 12 and IAS 27 which define investment entities together
with disclosure requirements.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS
27)
To determine whether the Company meets the definition of an
investment entity, further consideration is given to the
characteristics of an investment entity that are demonstrated by
the Company.
The Company meets the definition of an investment entity on the
basis of the following criteria:
-- The Company obtains funds from multiple investors for the
purpose of providing those investors with investment management
services;
-- The Company commits to its investors that its business
purpose is to invest funds solely for returns from capital
appreciation, investment income, or both; and
-- The Company measures and evaluates the performance of
substantially all its investments on a fair value basis.
As the Company has met the definition of an investment entity
under IFRS 10, it is exempt from preparing consolidated financial
statements.
The Company has taken the exemption permitted by IAS 28
"Investments in Associates and Joint Ventures" and IFRS 11 "Joint
Arrangements" for entities similar to investment entities and
measures its investments in associates at fair value. The Directors
consider an associate to be an entity over which the Group has
significant influence by means of owning between 20% and 50% of the
entities' shares. The Company's associates are disclosed in Note
14.
Going concern
As at 30 June 2021, the Company had net assets of GBP122.9
million (30 June 2020: GBP97.4 million) and cash balances of GBP5.4
million (30 June 2020: GBP5.9 million) which are sufficient to meet
current obligations as they fall due.
In the period prior to 30 June 2021 and up to the date of this
report, the COVID-19 pandemic has had a negative impact on the
global economy. As this situation is both unprecedented and
evolving, it raises some uncertainties and additional risks for the
Company.
The Directors and Investment Manager are actively monitoring the
potential effect on the Company and its investment portfolio. In
particular, they have considered the following specific key
potential impacts:
-- Unavailability of key personnel at the Investment Manager or Administrator;
-- Increased volatility in the fair value of investments,
including any potential impairment in value; and
-- Increased uncertainty as to the timing and quantum of dividend receipts.
In considering the key potential impacts of COVID-19 on the
Company and its investment portfolio outlined above, the Directors
have taken account of the mitigation measures already in place. At
Company level, key personnel at the Investment Manager and
Administrator have successfully implemented business continuity
plans to ensure business disruption is minimised, including remote
working where required, and all staff are continuing to assume
their day-today responsibilities.
As further detailed in Note 14, 76.13% of the Company's
investments are valued by reference to the market bid price as at
the date of this report. As these are quoted prices in an active
market, any volatility in the global economy is reflected within
the value of the financial assets designated at fair value through
profit or loss. As such, the Company has not included any fair
value impairments in relation to its investments.
As noted further in the Report of the Directors, in view of the
effects of COVID-19, there is currently uncertainty as to the
timing and quantum of dividend receipts from the Company's
portfolio companies. The Directors are also mindful that changes in
the composition of the portfolio could mean that there will be
lower dividend receipts than in past years, but this is not
expected to impact the liquidity available to the Company.
The Directors are confident that the Company has adequate
resources to continue in operational existence for the foreseeable
future and as a result of this, do not consider there to be any
threat to the going concern status of the Company. The Directors
have considered the potential impact of the effects of COVID-19 on
the Company's activities and do not consider that this will impact
the Company's ability to operate as a going concern. The Directors
have also considered the continuation vote scheduled for the 2021
AGM and note Saba Capital's stated intention to vote against
continuation. In that circumstance, the Company will be obliged to
return to shareholders with proposals to either reorganise,
restructure or wind up the Company. Although the wind up option is
included within the Articles amended in 2013, the Directors believe
that the nature of the Company's investments mean that a wind up in
the short term would not be in shareholders' interests. In line
with accounting standards, the Directors are nevertheless obliged
to disclose that this uncertainty exists, which is material and
therefore if a wind up was actioned, may cast doubt on the
Company's ability to continue as a going concern. The Directors
also note that no new investments have been undertaken by the
company since April 2018 and that the Investment Manager's focus is
currently on optimising performance of existing investments.
Continuation vote
The Company has regularly submitted itself to continuation
votes. An extraordinary resolution was passed at the 2019 AGM under
which 75% of the votes would be required to continue as currently
constituted and an extraordinary resolution will be tabled at the
2021 AGM requiring a 75% majority for continuation.
As announced on 25 June 2021, communication received from Saba
Capital, indicated that it would not support continuation. Should
the vote to continue not pass, the Articles require the Company to
"formulate proposals...to reorganise, reconstruct, or wind up the
Company." In that event, the proposals will be the result of
consultation with shareholders.
The Investment Manager is engaging with shareholders in
anticipation of the vote and to explore alternatives to
continuation, such as a company reorganisation and
reconstruction.
Use of estimates and judgements
The preparation of the Financial Statements in conformity with
IFRS requires management to make judgements, estimates and
assumptions that affect the application of the reported amounts in
these Financial Statements. The determination that the Company is
an investment entity is a critical judgement, as set out above. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable in the circumstances. Actual results may differ from
these estimates. The unquoted equity and debt securities have been
valued based on unobservable inputs (see Note 14).
Segmental reporting
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, which is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board as a whole. The key
measure of performance used by the Board to assess the Company's
performance and to allocate resources is the total return on the
Company's NAV, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss
used by the Board and that contained in these Financial
Statements.
For management purposes, the Company is domiciled in Guernsey
and is engaged in a single segment of business mainly in one
geographical area, being investment mainly in UK equity
instruments, and therefore the Company has only one single
operating segment.
Foreign currency translation
Monetary assets and liabilities are translated from currencies
other than Sterling ('foreign currencies') to Sterling (the
'functional currency') at the rate prevailing on the reporting
date. Income and expenses are translated from foreign currencies to
Sterling at the rate prevailing at the date of the transaction.
Exchange differences are recognised in the profit or loss section
of the Statement of Profit or Loss and Other Comprehensive
Income.
Financial instruments
Financial instruments comprise investments in equity, debt
instruments, derivatives, trade and other receivables, cash and
cash equivalents, and trade and other payables. Financial
instruments are recognised initially at cost, which is deemed to be
fair value. Subsequent to initial recognition financial instruments
are measured as described below.
Financial assets designated at FVTPL
All the Company's investments including debt instruments and
derivative financial instruments are held at FVTPL. They are
initially recognised at cost at acquisition, which is deemed to be
their fair value. Transaction costs are expensed in the profit or
loss section of the Statement of Profit or Loss and Other
Comprehensive Income. Gains and losses arising from changes in fair
value are presented in the profit or loss section of the Statement
of Profit or Loss and Other Comprehensive Income in the period in
which they arise.
Purchases and sales of investments are recognised using trade
date accounting. Quoted investments are valued at bid price on the
reporting date or at realisable value if the Company has entered
into an irrevocable commitment prior to the reporting date to sell
the investment. Where investments are listed on more than one
securities market, the price used is that quoted on the most
advantageous market, which is deemed to be the market on which the
security was originally purchased. If the price is not available as
at the accounting date, the last available price is used. The
valuation methodology adopted is in accordance with IFRS 13.
Loan notes are classified as debt instruments and are recognised
initially at cost incurred in their acquisition. Subsequent to
initial recognition, loan notes are valued at fair value.
In the absence of an active market, the Company determines the
fair value of its unquoted investments by taking into account the
International Private Equity and Venture Capital ("IPEV")
guidelines.
Derivatives held for trading
When considered appropriate the Company will enter into
derivative contracts to manage its price risk and provide
protection against the volatility of the market.
