ANNUAL REPORT AND ACCOUNTS 2015
Investing for the future
CONTENTS
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30
CHAiRmAn’S STATEmEnT
inVESTinG PoLiCY STATEmEnT
REViEW of TRAdinG PoRTfoLio
inTERESTS in GoLd EXPLoRATion
inTERESTS in EnERGY
oTHER inVESTmEnTS
ComPAnY infoRmATion & BoARd of diRECToRS
STRATEGiC REPoRT
diRECToRS’ REPoRT
STATEmEnT of diRECToRS’ RESPonSiBiLiTiES
indEPEndEnT AudiToR’S REPoRT To THE mEmBERS of STARVEST PLC
PRofiT And LoSS ACCounT
BALAnCE SHEET
CASH fLoW STATEmEnT
noTES To finAnCiAL STATEmEnTS
noTiCE of AnnuAL GEnERAL mEETinG
1 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
WWW.STARVEST.CO.UK STRATEGiC REPoRT | CHAIRMAN’S STATEMENT
CHAIRMAN’S STATEMENT
i am pleased to present my first annual
statement to Shareholders for the year
ended 30 September 2015 and the fifteenth
since the Company was formed in 2000.
Bruce Rowan
Investing policy
It is a great personal sadness, shared by my fellow directors,
that for health reasons, Bruce found it necessary to step down
from the Board at the end of August 2015. Over many years,
Bruce gained a reputation for his successful support for small-
cap mineral exploration businesses both in his native Australia
and throughout the world. He had the vision to support a large
number of such businesses as a result of which he was much
sought after. We wish him all the very best in his retirement
during which we will do our very best to honour his trust in us
and to enhance the value of the Company’s portfolio.
Results for the year
Following the three tough years of 2011 to 2013, 2014 showed a
marked improvement in the Company’s net asset value. Sadly,
that, and more has been lost during the last year so that the
closing net asset value has fallen to a level not previously known.
Many of our portfolio companies exploring for gold, iron ore and
other such minerals have continued to find it difficult to raise
essential cash and so have seen share price falls in what has
become a harsh environment for early stage mineral explorers.
At the balance sheet date, more than 45% of the portfolio value
was attributed to oil stocks which have been hit by a collapse
of world oil prices. For example, a year ago we reported
having seen a dramatic rise in the price of Nordic Energy plc,
a company then valued at 7 pence per share, but which has
since failed in its attempt to be admitted to AIM leading to a
boardroom hiatus and a current price of 0.8 pence per share.
On a brighter note, we have two companies in the portfolio
each of which is edging towards gold production; we wait with
anticipation for continued good news from Ariana Resources plc
and KEFI Minerals plc.
The Company’s investing policy is reproduced on page 3 of this
report and made available on our website, www.starvest.co.uk
Trading portfolio valuation
A brief review of the major portfolio companies follows from
page 4; other investee companies are listed with the websites
from which further information may be obtained.
Shareholder information
The Company’s shares are traded on AIM.
Announcements made to the London Stock Exchange are sent
to those who register at the Company’s website,
www.starvest.co.uk where historic reports and announcements
are also available.
Annual general meeting
We will hold our annual general meeting at 11.00 am on 10
December 2015 at the City office of Grant Thornton UK LLP,
our Nominated Adviser, when we look forward to meeting those
Shareholders able to attend.
Callum N Baxter
Chairman & Chief Executive
4 November 2015
2 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
STRATEGiC REPoRT | INVESTING POLICY STATEMENT
INvESTINg pOlICy STATEMENT
About us
Lack of liquidity:
The investee companies, being small, almost invariably lack
share market liquidity, even if they are quoted on AIM, ISDX,
ASX, or TSX-V. Therefore, in the early years it is rarely possible
to sell an investment at the quoted market price with the
result that extreme patience is required whilst the investee
company develops and ultimately attracts market interest. If
and when an explorer finds a large exploitable resource, it may
become the object of a third party bid, or otherwise become a
much larger entity; either way an opportunity to realise cash is
expected to follow.
Success rate:
Of the 25 to 30 investments held at any one time, it is expected
that no more than five will prove to be ‘winners’; from half
of the remainder we may expect to see modest share price
improvements. Overall, the expectation is that in time
Shareholder returns will be acceptable if not substantial.
Accordingly, the Board is unable to give any estimate of the
quantum or timing of returns.
Profit distribution:
When profits have been realised and adequate cash is available,
it is the intention of the Board to recommend the distribution of
up to half the profits realised.
Other matters:
The Company currently has investments in the following
companies, which themselves are investment companies:
Equity Investors plc; Equity Resources Limited and Guild
Acquisitions plc.
The Company takes no part in the active management of
investee companies, although directors of the Company are also
non-executive directors on the boards of four such companies.
Callum Baxter, newly appointed Chairman, is also the CEO of
one such company.
The Board, under the leadership of the previous chairman,
Bruce Rowan, has managed the Company as an investment
company since January 2002. Collectively, the Board has
significant experience over many years of investing in small
company new issues and pre-IPO opportunities in the natural
resources and mineral exploration sectors.
Following the appointment as chairman of Callum Baxter, the
Board will continue with a similar investment strategy, that is,
with a focus on the natural resources sector.
Company objective
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.
Investing strategy
Natural resources:
Whilst the Company has no exclusive commitment to the
natural resources sector, the Board sees this as having
considerable growth potential in the medium term. Historically,
investments were generally made immediately prior to an initial
public offering, on AIM or ISDX as well as in the aftermarket.
As the nature of the market has changed since 2008, it is more
likely that the future investment portfolio will include a spread
of companies that generally have moved beyond the IPO stage
but remain in the early stages of identifying a commercial
resource and/or moving towards development with the
appropriate finance.
Investment size:
Initial investments are for varying amounts but usually in the
range of £100,000 - £300,000. These companies are invariably
not generating cash, rather they have a constant requirement
to raise new equity in order to continue exploration and
development. Therefore, after appropriate due diligence, the
Company may provide further funding support and make later
market purchases, so that the total investment may be greater
than £300,000.
