Starvest Plc
Annual Report 2013

Plain-text annual report

AnnuAl report And Accounts 2013 Investing for the future 2013 stArvest plc www.stArvest.co.uk The Company is established as a source of early stage finance to fledgling businesses, to maximise the capital value of the Company and to generate benefits for Shareholders in the form of capital growth and modest dividends. Visit our investor website online at www.starvest.co.uk StarveSt plc annual report and accountS 2013 Contents 02 Chairman’s statement 03 Investing policy statement 04 Strategic report – Review of trading portfolio 06 Strategic report – Core portfolio 10 Strategic report – Other portfolio companies 12 Board of directors 12 Company information 13 Directors’ report 15 Statement of directors’ responsibilities 16 Independent auditor’s report 17 Profit and loss account 18 Balance sheet 19 Cash flow statement 20 Notes to financial statements 29 Notice of Annual General Meeting 31 Notes to the notice of Annual General Meeting 33 Notes to the proxy form Starvest was admitted to the AIM of the London Stock Exchange in 2000 and commenced its current business under the leadership of Bruce Rowan in January 2002 with £550,000 cash, since which further investment funds of £1.3 million have been added. Since that time, fortunes have been mixed; by June 2007, the portfolio value, using mid-market prices, rose to £19.2 million or 47 pence per share. The latest valuation is shown in the latest quarterly net asset valuation announcement and on page 5. Read about our core investment portfolio from page 6 onwards 01 StarveSt plc www.Starve St.co.uk Chairman’s statement R Bruce Rowan Chairman and Chief Executive We remain supportive of our investee companies, nine of  which now constitute our core portfolio. I am pleased to present my twelfth annual Admission of AIM stocks to ISAs statement to Shareholders for the year With effect from 6 April 2013, HM Government ended 30 September 2013. has permitted UK taxpayers to include AIM Results for the year stocks in their tax free individual savings accounts (ISAs). We suggest that this may We have experienced another tough year be attractive to you as an investor in Starvest during which investment values have again and other undervalued AIM stocks and that, declined. However, values have risen from if you have not already done so, you may wish the low point in July this year and I now see to discuss the matter with your stockbroker some reason for mild optimism for the future. and/or tax accountant. The loss before taxation has decreased Investment policy slightly from £1.03 million to £1.01 million. The Company’s investing policy is reproduced In addition: • we have no debt, but a bank overdraft facility only; • we continue to believe that we are in a strong position to benefit from an upturn in markets which must surely come; and • the fundamentals have not changed: the world is becoming more affluent with an increasing number of people expecting refrigerators, motor cars, air conditioning, laptop computers and all other tools of 21st Century living. Trading portfolio valuation A detailed review of the portfolio companies follows from page 4. Our commentary focuses on the nine companies that constitute our core portfolio but does not exclude others that may well rebound. on page 3 of this report and made available on the Company’s website, www.starvest.co.uk. Shareholder information The Company’s shares are traded on AIM. Announcements made to the London Stock Exchange are sent to those who register on the Company website, www.starvest.co.uk, where historic reports and announcements are also available. Annual general meeting We will hold our annual general meeting at 3.00pm on Wednesday 18 December 2013 at the City office of Grant Thornton UK LLP, our nominated advisor, when we look forward to meeting those Shareholders able to attend. R Bruce Rowan Chairman and Chief Executive 31 October 2013 02 StarveSt plc annual report and accountS 2013 investing PoliCy statement About us Initial investments are for varying amounts Of the 25 to 30 investments held at any The Board has managed the Company as but usually in the range of £100,000 to £300,000. one time, it is expected that no more than an investment company since January 2002. These companies are invariably not generating five will prove to be ‘winners’; from half cash; rather they have a constant requirement of the remainder we may expect to see Collectively, the Board has a wealth of to raise new equity in order to continue modest share price improvements. Overall, experience over many years of investing exploration and development. Therefore after the expectation is that in time Shareholder in small company new issues and pre-IPO appropriate due diligence, the Company may returns will be acceptable if not substantial. opportunities in the natural resources and provide further funding support and make mineral exploration sectors. later market purchases so that the total Accordingly, the Board is unable to give any investment may be greater than £300,000. estimate of the quantum or timing of returns. Company objective That stated, when profits have been realised The Company is established as a source of The business is inherently high risk and of a and adequate cash is available, it is the early stage finance to fledgling businesses, cyclical nature dependent upon fluctuations intention of the Board to recommend the to maximise the capital value of the Company in world economic activity, which impacts on distribution of up to half the profits realised. and to generate benefits for Shareholders in the demand for minerals. However, it offers the form of capital growth and modest dividends. the investor a spread of investments in an The Company currently has investments in the Investing strategy continue to offer the potential of significant investment companies: Equity Investors plc, Whilst the Company has no exclusive returns for the foreseeable future. Equity Resources plc, Guild Acquisitions plc, commitment to the natural resources sector, and International Mining & Infrastructure exciting sector, which the Board believes will following companies which themselves are the Board sees this as having considerable The investee companies, being small, almost Corporation plc. growth potential for the foreseeable future. invariably lack share market liquidity, even Historically, investments were generally if they are quoted on AIM, ISDX, ASX, TSX The Company takes no part in the active made immediately prior to an initial public or TSX-V. Therefore, in the early years, it is management of investee companies, offering on AIM or ISDX, formerly PLUS rarely possible to sell an investment at the although Directors of the Company are also markets and in the aftermarket. As the quoted market price with the result that non-executive directors on the boards of nature of the market has changed since 2008, extreme patience is required whilst the seven such companies, with one Director it is more likely that the future investment investee company develops and ultimately being the executive chairman of an eighth. portfolio will include a spread of companies attracts market interest. If and when an that generally have moved beyond the IPO explorer finds a large exploitable resource, stage but remain in the early stages of it may become the object of a third party bid identifying a commercial resource and/or or otherwise become a much larger entity; moving towards development with the either way an opportunity to realise cash is appropriate finance. expected to follow. 03 StarveSt plc www.Starve St.co.uk strategiC rePort – review of trading Portfolio During the year ended 30 September 2013, the portfolio comprised interests in the companies as described on the following pages. The tough trading and fundraising conditions prices or where the Company’s interest is of of the past three years have taken a toll on such a size as to inhibit selling into a depressed some of the businesses in which Starvest market. We attribute no value to those of our is invested to such an extent that as at investments that do not enjoy a market quote 30 September 2013: but we hope for future benefits amongst • nine portfolio companies accounted for the greater part of the portfolio by value; and • the remainder include both mineral exploration ventures as well as other businesses all of which are valued below cost. Transactions During the year there were no sales. Additional investments were made in Goldcrest Resources plc, formerly Rare Earths and Metals plc; in addition, loan stock in Guild Acquisitions plc was exchanged for equity and £10,000 in cash. Trading portfolio valuation When reporting in previous years, attention was drawn to the continuing adverse conditions in our chosen market for early stage mineral exploration stocks. The year to 30 September 2013 has been difficult with a continuing steady decline in market prices until July since when we have seen modest increases. Against this background, we continue to value our portfolio investments conservatively at the lower of cost or bid price or lower Directors’ valuation where we believe those facts of which we are aware cast doubt on the market these investments. This cautious approach has proved to be appropriate in these difficult times; these discounts total £196,000 (2012: £354,000). A detailed review of the portfolio companies follows. Whilst the portfolio contains investments in companies that have made real progress during the year, there are many, particularly smaller companies, that have struggled for one or more reasons. Raising new finance, which is essential to progress in any mineral exploration business, has proved to be very tough; no fewer than five of our investee companies have effectively fallen this year. Our commentary focuses on the nine companies that constitute our core portfolio but also includes others that may