Quoted derivatives are valued at bid price on the reporting
date. Where derivatives are listed on more than one securities
market, the price used is that quoted on the most advantageous
market, which is deemed to be the market on which the security was
originally purchased. If the price is not available as at the
accounting date, the last available price is used. Gains and losses
arising from changes in fair value are presented in the profit or
loss section of the Statement of Profit or Loss and Other
Comprehensive Income in the period in which they arise.
Trade and other receivables
The Company's trade and other receivables are classified as
financial assets at amortised cost. They are measured at amortised
cost less impairment assessed using the simplified approach of the
expected credit loss model based on experience of previous losses
and expectations of future losses. Due to the short term nature of
the trade and other receivables, no impairment has been
recognised.
Trade and other payables
The Company's trade and other payables are measured at amortised
cost and include trade and other payables and other short term
monetary liabilities which are initially recognised at fair value
and subsequently measured at amortised cost using the effective
interest rate method. Due to the short term nature of the trade and
other payables, no impairment has been recognised.
Derecognition of financial instruments
The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all the risks and rewards of ownership of the
financial asset are transferred.
On derecognition of a financial asset, the difference between
the carrying amount of the asset (or the carrying amount allocated
to the portion of the asset derecognised), and consideration
received (including any new asset obtained less any new liability
assumed) is recognised in the profit or loss section of the
Statement of Profit or Loss and Other Comprehensive Income.
The Company derecognises a financial liability when its
contractual obligations are discharged, cancelled or expire. Any
gain or loss on derecognition is recognised in the profit or loss
section of the Statement of Profit or Loss and Other Comprehensive
Income.
Cash and cash equivalents
The Company considers all highly liquid investments with
original maturities of less than 90 days when acquired to be cash
equivalents. Due to the credit rating of the financial institutions
holding the Company's cash and cash equivalents, no impairment has
been recognised.
Share issue expenses
Share issue expenses of the Company directly attributable to the
issue and listing of its own shares are charged to the
distributable reserve.
Share capital
Ordinary shares are classified as equity where there is no
obligation to transfer cash or other assets.
Dividends
Dividends paid during the year from distributable reserves are
disclosed in the Statement of Changes in Equity. Dividends declared
post year end are disclosed in the Notes to the Financial
Statements.
Distributable reserves
Distributable reserves represent the amount transferred from the
share premium account, approved by the Royal Court of Guernsey on
18 July 2008, and amounts transferred to distributable reserves in
relation to the sale of Treasury shares above cost.
Income
Investment income and interest income have been accounted for on
an accruals basis using the effective interest method. Dividends
receivable are recognised in the profit or loss section of the
Statement of Profit or Loss and Other Comprehensive Income when the
relevant security is quoted ex-dividend. The Company currently
incurs withholding tax imposed by countries other than the UK on
dividend income. These dividends are recorded gross of withholding
tax in the profit or loss section of the Statement of Profit or
Loss and Other Comprehensive Income .
Expenses
All expenses are accounted for on an accruals basis. In respect
of the analysis between revenue and capital items presented within
the Statement of Profit or Loss and Other Comprehensive Income, all
expenses have been presented as revenue items except as
follows:
-- expenses which are incidental to the acquisition and disposal
of an investment are charged to capital; and
-- expenses are split and presented partly as capital items
where a connection with the maintenance or enhancement of the value
of the investments held can be demonstrated. Accordingly, the
performance fee is charged to capital, reflecting the Directors'
expected long-term view of the nature of the investment returns of
the Company.
Treasury shares reserve
The Company has adopted the principles outlined in IAS 32
'Financial Instruments: Presentation' and treats consideration paid
including directly attributable incremental cost for the repurchase
of Company shares held in Treasury as a deduction from equity
attributable to the Company's equity holders until the shares are
cancelled, reissued or disposed of. No gain or loss is recognised
within the statement of Profit or Loss and Other Comprehensive
Income on the purchase, sale, issue or cancellation of the
Company's own equity investments.
Any consideration received, net of any directly attributable
incremental transaction costs upon sale or re-issue of such shares,
is included in equity attributable to the Company's equity
holders.
2. NEW STANDARDS AND INTERPRETATIONS
New and amended standards and interpretations applied in these
financial statements
There were no new standards or interpretations effective for the
first time for periods beginning on or after 1 January 2020 that
had a significant effect on the Company's financial statements.
Furthermore, none of the amendments to standards that are effective
from that date had a significant effect on the financial
statements.
New and amended standards and interpretations not applied in
these financial statements (issued but not yet effective)
Other accounting standards and interpretations have been
published and will be mandatory for the Company's accounting
periods beginning on or after 1 January 2021 or later periods. The
impact of these standards is not expected to be material to the
reported results and financial position of the Company.
3. TAXATION
The Company is exempt from taxation in Guernsey under the
provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance,
2008 and is charged an annual fee of GBP1,200 (2020: GBP1,200
).
4. TRANSACTION COSTS
The transaction charges incurred in relation to the acquisition
and disposal of investments during the year were as follows:
2021 2020
GBP GBP
Stamp duty 31,402 220,933
Commissions and custodian transaction charges:
In respect of purchases 11,036 183,823
In respect of sales 46,828 84,256
89,266 489,012
------------------------------------------------ ------- --------
5. BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE
Earnings/(loss) per share is based on the following data:
2021 2020
Return/(loss) for the year GBP34,569,191 GBP(131,282,702)
Weighted average number of issued Ordinary shares 86,648,736 93,771,223
Basic and diluted earnings/(loss) per share (pence) 39.91 (140.00)
----------------------------------------------------- -------------- -----------------
6. NAV PER SHARE
NAV per share is based on the following data:
2021 2020
NAV per Statement of Financial Position GBP122,931,988 GBP97,394,961
Total number of issued Ordinary shares (excluding Treasury shares) at 30 June 83,737,000 91,861,567
------------------------------------------------------------------------------- ------------------- --------------
NAV per share (pence) 146.81 106.02
------------------------------------------------------------------------------- ------------------- --------------
7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash held by the Company
available on demand. Cash and cash equivalents were as follows:
2021 2020
GBP GBP
Cash on demand 5,447,571 5,916,155
---------------- ---------- --------------
5,447,571 5,916,155
---------------- ---------- --------------
8. TRADE AND OTHER RECEIVABLES
2021 2020
GBP GBP
Current assets:
Unsettled trade sales - 2,583,444
Other receivables 391,790 -
Prepayments 14,482 26,609
----------------------- --------- ----------
406,272 2,610,053
----------------------- --------- ----------
There were no past due or impaired receivable balances
outstanding at the year end (2020: GBPNil).
9. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR
LOSS AND DERIVATIVES HELD FOR TRADING
2021 2020
GBP GBP
Equity investments 117,965,568 83,197,300
Debt instruments 3,677,145 5,848,545
----------------------------------------------------------------------- ---------------------- -------------------
Financial assets designated at FVTPL 121,642,713 89,045,845
Derivative financial instruments held for trading - 21,080
Total financial assets designated at FVTPL and derivatives held for
trading 121,642,713 89,066,925
----------------------------------------------------------------------- ---------------------- -------------------
Equity investments
Cost brought forward 167,187,388 183,283,825
Purchases 11,184,002 59,441,534
Conversion of loans* 8,902,985 -
Sales (28,890,455) (77,221,490)
Net realised (losses)/gains (5,164,988) 1,870,189
Adjustment to cost brought forward - (186,670)
----------------------------------------------------------------------- ---------------------- -------------------
Cost carried forward 153,218,932 167,187,388
Unrealised (losses)/gains brought forward (84,056,730) 47,197,282
Movement in unrealised (losses)/gains 50,646,556 (131,440,682)
Adjustment to unrealised gains brought forward - 186,670
----------------------------------------------------------------------- ---------------------- -------------------
Unrealised losses carried forward (33,410,174) (84,056,730)
Effect of exchange rate movements on revaluation (1,843,190) 66,642
----------------------------------------------------------------------- ---------------------- -------------------
Fair value of equity investments 117,965,568 83,197,300
----------------------------------------------------------------------- ---------------------- -------------------
Debt instruments
Cost brought forward 8,104,315 3,950,568
Purchases 4,056,625 4,153,747
Conversion of loans* (8,902,985) -
Net realised gains - -
----------------------------------------------------------------------- ---------------------- -------------------
Cost carried forward 3,257,955 8,104,315
Unrealised (losses)/gains brought forward (2,004,674) 660,939
Movement in unrealised (losses)/gains 3,259,261 (2,665,613)
----------------------------------------------------------------------- ---------------------- -------------------
Unrealised gains/(losses) carried forward 1,254,587 (2,004,674)
Effect of exchange rate movements on revaluation (835,397) (251,096)
----------------------------------------------------------------------- ---------------------- -------------------
Fair value of debt instruments 3,677,145 5,848,545
----------------------------------------------------------------------- ---------------------- -------------------
Total financial assets designated at FVTPL 121,642,713 89,045,845
----------------------------------------------------------------------- ---------------------- -------------------
Derivative financial instruments held for trading
Cost brought forward - 712,142
Purchases 33,238,926 6,237,568
Sales (23,991,363) (14,091,736)
Net realised gains (9,247,563) 7,142,026
----------------------------------------------------------------------------- ------------- -------------
Cost carried forward - -
----------------------------------------------------------------------------- ------------- -------------
Unrealised gains brought forward 21,080 6,288,373
Movement in unrealised gains (21,080) (6,267,293)
----------------------------------------------------------------------------- ------------- -------------
Unrealised gains carried forward - 21,080
----------------------------------------------------------------------------- ------------- -------------
Fair value of derivatives held for trading - 21,080
----------------------------------------------------------------------------- ------------- -------------
Total derivative financial instruments held for trading - 21,080
----------------------------------------------------------------------------- ------------- -------------
Total financial assets designated at FVTPL and derivatives held for trading 121,642,713 89,066,925
----------------------------------------------------------------------------- ------------- -------------
*During the year, debt instruments in relation to GID worth
GBP8.9 million were transferred to Equity Investments, making up
79,032,963 common shares and 116,499,889 Series A shares.
Total realised gains and losses and unrealised gains and losses
on the Company's equity, debt and derivative financial instruments
are made up of the following gain and loss elements:
2021 2020
GBP GBP
Realised gains 5,286,855 29,509,499
Realised losses (19,699,406) (20,497,284)
Net realised (losses)/gains in financial assets designated at FVTPL and derivatives
held for
trading (14,412,551) 9,012,215
------------------------------------------------------------------------------------- ------------- --------------
Movement in unrealised gains 9,326,603 (76,243,496)
Movement in unrealised losses 44,558,134 (64,130,092)
Net movement in unrealised gains/(losses) in financial assets designated at FVTPL
and derivatives
held for trading 53,884,737 (140,373,588)
------------------------------------------------------------------------------------- ------------- --------------
10. TRADE AND OTHER PAYABLES
2021 2020
GBP GBP
Current liabilities:
Accruals 195,392 184,063
Unsettled trade purchases 4,369,176 14,109
----------- ---------
4,564,568 198,172
----------- ---------
The carrying amount of trade payables approximates to their fair
value.
11. SHARE CAPITAL AND RESERVES
The authorised share capital of the Company is GBP3,000,000
divided into 300 million Ordinary shares of GBP0.01 each.
The issued share capital of the Company, including Treasury
shares (See note 12), is comprised as follows:
2021 2020
Number GBP Number GBP
Opening balance 99,624,762 996,248 99,374,762 993,748
Ordinary shares issued
during the year 125,000 1,250 250,000 2,500
-------------------------- ----------- -------- ----------- ---------
Issued, called up
and fully paid Ordinary
shares of GBP0.01
each 99,749,762 997,498 99,624,762 996,248
-------------------------- ----------- -------- ----------- ---------
Capital risk management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns to shareholders and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell
assets.
In accordance with the Company's Memorandum and Articles of
Incorporation the retained earnings and distributable reserve shown
in the Company's Statement of Financial Position at the year end
are distributable by way of dividend.
The Company may carry the returns of the Company to the
distributable reserve or use them for any purpose to which the
returns of the Company may be properly applied and either employed
in the business of the Company or be invested, in accordance with
applicable law. The distributable reserve includes the amount
transferred from the share premium account which was approved by
the Royal Court of Guernsey on 18 July 2008.
During the year ended 30 June 2021, the Company paid dividends
of GBP2,107,376 (2020: GBP4,730,473) from distributable reserves,
as disclosed in Note 13.
Externally imposed capital requirement
There are no capital requirements imposed on the Company.
Rights attaching to shares
The Ordinary shares carry the right to vote at general meetings
and the entitlement to receive any dividends and surplus assets of
the Company on a winding up.
12. TREASURY SHARES RESERVE
2021 2020
Number GBP Number GBP
Opening balance 7,763,195 12,265,601 3,527,782 6,895,640
Treasury shares purchased during the year 8,249,567 6,926,038 4,235,413 5,369,961
------------------------------------------- ------------ ----------- ----------- -----------
Closing balance 16,012,762 19,191,639 7,763,195 12,265,601
------------------------------------------- ------------ ----------- ----------- -----------
During the year ended 30 June 2021, 8,249,567 (2020: 4,235,413)
Treasury shares were purchased at an average price of 83.96 pence
per share (2020: 126.79 pence per share), representing an average
discount to NAV at the time of purchase of 33.8% (2020: 28.5%).
13. DIVIDS
On 23 December 2020, the Company declared an interim dividend of
GBP2,107,376 equating to 2.5 pence per Ordinary share, which was
paid on 31 January 2021 to shareholders on the register on 8
January 2021.
On 7 July 2021, the Company declared an interim dividend of
GBP2,096,650 equating to 2.5 pence per Ordinary share, which was
paid on 30 July 2021 to shareholders on the register on 16 July
2021.
14. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
Financial risk management objectives
The Investment Manager, Crystal Amber Asset Management
(Guernsey) Limited and the Administrator, Ocorian Administration
(Guernsey) Limited provide advice to the Company which allows it to
monitor and manage financial risks relating to its operations
through internal risk reports which analyse exposures by degree and
magnitude of risk. The Investment Manager and the Administrator
report to the Board on a quarterly basis. The risks relating to the
Company's operations include credit risk, liquidity risk, and the
market risks of interest rate risk, price risk and foreign currency
risk. The Board has considered the sensitivity of the Company's
financial assets and monitors the range of reasonably possible
changes in significant observable inputs on a regular basis and
does not consider that any changes are required this year to the
categories used in prior years.