High risk:
The business is inherently high risk and of a cyclical nature
dependent upon fluctuations in world economic activity which
impacts on the demand for minerals. However, it offers the
investor a spread of investments in an exciting sector, which the
Board believes will continue to offer the potential of significant
returns for the foreseeable future.
WWW.STARVEST.Co.uK 3
STRATEGiC REPoRT | REVIEW OF TRADING PORTFOLIO
REvIEw OF TRAdINg pORTFOlIO
Introduction
During the year to 30 September 2015, the portfolio comprised
interests in the companies commented on below. In addition, a
further 12 active companies were included but not commented
on in this review.
The tough trading and fundraising conditions of the past four
years have taken a toll on some of the businesses in which
Starvest is invested to such an extent that, as at 30 September
2015, the net asset value had reduced by 74% in one year
from a value of £4.41m at 30 September 2014, to £1.14m. As
a year ago, the greater part of the value is in oil, gas and coal
exploration ventures, but the values have been significantly
reduced; together the Company’s interests now amount to 66%
of its portfolio; much of the remainder is in gold exploration.
Transactions
During the year the Company sold its remaining stake in
Beowulf Mining plc. In addition, the Company subscribed to
a placing in Alba Mineral Resources plc which it sold at profit
within four weeks before purchasing a further holding as the
price fell. Otherwise there were no purchases or sales.
During the year, we received interest on short-term loans
advanced during the previous year to Goldcrest Resources plc;
Goldcrest also made a partial repayment of the capital.
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 September 2015
has been no better with a dramatic decline in market prices.
Against this background, we continue to value our portfolio
of 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 prices or where
the Company’s interest is of such a size as to inhibit selling
into a depressed market. We attribute no value to those of our
investments that do not enjoy a market quote.
For the purpose of the quarterly valuation announced at the end
of September, we have one exception to this rule. Many years
ago, we took a founding stake in Concorde Oil & Gas plc which
was subsequently acquired by Kuwait Energy plc, a company
registered in Jersey which we understand is in the early stages
of seeking a public quotation, possibly in New York. In view of
the significant progress made by the company, we have valued
the holding at a price advised by a Kuwaiti broker which makes
a local market in the stock.
The Directors are satisfied that this is the only significant
management estimate made within the financial statements.
This cautious approach has proved to be appropriate in these
difficult times; additional provisions made during the year total
£140,000 (2014: £351,000)
A detailed review of the six leading portfolio companies follows.
This year, we are not commenting on the smaller companies,
although they are listed at the end of the review.
Raising new finance, an essential requirement for any mineral
exploration business, has continued to be very tough leading to
the heavy dilution of existing shareholders and to some failures.
As the net asset value has fallen substantially during the year
to £1.14m, the loss before taxation has increased from £356k to
£964k. In addition, the Company:
• has no debt other than a convertible loan from a
shareholder and a bank overdraft facility only;
• continues to believe that it is in a strong position to benefit
from an upturn in markets which will come in time;
• believes that 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
which all require natural resources in order to both produce
and power.
Financial Reporting Standards (FRS102)
To date we have prepared our financial statements under UK
Generally Accepted Accounting Standards (UK GAAP). However,
with effect from 1 October 2015 we will be required to adopt FRS
102 (“New UK GAAP”). The significant impact of this change will
be on the valuation of the Company’s investments. To date, we
have been able to carry all our investments at the lower of cost or
current value. However, under the new accounting standard, we
will be required to mark-to-market all our investments. Based
on the closing prices at 30 September 2015, the investments
(and hence net assets of the group) will not be affected as all
investments are carried at a loss to cost price.
Company statistics
The Company considers the following statistics to be its Key
Performance Indicators (KPIs) and is satisfied with the results
achieved in the year given the uncertain market conditions.
4 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
STRATEGiC REPoRT | REVIEW OF TRADING PORTFOLIO
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
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 slightly improved;
as at the close of business on 30 October 2015, the asset value
net of debt was £1.3m.
Review of the current market
We and our investee companies have endured yet another tough
year; extreme short termism leading to lower prices and/or
greater volatility has become the norm. It is clear that many
private investors upon whom we and our investee companies
have relied for new capital have withdrawn their support or,
at best, are awaiting a recognisable upturn in world-wide
economic fortunes; this is compounded in that few institutional
investors have an appetite for small early stage projects.
World markets continue to be volatile. For instance, in the past
four years the gold price has been as high as $1,883 per oz.
but has also been as low as $1,093; at the present time it is
approximately $1,170, not far from where it was a year ago.
Then there is iron ore which is in plentiful supply but with
Australia the dominant exporter. Prices have fallen from $130/t
to below $50/t.
Demand for raw materials continues to fall. Although there
may be timing issues, we expect demand to recover to be
followed by prices. Meanwhile, opportunities for junior
explorers to realise value and generate cash are few.
In spite of the challenging environment, the strengthening of
the US$ has been and will be a factor in determining world
commodity prices.
It is worth reminding ourselves of what we have consistently
stated: we are investing in a high risk sector where positive returns
are not guaranteed and that we never expect more than five of the
25 to 30 investments held at any one time to be ‘winners’.
30 September 2015
at BId values
as adjusted
30 September 2014
at BID values
as adjusted
£1.04m
£1.14m
3.09p
2.75p
11%
£1.02m
£4.15m
£4.41m
11.87p
5.88p
50%
£2.18m
Change
%
-75%
-74%
-74%
-53%
-53%
WWW.STARVEST.Co.uK 5
STRATEGiC REPoRT | PoRTfoLio REViEW | INTERESTS IN GOLD EXPLORATION
INTERESTS IN gOld ExplORATION
Ariana Resources plc
Significant progress has been made by Ariana in the first half of
this financial year where they are transitioning to become a gold
producer in Turkey.
With a market capitalisation of £7m today, it has experienced
huge swings even in the past year. Having traded consistently
in the range 0.8-1 pence per share for most of 2014 and up to
June 2015 when it shot up to 1.30p, it has since fallen back to
the range 0.8-0.9pps where it languishes today. But then, most
other small-cap mineral exploration companies are suffering
the same fate, if not worse, in this challenging market.