well rebound; we remain resolved to allow our investments time to mature; most certainly this proved to be appropriate with the companies for which a takeover offer was received in previous years and when we generated substantial profits and paid dividends. The key performance indicators are set out opposite: 04 StarveSt plc annual report and accountS 2013 Company statistics Trading portfolio value Company asset value net of debt Net asset value per share Closing share price Share price discount to net asset value Market capitalisation 30 September 2013 at BID values as adjusted 30 September 2012 at BID values as adjusted £2.52 million £3.51 million £2.73 million £3.66 million 7.44 pence 9.86 pence 5.62 pence 6.5 pence 24% 34% Change -28% -25% -25% -13% £2.09 million £2.41 million -13% These values include unrealised gains on elements of the trading portfolio that are not reflected in the financial statements. Since the year end values have fluctuated; as at the close of business on 25 October 2013, the net asset value was £2.65 million. Review of the current market • having committed itself to a cash hungry However, demand for raw materials We and our investee companies have endured project in the good times, so as to continues to grow so it must only be a another tough year; the former long-term maintain the momentum towards an matter of time before prices begin to recover. view and momentum in the market has eventual sale or development, the Meanwhile, the opportunities for junior evaporated to be replaced by extreme company has no option but to raise explorers to realise value and generate short-termism leading to lower prices and/or new equity at ever lower prices. cash are few. volatility. It is clear that many private investors who had been so supportive in World markets have been volatile. For Of our core holdings, four are focused on earlier years have taken fright, or at best are instance, the gold price has been as high as gold, the price of which is volatile in these sitting on their hands awaiting a recognisable $1,795 per oz but has also been as low as uncertain times. Another two have a strong upturn in worldwide economic fortunes; this $1,192 in the past two years; at the present focus on iron ore, the demand for which is compounded in that few institutional time it is approximately $1,300. Only those continues to increase as the economies of investors have an appetite for small early with a sound business plan and cost control China and the third world expand; another stage projects. with access to the necessary finance will two are developing new sources of other basic In times like these we repeatedly note two of the populations in developing countries is to downward drivers of price: Then there is iron ore which is in plentiful improve as we wish and expect. The ninth succeed in such volatile markets. commodities essential if the standard of living • a company makes an announcement, thus drawing attention to itself; irrespective of substance, this is followed by a price fall; and supply but with Australia the dominant and latest is searching for oil. exporter. Spot iron ore prices are currently in the region of $130/t, but have seen major Patience is the key as we await a recovery. movements with $80/t threatened not long ago. 05 StarveSt plc www.Starve St.co.uk strategiC rePort – Core Portfolio The following companies constitute Starvest’s core portfolio as at 30 September 2013. Ariana Resources plc AIM ticker: AAU Beowulf Mining plc AIM ticker: BEM www.arianaresources.com www.beowulfmining.com Sector Sector Gold exploration in Turkey Iron ore, copper and gold in Northern Sweden Background information Background information Ariana has a JORC resource of 1.5 million oz equivalent of gold, over a third of which relates to the Kiziltepe sector of its flagship Red Rabbit project. What they are doing • With earn-in contributions from Turkish construction company Proccea towards its eventual 50% stake on production start-up, Ariana’s interest has been reduced to 82%. • Mine construction is expected to start in late 2013. • Initial production is expected by late 2014 at an annual rate of 21,000 ounces. • An eight year mine life is forecast, with adjacent assets adding further potential to the project. Future plans • Ariana has recently announced ten new drill-ready targets at Kiziltepe and a further 300 scouting targets. • Ariana has a 49% interest in a JV with Canadian Eldorado Gold, which is funding an exploration campaign on the Salinbas and Ardala projects in the north-eastern Artvin Province, with a maiden JORC resource of 1.09 million oz gold inferred and indicated. • Ariana also has an 11.5% interest in Tigris Resources with exploration interests in the south-east. Comment: Despite the vagaries in the gold price, Ariana offers interesting potential once planned cash flow materialises from its Kiziltepe operations thus enabling it to pursue its wider interests. Further information is available on the Ariana website: www.arianaresources.com Beowulf is dual listed on Stockholm’s AktieTorget market. • Sweden has a long-established mining history and record of political, economic and social stability. • Recent non-violent attempts to disrupt Kallak drilling operations by limited numbers of protesting activists, and separately by local Sami reindeer herders, have caused minor delays to drilling and testing operations which are being overcome. Positive support from landowners, local authorities and central government has led to Kallak being designated as an area of national interest, effectively giving it national credibility, protection, and assistance in the company’s project plans. • Beowulf enjoys a 100% interest in all of its projects except for the Ballek copper-gold project owned 50/50 in JV form with an Australian partner, Energy Ventures Ltd. What they are doing Beowulf has projects in Sweden, in particular: • a 144 mt iron ore JORC resource at Kallak North; • a potentially larger and contiguous deposit at Kallak South, for which an extensive exploratory drilling campaign is planned; • adequate cash funding in hand; and • some early stage projects and others where considerable work has been undertaken. Future plans • Initial demand for iron ore production exists within Europe alone. • Access to the market will be well served by Sweden’s established infrastructure – being upgraded to accommodate the enhanced industry production levels. Comment: Beowulf would appear to offer investors a low risk opportunity. Further information is available on the Beowulf website: www.beowulfmining.com 06 StarveSt plc annual report and accountS 2013 Greatland Gold plc AIM ticker: GGP KEFI Minerals plc AIM ticker: KEFI www.greatlandgold.com www.kefi-minerals.com Sector Sector Gold exploration in Tasmania and Western Australia Gold exploration in Saudi Arabia Background information Background information Greatland has been conducting early stage exploration for gold since 2006 having been admitted to AIM that year. Having made progress on two properties, Warrentinna and Lisle, Greatland has entered into farm-in agreements with larger entities which will earn an increasing percentage share of the projects in exchange for expenditure incurred. KEFI has switched its focus from Turkey to Saudi Arabia where it has a 40% interest with a local construction company, ARTAR, in a JV partnership which has enabled KEFI to gain accelerated attention from the notoriously slow Saudi licensing authorities in granting exploration licences. What they are doing Significant recent developments have included: • very positive results at the Warrentinna project in Tasmania; • work on the Firetower project, the subject of a farm-in agreement with Unity Mining, continues apace; • significant surface geochemical results at Lisle peaking at 2.5g/t gold; • farm-in agreement signed with Tamar Gold at the Lisle gold project; • identified large gold anomalies at Lackman Rock with encouraging results from soil sampling; • identified gold and nickel targets at Bromus; and • exceptional geochemical results from Ernest Giles. Future plans • To press on with early stage exploration at their various properties for which purpose Greatland has recently raised £675,000 before costs from a share placing. Further information is available on the Greatland website: www.greatlandgold.com What they are doing • Early drilling of the Jibal Qutman licence resulted in 2000 assays establishing a compliant JORC resource of 313,000 ounces gold, with more expected as a result of further work already undertaken and the addition of a third drill rig. Future plans • With an updated resource assessment likely by year end, and the benefit of cheap labour and low fuel costs, it is understandable that the shares have been receiving market attention in the belief that KEFI could be applying for a production licence in early 2014. • With ARTAR paying its 60% share, the mine development cost requirement should be relatively modest, and KEFI’s likely need to seek limited further funding from its shareholders by the year-end should be successfully achieved. Further information is available on the KEFI website: www.kefi-minerals.com 07 StarveSt plc www.Starve St.co.uk strategiC rePort – Core Portfolio continued Nordic Energy plc ISDX ticker: NORP Oracle Coalfields plc AIM ticker: ORCP Regency Mines plc AIM ticker: RGM www.nordicenergyplc.com www.oraclecoalfields.com www.regency-mines.com Sector Sector Sector Oil and gas in the North Sea Coal in Pakistan Varied interests in mineral exploration ventures Background information Background information Background information Nordic was formed in 2012 and admitted to trading on ISDX in November; Starvest contributed core funding for an initial 42% stake. Oracle Coalfields is the first developer of the Thar lignite coal field in the Sindh province in south-east Pakistan; it came to AIM in April 2011. What they are doing