Lowell Resources Fund (ASX: LRT)
ARSN 093 363 896
Appendix 4E
For the year ended 30 June 2019
Lowell Resources Fund
Appendix 4E
For the year ended 30 June 2019
Preliminary Final Report
This preliminary final report is for the reporting period from 1 July 2018 to 30 June 2019.
The previous corresponding year end was 30 June 2018.
Results for announcement to the market
30 June 2019
30 June 2018
Increase / (Decrease)
$’000
$’000
at the end of the
Net assets attributable to unitholders
Revenues / (losses) from
continuing operations
Profit / (loss) for the year
15,992
(5,244)
(5,997)
22,195
1,646
reporting year
(27.95%)
(418.53%)
94
(6,480.69%)
Earnings / (losses) per unit
30 June 2019
30 June 2018
Earnings / (losses) per unit
Dilluted earnings / (losses) per unit
($2.155)
($2.155)
$0.037
$0.037
Brief explanation of results
LRT’s portfolio net asset value per unit ended the year at $5.81 per unit. It was a year of two halves for the Fund, from June
to December 2018, the junior resources sector fell substantially, in line other emerging company sectors. The oil price also
fell over over H1 FY 2019 and the gold price was flat. Coupled with a write off of the Fund’s largest unlisted stock position,
this resulted in considerable volatility for the Fund’s NAV in the first half. The second half of the financial year saw a recovery
in the junior resources sector, the emerging company index and the gold and oil prices, which enabled the Fund’s NAV to
finish up for the half.
Over the year, commodity markets were heavily impacted by the outlook for global interest rates, particularly in the USA
where expectations of rate increases in the first half were rapidly replaced by an environment of loosening monetary policy
and an increase in money supply in late December. This flowed through to strengthening gold and oil prices in the second
half. Australian dollar gold prices hit record levels late in the financial year. Base metals such as copper were weaker, but
the sector continued to attract the bulk of M&A activity, of which the Fund was a beneficiary.
The Fund’s management is prepared for a continued rise in gold prices and a return of institutional investor interest in the
junior end of the mining & energy sector. Financial market uncertainty and accommodative monetary policy are likely to
support gold investment demand in the coming 12 months, as a result of which the Fund continues to hold an overweight
position in junior gold stocks. The Fund’s management is working to close the gap between the traded unit price and the
NAV per unit which opened up further with the increase in the NAV over the second half.
The financial results of the operations of the Fund are disclosed in the statement of comprehensive income. The net
accounting profit for the Fund for the year ended 30 June 2018 was ($5,996,547). This compares to a net accounting profit
of $93,980 for the year ended 30 June 2018.
1
Lowell Resources Fund
Appendix 4E
For the year ended 30 June 2019
(continued)
As at 30 June 2019, the net asset of the Fund was $15,992,231. This compares to a net asset of $22,195,213 for the year
ended 30 June 2018. The decrease in assets was a result of portfolio volatility particularly over the first half of the financial
year under review, coupled with the impact of the Fund’s exposure to the unlisted Laguna Gold.
Distribution information
As at 30 June 2019, the Fund had no distributable income for distribution.
Distribution Reinvestment Plan
Distribution Reinvestment Plan (DRP)’s Terms and Conditions provides that:
participation is entirely optional;
unitholders must use all of their future Income Distributions to acquire new units in the Fund;
the election that unitholders make will apply to all future Income Distributions unless unitholders advise the Fund by
varying or cancelling these instructions;
the purchase price of the re-invested units will be based on the ex-distribution price calculated by the responsible entity
on the distribution calculation date;
unitholders will not pay any additional costs such as brokerage and stamp duty; and
if unitholders participate in the DRP, they will receive a statement of the income due to them and details of units allotted
to them.
Net tangible assets
30 June 2019
x
Net tangible assets per security
$5.8099
30 June 2018
$7.9347
Other information
There was no gain or loss of control of entities during the current year.
The Fund does not have associates or joint venture entities.
The Fund carried out Buy-back arrangements during the reporting year.
The Fund is not a foreign entity.
Audit
This report is based on accounts which have been audited by the Fund’s Auditors – Nexia Melbourne Audit Pty Ltd.
Melbourne
26 August 2019
2
Lowell Resources Fund
ARSN 093 363 896
Annual Report
For the year ended 30 June 2019
3
Lowell Resources Fund
ARSN 093 363 896
Annual Report
For the year ended 30 June 2019
Contents
Investment Manager's Report
Corporate Governance Statement
Directors' Report with Remuneration Report
Auditor's Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Net Assets Attributable to Unitholders
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor's Report to the Unitholders of Lowell Resources Fund
Unitholder and Other Information
Page
5
7
13
20
21
22
23
24
25
48
49
53
These financial statements cover Lowell Resources Fund as an individual entity.
The Responsible Entity of Lowell Resources Fund is Cremorne Capital Limited (ACN 006 844 588) (AFSL 241175).
The Responsible Entity's registered office is:
8 Chapel Street
Cremorne VIC 3121
4
Lowell Resources Fund
Investment Manager’s Report
For the year ended 30 June 2019
Investment Manager's Report
The Lowell Resources Fund (LRT) is managed by Lowell Resources Funds Management Limited (LRFM), which has occupied
this role since 2004, with Cremorne Capital Limited acting as Responsible Entity. LRT is listed on the Australian Stock Exchange
as a Listed Investment Trust under the ASX code LRT. The Fund is designed as a relatively high-risk/reward investment vehicle
which is focused on the emerging mining and oil and gas sectors. The Fund has demonstrated that it can achieve above-
average returns over the longer term.
The performance of the Lowell Resources Fund during the 2018/19 financial year was a tale of two halves. The December half
was disappointing for the sector in which the LRT is focused, with an exodus of risk capital from higher risk equities in general.
For the FY2019, the Net Asset Value of the Fund (‘NAV’ which is the value of the shareholdings and cash held by LRT) fell 26%,
from $7.89/unit to $5.79/unit. Most of the fall happened in the six months to end December, when the NAV dropped 33.7%. This
was exacerbated by the write off of the Fund’s largest investment being the unlisted Laguna Gold. Laguna management failed
to take the opportunity to list the company and provide an exit for investors whilist mine operations deteriorate into negative
cashflows. While the majority of the Fund’s write-off was ‘mark to market’ gain, the Manager has subsequently reduced the
Fund’s exposure to stocks with such limited exit potential.
The second half of the financial year produced a better outcome, with the Fund’s NAV rising 10.7%, as risk capital began to
return to the sector and gold prices improved.
The traded unit price under-performed the actual NAV/unit of the Fund itself. The unit price started the FY at $6.75/unit and
ended the year at $4.10/unit. The underlying NAV of the fund at end-June was $5.79, meaning holders were prepared to sell
units at a 29% discount to the value of the investment inside the Fund. During the year, the Manager took steps to reduce this
discount and increase the liquidity of the traded units, presenting at investor conferences both domestically and overseas, as
well as conducting one on one briefings for brokers, and hosting events showcasing selected stocks in the LRF portfolio. As
value managers, LRFM itself purchased units in the Trust when the trading window allowed, believing the discount was too
steep given the market conditions and the Manager’s positive views on both the assets inside the Fund and the outlook for
various commodities and sectors in which the fund is invested.
Excluding gold and iron ore, the first half of the FY saw some sluggish performance from commodities like base metals and oil.
It was generally a much better second half and this drove the improved performance of small resources companies listed in
Australia, the UK and North America, the major markets in which the Fund is invested.
Gold was a strong performer across the entire year as investors sought out the yellow metal for a hedge or protection against
financial difficulties triggered by the expanding trade imbroglio between the US and China. The gold price measured in Australian
dollars was even stronger, as the A$ dropped against the US$. In fact, the Australian dollar gold price hit new highs across the
June half, delivering strong cashflows for gold producers and stimulating merger and acquisition activity in the gold sector. The
Fund Manager is of the opinion that the bull market for gold shares may be in its infancy.
As at 30 June, the Fund’s portfolio was weighted 36% in gold-focused exploration and mining stocks, with the largest single
holding being 9.9% in new Western Australian gold producer Gold Road Resources. Other significant gold holdings include
advanced resource definition / feasibility stage companies in WA such as De Grey Mining, Musgrave Minerals and Genesis
Minerals. The Fund also has exposure to a number of undervalued gold stocks with projects in West Africa, including Cardinal
Resources, Oklo Resources, Predictive Discovery and Golden Rim.
5
Lowell Resources Fund
Investment Manager’s Report
For the year ended 30 June 2019
(continued)
Among the Fund’s oil and gas investments, Afton Energy continued to produce profitably in Texas, with production underway
since January 2018. Indago Energy’s Multi-Flow heavy oil product began to gain traction in the market, realising on a number
of international leads. The Fund has exposure to the high gas prices of eastern Australia through Comet Ridge, as well as
number of explorers including Mosman Oil & Gas.
In the base and battery metals sub-sectors, the Fund’s investments in Liontown Resources (hard rock lithium at Kathleen Valley
in WA) and Adriatic Metals (polymetallic base and precious metals in Bosnia) performed strongly and show excellent potential
for commercial development.