In spite of the languishing share price, Ariana has made
significant progress towards revenue generation; it has:
• At the Red Rabbit Gold Project in south-western Turkey,
50% owned by Ariana, Kiziltepe Mine construction has
advanced so that first gold production is scheduled during
the second half of 2016 at 20,000 ounces per annum for the
first eight years of operation.
• An expected cash cost of approximately US$600 per ounce.
• When it comes on stream, the Tavsan Sector is expected to
add 30,000 ounces gold per annum.
• Further resource discoveries are expected in the vicinity.
• Kiziltepe mine development is fully funded, with all
necessary land holdings secured.
• Once revenue becomes a reality, Ariana’s other intended
activities will be fully funded.
Meanwhile, Ariana is seeking a profitable exit from other
development projects such as those in north-eastern Turkey in
which Eldorado has a 51% interest; the inferred and indicated
JORC totals 1.09 million ounces of gold.
Therefore, as Ariana nears production during 2016, it is not
unreasonable to expect share price growth, although there must
be some doubt that we will ever fully recover our investment in
today’s challenging economic climate.
www.arianaresources.com
our interests in gold exploration have endured
yet another tough year!
following falls in the gold price to uS$1,200,
a year ago we predicted that further falls
were likely. indeed, the price fell in July 2015
by uS$100, but has since increased so it
now trades around uS$1,170. Given all the
uncertainty in world markets, the focus must be
on cost reduction.
Amongst the Starvest investments, there are six
with interests in gold exploration. of these, we
comment on two:
6 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
STRATEGiC REPoRT | PoRTfoLio REViEW | INTERESTS IN GOLD EXPLORATION
KEFI Minerals plc
Kefi is an exploration and development company focussed on
gold and copper deposits, primarily in the highly prospective
Arabian-Nubian Shield.
With a market capitalisation of £9m and a price of just 0.45p, we
believe that there is plenty of scope for upside. In their research
note dated 1 October 2015, Edison estimated that the shares
offer investors an IRR of 38.6% over twelve years such has been
the significant progress at the 95% owned Tulu Kapi project in
Ethiopia. The mine development plan is well advanced with
100,000 ounces per annum of gold expected for ten years; the
reserve is estimated at 1.05million ounces @ 2.12g/t. Plant
and mining contractors were recently appointed. The Ethiopian
government is intending to contribute US$20m towards the cost
of the mine estimated at US$120m.
In addition, Kefi has a 40% stake in the Jibal Qutman project in
Saudi Arabia where it has recently discovered additional areas
of gold mineralisation. The estimated gold resource totals
733,000 ounces.
As the operator of these joint-venture projects, Kefi is well
positioned to develop them prudently while continuing to add
value through further exploration.
www.kefi-minerals.com
The remaining four companies are:
Goldcrest Resources plc
www.goldcrestresourcesplc.com
Ghana
Greatland Gold plc
www.greatlandgold.com
Australia
Minera IRL Limited
www.minera-irl.com
Peru
Red Rock Resources plc
www.rrrplc.com
Ivory Coast and Kenya
WWW.STARVEST.Co.uK 7
STRATEGiC REPoRT | PoRTfoLio REViEW | INTERESTS IN ENERGY
INTERESTS IN ENERgy
We have four companies in the energy sector on which
we comment as follows:
Nordic Energy plc
Alba Mineral Resources plc
Unfortunately, Nordic’s attempt to move from ISDX to AIM
coincided with a severe fall in the oil price. The bid share price
collapsed from 7 pence at 30 September 2014 to 0.8 pence a
year later, thus accounting for a large part of the value loss in
the past year.
It is our belief that there remains the possibility for Nordic to
recover value. We wait with interest.
Nordic is focussed on oil and gas opportunities in Denmark,
Norway, and the North Sea sectors of the Netherlands and
the UK where it holds licence 1/13 in the Danish sector, 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.
A CPR which was delivered in June 2014 identified multiple
drilling targets to be followed by farm-out discussions with
major players.
www.nordicenergyplc.com
Alba is a UK-based exploration company with an overall
strategy to develop a portfolio of well-researched, promising
and prospective exploration interests.
A year ago it expanded its interests to include a 5% stake in
Horse Hill Developments Limited, a company with a 65%
interest in drilling for oil and gas in Surrey at Horse Hill, just to
the north of Gatwick Airport (www.horsehilldev.co.uk). During
the past year, it doubled its stake when it acquired a further
5% from Regency Mines plc and more recently has acquired a
further 5% thus increasing its stake to 15%, together with an
option to farm into 5% of a production licence which includes the
nearby Brockham Oil Field.
For its part, Horse Hill Developments has completed the
drilling programme and, as expected, has located hydrocarbons
but further testing is required to establish the commerciality of
the find.
Since September, Alba has secured an option to earn up to
70% of a graphite project in southern Greenland which is also
prospective for gold, nickel, copper and platinum group metals.
Alba will manage the project and, on achieving agreed targets,
will increase its percentage interest.
Otherwise, Alba has projects prospective for:
• uranium in Mauritania;
• gold, nickel and base metals in western Ireland.
www.albamineralresources.com
8 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
STRATEGiC REPoRT | PoRTfoLio REViEW | INTERESTS IN ENERGY
Kuwait Energy plc
Oracle Coalfields plc
The Company’s interest in Kuwait Energy arises from it having
been a major founding shareholder in Concorde Oil and Gas plc
in 2006, which was subsequently taken over by Kuwait Energy.
After much delay, Kuwait Energy announced an intention to
seek a listing on the London Stock Exchange which, we were
advised, was planned for the fourth quarter 2014. In the event,
the oil price collapse intervened and, so far as we know today,
there is no replacement plan although in a recent webinar, one
was alluded to.
Kuwait Energy is an independent oil and gas company actively
engaged in the exploration, appraisal, development and
production of hydrocarbons. Since being established in 2005, the
company has built a high-quality, diversified portfolio of oil and
gas assets focused on exploration and production activities in
the MENA region (Middle East and North Africa). It has interests
in Egypt, Iraq, Yemen, Oman and Pakistan where it has built
strong relationships with national oil and gas companies and so
provides valuable technical expertise, advice and assistance to
the companies and local governments on oil and gas projects
that are important to these countries’ economic development.