What they are doing Nordic is focussed on oil and gas opportunities in Denmark, Norway, and the North Sea sectors of the Netherlands and the UK. • Nordic holds Licence 1/13, the largest exploration and production licence in the Danish North Sea, covering an area of 3,600 sq. km; the Licence is located approximately 50 km from the edge of the Central Graben, where existing production and multiple discoveries are located, and 100 km from the Siri Area which has a number of tertiary fields. Future plans • A programme of assessment leading to a CPR Oracle has: • a JORC resource of 529mt; • a first phase proven coal reserve of 113 mt, and has moved from exploration into development; • a 30 year production licence extendable on expiry for a further 30 years, producing initially an annual 2.4 mt a year; • joint development agreements signed for a mine-mouth power plant; and • agreements with major Chinese state-owned entrepreneur CAMC Engineering (CAMCE), for the funding and development of the mine and adjacent power plant. is planned for Q4 2013 followed by drilling within 24-36 months thereafter. Future plans Comment: The Directors of the Company all have significant experience in the oil and gas sector, specifically in the Nordic region and believe that significant opportunities exist and that their expertise and extensive contacts will assist them in the identification, evaluation and funding of appropriate investment opportunities. Further information is available on the Nordic website: www.nordicenergyplc.com The future plans are: • to supply a 300MW power plant and local industry such as the cement sector; • to raise initial mine capital costs estimated at US$467 million; • CAMCE will assist Oracle in securing the requisite funding for two thirds of the construction costs likely to be obtained from Chinese banks with related capital expenditure underwritten by the SINOSURE export credit agency; and • initial mine production expected within two years and later capable of expansion to an annual level of 5 to 6 mt raising supply to an eventual 1100MW plant. Comment: Oracle enjoys first-mover advantage and local status as it seeks to alleviate Pakistan’s shortage of electricity which is seriously constraining the development of the national economy as well as being a cause of growing civilian unrest. Oracle enjoys the support of government and is one to watch. Oracle has achieved all its pledged objectives and commitments, yet in common with many others, it has seen its share price fall since AIM admission. Further information is available on the Oracle website: www.oraclecoalfields.com Regency came to AIM in 2005 with a portfolio of exploration properties in Australia since when it transferred some to Red Rock Resources plc and continued to deal with others as well as take stakes in other mineral exploration ventures. What they are doing Regency has: • exploration assets in Western Australia prospective for base metals and gold; • 19.9% interest in ASX quoted Ram Resources Limited, the holder of licences in the Fraser Range, WA prospective for gold and nickel-copper-cobalt, adjacent to those held by Sirius Resources (ASX); • with the support of the Sudanese government, a 51% interest in IMRAS exploring for agro-minerals in Sudan; • 50% of Oro Nickel Vanuatu, which itself holds the Mambare property in Papua New Guinea with a JORC resource of 162.6 mt nickel grading 0.94% with 1.53 mt of contained nickel plus cobalt, from 3% only of the tenement; there is also potential for base metals, gold and geothermal resources; • a 6% interest in Direct Nickel Limited which is in the later stages of proving a game-changing nickel treatment technology; and • other investment interests in Alba Mineral Resources plc and Greatland Gold plc. Future plans More of the same: conduct early stage exploration; prove a resource; dispose of it to a third party in exchange for a minority stake, and/or a carried interest. Immediate plans are to continue early stage exploration in Sudan. Comment: The significance of the Mambare project with the associated technological breakthrough by Direct Nickel should not be overlooked. Further information is available on the Regency website: www.regency-mines.com 08 StarveSt plc annual report and accountS 2013 Red Rock Resources plc AIM ticker: RRR www.rrrplc.com Sector Gold and iron ore Background information Red Rock was launched on to AIM in mid-July 2005 by Regency Mines with a portfolio of exploration licences of properties in Western Australia. What they are doing Red Rock is an early stage exploration company with a diverse range of projects in Colombia, Greenland and Kenya as well as interests in Australia including: • a 50% interest in a producing gold mine in Colombia; • a direct interest of 15% in tenements in Kenya prospective for gold, with the prospect of a further 45% on completion of a bankable feasibility study, plus a 33% interest in the holder of the remaining interest; a JORC estimate shows a 1.193m oz resource; • a 60% interest in an iron ore project in Greenland with a JORC resource; an offer for a partial sale has been received; • an interest in ASX quoted Jupiter Mines Limited which has a 33% interest in a major South African manganese producer as well as other assets in Western Australia; • a 38% interest in ASX quoted Resource Star Limited which recently announced an intention to acquire a number of Texan oil wells; and • an interest in Regency Mines plc, Alba Mineral Resources plc and Ascot Mining plc. Future plans Rather like Regency Mines, we suspect more of the same. Further information is available on the Red Rock website: www.rrrplc.com Sunrise Resources plc AIM ticker: SRES www.sunriseresourcesplc.com Sector Diversified mineral exploration and development specialist Background information Sunrise was admitted to AIM in 2005 initially with a portfolio of diamond exploration assets from Tertiary Minerals plc. Tertiary remains a major shareholder. What they are doing Exploring for: • diamonds through its wholly-owned Western Australia Cue Diamond project, where samples of a discovered kimberlite float have been sufficiently encouraging to suggest that evaluation of its economic potential through bulk sampling is warranted with further exploration work planned to locate the bedrock source; • gold in Australia, where work on the Baker’s and the Corona gold exploration projects has been deferred; and • barites in Ireland where Sunrise is evaluating a production opportunity for its high-white Derryginach barite resource against a background of increasing prices and with no major mine supplier outside of China. Future plans With access to new capital restricted, Sunrise has taken a cautious approach to discretionary expenditure on its mineral projects in order to conserve cash until replacement equity can be raised on more favourable terms. It has relinquished its option over a Canadian gold project and suspended its diamond exploration work in Finland. Further information is available on the Sunrise website: www.sunriseresourcesplc.com 09 StarveSt plc www.Starve St.co.uk strategiC rePort – other Portfolio ComPanies Alba Mineral Resources plc AIM ticker: ALBA Centamin plc LSE ticker: CEY www.albamineralresources.com www.centamin.com Sector Alba is a UK-based exploration company with an overall strategy to develop a portfolio of well-researched, promising and prospective exploration interests; currently, these are: • uranium in Mauritania; and • gold, nickel and base metals in western Ireland; work on its JV agreement with Teck Resources has been financed by Teck towards its ultimate 75% interest by mid-2015. But with limited financial resources, Alba’s activities have been concentrated on securing additional funding, much of which was achieved by the issue of new shares to satisfy debts due to its directors and to its Mauritanian JV partner. Further information is available on the Alba website: www.albamineralresources.com Sector Gold mining in Egypt Background information The interest was acquired in 2011 in part consideration for a holding in Sheba Exploration, an Ethiopian gold exploration venture at a time when Centamin wished to build a portfolio of interests outside Egypt where it holds and is significantly dependent on its investment in the Sukari gold mine. What they are doing Last year saw the start of civilian unrest and changes in government, along with labour problems at the mine, a fall in production levels and a legal dispute with a junior administrative court that was contesting Centamin’s mining licence. This led to a serious threat that the Egyptian Government’s stake in the mine should be raised from 50% to 75% or the mining licence annulled or suspended. The inevitable consequence was a sharp decline in the share price, although more recently the price has enjoyed a minor recovery to reach a level of almost one half of the value obtained at the time of the Sheba take-over. Whilst tensions in Egypt remain, Centamin has continued to deliver positive results, most recently announcing a third quarter when 84,757 ounces of gold were produced, bringing the total for the year to date to 265,397 ounces and close to the annual target of 320,000 ounces. The interest in Centamin has been sold since the end of the financial period under review. Further information is available on the Centamin website: www.centamin.com In addition, the Company holds interests in the following which are believed to be worth watching for future developments. Other investments Starvest also holds investments in: Agricola Resources plc; Alpha Universal Management plc; CAP Energy Limited; Carpathian Resources Limited; Equity Investors plc; Equity Resources plc; Fundy Minerals Limited; Gippsland Limited; Goliath Resources Inc.; Kincora Copper Limited; Kuwait Energy plc and Treslow Limited. Kuwait Energy is worth an additional comment: the holding is as a result of the acquisition in 2006 of a substantial stake in the original holding in Concorde Oil & Gas plc. A London listing for Kuwait is expected. 