Lowell Resources Fund (ASX: LRT)
ARSN 093 363 896
Appendix 4E
For the year ended 30 June 2023
Results for announcement to the market
Net assets attributable to unitholders
Revenues from
continuing operations
Profit for the year
Earnings per unit
Earnings per unit
Dilluted earnings per unit
30 June 2023
30 June 2022
Increase / (Decrease)
$’000
$’000
at the end of the
44,285
1,621
59
43,557
4,185
558
reporting year
1.67%
(61.27%)
(89.48%)
30 June 2023
30 June 2022
$0.002
$0.002
$0.019
$0.019
Brief explanation of results
LRT’s portfolio net asset value per unit ended the year at $1.4030 per unit (post distribution),
LRT’s portfolio net asset value (‘NAV’) per unit ended the year at $1.4030 per unit (post distribution), a slight drop on the
2022 post distribution NAV of $1.4840 per unit.
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 2023 was $58,722. This compares to a net accounting profit of
$558,416 for the year ended 30 June 2022.
As at 30 June 2023, the net assets of the Fund were $44,285,267. This compares to net assets of $43,556,547 for the
year ended 30 June 2022.
During the 2022-23 financial year, the Lowell Resources Fund (‘LRT’ or ‘the Fund’) was impacted by rising interest rates in
western economies, as central banks wrestled with skyrocketing inflation. Inflation, which had been kick started by ultra low
interest rates during Covid, was spurred along by high energy prices related in part to the Ukraine war, as well as low
unemployment and high freight costs. Rising interest rates have particularly impacted growth sectors such as mineral
exploration stocks which are the focus of the Fund. High interest rates also presented a head-wind for precious metals such
as gold, a key commodity target for junior explorers. However, as we entered the new financial year, it may be that the
interest rate hike cycle is close to an end, with inflation rates falling in many western economies. Energy prices such as
crude oil have also been moderating, to the extent that OPEC+ (primarily Saudi Arabia and Russia) have announced a
number of production cuts to support the price.
1
The Chinese economy, the other major driver of resources markets, was last out of Covid lockdowns, but the expected
rebound in economic activity and Chinese demand has been muted. Monetary stimulus measures in China have been less
than anticipated, albeit interest rates have been reduced (in stark contrast to most western economies). China’s economy
was on the verge of deflation at the end of the financial year. As a result commodities where China is key to demand such
as iron ore and base metals such as copper and zinc are well below their highs.
The bright spot in commodity prices has been lithium, which has been strong but volatile, with prices peaking at all time
highs in November 2022. NEV sales in China jumped by 60% year-on-year in May 2023, extending the 110% surge in April
and marking nearly one-third of the market share, erasing concerns about poor demand levels at the start of the year.
Battery metals, primarily lithium, became the Fund’s second largest exposure by commodity group.
Gold, while reduced as a proportion of the Fund’s commodity exposure, remained the largest exposure by project commodity.
The US dollar gold price was up around US$100/oz over the financial year, but the equity markets saw a divergence between
rising share prices for larger producers against continued falls for the junior exploration sector. Copper recovered slightly
over the year, although dwindling exchange stockpiles and forecast mid-term shortages would justify a significantly higher
price.
The best performing commodities over the 12 months included bauxite (up over 40% due to Indonesia export restrictions)
and uranium (up over 10% due to restricted supply from major producers Kazatomprom and Cameco, the SPUT fund buying
on market and fresh contracting by utility company offtakers).
“Critical minerals” grew in prominence, although the definition remains variable. China’s dominance of the rare earth supply-
side sees REE’s included in almost every critical mineral list. Interestingly, the price of Nd/Pr fell by around 50% during the
financial year, yet share prices of ASX companies focused on REE’s were up on average by over 100%.
Distribution information
As at 30 June 2023, the Fund had a distributable income of $2,234,010 for distribution.
Distribution Reinvestment Plan
Distribution Reinvestment Plan (DRP)’s Terms and Conditions provides that:
•
•
•
•
•
•
participation is entirely optional;
unitholders may 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 price calculated by the responsible entity in accorance
with the Fund’s DRP terms and conditions;
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 2023
Net tangible assets per security
$1.4030
30 June 2022
$1.4840
2
Lowell Resources Fund
Appendix 4E
For the year ended 30 June 2023
(continued)
Other information
There was no gain or loss of control of entities during the reporting period.