Credit risk
Credit risk is the risk that the counterparty to a financial
instrument will default on its contractual obligations with the
Company, resulting in financial loss to the Company. At 30 June
2021 the major financial assets which were exposed to credit risk
included financial assets designated at FVTPL, derivatives held for
trading and cash and cash equivalents.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at 30 June 2021. The Company's credit
risk on liquid funds is minimised because the counterparties are
banks with high credit ratings assigned by an international
credit-rating agency.
The table below shows the cash balances at the accounting date
and the S&P credit rating for each counterparty at that
date.
Cash Balance Cash Balance
2021 2020
Location Rating GBP GBP
Butterfield Bank (Guernsey) Limited Guernsey BBB+ 5,311,152 5,766,126
Barclays Bank plc - Isle of Man Branch Isle of Man A- 136,420 150,029
---------------------------------------- ------------- -------- ------------- -------------
5,447,571 5,916,155
--------------------------------------------------------------- ------------- -------------
The credit ratings disclosed above are the credit ratings of the
parent entities of each of the counterparties being The Bank of N.
T. Butterfield & Son Limited and Barclays Bank plc.
The Company's credit risk on financial assets designated at
FVTPL and derivatives held for trading is considered acceptable as
these assets consist mainly of quoted equities or are linked to
quoted equities. The Company is also exposed to credit risk on
financial assets with its brokers for unsettled transactions. This
risk is considered minimal due to the short settlement period
involved and the high credit quality of the brokers used. There are
no credit ratings available for the debt instruments held by the
Company. At 30 June 2021, GBP123,276,719 (2020: GBP88,963,426) of
the financial assets of the Company were held by the Custodian,
Butterfield Bank (Guernsey) Limited .
Bankruptcy or insolvency of the Custodian may cause the
Company's rights with respect to financial assets held by the
Custodian to be delayed or limited. 97% (2020: 91%) of the
Company's financial assets are held by the Custodian in segregated
accounts. The Company monitors its risk by monitoring the credit
quality and financial position of the Custodian. The parent of the
Custodian has an S&P credit rating of BBB+ (2020: BBB+). The
remaining balance of financial assets of GBP4,219,837 (2020:
GBP8,629,707) includes GBPNil (2020: GBP21,080) warrant
instruments, GBP 3,677,145 (2020: GBP 5,848,545 ) loan notes issued
by GI Dynamics Inc., GBP136,420 (2020: GBP150,029) cash held by
Barclays Bank plc and GBP406,272 (2020: GBP2,610,053) are trade
receivables.
Liquidity risk
Liquidity risk is the risk that the Company will be unable to
meet its obligations arising from financial liabilities. Ultimate
responsibility for liquidity risk management rests with the Board
of Directors, which has built an appropriate framework for the
management of the Company's liquidity requirements.
The Company adopts a prudent approach to liquidity risk
management and maintains sufficient cash reserves to meet its
obligations. All the Company's Level 1 investments are listed and
are subject to a settlement period of three days.
The following tables detail the Company's expected and
contractual maturities for its financial assets and
liabilities:
2021 Weighted Less than 1 year 1-5 years 5+ years Total
average
interest
rate
Assets GBP GBP GBP GBP
Non-interest
bearing 118,508,260 - - 118,508,260
Variable
interest
rate
instruments 0.00% 5,311,151 - - 5,311,151
Fixed
interest
rate
instruments 5.00% 3,677,145 - - 3,677,145
Fixed 10.00%
interest rate
instruments - - - -
Liabilities
Non-interest
bearing (4,564,568) - - (4,564,568)
-------------- --------- ---------------------------- ------------
122,931,988 - - 122,931,988
-------------- --------- ---------------------------- ---------------------------- ----------------------------- ------------
2020 Weighted average interest Less than 1 year 1-5 years 5+ years Total
rate
Assets GBP GBP GBP GBP
Non-interest bearing 85,978,462 - - 85,978,462
Variable interest rate
instruments 0.29% 5,766,126 - - 5,766,126
Fixed interest rate
instruments 5.00% 3,184,555 - - 3,184,555
Fixed interest rate
instruments 10.00% - 2,663,990 - 2,663,990
Liabilities
Non-interest bearing (198,172) - - (198,172)
------------------------------- ------------------------------ ----------------- -----------
94,730,971 2,663,990 - 97,394,961
------------------------------- ------------------------------ ----------------- ---------- --------- -----------
Market risk
The Company is exposed through its operations to market risk
which encompasses interest rate risk, price risk and foreign
exchange risk.
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest rates.
The Company is exposed to interest rate risk as it has current
account balances with variable interest rates. The Company's
exposure to interest rates is detailed in the liquidity risk
section of this note. Interest rate repricing dates are consistent
with the maturities stated in the liquidity risk section of this
note.
The Investment Manager monitors market interest rates and will
place interest bearing assets at best available rates but will also
take the counterparty's credit rating and financial position into
consideration.
The cash at hand balances are the only assets with variable
interest rates, the movement in variable interest rates is an
immaterial amount, therefore no sensitivity analysis for the
movement is disclosed.
Price risk
Price risk is the risk that the fair value of investments will
fluctuate as a result of changes in market prices. This risk is
managed through diversification of the investment portfolio across
business sectors. In general, the Company will not invest more than
20% of its gross assets in any single investment at the time of
investment. However, there is no guarantee that the value will not
rise above 20% after any investment is made, particularly where it
is believed that an investment is exceptionally attractive.
The Company's positions in derivative financial instruments are
set out in Note 9.
The following tables detail the Company's equity investments as
at 30 June 2021.
2021
Value
Equity Investments Sector GBP Percentage of Gross Assets
De La Rue plc Commercial Services 44,560,772 35
GI Dynamics Inc Healthcare 20,000,482 16
Equals Group plc Financial Services 18,797,414 15
Hurricane Energy plc Oil and Gas 16,200,000 13
Allied Minds plc Private Equity 9,567,511 8
Board Intelligence Ltd Commercial Services 4,004,232 3
Other Various 4,835,157 4
Total 117,965,568 93
----------------------------------------------- ------------ ---------------------------
2020 Value Percentage of Company's
Equity Investments Sector GBP Gross Assets
De La Rue plc Commercial Services 24,370,625 25
Allied Minds plc Private Equity 18,069,240 19
Equals Group plc Financial Services 11,070,749 11
Redde Northgate plc (formerly Northgate plc) Commercial Services 8,048,247 8
Hurricane Energy plc Oil and Gas 7,558,259 8
Board Intelligence Ltd Commercial Services 6,340,942 6
Other Various 7,739,238 8
Total 83,197,300 85
--------------------------------------------------------------------- ----------- ------------------------
The following tables detail the investments in which the Company
holds more than 20% of the relevant entities. These have been
recognised at fair value as the Company is regarded as an
investment entity as set out in Note 1.
2021
Equity Investments Place of Business Place of Incorporation Percentage Ownership Interest
Leaf Clean Energy plc United Kingdom United Kingdom 23.7
Hurricane Energy plc United Kingdom United Kingdom 22.6
Equals Group plc United Kingdom United Kingdom 22.4
Allied Minds plc United States United States 21.2
GI Dynamics Inc. United States United States *
2020
Equity Investments Place of Business Place of Incorporation Percentage Ownership Interest
GI Dynamics Inc. United States United States 73.1
Allied Minds plc United States United States 22.5
Equals Group plc United Kingdom United Kingdom 21.4
*GI Dynamics Inc. is a private company and its shares are not
listed on a stock exchange. Therefore, the percentage held is not
disclosed.