10 StarveSt plc annual report and accountS 2013 Goldcrest Resources plc ISDX ticker: GCRP www.goldcrestresourcesplc.com International Mining & Infrastructure Corporation plc AIM ticker: IMIC www.imicplc.com Minera IRL Limited AIM ticker: MIRL www.minera-irl.com Sector Gold What they are doing Goldcrest: Sector Infrastructure and iron ore What they are doing • is under new management and is now focused on exploring for gold in north-east Ghana; • has raised further funds and strengthened its Board as it prepares to seek admission to AIM in 2013; and • has changed its name twice in the past three years from Lisungwe to Rare Earths and Metals. Further information is available on the Goldcrest website: www.goldcrestresourcesplc.com Guild Acquisitions plc ISDX ticker: GACQ Guild has a mixture of assets including stakes in Starvest investee companies Goldcrest Resources plc and Equity Resources plc. Guild does not maintain a website. • IMIC is focused on infrastructure solutions for West African iron ore development projects. • Subject to final approvals, IMIC has successfully bid £120 million for Afferro Mining with its Nkout project in Cameroun; although this acquisition represents a significant multiple of IMIC’s own capitalisation and met with initial scepticism in the market, IMIC’s success marks a significant extension of its original objectives. Comment: IMIC enjoys support from its strategic partner, the privately held African and Iron Ore Group (AIOG), as well as from Chinese interests in assuring access to supply sources for its future iron ore requirements. With its Cameroun mining and infrastructure project now added to its Guinea infrastructure work, IMIC has become a major player in West Africa. Further information is available on the IMIC website: www.imicplc.com MARECHALE CAPITAL Marechale Capital plc AIM ticker: MAC www.marechalecapital.com Sector Investment banking What they are doing Unlike other investments, Marechale is not involved in the mineral exploration business but an interest was acquired some years ago when it was an adviser to companies quoted on what became PLUS Markets and more recently, ISDX. Today it describes itself as an investment banking and corporate finance business, using its established relationships and sector specialisation to raise capital and refinance high growth companies and funds in the retail, leisure, renewable energy and infrastructure sectors. Further information is available on the Marechale website: www.marechalecapital.com Sector Gold What they are doing Minera IRL, South American precious metals mining, development and exploration company listed on the AIM, Lima and Toronto TSX markets, focuses its activities entirely on: • Peru where it operates the 100%-owned Corihuarmi gold mine, and is developing the Ollachea underground mine while also exploring a number of other gold prospects. Expected lower production, grades and revenues from Corihuarmi have recently impacted on Minera’s significant financing requirement for the Ollachea development, resulting in group losses. • In Argentina, a DFS has established Minera’s Don Nicolas gold-silver project as robust enough for mine construction, with local equity and debt funding already fully secured. Minera’s local subsidiary retains a 51% interest in the project with production intended by end 2014, with an annual forecast of 52,400 ounces gold and 56,000 ounces silver over an initial mine life of 3.6 years, but with further extensions adding to the project’s potential. Comment: While the market reacted unfavourably to news of the Peru ventures and to overall funding uncertainties, the release of the Don Nicolas arrangements has led to a favourable re-appraisal of Minera’s overall potential; predatory enquiries were swiftly rejected by the company. Future developments seem likely. Further information is available on the Minera website: www.minera-irl.com 11 StarveSt plc www.Starve St.co.uk Corporate GovernanCe Board of direCtors R Bruce Rowan Anthony C R Scutt John Watkins, FCA Chairman and Chief Executive Non-executive Director Finance Director and Company Secretary Bruce Rowan, who has managed the Company’s Tony is an experienced private investor and John is a chartered accountant in practice and operations since January 2002, is well known investment analyst as well as a director of a non-executive director of other companies in London as an investor in small mineral investee companies Agricola Resources plc, including AIM quoted investee companies exploration start-up ventures. In addition Beowulf Mining plc, and Oracle Coalfields plc. Greatland Gold plc, Red Rock Resources plc to his chairmanship of the Company, he is chairman of AIM quoted Tiger Resource Finance plc, of Australian ASX quoted Sunvest Corporation Limited and is an executive director of ISDX quoted Gledhow Investments plc. ComPany information and Regency Mines plc and chairman of ISDX quoted Goldcrest Resources plc. Directors R Bruce Rowan Auditor Bankers Registrars Grant Thornton UK LLP Allied Irish Bank (GB) Share Registrars Limited Chairman & Chief Executive Chartered Accountants and 10 Berkeley Square Anthony C R Scutt Non-executive Director John Watkins, FCA Finance Director Secretary and registered office Statutory Auditor 1020 Eskdale Road IQ Winnersh Wokingham Berkshire RG41 5TS London, W1J 6AA Clydesdale Bank plc 2 Bishops Wharf Walnut Tree Close Guildford GU1 4UP Registered number Broker First Floor, Suite E 9 Lion & Lamb Yard Farnham Surrey, GU9 7LL Tel: 01252 821390 Listing AIM Market of the 3981468 Solicitors Ronaldsons LLP 55 Gower Street London WC1E 6HQ Nominated advisor Grant Thornton UK LLP 30 Finsbury Square London, EC2P 2YU S I Capital Limited London Stock Exchange (AIM) 1 High Street Godalming Surrey, GU7 1AZ Ticker: SVE Website Register for email alerts at www.starvest.co.uk – updated regularly to provide information as it is released to the market. John Watkins, FCA 55 Gower Street London, WC1E 6HQ Business address 67 Park Road Woking Surrey, GU22 7DH email@starvest.co.uk Tel: 01483 771992 Fax: 01483 772087 12 StarveSt plc annual report and accountS 2013 Directors’ report The Directors present their thirteenth annual Results and dividends report on the affairs of the Company, together The Company’s results are set out in the profit and loss account on page 17. The audited with the financial statements for the year financial statements for the year ended 30 September 2013 are set out on pages 17 to 28. ended 30 September 2013. The Directors do not recommend the payment of a dividend for the year (2012: £nil). Principal activities and business review Since Bruce Rowan was appointed Chief Executive on 31 January 2002, the Company’s Directors The Directors who served during the year are as follows: principal trading activity has been the use of his R Bruce Rowan expertise to identify and, where appropriate, Anthony C R Scutt support small company new issues, pre IPO John Watkins and on-going fundraising opportunities with a view to realising profit from disposals as Substantial shareholdings the businesses mature in the medium term. At the close of business on 30 September 2013, the following were registered as being The Company’s investment policy is stated on page 3. interested in 3% or more of the Company’s ordinary share capital: The Company’s key performance indicators and developments during the year are given Ronald Bruce Rowan in the Chairman’s statement and in the Barclayshare Nominees Limited trading portfolio review, all of which form LR Nominees Limited Ordinary shares of £0.01 each Percentage of issued share capital 10,170,000 4,825,677 1,763,068 1,402,044 1,294,385 1,200,000 25.80% 12.24% 4.47% 3.56% 3.28% 3.04% Hargreaves Lansdown Nominees Limited TD Direct Investing Nominees Limited Mrs Diane Mary Watkins part of the Directors’ report. Key risks and uncertainties This business carries with it a high level of risk and uncertainty, although the rewards can be outstanding. The risk arises from the very nature of early stage mineral exploration where there can be no certainty of outcome. In addition, often there is a lack of liquidity in the Company’s trading portfolio, most of which is, or in the case of pre IPO commitments is expected to be, quoted on AIM or ISDX, such that the Company may have difficulty in realising the full value in a forced sale. Accordingly, a commitment is only made after thorough research into both the management and the business of the target, both of which are closely monitored thereafter. Furthermore, the Company limits the amount of each commitment, both as to the absolute amount and percentage of the target company. Details of other financial risks and their management are given in Note 19 to the financial statements. Share capital Payment of suppliers In accordance with the authority to purchase The Company’s policy is to settle terms of up to 5,850,000 Ordinary shares renewed at payment with suppliers when agreeing terms the 2012 annual general meeting, the Company of business, to ensure that suppliers are holds 2,300,000 of its own Ordinary shares aware of the terms of payment and to abide in treasury bought in previous years. These by them. It is usual for suppliers to be paid purchases were made to enhance the underlying within 14 days of receipt of invoice. At net asset value per share given the substantial 30 September 2013, the Company’s trade discount at which shares were traded at the time. The Directors will place a further creditors were equal to costs incurred in 66 days (2012: 20 days). resolution before Shareholders at the forthcoming annual general meeting so as Post balance sheet events to give themselves the opportunity to make There are no reportable post balance further purchases should circumstances sheet events. be favourable. Charitable and political donations During the year there were no charitable or political contributions (2012: £nil). 