The Fund does not have associates or joint venture entities during the reporting period.
There was a Rights Issue in September 2022.
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
8 August 2023
3
Lowell Resources Fund
ARSN 093 363 896
Annual Report
For the year ended 30 June 2023
4
Lowell Resources Fund
ARSN 093 363 896
Annual Report
For the year ended 30 June 2023
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
6
8
14
20
21
22
23
24
25
46
47
51
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
5
Lowell Resources Fund
Investment Manager’s Report
For the year ended 30 June 2023
Investment Manager's Report
Lowell Resources Fund (LRT) is managed by Lowell Resources Funds Management Limited (LRFM), which has fulfilled 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 Lowell Resources Fund was subject to more difficult conditions in its focus market of junior resource companies in FY2023.
Over the 12 months of FY2023, the change in Net Asset Value of the Fund (‘NAV’ which is the value of the shareholdings and
cash held by LRT) fell by 7.9%, inclusive of distributions. For example, the larger (>$76m market cap) ASX listed resources
companies were up on average 52.5% for the financial year, the micro cap companies (<$8m) in the sector fell by 32%. Over
the longer term, Fund performance has been extremely strong. The LRT Change in NAV per unit incl distributions over 5 years
to 30 June 2023 has been 16.5%pa.
The Fund’s largest commodity exposure remained to gold at 31% (including PGMs), but was down from 50% the previous year.
This was primarily due to exits from some highly successful gold investments in De Grey Mining and Genesis Minerals, which
had grown from junior gold explorers to mid-cap developers/miners. Exposure to battery minerals (mainly lithium) grew from
6.5% to 24% over the year, due to the success of Azure Minerals and other investments. Base metals (not including nickel)
exposure was 18% at 30 June 2023, while nickel fell to 2% of the Fund’s commodity mix. Oil and gas exposure was again
steady at 8%.
At year’s end, three of the Fund’s top 10 holdings were lithium exploration companies:
• Azure Minerals (AZS:ASX) announced drill intersections of up to 105m at 1.26% Li2O in pegmatite with coarse
spodumene crystals at its 60% owned Andover nickel-lithium project in WA. Surface sampling of spodumene
pegmatites on the project has indicated this is part of one 2km mineralized corridor, with another 8 zones yet to be drill
tested. It was the largest holding of the Fund at 30 June 2023 with a 12.8% allocation.
• CAA Mining (Unlisted) holds rights to acquire majority control of areas adjacent to Atlantic Lithium’s Ewoyaa Li deposit
(35Mt at 1.25% Li2O) on the coast of Ghana The Fund allocation to CAA at year end was 2.9%.
•
Leeuwin Metals (LM1.ASX) announced expansion of its Jenpeg lithium project in Manitoba, and additional sampling
of historical drill core containing lithium pegmatites. LM1 also intersected 10m of semi-massive to massive nickel
sulphides in diamond drilling at its William Lake nickel project in the Thompson Nickel Belt, also in Manitoba. The Fund
allocation to MGV at year end was 2.4%.
The Fund’s second largest holding overall, and largest individual gold holding, was Musgrave Minerals (MGV.ASX) with 6.7%
where completion of Stage 1 PFS on its Cue Gold Project in WA triggered a takeover battle for the company. Westgold made
an unsolicited scrip bid for MGV, which was followed after year end by a higher scrip-plus-cash offer from Ramelius
Resources. The Ramelius offer has been recommended by the MGV board. Other significant gold holdings included
Predictive Discovery (ASX.PDI) with 4.5% and Saturn Minerals (ASX.STN, 2.0%).
6
Lowell Resources Fund
Investment Manager’s Report
For the year ended 30 June 2023
(continued)
Significant holdings in other metals include advanced copper explorer Caravel Minerals (3.7%), Brazil-focused REE-base metal
explorer Alvo Minerals (3.0%), Queensland gas developer Comet Ridge (3.0%) and north American advanced nickel explorer
Talon Metals (2.4%).
A $0.0702/unit distribution to unitholders was announced with the ex-date being 30 June 2023.
ASX-listed units continued trade at a discount to the actual NAV/unit of the Fund itself. The ASX traded unit price started the FY
at $1.30/unit and ended the year at $1.25/unit. The underlying NAV of the fund at end-June was $1.4738/unit (pre distribution)
or $1.430/unit (post distribution).