The performance of the LRF over the year to 30 June 2019 is shown in the chart below:
$8.50
$8.00
$7.50
$7.00
$6.50
$6.00
$5.50
$5.00
$4.50
$4.00
LRT NAV Performance weekly
30 June '18 to 30 June '19
8
1
0
2
6
0
/
/
0
3
8
1
0
2
9
0
/
/
0
3
8
1
0
2
2
1
/
/
1
3
9
1
0
2
3
0
/
/
1
3
9
1
0
2
6
0
/
/
0
3
6
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
Corporate Governance Statement
Overview
Cremorne Capital Limited (Responsible Entity, or Company) is the responsible entity for the Lowell Resources Fund (Fund, or
LRF, ASX: LRT), a registered managed investment scheme that was listed on the Australian Securities Exchange (ASX) on 22
March 2018.
The Responsible Entity is the holder of an Australian Financial Services License (AFSL) 241175 which enables it to operate as
responsible entity of the Fund.
This Corporate Governance Statement (Statement) reports against the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations 3rd Edition, March 2014 (Recommendations).
Principle 1: Lay solid foundations for management and oversight
As the Fund is an externally managed entity, the following Recommendations under Principle 1 are not applicable: 1.1, 1.2, 1.3,
1.4, 1.5, 1.6, 1.7.
In operating the Fund, the Responsible Entity’s overarching principle is always to act in good faith and in the best interests of
the Fund’s unitholders in accordance with its fiduciary duty. The Responsible Entity’s duties and obligations in relation to the
Fund principally arise from the Constitution of the Fund, the Compliance Plan for the Fund, the Recommendations, the general
regulatory requirements of the Australian Securities and Investments Commission (ASIC) and ASX and legislative and
regulatory requirements of jurisdictions in which the Fund and the Responsible Entity operate.
The Board of Directors of the Responsible Entity, in consultation with management and the Compliance Committee of the Fund
(established under the Compliance Plan), determine appropriate corporate governance practices, taking into account the
matters outlined in the preceding paragraph. Where corporate governance practices differ from a Recommendation, this
Statement will set out the reasons for the difference.
The Responsible Entity has adopted an Audit and Risk Committee Charter and a Risk Management Plan.
As part of the governance process, the Board of the Responsible Entity and the Compliance Committee periodically review the
Fund’s policies and practices to provide reasonable assurance that they meet the requirements of stakeholders and that there
is a process of continual improvement in governance standards.
A copy of the charters and policies adopted by the Responsible Entity on behalf of the Fund are available at
http://www.cremornecapital.com/lrf-corporate-governance/.
7
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
(continued)
Principle 2: Structure the Board to add value
As the Fund is an externally managed entity, the following Recommendations under Principle 2 are not applicable: 2.1, 2.2, 2.4,
2.5 and 2.6.
2.3 Details of independent directors
The Directors of the Responsible Entity are Michael Ramsden (non-executive Chairman), appointed on 1 June 2007, Donald
Carroll (non-executive), appointed on 21 September 2009 and Oliver Carton (non-executive), appointed on 22 October 2010.
Having regard to the size and intended operations of the Fund, the Board of the Responsible Entity does not consider it
necessary to have any independent Directors, however the Board considers Oliver Carton to be an independent Director.
Principle 3: Act ethically and responsibly
3.1 Code of Conduct
The Board of the Responsible Entity has adopted a Code of Conduct (Code) that applies to all Directors, senior executives,
employees, service providers and representatives of the Responsible Entity. The Code requires all Directors, senior
management and employees of the Responsible Entity to act honestly always in the exercise of their duties as an employee,
and, where possible and appropriate, follows the Recommendations. The purpose of this Code is to set out the ethical principles
and professional standards of conduct which guide the Responsible Entity and its employees in its business activities.
The Code also sets out standards and restrictions in relation to:
the avoidance and management of actual or potential conflicts of interest;
preventing the offering or acceptance of bribed and other unlawful or unethical payments or inducements;
the non-tolerance of any act of harassment or discrimination; and
compliance with the letter and spirit of all Commonwealth and State or Territory trade practices laws.
The Board of the Responsible Entity has also adopted a Securities Trading Policy (Trading Policy) that sets out the
circumstances in which certain restricted persons may trade in Fund securities. The Trading Policy prohibits those restricted
persons from dealing in Fund securities when they are in possession of price-sensitive information that is not generally available
to the market and also places restrictions and notification requirements on dealing with Fund securities, including the imposition
of blackout periods and the need to obtain pre-trade approval. The Trading Policy aims to align with the ASX Listing Rules and
relevant guidelines.
The Responsible Entity is also subject to the AFSL licensing requirements.
A copy of the Code and the Trading Policy can be found at
http://www.cremornecapital.com/lrf-corporate-governance/ .
8
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
(continued)
Principle 4: Safeguard integrity in corporate reporting
4.1 Audit committee
Having regard to the size and intended operations of the Fund, the Board of the Responsible Entity has determined that the
function of an Audit and Risk Committee (ARC) is the responsibility of the Board of the Responsible Entity, which will carry out
this function in accordance with an adopted Audit and Risk Committee Charter (ARC Charter). A copy of the ARC Charter can
be found at http://www.cremornecapital.com/lrf-corporate-governance/. The Charter contains the delegated role, responsibilities,
functions and powers of the ARC and is reviewed periodically, or whenever significant change occurs.
Some of the key roles of the ARC are to:
oversee the Responsible Entity’s responsibilities relating to financial reporting, relevant statutory requirements, statutory
external financial audits and audits of the Fund;
monitor and review the proprietary of any related party transactions;
meet with the external auditor of the Fund at least annually and review the appointment of the external auditor of the Fund;
enhance credibility and objectivity of financial reports;
establish procedures for complaints and reports regarding accounting, internal accounting controls and auditing matters
relating to the Fund;
evaluate the adequacy and effectiveness of the administrative, operating and accounting policies for the Fund; and
review at least twice annually the risk management systems of the Fund in relation to some aspects of the risk management
and compliance frameworks.
The ARC will meet at minimum twice a year. The Fund’s independent external auditor is Nexia Melbourne Audit Pty Ltd.
4.2 Financial Statements Declaration
Prior to the approval of any financial statements, the ARC Charter requires that the Responsible Entity’s Chairman and the party
responsible for preparation of the Fund’s financial records make a declaration to the ARC that the financial records of the Fund
have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a
true and fair view of the financial position and performance of the Fund and that the opinion has been formed on the basis of a
sound system of risk management and internal control which is operating effectively.
4.3 External auditor attends AGM
The Fund’s external auditor will be requested to attend the Fund’s Annual General Meeting and to be available to answer any
questions from unitholders relevant to the audit.
9
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
(continued)
Principle 5: Make timely and balanced disclosure
5.1 Continuous disclosure policy
The Responsible Entity’s Board has adopted a Continuous Disclosure Policy for the Fund that assists with clear and effective
communication to unitholders by ensuring:
the Fund, at a minimum, complies with its continuous disclosure obligations under the Corporations Act and the ASX Listing
Rules;
the Fund provides unitholders, together with the market, timely, direct and equal access to information issued by it; and
information which is not generally available and which may have a material effect on the price or value of the Fund’s Units
is identified and appropriately considered for disclosure to the market.
The Fund’s Continuous Disclosure Policy can be found at http://www.cremornecapital.com/lrf-corporate-governance/.
Principle 6: Respect the rights of security holders
6.1 Provision of information to investors
The Responsible Entity recognises that unitholders are entitled to accurate, timely and relevant information and should be fully
informed of material matters that affect the Fund’s position and prospects. Any prospective investors should be able to make
informed investment decisions regarding the Fund. The Responsible Entity seeks to accomplish this through the periodic
release of:
weekly and monthly NAV notices to the ASX including publication of the NAV per unit;
monthly updates in respect of the Fund;
quarterly portfolio disclosure;
an Annual Investor Letter;
the Fund’s Half Year results; and
the Fund’s Full Year.
After it has been disclosed to the ASX, all information is available at
http://www.cremornecapital.com/lrf-unit-price/ .
The Responsible Entity also maintains information about the Fund and its governance the above website including:
a copy of the Fund’s Constitution and corporate governance charters and policies is available at
http://www.cremornecapital.com/lrf-corporate-governance/ ;
ASX Releases are available at
https://www.lowellresourcesfund.com.au/investor-centre/announcements.html;
Unit Registry details are available at
http://www.cremornecapital.com/lrf-registry
and
Share price information is available at
https://www.lowellresourcesfund.com.au/investor-centre/share-price.html.
10
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
(continued)
6.2 Investor relations
The Responsible Entity will seek feedback from unitholders to facilitate effective two-way communication.
6.3 Unitholder participation at meetings
The Responsible Entity recognises the importance of unitholder interaction and supports the principle of participation. If any
meetings are held, the Responsible Entity will provide the required documents to, and inform unitholders of such documents,
run the meeting as required and make the required ASX disclosures.