13 StarveSt plc www.Starve St.co.uk Corporate GovernanCe Directors’ report continued Transition to International Financial Going concern Management of capital Reporting Standards (IFRS) The Company’s day to day financing is from The Company’s objectives when managing The directors understand that the requirement its available cash resources or via a bank capital are: to prepare financial statements in accordance overdraft and, on occasion, by the use of with IFRS currently only applies to groups. short term loans. The Company’s formal As the Company is not part of a group it will overdraft facility was last confirmed by continue to take advantage of the exemption the bank in early 2013. • to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and available to AIM companies which do not prepare consolidated accounts and so defer the transition for as long as the exemption remains available. Auditor A resolution to reappoint Grant Thornton UK LLP as auditor for the coming year will be proposed at the forthcoming AGM in accordance with section 489 Companies Act 2006. Remuneration The remuneration of the Directors has been Whilst the Directors fully expect a sufficient • to provide an adequate return to overdraft facility to remain in place for the shareholders by trading its current foreseeable future, they are confident that asset investments. adequate funding can be raised as required to meet the Company’s current and future liabilities without resorting to this facility. In the very unlikely event that such finance could not be raised, the Directors could raise sufficient funds by disposal of certain of its current asset trade investments, although such a ‘forced’ sale is to be avoided if at all possible. The Company sets the level of capital in proportion to risk. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. Control procedures The Board has approved financial budgets and cash forecasts; in addition, it has fixed by the Board as a whole. The Board For the reasons outlined above, the Directors implemented procedures to ensure seeks to provide appropriate reward for the are satisfied that the Company will be able compliance with accounting standards skill and time commitment required so as to meet its current and future liabilities, and and effective reporting. to retain the right calibre of director without continue trading, for the foreseeable future paying more than is necessary. and, in any event, for a period of not less than By order of the Board Details of Directors’ fees and of payments made for professional services rendered are set out in Note 5 to the financial statements. twelve months from the date of approving the financial statements. The preparation of the financial statements on a going concern basis is therefore considered to remain appropriate. Management incentives Other than options issued in accordance with the 2005 share option schemes as set out in Note 12 to the financial statements, the Company has no share purchase, share option or other management incentive scheme. As required by legislation, the Company has introduced a stakeholders’ pension plan for the benefit of any future employees. John Watkins Finance Director and Company Secretary 31 October 2013 Company registration number: 3981468 14 StarveSt plc annual report and accountS 2013 statement of Directors’ responsibilities Directors’ responsibilities for the financial statements The Directors are responsible for keeping adequate accounting records that are sufficient The Directors are responsible for preparing the to show and explain the company’s transactions Directors’ report and the financial statements in and disclose with reasonable accuracy at any accordance with applicable law and regulations. time the financial position of the Company Company law requires the directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. and applicable law). Under company law The Directors confirm that so far as each the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company for that period. In preparing those financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. of the Directors is aware: • there is no relevant audit information of which the Company’s auditor is unaware; and • the Directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditor is are aware of that information. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 15 StarveSt plc www.Starve St.co.uk FinanCial statements inDepenDent auDitor’s report to the members oF starvest plC We have audited the financial statements of Respective responsibilities Opinion on other matter prescribed Starvest plc for the year ended 30 September of directors and auditor by the Companies Act 2006 2013 which comprise the profit and loss account, As explained more fully in the Directors’ In our opinion the information given in the the balance sheet, the cash flow statement Responsibilities Statement set out on page 15, Directors’ Report for the financial year for and the related notes. The financial reporting the directors are responsible for the preparation which the financial statements are prepared framework that has been applied in their of the financial statements and for being is consistent with the financial statements. preparation is applicable law and United satisfied that they give a true and fair view. Kingdom Accounting Standards (United Kingdom Our responsibility is to audit and express Matters on which we are required Generally Accepted Accounting Practice). an opinion on the financial statements to report by exception This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. in accordance with applicable law and We have nothing to report in respect of International Standards on Auditing (UK and the following matters where the Companies Ireland). Those standards require us to comply Act 2006 requires us to report to you if, in with the Auditing Practices Board’s (APB’s) our opinion: Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm. • adequate accounting records have not been, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records Opinion on financial statements and returns; or In our opinion the financial statements: • certain disclosures of directors’ • give a true and fair view of the state of the company’s affairs as at 30 September 2013 remuneration specified by law are not made; or and of its loss for the year then ended; • we have not received all the information • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006. and explanations we require for our audit. Paul Creasey Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants 31 October 2013 16 StarveSt plc annual report and accountS 2013 profit anD loss account For the year ended 30 september 2013 Operating income Direct costs Gross profit Administrative expenses Amounts written off trade investments Operating loss Interest receivable Interest payable Loss on ordinary activities before taxation Tax on loss on ordinary activities Loss on ordinary activities after taxation Loss per share – basic and diluted There are no recognised gains and losses in either year other than the result for the year. All operations are continuing. Year ended 30 September 2013 £ Year ended 30 September 2012 £ Notes — — — — — — (206,702) (802,394) (199,791) (842,703) (1,009,096) (1,042,494) 1,835 — 10,932 — (1,007,261) (1,031,562) 127 284,044 (1,007,134) (747,518) 8 2 3 6 (2.7) pence (2.0) pence The accompanying accounting policies and notes form an integral part of these financial statements. 17 StarveSt plc www.Starve St.co.uk FinanCial statements balance sheet as at 30 september 2013 Current assets Debtors Trade investments Cash at bank and in hand Creditors – amounts falling due within one year Net current assets Share capital and reserves Called-up share capital Share premium account Profit and loss account Equity shareholders’ funds Notes 7 8 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 37,200 310,042 2,258,662 3,051,056 257,556 199,036 2,553,418 3,560,134 10 (46,659) (46,241) 2,506,759 3,513,893 11 13 13 14 394,173 394,173 2,118,396 2,118,396 (5,810) 1,001,324 2,506,759 3,513,893 The financial statements on pages 17 to 28 were approved and authorised for issue by the Board of Directors on 31 October 2013 and signed on its behalf by: R Bruce Rowan Chairman and Chief Executive John Watkins Finance Director The accompanying accounting policies and notes form an integral part of these financial statements. 18 StarveSt plc annual report and accountS 2013 cash flow statement For the year ended 30 september 2013 Net cash outflow from operating activities Returns on investment and servicing of finance: Interest received Interest paid Taxation recovered/(paid) Dividend paid Financing: Issue of new shares Year ended 30 September 2013 £ Year ended 30 September 2012 £ Notes 15 (227,360) (781,300) 1,835 — 1,835 10,932 — 10,932 284,045 (762,546) — — — (183,586) 22,000 22,000 Increase/(decrease) in cash in the year 16 58,520 (1,694,500) The accompanying accounting policies and notes form an integral part of these financial statements. 19 StarveSt plc www.Starve St.co.uk FinanCial statements notes to financial statements For the year ended 30 september 2013 1 Statement of principal accounting policies The Directors have reviewed the principal accounting policies summarised below and consider them to be the most appropriate for the Company. They have all been applied consistently throughout the year and the previous year. Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards. Operating income Operating income represents amounts receivable for trade investment sales. Operating income is recognised on the date of sale contract. Direct costs Direct costs include the book cost of investments sold during the year. Administrative expenses All administrative expenses are stated inclusive of VAT, where applicable, as the company is not eligible to reclaim VAT incurred on its costs. Investments Current asset trade investments are stated at the lower of cost and net realisable value. Net realisable value is the lower of bid price and Directors’ valuation. The lower Directors’ valuation is applied where the Company’s interest in the investee company amounts to 7% or more of the investee Company’s issued share capital or more than 7% of the investment portfolio or where there are factors of which the Directors are aware which call for some further adjustment. At 30 September 2013, these discounts totalled £196,000 (2012: £354,000). Where the net realisable amount falls below cost the investment is written down accordingly with the decline in value (and any subsequent reversals) being included in operating profit. Increases in value are not recognised in the carrying amount (save for reversals of amounts previously written off as noted above) and are only recognised in the profit and loss account when they are realised by a disposal. Going concern The Company’s day to day financing is via a bank overdraft and, on occasion, by the use of short term loans. The Company’s formal overdraft facility was last confirmed by the bank in early 2013. Whilst the Directors fully expect a sufficient overdraft facility to remain in place for the foreseeable future, they are confident that sufficient funding can be raised as required to meet the Company’s current and future liabilities. In the very unlikely event that such finance could not be raised, the Directors could raise sufficient funds by disposal of certain of its current asset trade investments, although such a ‘forced’ sale is to be avoided if at all possible. For the reasons outlined above, the Directors are satisfied that the Company will be able to meet its current and future liabilities, and continue trading, for the foreseeable future and, in any event, for a period of not less than twelve months from the date of approving the financial statements. The preparation of the financial statements on a going concern basis is therefore considered to remain appropriate. Taxation Corporation tax payable is provided on taxable profits at the current rates enacted or substantially enacted at the balance sheet date. Deferred tax Deferred tax is provided on an undiscounted full provision basis on all timing differences which have arisen but not reversed at the balance sheet date using rates of tax enacted or substantively enacted at the balance sheet date. Options No charge to profit is made in respect of the options over the Company’s shares held by Directors as all of the options had fully vested prior to 1 October 2006, the effective date of Financial Reporting Standard 20, ‘Share Based Payments’. Treasury shares Where the Company acquired its own shares (‘treasury shares’) these are deducted from retained profits. No profit or loss is recognised on purchase or subsequent sale of treasury shares. 20 StarveSt plc annual report and accountS 2013 2 Loss on ordinary activities before taxation Loss on ordinary activities before taxation is stated after charging: Auditor’s remuneration – audit Auditor’s remuneration – non-audit services Directors’ emoluments – Note 5 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 14,500 18,700 14,050 18,600 105,000 105,000 Auditor’s remuneration for non-audit services provided during the year comprises nominated advisor fees of £15,000 and tax compliance service fees of £3,700, both stated exclusive of VAT (2012: nominated advisor fees of £15,000 and tax compliance fees of £3,600 both stated exclusive of VAT). 3 Taxation Current year taxation UK corporation tax at 23.5% (2012: 25%) on loss for the year Adjustments in respect of prior years Total current tax (credit) for the year Year ended 30 September 2013 £ Year ended 30 September 2012 £ — (127) (284,172) 128 (127) (284,044) The tax assessed is at the standard rate of corporation tax in the UK at 23.5% (2012: standard rate 25%). The differences are explained below: Loss on ordinary activities before taxation Loss on ordinary activities at 23.5% (2012: 25%) Effect of: Expenses not deductible for tax purposes Adjustments in respect of prior years Losses carried forward Utilisation of tax losses and other deductions Other permanent differences Current tax (credit) for the year 4 Staff costs Year ended 30 September 2013 £ Year ended 30 September 2012 £ (1,007,261) (1,031,562) (236,706) (257,891) 36 (127) 236,670 — — 2 128 263,267 (284,172) (5,378) (127) (284,044) The Company had no employees during the year or the previous year; the two executive directors provide professional services as required on a part time basis. 21 StarveSt plc www.Starve St.co.uk FinanCial statements notes to financial statements continued For the year ended 30 september 2013 5 Directors’ emoluments Year ended 30 September 2013 R B Rowan A C R Scutt J Watkins Year ended 30 September 2012 R B Rowan A C R Scutt J Watkins Amounts paid to third parties – see note £ 54,000 — 18,000 Fees £ — 15,000 18,000 Total £ 54,000 15,000 36,000 33,000 72,000 105,000 Amounts paid to third parties – see note £ 54,000 — 18,000 Fees £ — 15,000 18,000 Total £ 54,000 15,000 36,000 33,000 72,000 105,000 Amounts paid to third parties Included in the above are the following amounts paid to third parties: • In respect of the management services of Bruce Rowan, £54,000 (2012: £54,000) is payable to Sunvest Corporation Limited, a company of which he is a director and shareholder. Of this £18,000 relates to the provision of an office (2012: £18,000). At 30 September 2013, the sum of £13,500 (2012: £13,500) was outstanding. • In respect of the professional services of John Watkins, FCA, £18,000 (VAT not chargeable; 2012: £18,000, VAT not chargeable) of the above remuneration was paid through his business. At 30 September 2013, the sum of £4,500 (2012: £4,500) was outstanding. Pensions No pension benefits were provided for any director in the current or previous year. Directors’ share options Details of share options held and exercised during the year by the directors are set out in Note 12. 22 StarveSt plc annual report and accountS 2013 6 Loss per share The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders by the weighted average number of shares in issue. Loss for the year Weighted average number of Ordinary shares of £0.01 in issue Loss per share – basic Weighted average number of Ordinary shares of £0.01 in issue inclusive of outstanding options Loss per share – diluted Year ended 30 September 2013 £ Year ended 30 September 2012 £ (1,007,134) (747,518) 37,117,259 36,967,532 (2.7) pence (2.0) pence 40,092,259 37,383,926 (2.7) pence (2.0) pence The weighted average number of shares in issue excludes outstanding options exercisable at 15 pence per share as they are out of the money. In view of the loss for the year, the options have no dilutive effect. 7 Debtors Prepayments Loans recoverable Taxation recoverable Year ended 30 September 2013 £ Year ended 30 September 2012 £ 27,200 10,000 25,870 — — 284,172 37,200 310,042 23 StarveSt plc www.Starve St.co.uk FinanCial statements notes to financial statements continued For the year ended 30 september 2013 8 Current trade investments, at the lower of cost, market value or directors’ valuation Cost At 30 September 2012 Additions at cost Disposals At 30 September 2013 Provisions At 30 September 2012 Released during the year Provided during the year At 30 September 2013 Net book amount At 30 September 2013 At 30 September 2012 The net book carrying values of the investments above were as follows: Quoted on LSE Quoted on AIM Quoted on ISDX Quoted on foreign stock exchanges Unquoted The market value or directors’ lower valuation of the trading portfolio was: Quoted on LSE Quoted on AIM Quoted on ISDX Quoted on foreign stock exchanges Unquoted 24 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 7,290,779 6,765,779 80,000 (70,000) 525,000 — 7,300,779 7,290,779 4,239,723 3,397,020 (44,977) (232,961) 847,371 1,075,664 5,042,117 4,239,723 2,258,662 3,051,056 3,051,056 3,368,759 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 193,500 416,250 1,677,835 2,096,627 373,483 13,844 — 216,314 21,865 300,000 2,258,662 3,051,056 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 193,500 416,250 1,805,944 2,460,655 468,483 13,844 — 216,314 21,865 395,000 2,481,771 3,510,084 StarveSt plc annual report and accountS 2013 9 Trade investments The Company has holdings in the companies described in the review of portfolio on pages 6 to 11. Of these, the Company has holdings amounting to 20% or more of the issued share capital of the following companies: Name Country of incorporation Class of shares held Percentage of issued capital Profit/(loss) for the last financial year Capital and reserves at last balance sheet date Accounting year end Equity Resources plc – see note 1 Nordic Energy plc – see note 2 Treslow Limited – see note 3 England & Wales England & Wales England & Wales Guild Acquisitions plc – see note 4 England & Wales Ordinary Ordinary Ordinary Ordinary 28.41% 42.37% 30.1% 22.22% £(36,950) £83,878 31 May 2012 — — — — — — 31 May 2013 30 April 2012 31 Dec 2012 Note 1: Equity Resources plc is considered to be an associated undertaking. Equity accounting has not been used as the Company does not prepare consolidated financial statements. The 31 May 2013 financial statements have yet to be approved by the Board and the auditor. Note 2: The Company has no representation on the Board of Directors of Nordic Energy plc (“Nordic”) nor does it exert significant influence in any other way. Accordingly, Nordic is not accounted for as an associate undertaking despite the holding being in excess of 20% of the issued share capital. The Company’s expectation is that its interest will be heavily diluted as Nordic develops its business for which it issues new equity. The 2013 financial statements have yet to be released. Note 3: During 2008, the Company agreed to support Treslow Limited through its pre IPO processes; the required information is not available. The company does not exert significant influence over Treslow Limited and so it is not considered to be an associated undertaking despite the holding being in excess of 20% of issued share capital. Note 4: Guild Acquisitions plc is not considered to be an Associate; Guild has an independent executive chairman. Neither the Company nor Mr Bruce Rowan, are involved in active management of Guild. Note 5: The Company’s share of the gross assets of its Associates at 30 September 2013 is £23,830. The share of gross assets has been derived from the latest available financial information in respect of the Associates. The company’s share of the items making up the profit and loss account and cash flow statements of its Associates has not been disclosed as the numbers are not considered material. 