Production at its Block 9 project in Iraq has recently been
started with more expected in 2016.
In view of the obvious progress made during the past year, we
have revisited our earlier decision to make a full provision for
the cost of Kuwait Energy. On advice, we have reinstated a
cost equal to a value equivalent to the price at which stock has
changed hands during the past three months in private deals
organised by a Kuwaiti broker.
www.kuwaitenergy.co
Oracle Coalfields development plans for its Block VI of the Thar
Coalfield in the Sindh Province of South East Pakistan continue
to progress towards first production of lignite coal by end 2018,
intended to supply a new 600MW mine-mouth power plant.
This project is of national importance to Pakistan which suffers
from a chronic shortage of electricity generating capacity.
The need for substantial fuel imports impacts severely on the
country’s economy and contributes to population unrest.
Oracle plans a first phase open pit development producing
5m tonnes per annum from a proven reserve of 113m tonnes
and a JORC compliant resource of 529m tonnes. Production
is expected to be doubled to 10m tonnes in phase two with a
doubling of power plant output. The mining lease is for 30
years, extendable for a further 30 years.
SEPCO, a leading Chinese power construction group, backed by
Chinese export credit guarantees, is contracted to construct the
mine and the power plant. The need is such that the Pakistan
Government has provided incentives; also, the Sindh Provincial
Government is strongly supportive. Oracle’s project has been
further supported by its inclusion as a priority project in the
programme of the recently created China-Pakistan Economic
Corridor. Oracle expects to retain a controlling interest in each
local company.
The basis for the coal price for supply to the power plant has
been agreed with the Thar Coal and Energy Board (TCEB) under
a pricing mechanism incorporating fiscal incentives and an
allowable 20% IRR in US$, thus protecting against world-wide
markets. When the coal price is determined, Oracle will apply
for an initial electricity tariff for the power plant. With financial
closure expected by the second quarter of 2016, Oracle is
presently engaged in negotiating contracts for both the mine
and the power plant and is planning for Sinosure’s export credit
financing and other bank finance.
Meanwhile work is progressing on the planned resettlement
of two communities in the vicinity of the mine-site and the
implementation of a corporate social responsibility programme
to benefit them in terms of water, basic healthcare and
veterinary support.
Despite Oracle’s present lowly AIM capitalisation, reflecting past
interim stock issue fund-raising and recent market volatility of
resource stocks, the expected positive news-flow in the months
ahead should generate increasing interest in both the project
and in Oracle.
www.oraclecoalfields.com
WWW.STARVEST.Co.uK 9
STRATEGiC REPoRT | PoRTfoLio REViEW | OTHER INVESTMENTS
OTHER INvESTMENTS
The remaining non-core investments are available
for sale when the conditions are deemed to be right.
These include:
International Mining &
Infrastructure Corporation plc
www.imicplc.com
CAP Energy plc
www.capenergy.co.uk
Marechale Capital plc
www.marechalecapital.com
Regency Mines plc
www.regency-mines.com
Sunrise Resources plc
www.sunriseresourcesplc.com
in addition, there are a number of failed or almost
failed ventures to which we attribute no value,
although we always hope and seek to crystallise
value where possible.
10 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
WWW.STARVEST.Co.uK 11
CoRPoRATE GoVERnAnCE | COMPANY INFORMATION & BOARD OF DIRECTORS
BOARd OF
dIRECTORS
Callum N Baxter
Chairman and
Chief Executive
Callum is an experienced
geologist and investor. He
is also executive director of
AIM quoted investee company
Greatland Gold plc and an
executive director of Goldcrest
Resources plc, both Starvest
investee companies.
Anthony C R Scutt
Non-executive Director
Tony is an experienced private
investor and investment analyst
as well as a director of investee
companies Agricola Resources
plc, and Oracle Coalfields plc.
John watkins, FCA
Finance Director and
Company Secretary
John is a chartered accountant
in practice and a non-executive
director of other companies
including AIM quoted investee
company, Greatland Gold plc.
COMpANy
INFORMATION
directors
Callum N Baxter - Chairman & Chief Executive
Anthony C R Scutt - Non Executive Director
John Watkins, FCA - Finance Director
Secretary and registered office
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
Registered Number
3981468
Auditor
Grant Thornton UK LLP
Chartered Accountants and Statutory Auditor
1020 Eskdale Road, Winnersh, Wokingham,
Berkshire, RG41 5TS
Solicitors
Ronaldsons LLP
55 Gower Street, London, WC1E 6HQ
Nominated adviser
Grant Thornton UK LLP
30 Finsbury Square, London, EC2P 2YU
Bankers
Allied Irish Bank (GB)
10 Berkeley Square, London, W1J 6AA
Clydesdale Bank plc
2 Bishops Wharf, Walnut Tree Close, Guildford,
Surrey, GU1 4UP
Broker
S I Capital Limited
46 Bridge Street, Godalming, Surrey, GU7 1HL
Registrars
Share Registrars Limited
First Floor, Suite E, 9 Lion & Lamb Yard, Farnham,
Surrey, GU9 7LL
Tel: 01252 821390
listing
AIM Market of the London Stock Exchange (AIM)
Ticker: SVE
website
Register for email alerts at
www.starvest.co.uk – updated regularly to provide
information as it is released to the market.
12 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
CoRPoRATE GoVERnAnCE | STRATEGIC REPORT
STRATEgIC REpORT
principal activities and business review
Key risks and uncertainties
Since Bruce Rowan was appointed Chief Executive on 31
January 2002, the Company’s principal trading activity has
been the use of his expertise to identify and, where appropriate,
support small company new issues, pre IPO and on-going
fundraising opportunities with a view to realising profit from
disposals as the businesses mature in the medium term.
The directors expect this to continue in the future under the
leadership of Callum Baxter, newly appointed Chief Executive.
The Company’s investing policy is stated on page 3.
The Company’s key performance indicators and developments
during the year are given in the Chairman’s statement and
in the trading portfolio review, all of which form part of the
Directors’ report.