The Manager continued its efforts to reduce this discount and increase the liquidity of the traded units, with active promotion
programs, including: online interviews, Twitter, LinkedIn, the LRFM website, and participation in mining industry conferences as
featured speakers or panellists.
As at 30 June the Fund held 9.9% of its assets in cash (pre-distribution).
7
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
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/.
8
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
(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/ .
9
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
(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 is an externally managed entity that does not hold an annual general meeting and this recommendation is therefore
not applicable
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/.
10
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
(continued)
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 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.
•
The Fund’s Constitution is available at
https://www.cremornecapital.com/lrf-constitution.
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.
11
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
(continued)
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.
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.
12
Lowell Resources Fund
Corporate Governance Statement
For the year ended 30 June 2023
(continued)
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.
13
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
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 30 June 2023. Cremorne Capital Limited was appointed as the Responsible Entity on 26 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 2022 to the date of the report.
Michael 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 Vice Chairman of the Victoria Racing Club.
Oliver Carton (appointed 22 October 2010)
Oliver is a qualified lawyer with over 30 years’ 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.
14
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
(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 24 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 12 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
30 June 2023
30 June 2022
Number of units
Number of units
31,564,087
29,351,614
Unlisted Options on issue
913,274
-
15
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
(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:
Operating profit before finance costs attributable to unitholders ($’000)
59
558
30 June 2023 30 June 2022
$
$
Distributions:
Total payable
Payable in dollar per unit
Financial Position
2,234,010
3,396,869
0.0708
0.1157
As at 30 June 2023, the Fund's total assets amounted to $46,970,358 (30 June 2022 $47,177,946).
Net Tangible Assets (NTA) per unit as disclosed to the ASX, from the period of 1 July 2022
through to 30 June 2023 was, as follows:
At reporting period end
High during the period
Low during the period
Management costs
30 June 2023
$1.4733
$1.6011
$1.2655
The Fund’s history of management costs (ICR) is as follows:
Indirect Cost Ratio
Financial year
Lowell Resources Fund
2021
2.3%
2022
2.42%
2023
2.09%
16
Meetings of directors
The numbers of meetings of the company's Board of Directors held during the year ended 30 June 2023, and the numbers
of meetings attended by each director were:
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
(continued)
Michael Ramsden
Oliver Carton
Don Carroll
Attended
Held
10
10
10
10
10
10
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
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 other matter or circumstance has arisen since 30 June 2023 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.
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.
17
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
(continued)
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.
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 2023
30 June 2022
$
5,700
5,700
$
5,500
5,500
The auditor's remuneration is borne by the Fund. Fees are stated exclusive of GST.
18
Lowell Resources Fund
Directors’ Report
For the year ended 30 June 2023
(continued)
Independence Declaration by Auditor
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 20.
All of our office employees have been following the government’s regulations of social distancing and hygiene and
there is no event that could be foreseeable to be considered to have an influence to the business of the Fund and our
office.
Signed in accordance with a resolution of the directors of the Responsible Entity made pursuant to s.298 (2) of the
Corporations Act 2001.
On behalf of the Directors
………………………..
Michael Ramsden
Chairman
Dated 8 August 2023
19
Auditor's Independence Declaration under section 307C of the
Corporations Act 2001
To the Directors of Cremorne Capital Limited
As lead partner for the audit of the financial statements of Lowell Resources Fund for the financial
year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.