10 Creditors Amounts falling due within one year: Trade creditors Corporation tax Social security and other taxes Accruals Year ended 30 September 2013 £ Year ended 30 September 2012 £ 27,734 — 3,750 15,175 7,851 — 2,800 35,590 46,659 46,241 A bank overdraft facility is secured by a charge over certain of the Company’s investments having a market value at the balance sheet date of £1.11 million. 25 StarveSt plc www.Starve St.co.uk FinanCial statements notes to financial statements continued For the year ended 30 september 2013 11 Share capital The authorised share capital of the Company and the called up and fully paid amounts were as follows: Authorised Number Nominal As at 30 September 2013 and 30 September 2012, Ordinary shares of £0.01 each 250,000,000 2,500,000 Called up, allotted, issued and fully paid As at 30 September 2013 and 30 September 2012 39,417,259 394,173 Shares held in treasury Total number of shares held in treasury 12 Share options 30 September 2013 30 September 2012 2,300,000 2,300,000 The Company established share option schemes on 27 June 2002 and on 14 February 2005. The 2002 scheme expired on 31 May 2012 when unexercised option lapsed; the 2005 share option scheme continues. During the year ended 30 September 2013, no new options were granted. As at 30 September 2013, the outstanding options were as follows: RB Rowan ACR Scutt J Watkins At 30 September 2012 Exercised during the year 1,750,000 350,000 875,000 2,975,000 — — — — At 30 September 2013 outstanding and exercisable 1,750,000 350,000 875,000 2,975,000 Exercise price 15 pence 15 pence 15 pence Date from which exercisable Expiry date 14 February 2005 31 January 2015 14 February 2005 31 January 2015 14 February 2005 31 January 2015 Note 1: The market value of the Company’s shares at 30 September 2013 was 5.62 pence (2012: 6.5 pence) and the range during the year was 6.5 pence to 5.6 pence (2012: 5.0 pence to 13.5 pence), the average for the year being 6.0 pence (2012: 8.86 pence). 13 Reserves The movements on reserves during the year were as follows: As at 30 September 2012 Loss for the year As at 30 September 2013 Share premium account £ Profit and loss account £ 2,118,396 1,001,324 — (1,007,134) 2,118,396 (5,810) 26 StarveSt plc annual report and accountS 2013 14 Movement on equity shareholders’ funds Loss for the year Shares issued Dividends paid Net decrease in shareholders’ funds Opening equity shareholders’ funds Closing equity shareholders’ funds 15 Reconciliation of operating loss to operating cash flows Operating loss Amounts written off trade investments (Increase)/decrease in debtors (Decrease)/increase in creditors Purchase of trade investments at cost Profit on sale of investments Disposals Net cash outflow from operating activities 16 Analysis and reconciliation of net funds Cash at bank Net cash Increase/(decrease) in cash in the year Movement in funds in the year Net cash at 1 October Net cash at 30 September Year ended 30 September 2013 £ Year ended 30 September 2012 £ (1,007,134) (747,518) — — 22,000 (183,586) (1,007,134) (909,104) 3,513,893 4,422,997 2,506,759 3,513,893 Year ended 30 September 2013 £ Year ended 30 September 2012 £ (1,009,096) (1,042,494) 802,394 (11,076) 418 842,703 1,840 (58,349) (80,000) (525,000) — 70,000 — — (227,360) (781,300) 30 September 2012 £ Cash flow £ 30 September 2013 £ 199,036 58,520 257,556 199,036 58,520 257,556 Year ended 30 September 2013 £ Year ended 30 September 2012 £ 58,520 (1,694,500) 58,520 (1,694,500) 199,036 1,893,536 257,556 199,036 27 StarveSt plc www.Starve St.co.uk FinanCial statements notes to financial statements continued For the year ended 30 september 2013 17 Commitments As at 30 September 2013 and 30 September 2012, the Company had no commitments other than for expenses incurred in the normal course of business. 18 Related party transactions There were no related party transactions during the year. In 2012 the directors received the following dividends in respect of their holdings in the Company. Ronald Bruce Rowan Anthony Charles Raby Scutt – personal Anthony Charles Raby Scutt – as trustee Mrs Diane Mary Watkins – wife of John Watkins John Watkins 19 Financial instruments Net dividend £50,850 £250 £550 £5,000 £175 The Company uses financial instruments, comprising cash, bank overdraft, short term loan, trade investments and trade creditors, which arise directly from its operations. The main purpose of these instruments is to further the company’s operations. Short term debtors and creditors Short term debtors and creditors have been excluded from all the following disclosures. Trade investments Trade investments are stated at cost less any provision for impairment. The difference between fair and book value is set out in Note 8. The Board meets quarterly to consider investment strategy in respect of the Company’s portfolio. Interest rate risk The Company finances its operations through retained profits and new investment funds raised. The Board utilises short term floating rate interest bearing accounts to ensure adequate working capital is available whilst maximising returns on deposits. Liquidity risk The Company seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. More information about the company’s liquidity risk, and the management of that risk, is given under ‘going concern’ in note 1 to the financial statements. Borrowing facilities As at 30 September 2013, the Company had an overdraft facility of £250,000 arranged with its bankers (2012: £250,000) secured on certain investments with a market value at 30 September 2013 of £1.11 million. The overdraft facility is renewable annually with the next review due in March 2014. Currency risk The Company trades substantially within the United Kingdom and all transactions are denominated in Sterling. Consequently, the Company is not significantly exposed to currency risk. Fair values Except where shown above, the fair values of the Company’s financial instruments are considered equal to the book value. 20 Post balance sheet event There are no reportable post balance sheet events. 21 Control There is considered to be no controlling party. 28 StarveSt plc annual report and accountS 2013 notice of annual General meetinG Notice is hereby given that the Annual General Ordinary business Meeting of Starvest plc (the “Company”) will Ordinary resolutions (within the meaning of Section 560 of the Act) for cash pursuant to the authority be held at the offices of Grant Thornton UK LLP, 1. To receive the report of the Directors and the conferred by Resolution 4 as if Section 561(1) 30 Finsbury Square, London EC2P 2YU on audited financial statements of the Company of the Act did not apply to any such allotment Wednesday 18 December 2013 at 3.00 pm for for the year ended 30 September 2013. provided that this power shall be limited to: the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as ordinary resolutions in the cases of resolutions 1 to 4 and 6 and as a special resolution in the case of resolution 5. 2. To re-elect Ronald Bruce Rowan as a (a) the allotment of equity securities where Director of the Company, who retires by such securities have been offered rotation under the Articles of Association (whether by way of a rights issue, open of the Company and, being eligible, offers offer or otherwise) to the holders of himself for re-election. 3. To re-appoint Grant Thornton UK LLP as auditors of the Company to act until the conclusion of the next Annual General Meeting and to authorise the Directors to determine the remuneration of the auditors. ordinary shares in the capital of the Company in proportion (as nearly as may be) to their holdings of such ordinary shares but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with equity securities representing 4. That in substitution for all existing authorities fractional entitlements and with legal under the following section to the extent or practical problems under the laws unutilised, the Directors be generally and of, or the requirements of, any regulatory unconditionally authorised pursuant to body or any stock exchange in, any Section 551 of the Companies Act 2006 territory; and (the “Act”) to allot relevant securities (within the meaning of section 560) up to an aggregate nominal amount of £250,000. (b) the allotment, other than pursuant to (a) above, of equity securities: The authority referred to in this resolution (i) arising from the exercise of options shall be in substitution for all other existing and warrants outstanding at the authorities, and shall expire (unless date of this resolution; previously renewed, varied or revoked by the Company in general meeting) at the earlier of the next Annual General Meeting of the Company and the date falling (ii) other than pursuant to (i) above, up to an aggregate nominal value of £250,000, 15 months following the date of the Annual and this power shall, unless previously General Meeting being convened by this revoked or varied by special resolution Notice. The Company