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.
By order of the Board
John watkins
finance director and Company Secretary
4 November 2015
Company registration number: 3981468
WWW.STARVEST.Co.uK 13
CoRPoRATE GoVERnAnCE | DIRECTORS’ REPORT
dIRECTORS’ REpORT
The Directors present their fifteenth annual report on the affairs
of the Company, together with the financial statements for the
year ended 30 September 2015.
Results and dividends
The Company’s results are set out in the profit and loss account
on page 18. The audited financial statements for the year ended
30 September 2015 are set out on pages 18 to 29.
The Directors cannot recommend the payment of a dividend for
the year (2014: £nil).
directors
The Directors who served during the year are as follows:
R Bruce Rowan – resigned 31 August 2015
Callum N Baxter – appointed 01 September 2015
Anthony C R Scutt
John Watkins
Substantial shareholdings
At the close of business on 30 September 2015, the following
were registered as being interested in 3% or more of the
Company’s ordinary share capital:
Ordinary shares
of £0.01 each
Percentage
of issued
share capital
Ronald Bruce Rowan
10,170,000
27.40%
Barclayshare
Nominees Limited
Hargreaves Lansdown
Nominees Limited
4,571,309
12.32%
2,192,859
5.91%
payment of suppliers
The Company’s policy is to settle terms of payment with suppliers
when agreeing terms of business, to ensure that suppliers are
aware of the terms of payment and to abide by them. It is usual
for suppliers to be paid within 14 days of receipt of invoice. At 30
September 2015, the Company’s trade creditors were equal to
costs incurred in 11 days (2014: 46 days).
post balance sheet events
There are no reportable post balance sheet events.
Transition to FRS102
The directors understand that the requirement to prepare
financial statements in accordance with FRS 102 will be
effective for the year ended 30 September 2016. The first
financial statements for this year will include comparatives
for the year ended 30 September 2015 being re-stated in
accordance with FRS 102 and a reconciliation between the old
and new GAAP will be provided in the notes.
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 fixed by the Board
as a whole. The Board seeks to provide appropriate reward for
the skill and time commitment required so as to retain the right
calibre of director without paying more than is necessary.
Details of Directors’ fees and of payments made for professional
services rendered are set out in Note 5 to the financial statements.
Management incentives
Wealth Nominees Limited
1,347,370
3.63%
TD Direct Investing
Nominees Limited
1,295,752
3.49%
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.
Mrs Diane Mary Watkins
1,200,000
3.23%
As required by legislation, the Company has introduced a
stakeholders’ pension plan for the benefit of any future employees.
Share capital
going concern
In accordance with the authority to purchase up to 5,850,000
Ordinary shares renewed at the 2012 annual general meeting,
the Company holds 2,300,000 of its own Ordinary shares in
treasury bought in previous years. These purchases were made
to enhance the underlying net asset value per share given the
substantial discount at which shares were traded at the time.
Charitable and political donations
During the year there were no charitable or political
contributions (2014: £nil).
The Company’s day to day financing is from its available cash
resources or 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 2015.
Whilst the Directors fully expect a sufficient overdraft facility to
remain in place for the foreseeable future, they are confident
that 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
14 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
CoRPoRATE GoVERnAnCE | DIRECTORS’ REPORT
certain of its current asset trade investments, although such a
‘forced’ sale is to be avoided if at all possible.
To assist the Company with its financing obligations, a
shareholder has provided a loan of £100,000. This loan is due to
be repaid within 12 months or be converted into Ordinary shares
at a price of 3 pence per share.
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.
Management of capital
The Company’s objectives when managing capital are:
• 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
• to provide an adequate return to shareholders by trading its
current asset investments.
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 implemented procedures to ensure compliance
with applicable accounting standards and effective reporting.
Financial instruments
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 2015, the Company had an overdraft facility
of £125,000 arranged with its bankers (2014: £250,000) secured
on certain investments with a market value at 30 September
2015 of £400,000. The overdraft facility is renewable annually
with the next review due in March 2016
.
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.
Price and credit risk
Management do not consider price or credit risk to be material
to the Company.
By order of the Board
John watkins
finance director and Company Secretary
4 November 2015
Company registration number: 3981468
WWW.STARVEST.Co.uK 15
CoRPoRATE GoVERnAnCE | STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STATEMENT OF dIRECTORS’
RESpONSIBIlITIES
directors’ responsibilities for the financial statements
The Directors are responsible for preparing the Directors’
report, the Strategic report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law).
Under company law 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;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies 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.
The Directors confirm that so far as each 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
auditors 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.
16 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STARVEST PLC
INdEpENdENT AudITOR’S REpORT TO THE
MEMBERS OF STARvEST plC
We have audited the financial statements of Starvest plc for the
year ended 30 September 2015 which comprise the profit and
loss account, the balance sheet, the cash flow statement and
the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
Opinion on other matters prescribed by the Companies
Act 2006
In our opinion the information given in the Directors’ report
and the Strategic report for the financial year for which the
financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
• 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 and returns; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Tracey James
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Reading
4 November 2015
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.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors’
Responsibilities set out on page 16, the directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s (APB’s)
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 FRC’s website at
www.frc.org.uk/apb/scope/private.cfm
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the company’s affairs as
at 30 September 2015 and of its loss for the year then ended;
• 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.
WWW.STARVEST.Co.uK 17
finAnCiAL STATEmEnTS | PROFIT AND LOSS ACCOUNT
pROFIT ANd lOSS ACCOuNT
foR THE YEAR EndEd 30 SEPTEmBER 2015
Turnover
Cost of sales
Gross profit
Administrative expenses
Amounts written off trade investments
Operating loss
Interest receivable
Loss on ordinary activities before taxation
Tax on loss on ordinary activities
Loss on ordinary activities after taxation
Loss per share – basic and diluted
Year ended
30 September 2015
£
Year ended
30 September 2014
£
Notes
123,891
(112,916)
10,975
(234,766)
(749,671)
(973,462)
9,326
(964,136)
-
262,940
(194,801)
68,139
(206,837)
(220,101)
(358,799)
2,475
(356,324)
-
(964,136)
(356,324)
(2.60) pence
(0.96) pence
8
2
3
6
There are no recognised gains and losses in either year other than the result for the year.