The Company has assessed the price risk of the listed equity,
debt and derivative financial instruments based on a potential 25%
(2020: 25%) increase/decrease in market prices, which the Company
believes represents the effect of a possible change in market
prices and provides consistent analysis for shareholders, as
follows:
At the year end and assuming all other variables are held
constant:
-- If market prices of listed equity, debt and derivative
financial instruments had been 25% higher (2020: 25% higher), the
Company's return and net assets for the year ended 30 June 2021
would have increased by GBP23,152,596, net of any impact on
performance fee accrual (2020: GBP19,187,613);
-- If market prices of listed equity, debt and derivative
financial instruments had been 25% lower (2020: 25% lower), the
Company's return and net assets for the year ended 30 June 2021
would have decreased by GBP23,152,596, net of any impact on
performance fee accrual (2020: decreased by GBP19,187,613
reflecting the effect of the derivative financial instruments held
at the reporting date); and
-- There would have been no impact on the other equity reserves.
Foreign exchange risk
Foreign exchange risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange rates
and arises when the Company invests in financial instruments and
enters into transactions that are denominated in currencies other
than its functional currency. During the year the Company was
exposed to foreign exchange risk arising from equity and debt
investments and derivative financial instruments held in Australian
Dollars, Euro and US Dollars (2020: Australian Dollars, Euro and US
Dollars).
The table below illustrates the Company's exposure to foreign
exchange risk at 30 June 2021:
2021 2020
GBP GBP
Financial assets designated at FVTPL:
Listed equity investments denominated in Australian Dollars - 1,494,943
Listed equity investments denominated in Euro 84,727 367,864
Debt instruments denominated in US Dollars 3,677,145 5,848,545
Warrant instruments denominated in US Dollars - 21,080
----------
Total assets 3,761,872 7,732,432
-------------------------------------------------------------- ---------- ----------
If the Australian Dollar weakened/strengthened by 10% (2020:
10%) against Sterling with all other variables held constant, the
fair value of equity investments would increase/decrease by GBPNil
(2020: GBP149,494).
If the Euro weakened/strengthened by 10% against Sterling with
all other variables held constant, the fair value of equity
investments would increase/decrease by GBP8,473 (2020:
GBP36,786).
If the US Dollar weakened/strengthened by 10% (2020: 10%)
against Sterling with all other variables held constant, the fair
value of debt instruments would increase/decrease by GBP367,715
(2020: GBP584,855) and the fair value of the derivative financial
instruments would increase/decrease by GBPNil (2020: GBP2,108).
Fair value measurements
The Company measures fair values using the following fair value
hierarchy that prioritises the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the
fair value hierarchy under IFRS 13 are as follows:
Level 1: Quoted price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
This category includes instruments valued using quoted prices in
active markets for similar instruments; quoted prices for identical
or similar instruments in markets that are considered less than
active; or other valuation techniques for which all significant
inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments for which the
valuation technique includes inputs not based on observable data
and the unobservable inputs have a significant effect on the
instrument's valuation. This category includes instruments that are
valued based on quoted prices for similar instruments for which
significant unobservable adjustments or assumptions are required to
reflect differences between the instruments.
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement. For this purpose, the significance of an input
is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of
a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset or
liability.
The determination of what constitutes 'observable' requires
significant judgement by the Company. The Company considers
observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The objective of the valuation techniques used is to arrive at a
fair value measurement that reflects the price that would be
received to sell an asset or transfer a liability in an orderly
transaction between market participants at the measurement
date.
The following tables analyse within the fair value hierarchy the
Company's financial assets measured at fair value at 30 June 2021
and 30 June 2020:
Level 1 Level 2 Level 3 Total
2021 GBP GBP GBP GBP
Financial assets designated at FVTPL and derivatives held for
trading:
Equities - listed equity investments 89,741,685 2,868,699 - 92,610,384
Equities - unlisted equity investments - - 25,355,184 25,355,184
Debt - loan notes - - 3,677,145 3,677,145
89,741,685 2,868,699 29,032,329 121,642,713
------------------------------------------------------------------ ----------- ---------- ----------- ------------
Level 1 Level 2 Level 3 Total
2020 GBP GBP GBP GBP
Financial assets designated at FVTPL and derivatives held for
trading:
Equities - listed equity investments 74,747,380 2,003,070 - 76,750,450
Equities - unlisted equity investments - - 6,446,850 6,446,850
Debt - loan notes - 610,415 5,238,130 5,848,545
Derivatives - warrant instruments - 21,080 - 21,080
------------------------------------------------------------------ ------------ ---------- ----------- -----------
74,747,380 2,634,565 11,684,980 89,066,925
------------------------------------------------------------------ ------------ ---------- ----------- -----------
The Level 1 equity investments were valued by reference to the
closing bid prices in each investee company on the reporting
date.
The Level 2 equity investment relates to Sutton Harbour due to
the low volume of trading activity in the market for this
investment and has been valued by reference to the closing bid
price in the investee company on the reporting date.
The Level 3 equity investment in Board Intelligence was valued
by reference to the valuation multiples of publicly-listed cloud
software companies, after applying a discount equivalent to that
which prevailed at the time of its last investment round in June
2020. The Level 3 equity investment in Leaf Clean Energy Company
was revalued in the period taking into account the expected
proceeds of the company's wind down. It had previously been held at
the delisting bid price. The Level 3 equity and debt investments in
GI Dynamics were valued by reference to the discounted cash flow
valuation of the company with an additional discount for dilution
risk. The total valuation was then allocated through a waterfall to
the different instruments owned by the Fund, being a loan note,
Series A shares and common stock.
For financial instruments not measured at FVTPL, the carrying
amount is approximate to their fair value.
Fair value hierarchy - Level 3
The following table shows a reconciliation from the opening
balances to the closing balances for fair value measurements in
Level 3 of the fair value hierarchy:
2021 2020
GBP GBP
Opening balance at 1 July 11,684,980 9,561,369
GI Dynamics Inc - Transfer to Level 3 4,294,452 -
Purchases 15,776,344 3,551,095
Movement in unrealised (losses)/gains 12,187,394 (1,851,998)
Conversion of loans (8,902,985) -
Sales (3,183,907) -
Net realised gain 1,830,764 -
Effect of exchange rate movements (4,654,713) 318,606
Closing balance at 30 June 29,032,329 11,684,980
--------------------------------------- ------------- ---------------
The Company recognises transfers between levels of the fair
value hierarchy on the date of the event of change in circumstances
that caused the transfer.
The table below provides information on significant unobservable
inputs used at 30 June 2021 in measuring equity financial
instruments categorised as Level 3 in the fair value hierarchy. It
also details the sensitivity to changes in significant unobservable
inputs used to measure value in each case.