6.4 Option for electronic unitholder communications
The Responsible Entity recognises the benefits of the use of electronic communications and unitholders have the option to
receive communications from, and send communications to, the unit registry electronically. The following information can be
received electronically:
distribution statements;
periodic statements;
annual taxation statements;
Annual Reports;
If any meetings are held, notices of meetings and proxy forms and the ability to vote online; and
other general Fund communications.
The unit registry can be contacted via email or telephone for any unitholder wishing to update their communications preferences.
Contact details for the unit registry can be found at https:// automic.com.au.
Principle 7: Recognise and manage risk
7.1 Risk committee
The ARC Charter, combined with a Risk Management Plan (RM Plan) and Fund Compliance Plan, provide the framework that
the Responsible Entity has adopted to oversee and manage risk in relation to the Fund. The Responsible Entity’s Board and
the Fund’s Compliance Committee (established under the Fund Compliance Plan) otherwise have oversight of the operational
risk and compliance frameworks as they consider risk management matters should be a strong focus of the management of
the Fund.
The RM Plan sets out a policy for risk oversight and management within the Company. A copy of the Risk Management Plan
and Fund Compliance Plan can be found at http://www.cremornecapital.com/lrf-corporate-governance/.
7.2 Review of risk management framework
The RM Plan is to be reviewed by the Compliance Manager and updated at least annually with quarterly reporting to the Board
of any matters that affect the accuracy of the RM plan and any relevant actions plans included in the RM Plan. In the event of
a material breach of the RM Plan, or a material regulatory change affecting the Responsible Entity or the Fund, the RM Plan (or
the risk assessment contained therein) will be reviewed and amended as necessary.
11
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2019
(continued)
7.3 Internal audit function
The Company does not have an internal audit function. The Responsible Entity is the holder of AFSL 241175 and is subject to
the regular requirements imposed upon AFSL holders. The Responsible Entity has appointed an external auditor of the Fund,
and these external audits provide reasonable assurance on the design and operating effectiveness of the Fund’s compliance
and control environment. In addition, periodic monitoring of compliance with key policies and procedures is performed by the
Responsible Entity and the results are reported to the Board of the Responsible Entity.
The Boards and senior management of the Responsible Entity have the skills and expertise to understand and rigorously review
and challenge the information provided and recommendations submitted for approval. Where additional assurance is desired,
the Board can commission external independent advice and reviews as necessary.
7.4 Economic, environmental and social sustainability risks
The Responsible Entity acknowledges that whilst the industry in which the assets of the Fund are primarily invested in may
have material exposure to environmental or social sustainability risks (resources sector), the Board of the Responsible Entity
does not consider the Fund currently has such material exposure.
Further details in relation to environmental and social sustainability risks can be found in the Fund’s Product Disclosure
Statement which can be found at http://www.cremornecapital.com/lrf-pds/.
Principle 8: Remunerate fairly and responsibly
As the Fund is an externally managed entity, the following Recommendations under Principle 8 are not applicable: 8.1, 8.2 and
8.3.
12
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
Directors' Report
The Directors of Cremorne Capital Limited (ACN 006 844 588, AFSL 241175), the Responsible Entity of Lowell Resources
Fund (LRT), present their report together with the financial statements of Lowell Resources Fund (‘the Fund’) for the year
ended 30th June 2019. Cremorne Capital Limited was appointed as the Responsible Entity on 26th June 2000 for the Fund.
Lowell Resources Funds Management Limited (ACN 006 769 982, AFSL 345674) is the Investment Manager of LRT.
Directors
The following persons held office as Directors of Cremorne Capital Limited from 1 July 2018 to 30 June 2019:
Michel Ramsden (appointed 1 June 2007)
Michael is a qualified lawyer with more than 30 years experience as a corporate adviser, he has been involved with all forms
of finance, including money markets, futures trading, lease finance, trade finance and foreign exchange. Michael has worked
for a Lloyds broker in London and a number of major international companies including CIBC Australia, JP Morgan and
Scandinavian Pacific Investments Limited. Michael was a Director of D&D Tolhurst Stockbrokers and Tolhurst Corporate Ltd,
and is experienced in funds management, mergers and acquisitions, corporate restructuring, equity raising and the general
provision of corporate advice. Michael is currently Chairman of Australia Mines Limited (ASX:AUZ), African Mahogany
Australia Pty Ltd, Managing Director of Terrain Capital and a Honorary Treasurer and a Director of the Victoria Racing Club.
Oliver Carton (appointed 22 October 2010)
Oliver is a qualified lawyer with over 22 years of experience in a variety of corporate roles. He currently runs his own
consulting business and was previously a Director of the Chartered Accounting firm KPMG. Prior to that, he was a senior
legal officer with ASIC. Oliver has significant corporate governance experience and is currently director and company
secretary of a number of listed and unlisted companies, ranging from Cremorne Capital Limited to the not for profit Melbourne
Symphony Orchestra Pty Ltd. Mr Carton did not hold any stock in the Fund at the end of this reporting year.
Don Carroll (appointed 21 September 2009)
Don has extensive experience in the international resources business primarily in the marketing and development of
minerals. In a career spanning 29 years with BHP Billiton, and prior to that Rio Tinto, he has held a number of senior positions
including President BHP Billiton Japan, President BHP Billiton India and Group General Manager Marketing Asia based in
Hong Kong. He has been active in the development of coal, bauxite and iron ore resources as well as the marketing of most
mineral and energy products. He has experience in the merger and acquisitions sector including the merger of BHP with
Billiton. Don holds a degree in mining engineering from Sydney University and is a long-standing member of the Australian
Institute of Mining and Metallurgy and is a member of the Australian Institute of Company Directors. Mr Carroll did not hold
any stock in the Fund at the end of this reporting year.
13
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
(continued)
Secretaries
Lisa Ratcliffe (appointed 29 January 2012)
Lisa holds a membership of FCCA . Her current role is the company secretary and also the accountant of Cremorne Capital
Limited Ms Ratcliffe has 23 years of accounting experience working in a variety of practice and industries in both the UK and
Australia. She has been working with Cremorne Capital Limited corporate advisory for 11 years as accountant and company
secretary of several businesses.
Julie Edwards (appointed 20 March 2018)
Julie Edwards holds a Bachelor of Commerce degree, is a member of CPA Australia and holds a Public Practice Certificate.
Ms Edwards is a director and manager of Lowell Accounting Services Pty Ltd and also provides Company Secretarial
services for a number of other ASX listed companies and unlisted companies.
Principal activities
The Fund invests predominantly in securities listed on the ASX and investments that are likely to be listed on the ASX in the
future and Australian denominated cash. The Fund’s goal is to produce superior long-term returns from a selected number
of underlying investments, irrespective of short term price movements.
The Fund did not have any employees during the year.
There were no other significant changes in the nature of the Fund's activities during the year.
Units on Issue
Units on issue in the Fund at year end are set out below:
Units on issue
Options:
30 June 2019
Number of units
2,752,580
30 June 2018
Number of units
2,797,239
The Fund issued 1,221,594 Unlisted Options on 28 February 2018. The Options’ exercise price is $9.1521 expiring on 21
March 2020 being 24 months from the date that the Fund’s official quotation was completed on ASX.
14
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
(continued)
Review and results of operations:
During the year, the Fund continued to invest its funds in accordance with target asset allocations as set out in the governing
documents of the Fund and in accordance with the provisions of the Fund’s Consitutions.
The performance of the Fund, as represented by the results of its operations, was as follows:
30 June 2019 30 June 2018
$
$
Operating profit/(loss) before finance costs attributable to unitholders ($'000) (5,997)
94
Distributions
Distributions paid and payable
Distributions (dollar per unit)
Financial Position
nil nil
nil nil
As at 30 June 2019, the Fund's total assets amounted to $16,177,129 (30 June 2018: $22,673,724 ).
Net Tangible Assets (NTA) per unit as disclosed to the ASX, from the period of 01 July 2018
through to 30 June 2019 was, as follows:
xxx
At reporting period
High during period
Low during period
Management costs
30 June 2019
$
5.8099
7.8979
5.2443
The Fund’s history of management costs (ICR) is as follows:
Indirect Cost Ratio
Financial year
Lowell Resources Fund
2017
2.1%
2018
2.1%
2019
2.1%
15
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
(continued)
Meetings of directors
The numbers of meetings of the company's Board of Directors and of each board committee held during the year ended 30
June 2019, and the numbers of meetings attended by each director were:
Full Board
Audit Compliance &
Corporate Governance
Committee
Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
Michael Ramsden
Oliver Carton
Don Carroll
Remuneration Report (audited)
The remuneration report, which has been audited, outlines the key management personnel remuneration arrangements for
the consolidated entity in accordance with the requirements of the Corporations Act 2001 and its regulations. The Board
remains confident that its remuneration policy and the level and structure of its executive remuneration are suitable for the
company and its shareholders. No amount is paid by the Scheme directly to the Directors or key management personnel of
the Responsible Entity. Consequently, no compensation as defined in AASB 124 “Related Party Disclosures” is paid by the
Scheme to the Directors as Key Management Personnel.