All operations are continuing.
The accompanying accounting policies and notes form an integral part of these financial statements.
18 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | BALANCE SHEET
BAlANCE SHEET
AS AT 30 SEPTEmBER 2015
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 reserve
Equity shareholders’ funds
Notes
30 September
2015
£
30 September
2014
£
7
8
10
11
13
13
14
14
55,040
1,033,096
228,318
1,316,454
(125,155)
1,191,299
394,173
2,118,396
(1,326,270)
5,000
1,191,299
100,184
1,855,061
239,540
2,194,785
(44,350)
2,150,435
394,173
2,118,396
(362,134)
-
2,150,435
The financial statements on pages 18 to 29 were approved and authorised for issue by the Board of Directors on 4 November 2015
and signed on its behalf by:
Callum N Baxter
Chairman and Chief Executive
John watkins
finance director
The accompanying accounting policies and notes form an integral part of these financial statements.
WWW.STARVEST.Co.uK 19
finAnCiAL STATEmEnTS | CASH FLOW STATEMENT
CASH FlOw STATEMENT
foR THE YEAR EndEd 30 SEPTEmBER 2015
Cash outflow before financing activities
Shares to be issued
Returns on investment and servicing of finance:
Interest received
(Decrease) in cash in the year
Year ended
30 September 2015
£
Year ended
30 September 2013
£
Notes
15
15
16
(25,548)
5,000
9,326
(11,222)
(20,491)
-
2,475
(18,016)
The accompanying accounting policies and notes form an integral part of these financial statements.
20 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAl STATEMENTS
foR THE YEAR EndEd 30 SEPTEmBER 2015
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.
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.
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, excluding Kuwait Energy plc
which has been valued by the Directors. 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 2015, these provisions totalled £140,000
(2014: £351,000).
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 2015.
Whilst the Directors fully expect a sufficient overdraft facility to
remain in place for the foreseeable future, they are confident
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.
Financial instruments
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangement
entered into. Where the contractual obligation of the financial
instruments (including share capital) are equivalent to a
similar debt instrument they are classed as financial liabilities.
Financial liabilities are presented as such in the balance sheet.
Finance costs and gains or losses relating to financial liabilities
are included in the profit and loss account. Finance costs are
calculated so as to produce a constant rate of charge on the
outstanding liability.
Where none of the contractual terms of share capital meet
the definition of a financial liability then this is classed as an
equity instrument. Dividends and distributions relating to equity
instruments are debited directly to equity.
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.
WWW.STARVEST.Co.uK 21
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
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 2015
£
Year ended
30 September 2014
£
15,500
15,000
90,000
15,100
15,000
90,000
Auditor’s remuneration for non-audit services provided during the year comprises nominated advisor fees of £15,000, stated
exclusive of VAT (2014: £15,000 exclusive of VAT).
3. Taxation
Current year taxation
UK corporation tax at 22% (2013: 23.5%) on loss for the year
Total current tax charge / (credit) for the year
Year ended
30 September 2015
£
Year ended
30 September 2014
£
-
-
-
-
The tax assessed is at the standard rate of corporation tax in the UK at 22% (2013: standard rate 23.5%).
The differences are explained below:
Loss on ordinary activities before taxation
Loss on ordinary activities at 20.5% (2014: 22%)
Effect of:
Losses carried forward
Current tax charge / (credit) for the year
4. Staff costs
(964,136)
(197,648)
197,648
-
(356,324)
(78,391)
78,391
-
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.
22 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
5. directors’ emoluments
Year ended 30 September 2015
R B Rowan
A C R Scutt
J Watkins
Year ended 30 September 2014
R B Rowan
A C R Scutt
J Watkins
Fees
£
-
12,000
15,000
27,000
Fees
£
-
12,000
15,000
27,000
Amounts paid to
third parties
– see note
£
48,000
-
15,000
63,000
Amounts paid to
third parties
– see note
£
48,000
-
15,000
63,000
Total
£
48,000
12,000
30,000
90,000
Total
£
48,000
12,000
30,000
90,000
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, £48,000 (2014: £48,000) 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 (2014: £18,000). At 30
September 2015, £nil (2014: £12,000) was outstanding.
• In respect of the professional services of John Watkins, FCA, £15,000; (2014: £15,000) of the above remuneration was paid
through his personal business. At 30 September 2015, £nil (2014: £3,750) was outstanding.
• Callum Baxter received no remuneration in the year.
Pensions
No pension costs were incurred for any director in the current or previous year.
Directors’ share options
Details of share options held and expired during the year by the directors are set out in Note 12.
WWW.STARVEST.Co.uK 23
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
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 and diluted
7. debtors
Prepayments
Short term loans to related parties
Short term loans to related parties
Year ended
30 September 2015
£
Year ended
30 September 2014
£
(964,136)
37,117,259
(356,324)
37,117,259
(2.60) pence
(0.96) pence
30 September 2015
£
30 September 2014
£
27,540
27,500
55,040
34,086
66,098
100,184
• During the year a further loan of £10,000 was advanced to Equity Resources plc (“EQR”) at 0% interest with no formal
agreement as to repayment date. The purpose of the loan was to assist EQR to meet its necessary operational costs during a
period when it seemed inappropriate that EQR should realise cash from its investments. The Company holds 28.41% of the
equity. However, the Company has made a full provision for these loans, totalling £20,000.
• During the year, a further loan of £5,000 was advanced to Goldcrest Resources plc (“GCRP”) at 20% pa interest in order to assist
GCRP in funding its necessary operational costs prior to an expected AIM listing. During the year £12,500 was repaid leaving
£27,500 outstanding at the year end.
• In 2014 a loan of £20,000 was advanced to Guild Acquisitions plc (“Guild”) at 12% pa interest to assist Guild in funding its
necessary operational costs. However, a full provision for this loan has been made.