Sensitivity to
changes in
Fair Value at 30 significant
Valuation Method June 2021 Unobservable inputs Factor unobservable inputs
------------------- -------------------- --------------------- --------------------- ------- --------------------
Board Intelligence Discount to 4,004,233 Comparable Revenue 13.8x A 25% increase
comparable company multiple (decrease) in the
multiples revenue multiple
Discount to would increase
comparable multiple 52.7% (decrease) FV by
GBP1.6m
(GBP1.2m)
A 25% decrease
(increase) in the
discount to the
revenue multiple
would increase
(decrease)
FV by GBP1.4m
(GBP1.1m)
------------------- -------------------- --------------------- --------------------- ------- --------------------
GI Dynamics Discounted cash 20,000,283 Discount rate 43% An increase
flow (decrease) in the
High growth rate 48% discount rate to
over 9 year period 48% (38%) would
reduce (increase)
FV by GBP7.5m
(GBP11.1m)
Dilution discount
A decrease
20% (increase) in the
near term growth
rate to 58% (38%)
would decrease
(increase)
FV by GBP3.6m
An increase
(decrease) of the
dilution discount
to 30% (to 10%)
would reduce
(increase) FV
by GBP2.7 million
------------------- -------------------- --------------------- --------------------- ------- --------------------
Leaf Clean Discounted cash 1,350,468 Discount rate 10% A 20% change to the
flow on expected discount rate would
wind down proceeds impact FV by
GBP0.02 million
------------------- -------------------- --------------------- --------------------- ------- --------------------
Sensitivity to
changes in
Fair Value at 30 significant
Valuation Method June 2020 Unobservable inputs Factor unobservable inputs
------------------- -------------------- -------------------- -------------------- --------- --------------------
Board Intelligence Blended value 6,446,850 n/a n/a n/a
implied by proposed
substantial
investment from an
independent
unconnected
investor
------------------- -------------------- -------------------- -------------------- ------- ----------------------
Assuming all other variables are held constant:
-- In 2020, if unobservable inputs in Level 3 debt investments
had been 5% higher/lower, the Company's return and net assets for
the year ended 30 June 2020 would have increased/decreased by
GBP261,907,
-- In 2020, if unobservable inputs in Level 3 equity investments
at 30 June had been 25% higher/lower, the Company's return and net
assets for the year ended 30 June 2020 would have
increased/decreased by GBP1,611,713; and
-- There would have been no impact on the other equity reserves.
15. RELATED PARTIES
Richard Bernstein is a director and a member of the Investment
Manager, a member of the Investment Adviser and a holder of 10,000
(2020: 10,000) Ordinary shares in the Company, representing 0.01%
(2020: 0.01%) of the voting share capital of the Company at the
year end.
During the year the Company incurred management fees of
GBP1,586,269 (2020: GBP2,489,201) of which GBPNil were outstanding
at the year end (2020: GBP Nil). There were no performance fees
incurred in the year (2020: GBPNil) and none outstanding at the
year end (30 June 2020: Nil).
As at 30 June 2021 the Investment Manager held 6,904,330
Ordinary shares (2020: 7,037,991) of the Company, representing
6.92% (2020: 7.66%) of the voting share capital.
As at 30 June 2021, the Company's investment in GI Dynamics Inc.
is an unconsolidated subsidiary due to the Company's percentage
holding in the voting share capital of GID. As GID is a private
company and its shares are not listed on a stock exchange, the
percentage held is not disclosed. There is no restriction on the
ability of GID to pay cash dividends or repay loans, but it is
unlikely that GID will make any distribution or loan repayments
given its current strategy. During the year the Company purchased
convertible loan notes (not driven by any contractual obligation)
for the purpose of supporting GID in pursuing its strategy.
GI Dynamics Inc. was incorporated in Delaware, had five
wholly-owned subsidiaries as at 30 June 2021 and its principal
place of business is Boston. The five subsidiaries were as
follows:
-- GI Dynamics Securities Corporation, a Massachusetts-incorporated non-trading entity;
-- GID Europe Holding B.V., a Netherlands-incorporated non-trading holding company;
-- GID Europe B.V., a Netherlands-incorporated company that
conducts certain European business operations;
-- GID Germany GmbH, a German-incorporated company that conducts
certain European business operations; and
-- GI Dynamics Australia Pty Ltd, an Australian-incorporated
company that conducts Australian business operations.
16. DIRECTORS' INTERESTS AND REMUNERATION
The interests of the Directors in the share capital of the
Company at the year end and as at the date of this report are as
follows:
2021 2020
Number of Total Number of Total
Ordinary shares voting rights Ordinary shares voting rights
Christopher Waldron 30,000 0.03% 30,000 0.03%
Jane Le Maitre(1) 13,500 0.01% 13,500 0.01%
Fred Hervouet 7,500 0.01% 7,500 0.01%
--------------------- ----------------- --------------- ----------------- ---------------
Total 51,000 0.05% 51,000 0.05%
--------------------- ----------------- --------------- ----------------- ---------------
(1) Ordinary shares held indirectly
During the year, the Directors earned the following remuneration
in the form of Directors' fees from the Company:
2021 2020
GBP GBP
Christopher Waldron(1) 47,500 47,500
Jane Le Maitre(2) 42,500 42,500
Fred Hervouet(3) 40,000 38,048
Nigel Ward(4) - 15,761
Total 130,000 143,809
------------------------- -------- --------
(1) Chairman of the Company with effect from 23 November
2017
(2) Chairman of Audit Committee with effect from 4 January
2018
(3) Chairman of Remuneration and Management Engagement Committee
with effect from 22 November 2019
(4) Retired with effect from 22 November 2019
The level of remuneration of the Directors reflects the time
commitment and responsibilities of their roles. The Chairman is
entitled to annual remuneration of GBP47,500 (2020: GBP47,500), the
Chairman of the Audit Committee is entitled to annual remuneration
of GBP42,500 (2020: GBP42,500) and the Chairman of the Remuneration
and Management Engagement Committee is entitled to annual
remuneration of GBP40,000 (2020: GBP40,000), of which GBP2,500
(2020: GBP2,500) relates to representing the Board at the Risk
Committee meetings of the Investment Manager. Independent Directors
are entitled to annual remuneration of GBP35,000 (2020:
GBP35,000).
At 30 June 2021, Directors' fees of GBP32,500 (2020: GBP32,500)
were accrued within trade and other payables.
17. MATERIAL AGREEMENTS
The Company has entered into the following material
agreements:
Crystal Amber Asset Management (Guernsey) Limited
Under the management agreement, the Investment Manager receives
a management fee of 2% applied to the Market Capitalisation of the
Company at 30 June 2013 (GBP73.5 million) (the "Base Amount"). To
the extent that an amount equal to the lower of the Company's NAV
and market capitalisation, at the relevant time of calculation,
exceeds the Base Amount (the "Excess Amount"), the applicable fee
rate on the Excess Amount will be 1.5%.
The Investment Manager is entitled to a performance fee in
certain circumstances. This fee is calculated by reference to the
increase in NAV per Ordinary share over the course of each
performance period.
Payment of the performance fee is subject to:
1. the achievement of a performance hurdle condition: the NAV
per Ordinary share at the end of the relevant performance period
must exceed an amount equal to the placing price, increased at a
rate of; (i) 7% per annum on an annual compounding basis in respect
of that part of the performance period which falls from (and
including) the date of Admission up to (but not including) the date
of the 2013 Admission; (ii) 8% per annum on an annual compounding
basis in respect of that part of the performance period which falls
from (and including) the date of the 2013 Admission up to (but not
including) the date of the 2015 Admission; and (iii) 10% per annum
on an annual compounding basis in respect of that part of the
performance period which falls from (and including) the date of the
2015 Admission up to the end of the relevant performance period
(with all dividends and other distributions paid in respect of all
outstanding Ordinary shares (on a per share basis) during any
performance period being deducted on their respective payment dates
(and after compounding the distribution amount per share at the
relevant annual rate or rates for the period from and including the
payment date to the end of the performance period) ("the Basic
Performance Hurdle"). Such Basic Performance Hurdle at the end of a
Performance Period is compounded at the relevant annual rate to
calculate the initial per share hurdle level for the next
performance period, which will subsequently be adjusted for any
dividends or other distributions paid in respect of all outstanding
Ordinary shares during that performance period; and
2. the achievement of a "high-water mark": the NAV per Ordinary
share at the end of the relevant performance period must be higher
than the highest previously reported NAV per Ordinary share at the
end of a performance period in relation to which a performance fee,
if any, was last earned (less any dividends or other distributions
in respect of all outstanding Ordinary shares declared (on a per
share basis) since the end of the performance period in relation to
which a performance fee was last earned).