Nexia Melbourne Audit Pty Ltd
Melbourne
Richard Cen
Director
Dated this 8th day of August 2023
Registered Audit Company 291969Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see www.nexia.com. au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients.Liability limited under a scheme approved under Professional Standards Legislation.AustraliaLevel 35, 600 Bourke StMelbourne VIC 3000 E: info@nexiamelbourne.com.auP: +61 3 8613 8888F: +61 3 8613 8800 nexia.com.auAustraliaNexia Melbourne Audit Pty Ltd
Lowell Resources Fund
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2023
Statement of Profit or Loss and Other Comprehensive Income
Income
Interest income
Dividend Income
Net gain on financial instruments held at fair value through profit or
loss
Other income
Net income
Expenses
Management fees
Custodian fees
Transaction costs
Performance fees
Auditor’s remuneration
Other operating expenses
Total expenses
Operating profit
Profit for the period
Note
Year Ended
Year Ended
30 June 2023
30 June 2022
$
$
7
8
88,468
96,250
1,064
-
1,426,331
4,095,675
9,958
88,473
1,621,007
4,185,212
983,371
1,174,587
82,292
61,592
20,550
27,536
386,944
66,205
143,877
1,894,573
27,066
320,488
1,562,285
3,626,796
58,722
558,416
58,722
558,416
Finance costs attributable to unitholders
Distribution to unitholders
(2,234,010)
(3,396,915)
Net (Increase) / decrease in net assets attributable to unitholders
2,175,288
2,838,499
Profit 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
$0.002 $0.019
$0.002 $0.019
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
Financial assets held at fair value through profit or loss
Total Assets
Liabilities
Trade and other payables
Total Liabilities (excluding net assets attributable to unitholders)
Net assets attributable to unitholders (liability) *
Lowell Resources Fund
Statement of Financial Position
For the year ended 30 June 2023
Note
Year Ended
Year Ended
30 June 2023
30 June 2022
$
$
11
3
4
5
6
4,657,262
4,647,064
10,235
200,666
42,302,861
42,330,216
46,970,358
47,177,946
2,685,091
3,621,399
2,685,091
3,621,999
44,285,267
43,556,547
* The Fund has adopted AMIT tax regime for the 2020/21, financial year and all future years. The above balance of Net
assets attributable to unitholders remains classified as a financial liability as profit is required to be distributed.
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 2023
Statement of Changes in Net Assets Attributable to Unitholders
Net Assets Attributable to
Unitholders
Balance as at 30 June 2021
Gross Increase in net assets attributable to unitolders
Distribution to unitholders
Distribution reinvested from unitholders
Applications for units
Cost of capital raising
Buy-backs of units
Balance as at 30 June 2022
Gross Increase in net assets attributable to unitolders
Distribution to unitholders
Distribution reinvested from unitholders
Applications for units
Cost of capital raising
Buy-backs of units
Balance as at 30 June 2023
44,480,765
558,416
(3,396,915)
2,048,670
-
-
(134,389)
43,556,547
58,722
(2,234,010)
1,651,062
1,252,946
-
-
44,285,267
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
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
Interest received
Dividends received
Receipts of fees from collabration in other entities’ capital raising activities
Receipts of tax incentives
Payments of other operating expenses
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from investing activities
Payment for investing activities
Net cash inflow / (outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of units
Payments for buy-backs of units
Payments for distribution
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
Lowell Resources Fund
Statement of Cashflows
For the year ended 30 June 2023
Note
Year Ended
Year Ended
30 June 2023
30 June 2022
$
$
13,679,335
26,361,748
(11,979,489)
(20,572,646)
88,468
96,250
-
9,959
1,064
-
-
88,473
(1,391,426)
(4,538,310)
11(b)
503,097
1,340,329
-
-
-
-
-
-
2,904,007
2,048,670
-
(134,389)
(3,396,907)
(4,202,367)
(492,900)
(2,288,086)
10,198
(947,757)
4,647,065
5,594,822
Cash and cash equivalents at the end of the year
11(a)
4,657,262
4,647,065
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 2023
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 segments
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
34
35
35
35
36
37
37
38
39
40
44
45
45
45
25
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(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 22 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 2023. 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 2023
(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 2022 affected any of the amounts recognised in the current period or any prior period.
(b) Financial instruments
The Fund’s financial assets have been measured at fair value through profit or loss historically 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 2023
(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 or the assets no longer meet the definition of financial assets under
the relevant accounting standard. Financial liabilities are derecognised when the obligation under liabilities are discharged or
the liabilities no longer meet the definition of financial assets under the relevant accounting standard.
(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 2023
(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 of the transactions of 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 carrying
amounts equivalent to their amortised cost without the present value effect mentioned above.
(v) Impairment of financial assets
The Fund holds receivables with no financing component and they have maturities of less than 3 months 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
credit risk on such receivables are immaterial and there’s no history nor any future expectation of default or loss to the Fund
regarding such receivables, there is no material 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.
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.
29
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
continued)
.2 Summary of significant accounting policies (continued)
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 accounting standards.
(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.
(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 prices, 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 this standard.
30
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
2 Summary of significant accounting policies (continued)
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)
(c) Revenue
The revenue earned by the Fund during the financial year was for contracts with no financing components that were all
settled (‘completed’ per AASB 15’s defined ‘completed contracts’) during the financial year. The contracts’ transaction
prices and consideration were all matched to the actual revenue cash proceeds received by the Fund.