24 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
8. Current trade investments, at the lower of cost, market value or directors’ valuation
30 September 2015
£
30 September 2014
£
Cost
At 30 September 2014
Additions at cost
Disposals
At 30 September 2015
Provisions
At 30 September 2014
Released during the year
Provided during the year
At 30 September 2015
Net book amount
At 30 September 2015
At 30 September 2014
The net book carrying values of the investments above were as follows:
Quoted on AIM
Quoted on ISDX
Quoted on foreign stock exchanges
Unquoted at Directors’ valuation
The market value of the trading portfolio was:
Quoted on AIM
Quoted on ISDX
Quoted on foreign stock exchanges
Unquoted at Directors’ valuation
6,680,779
40,000
(1,113,004)
5,607,775
4,825,718
(1,079,131)
828,092
4,574,679
1,033,096
1,855,061
694,920
272,547
708
64,921
7,300,779
10,000
(630,000)
6,680,779
5,042,117
(692,060)
475,661
4,825,718
1,855,061
2,258,662
1,390,407
455,812
8,842
-
1,033,096
1,855,061
30 September 2015
£
30 September 2014
£
694,920
272,547
708
64,921
1,433,913
2,710,812
8,842
-
1,033,096
4,153,567
WWW.STARVEST.Co.uK 25
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
9. Trade investments
The Company has holdings in the companies described in the review of portfolio on pages 6 to 10.
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]
Guild Acquisitions plc – see note [4]
England
& Wales
England
& Wales
England
& Wales
England
& Wales
Ordinary
28.41%
£(31,327)
£4,723
31 May 2014
Ordinary
39.71%
£(186,672)
£628,364
31 May 2014
Ordinary
30.1%
-
-
30 April 2013
Ordinary
22.22%
£(65,043)
£181,101
31 Dec 2014
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.
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.
Note [3]: During 2008, the Company agreed to support Treslow Limited through its pre IPO processes. The Company has no
representation on the Board of Directors so it 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 the issued share capital.
Note [4]: Guild Acquisitions plc is considered not to be an associated undertaking by virtue of its entirely separate management
based in the Isle of Man; there is no common director.
Additionally, despite a shareholding of 3.56%, Greatland Gold plc is considered to be an associate undertaking due to the fact that
the majority of directors are common to both companies. Equity accounting has not been used as the Company does not prepare
consolidated financial statements.
The Company’s share of the gross assets of its Associates at 30 September 2015 is £122,159. 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.
26 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
10. Creditors
Amounts falling due within one year:
Trade creditors
Social security and other taxes
Accruals
Loans
30 September 2015
£
30 September 2014
£
5,635
-
24,520
95,000
125,155
20,641
931
22,778
-
44,350
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 £400,000.
During the year the Company received a loan from a shareholder repayable in 12 months with an interest rate of 0% and with a
conversion option at 3 pence per share.
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 2015 and 30 September 2014, Ordinary shares of £0.01 each
250,000,000
2,500,000
Called up, allotted, issued and fully paid
As at 30 September 2015 and 30 September 2014
39,417,259
394,173
Shares held in treasury
Total number of shares held in treasury
12. Share options
30 September 2015
30 September 2014
2,300,000
2,300,000
The Company’s share option scheme, established on 14 February 2005, expired on 31 January 2015. During the year ended 30
September 2015 no new options were granted and as at 30 September 2015 no options were outstanding as follows:
R B Rowan
A C R Scutt
J Watkins
At
30 September 2014
Expired
during the
year
1,750,000
(1,750,000)
350,000
(350,000)
875,000
(875,000)
2,975,000
(2,975,000)
At
30 September 2015
Exercise
price
Date from which
exercisable
Expiry date
15 pence
14 February 2005
31 January 2015
15 pence
14 February 2005
31 January 2015
15 pence
14 February 2005
31 January 2015
-
-
-
-
WWW.STARVEST.Co.uK 27
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
13. Reserves
The movements on reserves during the year were as follows:
As at 30 September 2014
Loss for the year
As at 30 September 2015
14. Movement on equity shareholders’ funds
Loss for the year and net decrease in shareholders’ funds
Opening equity shareholders’ funds
Equity reserve
Closing equity shareholders’ funds
Share premium
account
£
2,118,396
-
Profit and loss
account
£
(362,134)
(964,136)
2,118,396
(1,326,270)
Year ended
30 September 2015
£
Year ended
30 September 2014
£
(964,136)
2,150,435
5,000
1,191,299
(356,324)
2,506,759
-
2,150,435
An equity reserve has been created representing the equity element of the convertible loan provided by a shareholder. Please refer to
note 10 for the details of this loan.
15. Reconciliation of operating loss to operating cash flows
Operating loss
Amounts written off trade investments
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Purchase of trade investments at cost
Profit on sale of investments
Disposals
Cash outflow before financing activities
Shares to be issued
Decrease in cash in the year
Year ended
30 September 2015
£
Year ended
30 September 2014
£
(973,462)
749,671
45,144
80,805
(40,000)
(11,598)
123,892
(20,548)
5,000
(20,548)
(358,799)
220,101
(62,984)
(2,309)
(10,000)
(66,500)
260,000
(20,491)
-
(20,491)
28 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTES TO FINANCIAL STATEMENTS
16. Analysis and reconciliation of net funds
Cash at bank
Net cash
(Decrease) in cash in the year
Movement in funds in the year
Net cash at 1 October 2014
Net cash at 30 September 2015
17. Commitments
30 September 2014
£
239,540
239,540
Cash flow
£
(11,222)
(11,222)
30 September 2015
£
228,318
228,318
Year ended
30 September 2015
£
Year ended
30 September 2014
£
(11,222)
(11,222)
239,540
228,318
(18,016)
(18,016)
257,556
239,540
As at 30 September 2015 and 30 September 2014, 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 other than those disclosed in notes 5 and 7 above.
19. post balance sheet event
There are no reportable post balance sheet events.
20. Control
There is considered to be no controlling party.
WWW.STARVEST.Co.uK 29
finAnCiAL STATEmEnTS | NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNuAl gENERAl MEETINg
Notice is hereby given that the Annual General Meeting of
Starvest plc (the “Company”) will be held at the offices of
Grant Thornton UK LLP, 30 Finsbury Square, London EC2P
2YU on Thursday 10 December 2015 at 11.00 am for 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 5 and as a special resolution in the
case of resolution 6.