Significant changes in state of affairs
On 5 October 2018, the Fund release an ASX announcement that on 21 August 2018 the Board of Cremorne Capital Ltd,
responsible entity of Lowell Resources Fund (ASX:LRT) approved a proposal to enable it to conduct an on-market unit buy-
back of up to 10% of LRT’s fully paid ordinary units for a period of 12 months commencing on 21 August 2018 (buy-back).
The buy-back will meet LRT’s previously stated aims of enhancing unitholder returns and capital efficiency, and maintaining
balance sheet flexibility to pursue future growth and investment opportunities. The buy-back will be funded by existing cash
balances and is not expected to negatively impact on LRT’s capacity to operate or to fund future investments. The maximum
number of Units that will be bought back (up to the 10% limit) is 237,342 which is based on the lowest number of units on
issue by LRT within the previous 12 months.
As at the end of this reporting period, there were 44,659 units bought back by the Fund.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Fund that
occurred during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect:
(i) the operations of the Fund in future financial years, or
(ii) the results of those operations in future financial years, or
(iii) the state of affairs of the Fund in future financial years.
16
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
(continued)
Likely developments and expected results of operations
The Fund will continue to be managed in accordance with the investment objectives and guidelines as set out in The
governing documents of the Fund and the provisions of the Fund's Constitution.
The results of the Fund's operations will be affected by a number of factors, including the performance of investment markets
in which the Fund invests. Investment performance is not guaranteed and future returns may differ from past returns.
As investment conditions change over time, past returns should not be used to predict future returns.
Indemnification and insurance of officers
No insurance premiums are paid for out of the assets of the Fund in regards to insurance cover provided to the offficers of
the RE (Cremorne Capital Limited) so long as the officers of the RE act in accordance with the Fund’s Constitution and the
Law, the officers remain indeminified out of the assets of the Fund against losses incurred while acting on behalf othe Fund.
Fees paid to and interests held in the Fund by the Responsible Entity and its associates
Fees paid to the Responsible Entity out of the Fund’s property during the year are disclosed in Note 9 to the financial
statements.
No fees were paid out of the Fund’s property to the Directors of the Responsible Entity during the year. The number of
interests in the Fund held by the Responsible Entity as at the end of the financial year are disclosed in Note 9 to the financial
statements.
Interests in the Fund
The movement in units on issue in the Fund during the year is disclosed in Note 6 to the financial statements. The value of
the Fund's assets and liabilities is disclosed in the Statement of Financial Position and derived using the basis set out in
Note 2 to the financial statements.
17
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2019
(continued)
Indemnification of auditor
The auditor of the Fund is in no way indemnified out of the assets of the Fund. The auditor had no financial or equity
interest in the Fund or was not issued any units by the Fund in the financial year.
Non-audit services
There has been provision of the following non-audit services during the financial year, by the Fund’s current Auditor, Nexia
Melbourne Audit Pty Ltd and also Nexia Melbourne Corporate Pty Ltd, a related party of the auditor. The provisions of these
services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The non-audit services performed by the auditor are disclosed in Note 8 to the financial statements.
Non-Audit Services
Compliance Plan
Total
30 June 2019
30 June 2018
$
$
4,850
4,850
5,100
5,100
The auditor's remuneration is borne by the Fund. Fees are stated exclusive of GST.
18
Lowell Resources Fund
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2019
Statement of Profit or Loss and Other Comprehensive Income
Income
Interest income
Dividends income
Net gain / (loss) on financial instruments held at fair value through
profit or loss
Other income
Net income / (loss)
Expenses
Management fees
Custodian fees
Performance fees
Auditor’s remuneration
Initial listing fees
Other operating expenses
Total expenses
Note
Year Ended
Year Ended
30 June 2019
30 June 2018
$
$
19,327
-
21,174
8,300
(5,280,542)
1,611,684
17,125
5,188
7
(5,244,090)
1,646,346
8
408,911
34,610
-
19,700
-
289,236
752,457
452,310
53,050
263,081
18,911
501,974
263,040
1,552,366
Operating profit / (loss)
(5,996,547)
93,980
Profit / (loss) for the period
(5,996,547)
93,980
Finance costs attributable to unitholders
(Increase) / decrease in net assets attributable to unitholders
5,996,547
(93,980)
Profit / (loss) for the period
Other comprehensive income
Total Comprehensive Income
-
-
-
-
-
-
Earnings per unit for profit attributable to unitholders of the Fund
Basic earnings per unit
Diluted earnings per unit
14
($2.155)
($2.155)
$0.037
$0.037
The above Statement of Profit or Loss and Other
Comprehensive Income should be read in conjunction with the accompanying notes.
21
Statement of Financial Position
Assets
Cash and cash equivalents
Trade and Other receivables
Lowell Resources Fund
Statement of Financial Position
For the year ended 30 June 2019
Note
Year Ended
Year Ended
30 June 2019
30 June 2018
$
$
11
3
802,380
645,893
2,165,460
12,264
Financial Assets held at fair value through profit or loss
2(b) & 4
14,728,856
20,496,000
Total Assets
Liabilities
Trade and Other payables
Total Liabilities (excluding net assets attributable to unitholders)
Net assets attributable to unitholders (liability)
16,177,129
22,673,724
5
6
184,898
184,898
478,511
478,511
15,992,231
22,195,213
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
22
Lowell Resources Fund
Statement of Changes in Net Assets Attributable to Unitholders
For the year ended 30 June 2019
Statement of Changes in Net Assets Attributable to Unitholders
Net Assets Attributable to
Unitholders
As at 30 June 2017
Increase / (decrease) in net assets attributable to unitolders
Distribution reinvested from unitholders
Applications for units
Cost of capital raising
Redemption of units
As at 30 June 2018
Increase / (decrease) in net assets attributable to unitolders
Distribution reinvested from unitholders
Applications for units
Cost of capital raising
Buy-backs of units
As at 30 June 2019
18,964,719
93,980
512,496
3,526,020
(196,771)
(705,231)
22,195,213
(5,996,547)
-
-
-
(206,435)
15,992,231
The above Statement of Changes in Net Assets Attributable to
Unitholders should be read in conjunction with the accompanying notes.
23
Statement of Cash Flows
Lowell Resources Fund
Statement of Cashflows
For the year ended 30 June 2019
Note
Year Ended
Year Ended
30 June 2019
30 June 2018
$
$
Cash flows from operating activities
Proceeds from sale of financial instruments held at fair value through profit
or loss
Payments of purchases of financial instruments held at fair value through
profit or loss
Distributions and dividends received
Interest received
Other income received
Payments of other operating expenses
6,671,969
6,442,622
(7,087,288)
(7,022,757)
-
26,207
2,000
8,300
14,663
5,188
(769,471)
(1,700,765)
Net cash inflow / (outflow) from operating activities
11(b)
(1,156,583)
(2,252,750)
Cash flows from investing activities
Proceeds from sale of securities
Payment for securities
Net cash inflow / (outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of units
Payments for redemption of units
Payments for buy-backs of units
Payments for distribution
Payments for cost of capital raising
Net cash inflow / (outflow) from financing activities
Net increase(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
-
-
-
-
-
-
-
-
3,534,258
(705,231)
(206,497)
-
-
-
(483,518)
(196,771)
(206,497)
2,148,738
(1,363,080)
(104,012)
2,165,460
2,269,472
Cash and cash equivalents at the end of the year
11(a)
802,380
2,165,460
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
24
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
Notes to the Financial Statements
Contents
1
2
3
4
5
6
7
8
9
General information
Summary of significant accounting policies
Trade and Other receivables
Financial Assets
Trade and Other payables
Net assets attributable to unitholders
Operating segment
Remuneration of auditors
Related parties transactions
10 Distributions to unitholders
11 Reconciliations of profit to net cash inflow/(outflow) from operating and financing activities
12 Financial risk management
13 Fair value measurement
14 Earnings per unit
15 Events occurring after the reporting period
16 Contingent assets and liabilities and commitments
Page
26
26
36
36
37
37
38
38
39
40
41
42
46
47
47
47
25
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
1 General information
These financial statements cover Lowell Resources Fund ('the Fund') as an individual entity.
The Fund is an Australian registered managed investment scheme under the Corporations Act 2001, which was constituted on
21st January 1986 and was admitted to the Australian Securities Exchange ('ASX') on 22nd March 2018.
The Responsible Entity of the Fund is Cremorne Capital Limited (ACN 006 844 588) (AFSL 241175), the Responsible Entity.
The Responsible Entity’s registered office is 8 Chapel Street, Cremorne, VIC 3121 and is incorporated and domiciled in Australia.
The Fund invests predominatly in securities listed on the ASX and investments that are likely to be listed on the ASX in the
future and Australian denominated cash. The Fund’s goal is to produce superior long-term returns from a selected number of
underlying investments, irrespective of short term price movements.
The financial staements of the Fund are for the year ended 30 June 2019. These statements are presented in Australian
currency. They were authorised for issue by the Directors on the date the Directors’ Declaration was signed.
The Directors of the Responsible Entity have the power to amend and reissue the financial statements.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below.These policies
have been consistently applied to all years presented, unless otherwise stated in the following text.
(a) Basis of preparation
These general purpose financial staements have been prepared in accordance with Australian Accounting Standards and
interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 in Australia.