may, at any time of the Company in general meeting, prior to the expiry of the authority, make an offer or agreement which would or expire at the earlier of the conclusion of the next Annual General Meeting of the might require relevant securities to be Company and the date falling 15 months allotted after the expiry of the authority following the date of the Annual General and the Directors are hereby authorised Meeting being convened by this Notice. to allot relevant securities in pursuance of The Company may, before such expiry, such offer or agreement as if the authority make offers or agreements which would had not expired. Special resolution or might require equity securities to be allotted after such expiry and the Directors are hereby empowered to 5. That in substitution for all existing authorities allot equity securities in pursuance to the extent unutilised, the Directors, of such offers or agreements as if the pursuant to Section 570 of the Act, be power conferred hereby had not expired. empowered to allot equity securities 29 StarveSt plc www.Starve St.co.uk notiCe oF annual General meetinG notice of annual General meetinG continued Special business If you are a registered holder of Ordinary 6. That the Company be unconditionally Shares in the Company, whether or not you and generally authorised to make market are able to attend the meeting, you may use purchases (as defined by the Companies the enclosed form of proxy to appoint one or Act 2006 Section 701(1)) of Ordinary shares more persons to attend and vote on a poll on of £0.01 each in its capital, provided that: your behalf. A proxy need not be a member (a) the maximum number of shares that of the Company. A form of proxy is provided. may be so acquired is 5,900,000, being This may be sent by facsimile transfer to a number that approximates to 15% of 01252 719 232 or by mail using the reply the issued Ordinary share capital of the paid card to: Company at the date of the meeting; The Company Secretary, Starvest plc (b) the minimum price that may be paid for c/o Share Registrars Limited the shares is £0.01 per share, being the Suite E, First Floor, 9 Lion and Lamb Yard nominal value per share; and Farnham, Surrey GU9 7LL (c) the maximum price that may be paid In either case, the signed proxy must be is an amount equal to or 5% higher received no later than 48 hours (excluding than the average of the middle market non-business days) before the time of the quotations per share as derived from meeting, or any adjournment thereof. the Daily List of the AIM market of the London Stock Exchange for the five business days immediately preceding the day on which the shares are purchased, and By order of the Board John Watkins Company Secretary 18 November 2013 the authority conferred by this resolution shall expire on the date falling fifteen Registered Office: months from the date of passing of this 55 Gower Street resolution but not so as to prejudice the London WC1E 6HQ completion of a purchase contracted before that date. Registered in England and Wales Number: 3981468 30 StarveSt plc annual report and accountS 2013 notes to the notice of annual General meetinG Entitlement to attend and vote 4. You may appoint more than one proxy In the case of a member which is a company, 1. Pursuant to Regulation 41 of The provided each proxy is appointed to the proxy form must be executed under its Uncertificated Securities Regulations 2001 exercise rights attached to different common seal or signed on its behalf by an and paragraph 18(c) of The Companies shares. You may not appoint more than officer of the company or an attorney for Act 2006 (Consequential Amendments) one proxy to exercise rights attached to the company. (Uncertificated Securities) Order 2009, any one share. To appoint more than one the Company specifies that only those proxy, please contact the registrars of the members registered on the Company’s Company, Share Registrars Limited on register of members 48 hours before 01252 821 390. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. the time of the Meeting shall be entitled to attend and vote at the Meeting. In calculating the period of 48 hours mentioned above no account shall be taken of any part of a day that is not a working day. Appointment of proxies 2. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and 5. A vote withheld is not a vote in law, which means that the vote will not be counted in Appointment of proxy by joint members the calculation of votes for or against the 7. In the case of joint holders, where more resolution. If no voting indication is given, your proxy will vote or abstain from voting than one of the joint holders purports to appoint a proxy, only the appointment at his or her discretion. Your proxy will submitted by the most senior holder will vote (or abstain from voting) as he or she be accepted. Seniority is determined by thinks fit in relation to any other matter the order in which the names of the joint which is put before the Meeting. holders appear in the Company’s register Appointment of proxy using hard copy proxy form of members in respect of the joint holding (the first-named being the most senior). 6. The notes to the proxy form explain how Changing proxy instructions to direct your proxy how to vote on each 8. To change your proxy instructions simply resolution or withhold their vote. submit a new proxy appointment using the the notes to the proxy form. To appoint a proxy using the proxy form, 3. A proxy does not need to be a member of the form must be: the Company but must attend the Meeting • completed and signed; methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to • sent or delivered to Share Registrars Limited at Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL Where you have appointed a proxy using or by facsimile transmission to the hard-copy proxy form and would like 01252 719 232; and to change the instructions using another hard-copy proxy form, please contact Share Registrars Limited on 01252 821 390. appoint your own choice of proxy (not the Chairman) and give your instructions • received by Share Registrars Limited no later than 48 hours (excluding directly to them. non-business days) prior to the Meeting. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 31 StarveSt plc www.Starve St.co.uk notiCe oF annual General meetinG notes to the notice of annual General meetinG continued Termination of proxy appointments Issued shares and total voting rights 9. In order to revoke a proxy instruction you 10. As at 5 November 2012, the Company’s will need to inform the Company using one issued share capital comprised 39,417,259 of the following methods: ordinary shares of £0.01 each. Each ordinary By sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share Registrars Limited at Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL or by facsimile transmission to 01252 719 232. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 5 November 2012 is 39,417,259. Communications with the Company 11. Except as provided above, members who have general queries about the Meeting should telephone John Watkins on 01483 771992 (no other methods of communication will be accepted). You may not use any electronic address provided either in this notice of general meeting; or any related documents (including the chairman’s letter and proxy form), to In either case, the revocation notice must communicate with the Company for any be received by Share Registrars Limited no purpose other than those expressly stated. later than 48 hours (excluding non-business days) prior to the Meeting. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. 32 StarveSt plc annual report and accountS 2013 Notes to the proxy form 1. As a member of the Company you are 5. To direct your proxy how to vote on the 8. Any power of attorney or any other entitled to appoint a proxy to exercise all resolutions mark the appropriate box with authority under which this proxy form or any of your rights to attend, speak and an ‘X’. To abstain from voting on a resolution, is signed (or a duly certified copy of such vote at a general meeting of the Company. select the relevant “Vote withheld” box. power or authority) must be included You can only appoint a proxy using the A vote withheld is not a vote in law, which with the proxy form. procedures set out in these notes. means that the vote will not be counted in 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. To appoint a proxy using this form, the form must be: a person other than the Chairman of the • completed and signed; 9. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). 10. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy • sent or delivered to Share Registrars Limited at Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey 11. For details of how to change your proxy GU9 7LL; and instructions or revoke your proxy appointment see the notes to the notice of meeting. someone other than the Chairman, you • received by Share Registrars Limited are responsible for ensuring that they no later than 48 hours (excluding 12. You may not use any electronic address attend the meeting and are aware of your non-business days) before the time provided in this proxy form to communicate voting intentions. of the meeting. with the Company for any purposes other 4. You may appoint more than one proxy 7. In the case of a member which is a company, provided each proxy is appointed to this proxy form must be executed under its exercise rights attached to different common seal or signed on its behalf by an shares. You may not appoint more than officer of the company or an attorney for one proxy to exercise rights attached to the company. than those expressly stated. any one share. To appoint more than one proxy please contact the registrars of the Company, Share Registrars Limited, on 01252 821 390. 33 www.starvest.co.uk 

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