The Fund had no unconditional receivables from customers, conditional contracts receivable nor payable in this financial
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 this standard.
Income includes net gains on financial instruments at fair value through profit or loss. These net gains include all
realised and unrealised fair value changes.
Income also includes dividend income and interest income. This is recorded separately on the statement of
comprehensive income when the right to receive payment is established.
(d) Net assets attributable to unitholders
The Fund’s units on issue in the ASX market are carried at their net asset value 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 short term and highly liquid investments with original maturities of 3 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.
31
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
2 Summary of significant accounting policies (continued)
(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.
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 the relevant standards 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.
(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 cannot be distributed to unitholders but retained in the Fund to offset future realised capital gain.
If realised capital gains exceed realised losses, the excess is distributed to the unitholders.
The benefits of any domestic tax credits /offsets and foreign tax paid are passed on to unitholders in distributions.
32
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
2 Summary of significant accounting policies (continued)
(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 under relevant accounting standard.
(j) Increase / Decrease In Net Assets Attributable To Unitholders
Income not eligible for distribution is included in net assets attributable to unitholders. Movments in net assets attributable 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 distribution payable is recognised and
included in the Trade and Othe Payables on 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.
(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 rates permitted under
taxation laws, 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).
Trade 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.
33
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
2 Summary of significant accounting policies (continued)
(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
For the 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.
3 Trade and other receivables
Goods and services tax recoverable
Dues from brokers on sale of investments to be settled
Application deposit paid for trades
Refundable tax offset receivable
Prepayments – ASX
Total
30 June 2023
30 June 2022
$
7,570
-
-
-
2,665
$
200,666
-
-
-
-
10,235
200,666
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 Fund’s main credit risk exposures are limited to Australia as most 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.
34
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
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
Total
2023
2022
38,698,886
39,103,982
3,603,975
3,226,234
42,302,861
42,330,216
The Fund did not have debt instruments nor any derivatives from its financial instruments and it did not have an assossicate
or a subsidiary under relevant accounting standards in this reporting year.
The Fund did not reclassify nor designated any of its financial instruments in this reporting year.
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
Distribution Rounding
Accrued Performance Fee
Total
30 June 2023
30 June 2022
$
$
79,504
284,973
86,381
91,158
38,813
94,324
2,233,972
3,396,915
235
26
189
-
2,685,091
3,621,399
6 Net assets attributable to unitholders
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 from applications
Units bought back during the year
Gross decrease in net assets attributable to unitholders
Distribution reinvestment from unitholders
Distributions payable
Closing balance of net assets attributable to unit holders
43,556,547
44,480,765
1,252,945
-
-
(134,388)
58,722
558,416
1,651,062
2,048,670
(2,234,010)
(3,396,916)
44,285,267
43,556,547
35
6 Net assets attributable to unitholders (continued)
(b) Movements in number of units
On issue at beginning of the year
Units reinvested
Units issued from applications
Units bought back during the year
On issue at year end *
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
29,351,614
28,046,614
1,285,045
1,374,576
927,428
-
-
(69,576)
31,564,087
29,351,614
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.
A distribution is required to be made by the Fund’s Constitution as has been in the past, thus, the above ‘net assets
attributable to unitholders’ balance is presented as a financial liability, not as an equity.
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 in the reporting year were as a result of applications and buy-backs and the split
processed.
7 Operating Segments
The operation of the fund is solely from Australia, the Fund has exposure to various resources’ sectors as follows:
COUNTRY
30 June
30 June
30 June
30 June
INCOME
ASSETS
Australia
Canada
UK
Total
2023
2022
2023
2022
$
1,621,007
$
4,185,212
$
$
40,481,161
38,625,084
-
-
-
-
1,216,781
3,251,889
604,919
453,243
1,621,007
4,185,212
42,302,861
42,330,216
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
investments.
36
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
8 Remuneration of auditor
During the year the following fees were paid or payable for services provided by the Fund’s Auditor (Nexia Melbourne Audit
Pty Ltd).
Audit Services
Half-year Review and Annual Audit of the Financial Report
Total
Non-Audit Services
Compliance Plan
Total
30 June 2023
30 June 2022
$
$
25,236
25,236
5,700
5,700
24,066
24,066
5,500
5,500
The auditor's remuneration is borne by the Fund. Fees are stated exclusive of GST.
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.