If the Basic Performance Hurdle is met, and the high-water mark
exceeded, the performance fee is an amount equal to 20% of the
excess of the NAV per Ordinary share at the end of the relevant
performance period over the higher of:
1. the Basic Performance Hurdle;
2. the NAV per Ordinary share at the start of the relevant
performance period (less any dividends or other distributions in
respect of all outstanding Ordinary shares declared (on a per share
basis) since then; and
3. the high-water mark (in each case on a per Ordinary share
basis) multiplied by the time weighted average of the number of
Ordinary Shares in issue in the Performance Period.
The excess is multiplied by the time weighted average of the
number of Ordinary shares in issue in the performance period, which
shall only include such number of Ordinary shares as reduced by the
number of any Ordinary shares redeemed or repurchased by the
Company. If the Company issues new shares during a relevant
performance period, the performance fee in respect of that period
shall be adjusted in such manner to be fair and reasonable to take
account of the new issue of shares. If a time-weighted number of
shares calculation is applied to a new pot of shares issued, then
the denominator for the calculation shall be the number of days
from the date of such issuance until the end of the relevant
Performance Period, inclusive. During 2019, the Company agreed that
performance fees accruing in respect of the current year be
calculated as if no charitable shares had been issued during that
year.
Depending on whether the Ordinary shares are trading at a
discount or a premium to the Company's NAV per share when the
performance fee becomes payable, the performance fee will be either
payable in cash (subject to the restrictions set out below) or
satisfied by the sale of Ordinary shares out of Treasury or by the
issue of new fully paid Ordinary shares (the number of which shall
be calculated as set out below):
-- If Ordinary shares are trading at a discount to the NAV per
Ordinary share when the performance fee becomes payable, the
performance fee shall be payable in cash. Within a period of one
calendar month after receipt of such cash payment, the Investment
Manager shall be required to purchase Ordinary shares in the market
of a value equal to such cash payment.
-- If Ordinary shares are trading at, or at a premium to, the
NAV per Ordinary share when the performance fee becomes payable,
the performance fee shall be satisfied by the sale of Ordinary
shares out of Treasury or by the issue of new fully paid Ordinary
shares. The number of Ordinary shares that shall become payable
shall be a number equal to the performance fee payable divided by
the closing mid-market price per Ordinary share on the date on
which such performance fee became payable.
Performance fee for year ended 30 June 2021
At 30 June 2021, the Basic Performance Hurdle was 249.84 pence
(as adjusted for all dividends paid during the performance period
on their respective payment dates, compounded at the applicable
annual rate) (2020: 230.03 pence), and the high-water mark
(adjusted for dividends) was 241.62 pence.
The NAV per share before any accrual for the performance fee
payable in respect of the year was 153.11 pence, excluding the
issuance of charitable shares on 25 September 2020. Accordingly, no
performance fee was earned during the year ended 30 June 2021
(2020: GBPNil).
Ocorian Administration (Guernsey) Limited
The Administrator provides administration and company
secretarial services to the Company. For these services, the
Administrator is paid an annual fee of 0.12% (2020: 0.12%) of that
part of the NAV of the Company up to GBP150 million and 0.1% (2020:
0.1%) of that part of the NAV over GBP150 million (subject to a
minimum of GBP75,000 per annum). During the year, the Company
incurred administration fees of GBP134,392 (2020: GBP157,059).
Butterfield Bank (Guernsey) Limited
Under the custodian agreement, the Custodian receives a fee,
calculated and payable quarterly in arrears at the annual rate of
0.05% (2020: 0.05%) of the NAV per annum, subject to a minimum fee
of GBP25,000 per annum. Transaction charges of GBP100 per trade for
the first 200 trades processed in a calendar year and GBP75 per
trade thereafter are also payable. During the year, the Company
incurred custodian fees of GBP55,465 (2020: GBP69,696).
18. LOAN FACILITY
On 1 July 2020, the Company entered into a loan facility with
Intertrader Limited whereby it transferred an amount of equity
holdings with a value of GBP19.1 million as at 1 July 2020 to
Intertrader Limited to be held as collateral for CFD instruments.
The interest charged on the loan facility is 2% per annum of the
daily overnight loan balance. The Company may draw on a loan
facility of up to 25% of the value of the initial equity holdings
transferred. The balance of this facility is as follows:
2021 2020
GBP GBP
Opening balance - -
Drawdowns 22,785,705 -
Repayments by way of sale of CFD instruments (22,975,306) -
Repayments by way of dividends receivable on CFD instruments (149,820) -
Facility fees payable 316,925 -
Facility commissions payable 22,496 -
Closing balance - -
------------------------------------------------------------- ---------------------- -----
As at the date of this report, the amount owed to Intertrader
Limited under the loan facility was GBPNil.
19. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors and on the basis of the
shareholdings advised to them, the Company has no ultimate
controlling party.
20. POST BALANCE SHEET EVENTS
On 7 July 2021, the Company declared an interim dividend of
GBP2,093,425 equating to 2.5 pence per
Ordinary share, which was paid on 4 August 2021 to shareholders
on the register on 16 July 2021.
On 19 August 2021, the Company reported that its unaudited NAV
at 31 July 2021 was 139.05 pence per Ordinary share.
On 24 September 2021, the Company reported that its unaudited
NAV at 31 August 2021 was 138.78 pence per Ordinary share.