The Fund is a for-profit unit trust for the purpose of preparing the financial statements.
The financial statements are prepared on the basis of fair value measurement of assets and liabiities except where otherwise
stated.
The Statement of Financial Position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of
liquidity and do not distinguish between current and non-current. All balances are expected to be recovered or settled within
twelve months, except for investments in fiancnial assets and net assets attributable to unitholders. The amount expected to be
recovered or settled within twleve months after the end of each reporting period cannot be reliably determined.
The finanical statements of the Fund also comply with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
26
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
None of the new standards and amendments to standards that are mandatory for first time for the financial year beginning
1 July 2018 affected any of the amounts recognised in the current period or any prior period.
(b) Financial instruments
In the current period, the Fund has adopted AASB 9 Financial Instruments from 1 July 2018. Comparative figures for the year
ended 30 June 2018 have not been restated. The financial instruments in the comparative period are still accounted for in
accordance with AASB 39 Financial Instruments: Recognition and Measurement. The Fund’s financial assets have been
measured at fair value through profit or loss historically which enables a smooth transition to the new AASB 9 and there is no
effect to the way of recognistion and measurement that the Fund applied in the past to the these assets.
(i) Classification
In accordance with AASB 9, the Fund classifies its financial assets and financial liabilities into the categories of financial
assets and financial liabilities discussed below. The Fund has not taken the option to irrevocably designate any if its
financial instruments as financial instruments held at fair value through other comprehensive income.
Financial assets held at fair value through profit or loss (FVTPL)
A financial asset is measured at fair value through profit or loss if:
- Its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI)
on the principal amount outstanding or
- It is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual
cash flows and sell or
- At initial recognition, it is irrevocably designated as measured at FVTPL when doing so eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases.
The Fund includes in this category financial instruments which are investments in other entities that are held under a business
model to manage them on a fair value basis for investment fair value gains.
Financial assets held at amortised cost
A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding. The Fund includes in this category short-term
non-financing receivables including cash, accrued income and other receivables.
27
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
Financial liabilities held at amortised cost
This category includes all financial liabilities, other than those measured at fair value through profit or loss. The Fund includes
in this category short-term payables only, the Fund did not have fixed rate bonds and debentures in the reporting year.
(ii) Recognition and derecognition
The Fund recognises financial assets and financial liabilities on the date it becomes a party to a contractual agreement (trade
date) and recognises changes in fair value of the financial assets or financial liabilities from this date. Purchases or sales of
financial assets that require delivery of assets within the time frame generally established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the Fund commits to purchase or sell the
asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or the Fund has
transferred substantially all risks and rewards of ownership. Financial liabilities are derecognised when the obligation under
liabilities are discharged.
(iii) Measurement
Financial instruments held at fair value through profit or loss (FVTPL)
At initial recognition, the Fund measures financial assets and financial liabilities at fair value. Transaction costs of financial assets
and financial liabilities carried at fair value through profit or loss are expensed in the Statement of Profit or Loss and Other
Comprehensive Income. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit
or loss are measured at fair value.
Gains and losses arising from changes in the fair value of the ‘financial assets or financial liabiities at fair value through profit or
loss’ category are presented in the Statement of Profit or Loss and Other Comprehensive Income within net gains/(losses) on
financial instruments held at fair value through profit or loss in the period in which they arise. Interest and dividends earned or
paid on these instruments are recorded separately in interest revenue or expense and dividend revenue or expense in the
statement of profit or loss and other comprehensive income. For further details on how the fair value of financial instruments is
determined, please see Note 13 to the financial statements.
28
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
Financial instruments measured at amortised cost
At initial recognition, the Fund measures such financial assets and financial liabilities at fair value and subsequently measure
them at their amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised, as well as through the amortisation process.
The effective interest method (EIR) is a method of calculating the amortised cost of a financial asset or a financial liability and
of allocating and recognising the interest income or interest expense in profit or loss over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the
financial asset or financial liability to the gross carrying amount of the financial asset or to the amortised cost of the financial
liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the
financial instruments, but does not consider expected credit losses. The calculation includes all fees paid or received between
parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
All the Fund’s financial assets and financial liabilities in this category settle within a short term of 3 months or less which the
present value discounting effect is immaterial to the amortised cost of these financial instruments, thus the Fund presented on
this reporting year’s financial report this category’s financial assets and financial liabilities at their amortised cost without the
present value effect mentioned above.
(v) Impairment of financial assets
The Fund holds only receivables with no financing component and which have maturities of less than 3 months at amortised
cost and most of the Fund’s receivables are trades’ proceeds settling within 2 days from the dates of trades, as such, the Fund
has chosen to apply an approach similar to the simplified approach for expected credit losses (ECL) under AASB 9 to all its
receivables. Therefore, the Fund does not track changes in credit risk and given the credit risk on such receivables are
immaterial and also there’s no history nor any future expectation of default or loss to the Fund regarding such receivables, there
is immaterial loss allowance based on lifetime ECLs in this reporting year to be recognised, the Fund however discloses in the
following paragraphs its ECL (Expected Credit Loss) approach regarding AASB 9 for the benefit of its unitholders.
.
29
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
The Fund assesses at each reporting date whether a financial asset or group of financial assets is impaired.
A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment
as a result of one or more events that have occurred after the initial recognition of the asset (an incurred loss event) and that
loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be
reliably estimated.
Evidence of impairment may include indications that the debtor, or a group of debtors, is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation and, where observable data indicate that there is a measurable decrease in the estimated future cash flows,
such as changes in arrears or economic conditions that correlate with defaults. If there is objective evidence that an impairment
loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future ECLs that have not yet been incurred) discounted using the
asset’s original EIR. The carrying amount of the asset is reduced through the use of an allowance account and the amount of
the loss is recognised in profit or loss as credit loss expense.
Impaired debts, together with the associated allowance, are written off when there is no realistic prospect of future recovery and
all collateral has been realised or has been transferred to the Fund. If a previous write-off is later recovered, the recovery is
credited to the credit loss expense.
Interest revenue on impaired financial assets is recognised using the rate of interest used to discount the future cash flows for
the purpose of measuring the impairment loss.
As stated in the first paragraph of the heading ‘impairment of financial assets’, there’s no historical, current nor expected future
credit loss from the Fund’s financial assets and thus the gross carrying amounts, after considering ECL explained above, reflect
the values required in the AASB 9 and also the disclosure requirements in AASB 7.
(iv) Offsetting financial instruments
The Fund did not offset nor any of its financial assets are financial liabilities were subject to any offsetting arrangements in this
reporting year and as at the end of the reporting period, there are no financial assets or liabilities offset or which could be offset
in the Statement of Financial Position thus no tabular or other forms of presentaton of such information is provided in this report.
30
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
(vi) Fair value measurement
For the Fund’s financial instruments measured at fair value, fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either
in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market
for the asset or liability. The principal or the most advantageous market must be accessible to the Fund. The fair value of
an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial
asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and
best use or by selling it to another market participant that would use the asset in its highest and best use. The fair value
for financial instruments traded in active markets at the reporting date is based on their quoted price (bid price for long
positions and ask price for short positions), without any deduction for transaction costs.
AASB 13 Fair Value Measurement specifies that the existence of published price quotations in an active market is the
best evidence of fair value and, when they are available, they are used to measure fair value. This accounting standard
defines an active market as a market in which transactions for the asset or liability take place with sufficient frequency
and volume to provide pricing information on an ongoing basis. The quoted price from an active market cannot be
adjusted for transaction costs or the size of the holding, according to AASB 13 and it further specifies that, if an asset or
a liability measured at fair value has a bid price and an ask price (e.g., an input from a dealer market), the price within
the bid-ask spread that is most representative of fair value in the circumstances must be used to measure fair value
regardless of where the input is categorised within the fair value hierarchy. The use of bid prices for asset positions and
ask prices for liability positions is permitted, but not required.
For all other financial instruments not traded in an active market, the fair value is determined using valuation techniques
deemed to be appropriate in the circumstances. Valuation techniques include the market approach (i.e., using recent
arm’s length market transactions, adjusted as necessary, and reference to the current market value of another instrument
that is substantially the same) and the income approach (i.e., discounted cash flow analysis and option pricing models
making as much use of available and supportable market data as possible)
31
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
(c) Revenue
The Fund adopted AASB 15 Revenue from contracts with customers on its effective date of 1 July 2018. This new revenue
standard replaces a number of previous revenue standards, for example AASB 18 Revenue and establishes a five-step
model to account for revenue arising from contracts with customers. In addition, guidance on interest and dividend income
have been moved from AASB 18 to AASB 9 without significant changes to the requirements. Therefore, there was no
impact of adopting AASB 15 for the Fund. The Fund did not have a customer to provide services or sell goods to in this
reporting year. The other income earned by the Fund was from its activities of collaborating with brokers’ placements
contracts in which no services nor goods were provided by the Fund, thus AASB 15 would not apply to these other income.