Lowell Resources Funds Management Ltd is the Investment Manager of the Fund.
(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 2022 to 30 June 2023:
• 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 $983,371 (2022: $1,174,587) were paid to the Responsible Entity in accordance with the
constitution at 2.09% per annum (2022: 2.1%) of the total cash and investment portfolio of the Fund assessed and payable
on a monthly basis.
There was $25 for performance fees accrued at the end of this reporting period and payable to Lowell Resources Funds
Management Ltd (the Investment Manager). A performance fee amount of $20,526 was paid in January 2023 relating to
the six month period to 31 December 2022.
37
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
9 Related party transactions (continued)
(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.
(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
30 June 2023
Ormley Pty Ltd
30 June 2022
Ormley Pty Ltd
Equitas Nominees Pty Ltd
balance)
66,267
-
60,100
balance)
-
-
-
-
66,267
-
-
66,267
66,267
6,167
66,267
-
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 124.
(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 payable
2,234,010
0.0708 3,396,915
0.1157
30 June 2023
30 June 2022
$ Total
$Per Unit
$ Total $Per Unit
38
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
11 Reconciliation of profit to net cash inflow from operating and financing activities
(a) Reconciliation of cash and cash equivalents
Cash
Total cash and cash equivalents
30 June 2023
30 June 2022
$
$
4,657,262
4,657,262
4,647,064
4,647,064
(b) Reconciliation of net income attributable to unitholders for period to net cash provided by operating activities
Profit for the period
Net (gains)/losses on financial instruments held at fair
value through profit or loss
Changes in net assets:
(Increase) in financial instruments held at fair value
through profit or loss
(Increase)/decrease in receivables
Increase/(decrease) in creditors and accruals
Net cash provided by operating activities
(c) Non-cash financing and investing activities
During the year, the following distribution payments
were satisfied by the issue of units under the
distribution investment plan.
Net cash provided by financing activities
58,722
5,548,945
(5,521,590)
190,431
226,589
503,097
558,416
9,613,832
(7,724,040)
(108,014)
(999,866)
1,340,328
2,904,007
2,048,670
2,904,007
2,048,670
39
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(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.
40
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(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
30 June
30 June
30 June
Total
30 June
Financial liabilities
2023
2022
2023
2022
2023
2022
2023
2022
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
-
-
-
$
$
364,713
130,206
86,381
94,324
451,094
224,530
-
4,657,262
4,647,064
-
10,235
200,666
-
4,667,497
4,847,730
-
4,216,403
4,623,200
due for payment
$
$
Trade and
other payable
Amounts payables
to related parties
Total
expected outflow
Financial assets –
cashflows realisable
Cash and
cash equivalents
Trade and
other receivables
Total
anticipated inflows
Net (outflow)/inflow
364,713
130,206
86,381
94,324
451,094
224,530
4,657,262
4,647,064
10,235
200,666
4,667,497
4,847,730
on
4,216,403
4,623,200
financial instruments
$
-
-
-
-
-
-
-
41
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
12 Financial risk management (continued)
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.
Interest rate risk management
30 June 2023
Financial Assets
Cash & Equivalents
Listed & Unlisted Equities
Trade and Other Receivables
Financial Liabilities
Trade and Other Payable
30 June 2022
Financial Assets
Cash & Equivalents
Listed & Unlisted Equities
Trade and Other Receivables
Financial Liabilities
Trade and Other Payable
Weighted
Average Int Rate
(p.a.)
Variable Int.
Rate
$’000
Non-Interest
Bearing
$’000
1.90%
-
-
-
4,657
-
-
4,657
-
Total
$’000
4,657
42,303
10
46,970
-
42,303
10
42,313
451
451
Weighted
Average Int Rate
(p.a.)
Variable Int.