Glossary of Capitalised Defined Terms
"Admission" means admission of the Ordinary shares on 17 June
2008, to the Official List and/or admission to trading on the
Alternative Investment Market of the London Stock Exchange, as the
context may require;
"AEOI Rules" means the Automatic Exchange of Information
Rules;
"AGM" or "Annual General Meeting" means the annual general
meeting of the Company;
"AIF" means Alternative Investment Funds;
"AIFM" means AIF Manager;
"AIFM Directive" means the EU Alternative Investment Fund
Managers Directive (no. 2011/61/EU);
"AIC" means the Association of Investment Companies;
"AIC Code" means the AIC Code of Corporate Governance;
"AIM" means the Alternative Investment Market of the London
Stock Exchange;
"Annual Report" means the annual publication of the Company to
the shareholders to describe its operations and financial
conditions, together with the Company's financial statements;
"ARR" means annual recurring revenue;
"Articles of Incorporation" or "Articles" means the articles of
incorporation of the Company;
"Audited Financial Statements" or "Financial Statements" means
the audited annual financial statements of the Company, including
the Statement of Profit or Loss and Other Comprehensive Income, the
Statement of Financial Position, the Statement of Changes in
Equity, the Statement of Cash Flows and associated notes;
"Australian Stock Exchange" means the Australian Stock Exchange
Limited;
"Bank of England" means the Bank of England, the central bank of
the UK;
"Board" or "Directors" or "Board of Directors" means the
directors of the Company;
"BOE" means barrels of oil equivalent;
"Brexit" means the departure of the UK from the European
Union;
"CBRS" means Citizens Broadband Radio Service;
"CEO" means chief executive officer;
"CE Mark" means a certification mark that indicates conformity
with health, safety, and environmental protection standards;
"CFD" means Contracts for Difference;
"Committee" means the Audit Committee of the Company;
"Company" or "Fund" means Crystal Amber Fund Limited;
"Companies Law" means the Companies (Guernsey) Law, 2008, (as
amended);
"CRS" means Common Reporting Standard;
"EBITDA" means earnings before interest, taxes, depreciation and
amortisation;
"EGM" or "Extraordinary General Meeting" means an extraordinary
general meeting of the Company;
"EndoBarrier" means a minimally invasive medical device for
treatment of type 2 diabetes;
"EPS" means Early Production System;
"Equals" means Equals Group plc;
"FATCA" means Foreign Account Tax Compliance Act;
"FCA" means the Financial Conduct Authority;
"FDA" means the United States Food and Drug Administration;
"FRC" means the Financial Reporting Council;
"FRC Code" means the UK Corporate Governance Code published by
the FRC;
"FTSE" means the Financial Times Stock Exchange;
"FV" means Fair Value;
"FVTPL" means Fair Value Through Profit or Loss;
"General Counsel" means the main lawyer who gives legal advice
to a company;
"GFSC" means the Guernsey Financial Services Commission;
"GFSC Code" means the GFSC Finance Sector Code of Corporate
Governance;
"GID" means GI Dynamics, Inc.;
"Gross Asset Value" means the value of the assets of the
Company, before deducting its liabilities, and is expressed in
Pounds Sterling;
"HQ" means headquarters;
"IAS" means international accounting standards as issued by the
Board of the International Accounting Standards Committee;
"IASB" means the International Accounting Standards Board;
"IFRIC" means the IFRS Interpretations Committee, which issues
IFRIC interpretations following approval by the IASB;
"IFRS" means the International Financial Reporting Standards,
being the principles-based accounting standards, interpretations
and the framework by that name issued by the International
Accounting Standards Board;
"Interim Financial Statements" means the unaudited condensed
interim financial statements of the Company, including the
Condensed Statement of Profit or Loss and Other Comprehensive
Income, the Condensed Statement of Financial Position, the
Condensed Statement of Changes in Equity, the Condensed Statement
of Cash Flows and associated notes;
"Interim Report" means the Company's interim report and
unaudited condensed financial statements for the period ended 31
December;
"Investment Management Agreement" means the agreement between
the Company and the Investment Manager, dated 16 June 2008, as
amended on 21 August 2013, further amended on 27 January 2015 and
further amended on 12 June 2018;
"IPEV Capital Valuation Guidelines" means the International
Private Equity and Venture Capital Valuation Guidelines on the
valuation of financial assets;
"KPMG" means KPMG Channel Islands Limited;
"LSE" or "London Stock Exchange" means the London Stock Exchange
plc;
"Market Capitalisation" means the total number of Ordinary
shares of the Company multiplied by the closing share price;
"MW" means megawatt;
"NAV" or "Net Asset Value" means the value of the assets of the
Company less its liabilities as calculated in accordance with the
Company's valuation policies and expressed in Pounds Sterling;
"NAV per share" means the Net Asset Value per Ordinary share of
the Company and is expressed in pence;
"NMPI" means Non-Mainstream Pooled Investments;
"Official List" is the list maintained by the Financial Conduct
Authority (acting in its capacity as the UK Listing Authority) in
accordance with Section 74(1) of the Financial Services and Markets
Act 2000;
"Ordinary share" means an allotted, called up and fully paid
Ordinary share of the Company of GBP0.01 each;
"R&D" means research and development;
"Risk Committee" means the Risk Committee of the Investment
Manager;
"S&P" means Standard & Poor's Credit Market Services
Europe Limited, a credit rating agency registered in accordance
with Regulation (EC) No 1060/2009 with effect from 31 October
2011;
"SaaS" means a Software-as-a-Service;
"Smaller Companies Index" means an index of small market
capitalisation companies;
"SME" means small and medium sized enterprises;
"SORP" means Statement of Recommended Practice;
"SPS" means Spectrum Payment Services Ltd;
"Stewardship Code" means the Stewardship Code of the Company
adopted from 14 June 2016, as published on the Company's website
www.crystalamber.com ;
"Supreme Court" means the highest court in the federal judiciary
of the US;
"Target Multiple" means the maximum multiple of the original
investment that could be paid, given value drivers, and receive a
desired return on investment;
"TISE" means The International Stock Exchange;
"Treasury" means the reserve of Ordinary shares that have been
repurchased by the Company;
"Treasury shares" means Ordinary shares in the Company that have
been repurchased by the Company and are held as Treasury
shares;
"UK" or "United Kingdom" means the United Kingdom of Great
Britain and Northern Ireland;
"UK Stewardship Code" means the UK Stewardship Code published by
the FRC in July 2010 and revised in September 2012;
"US" means the means the United States of America, its
territories and possessions, any state of the United States and the
District of Columbia;
"US$" or "$" means United States dollars;
"US Federal Reserve" means the Federal Reserve System, the
central banking system of the US; and
"GBP" or "Pounds Sterling" or "Sterling" means British pounds
sterling and "pence" means British pence.
Directors and General Information
Directors Investment Manager
Christopher Waldron (Chairman) Crystal Amber Asset Management (Guernsey) Limited
Fred Hervouet (Chairman of Remuneration and Management PO Box 286
Engagement Committee) Floor 2, Trafalgar Court
Jane Le Maitre (Chairman of Audit Committee) Les Banques, St Peter Port
Guernsey GYI 4LY
Investment Adviser
Crystal Amber Advisers (UK) LLP Nominated Adviser
17c Curzon Street Allenby Capital Limited
London W1J 5HU 5 St. Helen's Place
London EC3A 6AB
Administrator and Secretary
Ocorian Administration (Guernsey) Limited Legal Advisers to the Company
PO Box 286 As to English Law
Floor 2, Trafalgar Court Norton Rose Fulbright LLP
Les Banques, St Peter Port 3 More London Riverside
Guernsey GYI 4LY London SE1 2AQ
Broker As to Guernsey Law
Winterflood Investment Trusts Carey Olsen
The Atrium Building PO Box 98
Cannon Bridge House Carey House
25 Dowgate Hill Les Banques
London EC4R 2GA St. Peter Port
Guernsey GY1 4BZ
Independent Auditor
KPMG Channel Islands Limited Custodian
Glategny Court Butterfield Bank (Guernsey) Limited
Glategny Esplanade PO Box 25
St. Peter Port Regency Court
Guernsey GY1 1WR Glategny Esplanade
St. Peter Port
Registered Office Guernsey GY1 3AP
PO Box 286
Floor 2, Trafalgar Court Registrar
Les Banques, St Peter Port Link Asset Services
Guernsey GYI 4LY 65 Gresham Street
London
Identifiers EC2V 7NQ
ISIN: GG00B1Z2SL48
Sedol: B1Z2SL4
Ticker: CRS
Website: http://crystalamber.com
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FR UWVVRASUKURR
(END) Dow Jones Newswires
September 28, 2021 02:13 ET (06:13 GMT)
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