The revenue earned by the Fund during the last financial year ended 30 June 2018 was for contracts with no financing
components that were all settled (‘completed’ per AASB 15’s defined ‘completed contracts’) during the last reporting year
and thus this AASB 15 does not need to be applied to those revenue of the Fund and the Fund assessed that the
application of this new accounting standard has no effect to both the past and current reporting years’ revenue. The
contracts’ transaction prices and consideration were all matched to the actual revenue cash proceeds received by the
Fund and the amounts of such revenue generated from such contracts in both the reporting years above are also
immaterial compared to the total revenue earned in these two years or compared with the gross or net asset values of
the Fund. Given the immaterial amount of the revenue, the Fund did not present a disaggregated revenue table, but
disclosed such income on the Statement of Profit or Loss and Other Comprehensive Income.
The Fund had no unconditional receivables from customers, conditional contracts receivable nor payable in this reporting
year and therefore has no contract assets nor contract liabilities defined under AASB 15. The receivables presented on
this year’s Statement of Financial Position are financial instruments covered under AASB 9 and 7, they were not a contract
of the AASB 15’s type with ‘customers’ because those contracts were for disposal of financial instruments, not for the
Fund selling goods or providing services, to a customer under AASB 15. The Fund has no unfulfilled contract obligation
nor has it to apply any significant judgement in fulfilling the contract regarding the immaterial amount of revenue covered
under AAAB 15.
32
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
(d) Net assets attributable to unitholders
The Fund’s units on issue in the ASX market are carried at their redemption amounts and presented as financial liabilities
that are payable at the reporting year end if the holders exercise their rights to put the units back to the Fund. The Fund
is a closed-end Fund and is not subject to applications and redemptions.
(e) Cash and Cash Equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, deposits
held at call with financial institutions and other shor term and highly liquid investments with original maturities of three months
or less from the date of acquisition that are readily convertible to known amounts of cash and which are subject to an
insignificant rish of changes in value.
(f) Investment Income
Purchase and sale of financial instruments have been catogorised as cashflow from operating activities and net gain or loss
on financial assets and liabilities measured at fair value through profit or loss (FVTPL) are presented on the Statement
of Profit or Loss and Other Comprehensive Income. Such net gains or losses include both realised and unrealized gains
and losses. Realised gains and losses on disposals of financial instruments classified as at FVTPL are calculated using
the minimum capital gain tax methodology being one of the methods permitted by the Australian Taxation Office. They
represent the difference between an instrument’s initial carrying amount plus or minus any adjustment to the cost base
of such asset and the disposal’s proceeds amount. Unrealised gains and losses comprise changes in the fair value of
financial instruments for the reporting year. A separate disclosure of realised and unrealised gains or losses from financial
instruments classified as at FVTPL is not required by AASB accounting standards.
Interest income on cash and cash equivalents is recognised in the Statement of Profit or Loss and Other Comprehensive
Income on an accrual basis. There is no interest income recognised on any of the Fund’s financial assets measured at
amortised cost, thus separate presentation of such items’ effective interest income under AASB 9 and AASB 7 is not applicable
to this reporting year.
Dividend income is recognised on the date of payments. The Fund did not incur withholding tax imposed by foreign countries
on investment income. All income is recorded gross of withholding tax in the Statement of Profit or Loss and Other
Comprehensive Income. Trust distributions are recognised on an entitlement basis.
Other income is recognised on an accruals basis.
(g) Expenses
All expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income on an accruals basis.
33
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
(h) Income Tax
Under current legislation, the Fund is not subject to income tax as unitholders are presently entitled to the income of the
Fund. Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised, that
portion of the gain that is subject to capital gains tax will be distributed so that the Fund is not subject to capital gains tax.
Realised losses are not distributed to unitholders but are retained in the Fund to be offset against any
future
realised
capital gains. If realised capital gains exceed realised losses, the excess is distributed to the unitholders.
The benefits of any imputation credits and foreign tax paid are passed on to unitholders.
(i) Distributions
The Fund distributes its distributable income annually in accordance with the Fund's Constitution, to unitholders by cash or
reinvestment. The distributions are recognised in the Statement of profit or loss and other comprehensive Income as finance
costs attributable to unitholders per AASB 132.
(j) Increase / Decrease In Net Assets Attributable To Unitholders
Income not distributed is included in net assets attributable to unitholders. Movments in net assets attributalbe to unithodlers
are recognised in the Statement of Profit or Loss and Other Comprehensive Income as finance costs.
(k) Trade and Other Receivables
Trade and Other Receivables may include amounts for interest and trust distributions. Trust distributions are accrued when
the right to receive payment is established. Where applicable, interest is accrued on a daily basis. Amounts are generally
received within 14 days of being recorded as receivables. Receivables also include such items as Reduced Input Tax Credits
(RITC). Collectability of receivables is reviewed on an ongoing basis.
Receivables which are known to be uncollectable are written off by reducing the carrying amount directly and any of such
amount of the impairment loss is recognised in the Statement of Profit or Loss and Other Comprehensive Income with other
expenses. Subsequent recoveries of amounts previously written off are credited against other expenses in the Statement of
Profit or Loss and Other Comprehensive Income.
(l) Trade and Other Payables
Payables include liabilities and accrued expenses owed by the Fund which are unpaid as at the end of the reporting period.
As the Fund has a contractual obligation to distribute its distributable income, a separate distribution payable is recognised
in the Statement of Financial Position as at the end of each reporting period where this amout remains unpaid as the end of
the reporting period.
34
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
2 Summary of significant accounting policies (continued)
(m) Goods and Services Tax (GST)
The GST incurred on the costs of various services provided to the Fund by third parties such as investment management
fees have been passed onto the Fund. The Fund qualifies for Reduced Input Tax Credits (RITC) at a rate of at least 55%;
hence investment management fees and other expenses have been recognised in the Statement of Profit or Loss and Other
Comprehensive Income net of the amount of GST recoverable from the Australian Taxation Office (ATO). Accounts payable
are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the Statement of
Financial Position. Cash flows relating to GST are included in the Statement of Cash Flows on a gross basis.
(n) Use Of Estimates
The Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities within the current and
next financial year. Estimates are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. For the majority of the Fund's
financial instruments, quoted market prices are readily available.
For more information on how fair value is calculated please refer to Note 13 to the financial statements.
(o) Comparative Revisions
Comparative information has been revised where appropriate to enhance comparability. Where necessary, comparative
figures have been adjusted to conform with changes in presentation in the current year.
(p) New Accounting Standards For Applications In Future Periods
The AASB has issued a number of new and amended Accounting Standards that have mandatory application dates for
future reporting periods and the Fund has adopted the relevant standards. The responsible entity of the Fund has decided
not to early adopt any of the new and amended pronouncements relevant to the Fund. There was no such standard known
to the responsible entity that would be relevant and applicable to the Fundt applicable in the foreseable future reporting
periods.
35
3 Trade and other receivables
Interest receivable
Goods and services tax recoverable
Dues from brokers on sale of investments to be settled
Refundable tax offset receivable
Total
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
30 June 2019
30 June 2018
$
-
4,498
626,270
15,125
645,893
$
6,880
5,384
-
-
12,264
The Fund has no significant concentration of credit risk with respect to any party other than those receivables specifically
provided for and, if any provision is made, mentioned within Note 12. The main source of credit risk is considered to relate to
sale of investments to be settled.
On a geographic basis, the Funds credit risk exposures are limited to Australia as all investments are settled within Australia.
All balances of receivables are within initial terms and are considered to be of high credit quality. The fund does not hold any
financial assets whose terms have been renegotiated, but which would otherwise be past due or impaired. No collateral is
held as security for any of the trade and other receivable balances.
4 Financial assets and financial liabilities held at fair value through profit or loss
Financial assets held at fair value through profit or loss:
-
Listed equity stocks
- Unlisted equity stocks
14,119,837
17,241,319
609,019
3,254,681
Total financial assets held at fair value through profit or loss
14,728,856
20,496,000
The Fund does not have debt instruments nor any derivatives from its financial instruments in this reporting year.
The Fund does not have an assossicate or a subsidiary and it has no invesments in such entities under AASB 9 and 7.
The Fund did not reclassify nor designated any of its financial instruments in this reporting year.
36
5 Trade and other payables
Other unsecured payables and accrued expenses
Dues owed to brokers on purchase of investments to be settled
Management Fees Payable
Distribution Payable
Accrued Performance Fee
Total
6 Net assets attributable to unitholders
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
30 June 2019
30 June 2018
$
$
44,434
104,400
36,064
-
-
59,445
376,515
41,991
-
560
184,898
478,511
Movements in the number of units and net assets attributable to unitholders during the year were as follows:
(a) Movements in net assets attributable to unit holders
At beginning of the year
Units issued during the year
Cost of capital raising during the year
Units redeemed during the year
Units bought back during the year
22,195,213
18,964,719
-
-
-
(206,435)
3,526,020
(196,771)
(705,231)
-
(Increase) / decrease in net assets attributable to unitholders
(5,996,547)
93,980
Distribution reinvestment from unitholders
Distributions payable
-
-
512,496
-
Closing balance of net assets attributable to unit holders
15,992,231
22,195,213
(b) Movements in number of units
On issue at beginning of the year
Units reinvested
Units issued during the year
Units redeemed during the year
Units bought back during the year
On issue at year end
2,797,239
2,391,279
-
-
-
(44,659)
64,468
423,797
(82,305)
-
2,752,580
2,797,239
As stipulated within the Fund's Constitution, each unit represents a right to an individual unit in the Fund and does not
extend to a right to the underlying assets of the Fund. There are no separate classes of units and each unit has the same
rights attaching to it as all other units of the Fund.