Rate
$’000
Non-Interest
Bearing
$’000
0.23%
-
-
4,647
-
-
-
42,330
201
Total
$’000
4,647
42,330
201
-
-
224
224
42
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
12 Financial risk management (continued)
(d) Currency Risk
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 2023 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 2023
Currency
AUD Equivalent
exposure
in $’000
Change in
currency rate in %
Effect on net assets
attributed to
unitholders in $’000
Total
CAD
GBP
1,217
605
1,822
1(-1)
8/(-8)
-9/(9)
6(-6)
-2/(2)
30 June 2022
Currency
AUD Equivalent
exposure
in $’000
Change in
currency rate in %
Effect on net assets
attributed to
unitholders in $’000
CAD
GBP
3,252
453
3,705
-3/(-3)
4/(4)
113/(113)
-1/ (-1)
112/112)
Total
(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 2023
Index
30 June 2022
ASX All Ords
TSX & LSX
Unlisted Equities
Index
ASX All Ords
TSX & LSX
Unlisted Equities
Change in
equity price %
Effect on net profit
attributable to
unitholders
40/(40)
40/(40)
40/(40)
Change in
equity price %
40/(40)
40/(40)
40/(40)
$’000
1,198/(1,198)
24/(24)
108/(108)
Effect on net profit
attributable to
unitholders
$’000
1007/(1007)
20/(20)
91/(91)
43
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
13 Fair value of financial assets and liabilities
3Fair 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).
Financial assets held at fair value
through profit or loss
Shares in listed entities
Options in listed entities
Shares in unlisted entities
Options in unlisted entities
Total
30 June 2023
30 June 2023
30 June 2023
$
$
Level 1
Level 2
$
Level 3
38,361,222
337,664
-
-
38,698,886
-
-
3,603,973
-
3,603,973
-
-
2
-
2
There were no transfer between Level 1 and 2 in the period.
There were no transfers from Level 2 to Level 3 in the period.
Level 2 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 $2 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. The Fund
realised the loss of the shares in one of these two investees companies based on that investee’s liquidator’s advice. The other
investee entity’s stocks ‘ value stays at $1 as appropriate viewed by the IC.
44
Lowell Resources Fund
Notes to the Financial Statements
For the year ended 30 June 2023
(continued)
14 Earnings per unit
Basic earnings per unit amounts are calculated by dividing net profit 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.
Profit attributable to unitholders
30 June 2023
30 June 2022
$58,722
$558,416
Weighted average number of units in issue
31,117,127
29,124,614
Basic and diluted earnings per unit in dollars
$0.002
$0.019
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 2023 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 2023 and 30 June 2022.
45
DIRECTORS’ DECLARATION
The financial statements and notes thereto of the Lowell Resources Fund for the financial year ended 30 June 2023
as set out on pages 25 - 48 have been prepared by Cremorne Capital Limited (‘the Responsible Entity’) in accordance
with the Corporations Act 2001.
The directors of the Responsible Entity declare that:
a)
In the directors’ opinion, there are reasonable grounds to believe that the Fund will be able to pay its debts as
and when they become due and payable; and
b)
In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the
financial position and performance of the Fund.
Signed in accordance with a resolution of the Directors of the Responsible Entity made pursuant to section.295 (5)
of the Corporations Act 2001.
On behalf of the Directors
………………………….
Michael Ramsden
Director
MELBOURNE
Dated: 8 August 2023
46
Independent Auditor’s Report to the Members of Lowell Resources Fund
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Lowell Resources Fund (the Fund), which comprises the
statement of financial position as at 30 June 2023, the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of Lowell Resources Fund is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Fund’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Fund in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Fund, would be in the same terms if given to the directors as at the time
of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Registered Audit Company 291969Nexia Melbourne Audit Pty Ltd (ABN 86 005 105 975) is a firm of Chartered Accountants. It is affiliated with, but independent from Nexia Australia Pty Ltd. Nexia Australia Pty Ltd is a member of Nexia International, a leading, global network of independent accounting and consulting firms. For more information please see www.nexia.com. au/legal. Neither Nexia International nor Nexia Australia Pty Ltd provide services to clients.Liability limited under a scheme approved under Professional Standards Legislation.AustraliaLevel 35, 600 Bourke StMelbourne VIC 3000 E: info@nexiamelbourne.com.auP: +61 3 8613 8888F: +61 3 8613 8800 nexia.com.auAustraliaNexia Melbourne Audit Pty Ltd
Independent Auditor’s Report to the Members of Lowell Resources Fund
(cont.)
Key audit matter
How our audit addressed the key audit
matter
Valuation of Financial Assets – Unlisted
Shares
Our procedures included, amongst others:
Refer to notes 2(b) and 4.
At 30 June 2023, the Fund had $3,603,975 of
shares in unlisted entities in Financial Assets.
These financial assets have been classified as fair
value through profit or loss in accordance with
AASB 9 Financial Instruments and measured
using Level 2 inputs in accordance with AASB 13
Fair Value Measurement.