37
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
6 Net assets attributable to unitholders (continued)
Capital risk management
The Fund classifies its net assets attributable to unitholders as a financial liability. Generally the Fund's strategy is to hold
liquid investments. Liquid assets include cash and cash equivalents and listed investments.The Fund is a closed-ended
Fund during the period and is not subject to applications and redemptions.The movements in the number of units were as
a result of applications and redemptions processed prior to the Fund becoming closed-ended and additional units being
allotted under the dividend reinvestment plan.
7 Operating Segments
The operation of the fund is solely from Australia, the Fund has exposure to various resources’ sectors as follows:
COUNTRY
2019
2018
2019
2018
INCOME
ASSETS
Australia
Canada
UK
Total
$
$
$
$
5,244,090
1,646,346
12,912,397
17,867,976
-
-
-
-
1,479,775
2,260,724
336,683
367,300
5,244,090
1,646,346
14,728,856
20,496,000
The Fund has only one reportable segment. The Fund operates predominantly in Australia and is engaged solely in
investment activities, deriving revenue from dividend and distribution income, interest income and from the sale of its
investment portfolio.
8 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the Fund’s Auditor (Nexia Melbourne Audit
Pty Ltd) and Nexia Melbourne Corporate Pty Ltd, a related party of the Auditor:
Audit Services
Half-year Review and Annual Audit of the financial report
Total
Non-Audit Services
Compliance Plan
Investigative Accountant’s report
Total
30 June 2019
30 June 2018
$
$
15,250
15,250
4,850
-
4,850
13,811
13,811
5,100
15,000
20,100
The auditor's remuneration is borne by the Fund. Fees are stated exclusive of GST.
38
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
9 Related party transactions
The Responsible Entity of the Fund is Cremorne Capital Limited (ACN 006 844 588) (AFSL 241175) (the ‘Responsible
Entity'). The Responsible Entity's registered office is 8 Chapel Street, Cremorne, VIC 3121.
The Responsible Entity has contracted services to Lowell Resources Funds Management Limited to act as Investment
Manager for the Fund, Equity Trustees Limited acts as Custodian for the Fund. The contracts are on normal commercial
terms and conditions.
(a) Key Management Personnel
Key management personnel include persons who were Directors of the Responsible Entity at any time during or since the
end of the financial year up to the date of this report.
The following persons held office as Directors of Cremorne Capital Limited from 1 July 2018 to 30 June 2019:
Michel Ramsden
Oliver Carton
Don Carroll
(b) Other key management personnel
There were no other persons with responsibility for planning, directing and controlling the activities of the Fund, directly or
indirectly during the financial year.
(c) Transactions with the Responsible Entity and the key management personnel
Transactions with the Responsible Entity have taken place at arms length and in the ordinary course of business.
Investment management fees of $408,911 (2018: $452,310) were paid to the Responsible Entity in accordance with the
constitution at 2.1% per annum (2018: 2.1%) of the total cash and investment portfolio of the Fund assessed and payable
on a monthly basis.
(d) Key management personnel loans
The Fund has not made, gauranteed or secured, directly or indirectly, any loans to key management personnel or their
personally related entitites at any time during the reporting period.
(e) Other transactions within the Fund
Apart from those details disclosed in this note, no key management personnel have entered into a material contract with
the Fund during the year and there were no material contracts involving key management personnel’s interests existing at
year end.
39
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
9 Related party transactions (continued)
(f) Related party unitholdings
Parties related to the Fund held units in the Fund as follows:
Units held
Interest
Units
Units
Units held
(opening
held
acquired
disposed
(closing
balance)
(%)
balance)
6,010
-
-
-
6,010
30 June 2019
Equitas Nominees Pty Ltd
*
* Equitas Nominees Pty Ltd is a nominee for Ormley Pty Ltd, the trustee of Andrew Ramsden Super Fund.
Michael Ramsden is a Director of Ormley Pty Ltd.
* Lowell Resources Funds Management Limited is the Investment Manager of the Fund, it has no control / significant
influence nor providing any key management personnel services to the Fund, thus it is not classified as a related party of
the Fund under AASB 24.
30 June 2018
Ormley Pty Ltd
-
-
-
-
-
* Michael Ramsden is a Director of Ormley Pty Ltd as trustee for Andrew Ramsden Super Fund.
(g) Investments
The Fund did not hold any investments in Cremorne Capital Limited (The Responsible Entity) during the reporing year.
10 Distributions to unitholders
The distributions declared during the year were as follows:
Distributions paid or payable
Nil
Nil
Nil
Nil
30 June 2019
30 June 2018
$ Total
$Per Unit
$Total
$Per Unit
40
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
11 Reconciliation of profit to net cash inflow / (outflow) from operating and financing
activities
(a) Reconciliation of cash and cash equivalents
Cash
Deposits at call
Total cash and cash equivalents
30 June 2019
30 June 2018
$
802,380
-
802,380
$
915,460
1,250,000
2,165,460
(b) Reconciliation of net income attributable to unitholders for period to net cash provided by operating activities
Profit / (loss) for the period
Net (gains)/losses on financial instruments held at fair
value through profit or loss
Changes in net assets:
(Increase)/decrease in financial instruments held at fair
value through profit or loss
(Increase)/decrease in receivables
Increase/(decrease) in creditors and accruals
Net cash used in operating activities
(5,996,547)
5,773,640
(6,495)
(633,629)
(293,552)
(1,156,583)
93,980
(1,611,685)
(580,136)
(696)
(154,213)
(2,252,750)
41
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
12 Financial risk management
The Fund’s activities expose it to a variety of financial risks: market risk (including price risk and interest rate risk), credit
risk and liquidity risk. All securities investments present a risk of loss of capital. The maximum loss of capital on long equity
is limited to the fair value of those positions.
Financial risk management is carried out by the investment management team at Lowell Resources Funds Management
Limited, the Investment Manager of the Fund.
Lowell Resources Funds Management Limited is aware of the risks associated with the business of investment
management. A financial risk management framework has been established within the Investment Manager which
incorporates a regular assessment process to ensure that procedures and controls adequately manage the risks arising
from current business activities.
The Responsible Entity also has in place a framework to identify, control, report and manage compliance and business
obligations, and to ensure that the interests of unitholders in the Fund are protected.
This framework includes:
Policies and procedures;
Committee and board reporting;
Staff training;
Formal service provider agreements;
Compliance reporting by the Investment Manager, Investment Administrator and Custodian (the "Service Providers”);
Regular reviews of Service Providers; and
Monitoring of Responsible Entity Services compliance in accordance with Risk and Control Self-Assessment
methodology.
The Responsible Entity is ultimately responsible for compliance monitoring. The Responsible Entity undertakes monitoring
reviews of the Fund’s operations and performance, focusing on the general control environment and investment
management, administration and custodial functions as provided to the Responsible Entity of the Fund. The Fund uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of market risk and ratings analysis for credit risk.
(a) Credit risk management
Credit risk represents the risk that would be recognised if counterparties failed to perform as contracted. The Fund does not
have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics, except for its investments as disclosed in Note 12 and the cash held in the bank.
The carrying amount of financial assets recorded in the financial statements represents the Fund’s maximum exposure to
credit risk.
(b) Liquidity Risk
Liquidity risk is the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities. This
risk is controlled through the Fund’s investment in financial instruments, which under normal market conditions are readily
convertible to cash. In addition, the Fund maintains sufficient cash and cash equivalents to meet normal operating
requirements. Under the terms of it’s Constitution, the Fund has the ability to manage liquidity risk by delaying redemptions
to unit holders, if necessary, until the funds are available to pay them.
42
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
12 Financial risk management (continued)
Maturity analysis for financial liabilities
The following table details the Fund’s expected maturity for its non-derivative financial assets and liabilities. The table has
been drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. The inclusion of
information on non-derivative financial assets and liabilities is necessary in order to understand the Fund’s liquidity risk
management as the liquidity is managed on a net asset and liability basis.
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2019
$
2018
$
2019
$
2018
$
2019
$
2018
$
2019
$
2018
$
Financial liabilities
due for payment
Trade and other payable
Amounts payables
to related parties
Total expected outflow
Financial assets –
cashflows realisable
148,834
436,521
36,064
41,991
184,898
478,512
Cash and cash equivalents
802,380
2,165,460
Trade and other receivables
645,893
-
Total anticipated inflows
1,448,273
2,165,460
Net (outflow)/inflow
on financial instruments
1,263,375
1,686,949
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
148,834
436,521
36,064
41,991
184,898
478,512
802,380
2,165,460
645,893
-
1,448,273
2,165,460
1,263,375
1,686,949
None of the above items had any financing components and all of them are either cash or readily convertible to cash within
or less than 3 months from the end of this reporting year, thus they were all stated at their amortised cost without discounting
their cash flows.
Net assets attributable to unit holders are entirely payable on demand.
(c) Market Risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market
variables such as interest rates, foreign exchange rates, and equity prices. Market risk is managed and monitored using
sensitivity analysis, and minimised through ensuring that all investment activities are undertaken in accordance with
established mandate limits and investment strategies.
43
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
12 Financial risk management (continued)
(c) Market Risk (continued)
Interest rate risk management
30 June 2019
Financial Assets
Cash & Equivalents
Listed & Unlisted Equities
Trade and Other Receivables
Financial Liabilities
Trade and Other Payable
Weighted
Average Int Rate
Variable Int.
Rate
Non-Interest
Bearing
Total
(% p.a.)
$’000
$’000
$’000
0.99%
-
-
-
802
-
-
802
-
-
-
14,729
646
15,375
185
185
802
14,729
646
16,177
185
185
30 June 2018
Weighted
Average Int Rate
Variable Int.
Rate
Non-Interest
Bearing
Total
Financial Assets
Cash & Equivalents
Listed & Unlisted Equities
Trade and Other Receivables
Financial Liabilities
Trade and Other Payable
(d) Currency Risk
(% p.a.)
1.90%
-
-
-
$’000
2,165
-
-
2,165
-
-
$’000
$’000
-
20,496
12
20,508
479
479
2,165
20,496
12
22,673
479
479
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign
exchange rates. The table below indicates the currencies to which the Fund had significant exposure at 30 June 2019 on its
monetary assets and liabilities and forecast cash flows. The analysis calculates the effect of a reasonably possible movement
of the currency rate against the Australian Dollar on the statement of profit or loss and other comprehensive income, with all
other variables held constant.
30 June 2019
Currency
CAD
GBP
Total
30 June 2018
Currency
CAD
GBP
Total
AUD Equivalent in
exposure by
currency
$’000
1,480
337
1,817
Change in
currency rate in %
Effect on net assets
attributed to
unitholders
6/(6)
2/(2)
$’000
88/(88)
6/ ( 6)
94/(94)
AUD Equivalent in
exposure by
currency
Change in
currency rate in %
Effect on net assets
attributed to
unitholders
2/(2)
5/(5)
$’000
50/(50)
17/(17)
67/(67)
$’000
2,261
367
2,628
44
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
12 Financial risk management (continued)
(e) Equity Price Risk
Equity price risk is the risk that the fair value of equities decreases as a result of changes in market prices, whether those
changes are caused by factors specific to the individual stock or factors affecting all instruments in the market. Equity price
risk exposure arises from the Fund’s investment portfolio.
The effect on net assets attributable to unit holders and operating profit before distribution due to reasonably possible changes
in market factors, as represented by the equity indices, with all other variables held constant is indicated in the table below.
30 June 2019
Index
Change in
Effect on net profit
ASX All Ords
S&P/TSX Composite
Unlisted Equities
equity price %
20/(20)
20/(20)
20/(20)
attributable to
unitholders
$’000
409/(409)
60/(60)
20/(20)
30 June 2018
Currency
Change in
Effect on net profit
ASX All Ords
S&P/TSX Composite
Unlisted Equities
equity price %
20/(20)
20/(20)
25/(25)
attributable to
unitholders
$’000
2,923/(2,923)
526/(526)
814/(814)
45
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
13 Fair value of financial assets and liabilities
Fair value measurement applied in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
-
-
-
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for indentical
assets or liabilities.
Level 2 fair value measurements are those derived from inputs other quoted prices within Level 1 that are observable
for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for assets or liability
that are not based on observable market data (unobservable inputs).
2019
$
Level 1
13,926,811
193,026
Financial assets held at fair value
through profit or loss
Shares in listed entities
Options in listed entities
Warrants in listed entities
Shares in unlisted entities
Total
14,119,837
There were no transfer between Level 1 and 2 in the period.
There were transfers from Level 2 to Level 3 in the period.
2019
$
Level 2
2019
$
Level 3
609,015
609,015
4
4
Level 3 valuations are reviewed on a weekly basis by the Fund’s valuation committee. The committee considers the
appropriateness of the valuation model inputs within the resources obtainable without undue cost to the Fund.
The Level 3 equity that amounts to $4 consists of two unlisted private equity positions. There was no obtainable financial
information without undue costs to the Fund at the time of this valuation of these Level 3’s stocks. The Fund’s Investment
Committee (the IC)’s effort to gain access to comparative information from other similar entities was not successful. One of
these two investees is in the process of liquidation and indication information from the entity’s liquidator showed that this
investee entity would not be able to return any of the originally invested funds to its shareholders, the IC thus revalued these
stocks down to $3, the actual and estimated return of funds at the time of the valuation of these stocks could not be reliably
estimated. The other investee entity’s stocks were revalued down to $1 by the IC on the basis that the management personnel
could not be reached and no information / update of this investee entity could be obtained through the resources available to
the IC.
46
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2019
(continued)
14 Earnings per unit
Basic earnings per unit amounts are calculated by dividing net profit/(loss) attributable to unitholders before distributions by
the weighted average number of units outstanding during the year.
Diluted earnings per unit are the same as basic earnings per unit.
30 June 2019
30 June 2018
Profit / (loss) attributable to unitholders
($5,996,547)
Weighted average number of units in issue 2,783,019
$93,980
2,797,239
Basic and diluted earnings / (losses) per unit in dollars
($2.155)
$0.037
15 Events occurring after the reporting period
No significant events have occurred since the end of the year which would impact on the financial position of the Fund as
disclosed in the Statement of Financial Position as at 30 June 2019 or on the results and cash flows of the Fund for the year
ended on that date.
16 Contingent assets and liabilities and commitments
There are no contingent assets, liabilities or commitments as at 30 June 2019 and 30 June 2018.
47
Lowell Resources Fund
Unitholder and Other Information
For the year ended 30 June 2019
The information set out below was applicable as at 30 June 2019.
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report, is listed below:
Unitholders’ range
Analysis of numbers of unitholders by size of holding:
Size of holding
Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
Number of
unitholders
Number of
units
% of units
issued
75
22,404
345
104
791,719
722,861
66 1,215,596
0
0
0.81%
28.76%
26.26%
44.16%
0.00%
590 2,752,580
100.00%
The unitholders’ registry showed no unitholders holding less than a marketable parcel of $500 worth of units .
Largest unitholders
The names of the twenty largest holders of quoted units are listed below:
Position
Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MR & MRS MARTIN & JANE HICKLING
TIZIMA PTY LTD
LOWELL PTY LTD
MR JOHN BUCKHAM
LIC INVESTMENTS PTY LTD
FN NASSER PROVIDENT FUND
MR LUC GA DEFOSSEZ
NJUU PTY LTD
MR & MRS GABRIEL & MARIE SAVANNAH
D MOTTA & J MOTTA
UNICARE TRADING NOMINEES PTY
MRS ENG B E HEAH
CONSOLIDATED FINANCIAL SOLUTIONS PTY LTD
KMS PTY LTD
MR HOLT HUTTON
MR BERNARD PATRICK DEAN
MRS BRONWYN M MEPSTEAD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
FELSKAY PTY LTD
MS NERIDA JANICE DEVEREUX
Total
53
Holding
% IC
95,023
3.45%
68,580
2.49%
53,309
1.94%
49,184
1.79%
47,363
1.72%
36,378
1.32%
29,103
1.06%
28,656
1.04%
28,600
1.04%
25,729
0.93%
23,754
0.86%
23,665
0.86%
21,808
0.79%
21,220
0.77%
20,340
0.74%
20,042
0.73%
17,845
0.65%
17,832
0.65%
16,728
0.61%
16,299
0.59%
661,458
24.03%
Lowell Resources Fund
Unitholder and Other Information
For the year ended 30 June 2019
Substantial holders
There are no substantial unitholders as at 30 June 2019.
Voting rights
Voting rights which may attach to or be imposed on any unit or class of units is as follows:
(a) On a show of hands every unitholder present will have 1 vote; and
(b) On a poll every unitholder present will have 1 vote for each unit that they have in the Fund.
Investment Transactions
The total number of contract notes that were issued for transactions in securities during the financial year was 271.
Each investment transaction may involve multiple contract notes.
The total brokerage paid on these contract notes was $50,818.
Stock Exchange Listing
The Fund's units are listed on the Australian Securities Exchange and are traded under the code "LRT".
Unquoted Units
There are no unquoted units on issue.
Voluntary Escrow
There are no restricted units in the Fund or units subject to voluntary escrow.
On-Market Buy-Back
There was an on-market buy-back arrangement.
Registered Office of the Responsible Entity
Cremorne Capital Limited
8 Chapel Street
Cremorne VIC 3121
Telephone: 03 8295 8100
Unit Registry
Name:
Address:
Automic Registry Services
Level 5, 126 Phillip Street
Sydney NSW 2000
Phone (inside Australia): 1300 288 664
Phone (outside Australia) :+61 2 9698 5414
Email:
Website
hello@automic.com.au
www.automic.com.au
54