This is a key audit matter due to the inherent
subjectivity that is involved in the Management
making judgements in relation to the Level 2
inputs.
• We have reviewed the investment portfolio
and agreed the balance to the general ledger.
• We have reviewed the qualifications of the
individuals on the Investment Committee.
• We
have
reviewed
Investment
Committee’s valuations of the Fund’s unlisted
investments.
the
• Where there was market observable data
available, we used this data to confirm the
Investment Committee’s valuations.
•
For the unlisted investments where there was
little or no market observable data, we agreed
the investment value to the unlisted shares
holdings valuations valued by the Investment
Committee.
•
On a sample basis the valuations were tested
against available financial information.
Measurement of Unrealised gain / (loss) on
financial assets
Our procedures included, amongst others:
Refer to notes 2(f) and 11.
• We have reviewed the investment portfolio
and agreed balance to the general ledger.
At 30 June 2023, the Fund had ($5,548,945) of
unrealised loss on Financial Assets that classified
as fair value through profit or loss in accordance
with AASB 9 Financial Instruments.
• We have reviewed the cost of investment in
the Financial Assets as well as the market
revaluation as at 30 June 2023.
•
•
For the investment in observable market
where there was the market price, we agreed
the market revaluation to the market price,
and we used this data to confirm the
Investment Committee’s valuations.
For the unlisted investments where there was
little or no market observable data, we agreed
the investment value to the unlisted shares
holdings valuations valued by the Investment
Committee.
AustraliaAustralia
Independent Auditor’s Report to the Members of Lowell Resources Fund
(cont.)
Other Information
The directors are responsible for the other information. The other information comprises the
information in the Fund’s annual report for the year ended 30 June 2023 but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Fund are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Fund’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Fund or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
AustraliaAustralia
Independent Auditor’s Report to the Members of Lowell Resources Fund
(cont.)
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Fund’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Fund to
cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in page 17 of the Directors’ Report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Lowell Resources Fund for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Fund are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Nexia Melbourne Audit Pty Ltd
Melbourne
Dated this 8th day of August 2023
Richard Cen
Director
AustraliaAustralia
Lowell Resources Fund
Unitholder and Other Information
For the year ended 30 June 2023
The information set out below was applicable as at 30 June 2023.
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
0 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Above 100,001
Totals
Number of
unitholders
Number of
units
% of units
issued
110
107
42,022
292,764
55
415,499
465 16,632,226
77 14,181,576
0.13%
0.93%
1.32%
52.69%
44.93%
814 31,564,087
100.00%
The unitholders’ registry showed 58 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
LOWELL PTY LTD
FN NASSER PROVIDENT FUND
MR JOHN BUCKHAM
BAJKOR NOMINEES PTY LTD
MR LUC GA DEFOSSEZ
MR COLIN WEEKES
MALANGI PTY LTD
THIRTY SIXTH VILMAR PTY LTD
NJUU PTY LTD
MR G H SAVANNAH & MRS M S SAVANNAH
CONSOLIDATED FINANCIAL SOLUTIONS PTY LTD
PERPETUAL CORPORATE TRUST LTD
MR HOLT HUTTON
MR KENNETH WAYNE SLOSS
MRS ENG B E HEAH
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Holding
783,767
447,872
411,775
363,605
358,305
354,000
329,706
300,000
286,560
286,000
268,492
258,423
250,418
250,000
246,650
237,540
227,800
224,259
224,250
% IC
2.48%
1.42%
1.30%
1.15%
1.14%
1.12%
1.04%
0.95%
0.91%
0.91%
0.85%
0.82%
0.79%
0.79%
0.78%
0.78%
0.75%
0.72%
0.71%
0.71%
BNP PARIBAS NOMINEES P/L HUB24 CUSTOD’L SERV LTD
246,215
UNICARE TRADING NOMINEES PTY
MR FREDERIC MAURICE MARC NAVELLOU
MR BERNARD PATRICK DEAN
MR FRANK MAR
Total
Total issued capital - selected security class(es)
31,564,087
100.00%
51
6,355,637
20.14%
Lowell Resources Fund
Unitholder and Other Information
For the year ended 30 June 2023
(continued)
Substantial holders
There were no substantial shareholders in the Fund as at 30 June 2023.
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 167.
Each investment transaction may involve multiple contract notes.
The total brokerage paid on these contract notes was $61,592..
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.
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
52