ORdINARy BuSINESS
ORDINARY RESOLUTIONS
1 To receive the report of the Directors and the audited financial
statements of the Company for the year ended 30 September 2015.
2 To re-appoint Callum Newton Baxter, appointed during the
year, who is offering himself for election.
3 To re-elect Anthony Charles Raby Scutt as a Director of
the Company, who retires by rotation under the Articles of
Association of the Company and, being eligible, offers himself
for re-election.
4 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.
SPECIAL BUSINESS
5 That in substitution for all existing authorities under the
following section to the extent unutilised, the Directors
be generally and unconditionally authorised pursuant to
Section 551 of the Companies Act 2006 (the “Act”) to allot
relevant securities (within the meaning of section 560) up to
an aggregate nominal amount of £250,000. The authority
referred to in this resolution shall be in substitution for all
other existing authorities, and shall expire (unless 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 15 months following
the date of the Annual General Meeting being convened
by this Notice. The Company may, at any time prior to the
expiry of the authority, make an offer or agreement which
would or might require relevant securities to be allotted
after the expiry of the authority and the Directors are hereby
authorised to allot relevant securities in pursuance of such
offer or agreement as if the authority had not expired.
SPECIAL RESOLUTION
6 That in substitution for all existing authorities to the extent
unutilised, the Directors, pursuant to Section 570 of the Act,
be empowered to allot equity securities (within the meaning
of Section 560 of the Act) for cash pursuant to the authority
conferred by Resolution 5 as if Section 561(1) of the Act did
not apply to any such allotment provided that this power shall
be limited to:
offer or otherwise) to the holders of 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 fractional entitlements
and with legal or practical problems under the laws of,
or the requirements of, any regulatory body or any stock
exchange in, any territory; and
(b) the allotment, other than pursuant to (a) above, of equity
securities:
(i) arising from the exercise of options and warrants
outstanding at the date of this resolution;
(ii) other than pursuant to (i) above, up to an aggregate
nominal value of £250,000,
and this power shall, unless previously revoked or varied by
special resolution of the Company in general meeting, expire at
the earlier of the conclusion of the next Annual General Meeting
of the Company and the date falling 15 months following the
date of the Annual General Meeting being convened by this
Notice. The Company may, before such expiry, make offers
or agreements which would or might require equity securities
to be allotted after such expiry and the Directors are hereby
empowered to allot equity securities in pursuance of such offers
or agreements as if the power conferred hereby had not expired.
If you are a registered holder of Ordinary Shares in the Company,
whether or not you are able to attend the meeting, you may use
the enclosed form of proxy to appoint one or more persons to
attend and vote on a poll on your behalf. A proxy need not be a
member of the Company. A form of proxy is provided.
This may be sent by facsimile transfer to 01252 719 232 or by
mail using the reply paid card to:
The Company Secretary, Starvest plc
c/o Share Registrars Limited
Suite E, First Floor, 9 Lion and Lamb Yard
Farnham, Surrey GU9 7LL
In either case, the signed proxy must be received no later than
48 hours (excluding non-business days) before the time of the
meeting, or any adjournment thereof.
Registered Office:
55 Gower Street
London WC1E 6HQ
By order of the Board
John Watkins
Company Secretary
13 November 2015
(a) the allotment of equity securities where such securities
have been offered (whether by way of a rights issue, open
Registered in England and Wales Number: 3981468
30 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
finAnCiAL STATEmEnTS | NOTICE OF ANNUAL GENERAL MEETING
Notes to the Notice of general Meeting
Entitlement to attend and vote
1. Pursuant to Regulation 41 of The Uncertificated Securities
Regulations 2001 and paragraph 18(c) of The Companies Act
2006 (Consequential Amendments) (Uncertificated Securities)
Order 2009, the Company specifies that only those members
registered on the Company’s register of members 48 hours
before 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 the notes to the proxy form.
3. A proxy does not need to be a member of the Company but
must attend the Meeting 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 appoint your own choice of proxy (not
the Chairman) and give your instructions directly to them.
4. You may appoint more than one proxy provided each proxy
is appointed to exercise rights attached to different shares. You
may not appoint more than one proxy to exercise rights attached
to any one share. To appoint more than one proxy, please
contact the registrars of the Company, Share Registrars Limited
on 01252 821 390.
5. A vote withheld is not a vote in law, which means that the
vote will not be counted in 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.
Appointment of proxy using hard copy proxy form
6. The notes to the proxy form explain how to direct your proxy
how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
• completed and signed;
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
proxy form is signed (or a duly certified copy of such power or
authority) must be included with the proxy form.
Appointment of proxy by joint members
7. 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).
Changing proxy instructions
8. To change your proxy instructions simply submit a new proxy
appointment using the 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.
Where you have appointed a proxy using the hard-copy proxy
form and would like to change the instructions using another
hard-copy proxy form, please contact Share Registrars Limited
on 01252 821 390.
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.
Termination of proxy appointments
9. In order to revoke a proxy instruction you will need to inform
the Company using one of the following methods.
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.
In either case, the revocation notice must be received by Share
Registrars Limited no later than 48 hours (excluding non-
business days) prior to the Meeting.
• sent or delivered 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; and
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.
• received by Share Registrars Limited no later than 48
hours (excluding non-business days) prior to the Meeting.
In the case of a member which is a company, the proxy form
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.
WWW.STARVEST.Co.uK 31
finAnCiAL STATEmEnTS | NOTICE OF ANNUAL GENERAL MEETING
Issued shares and total voting rights
10. As at 31 October 2015, the Company’s issued share capital
comprised 39,417,259 ordinary shares of £0.01 each. Each
ordinary 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 31 October 2015 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 communicate with the
Company for any purpose other than those expressly stated.
Notes to the proxy form
1. As a member of the Company you are entitled to appoint a
proxy to exercise all or any of your rights to attend, speak and
vote at a general meeting of the Company. You can only appoint
a proxy using the procedures set out in these notes.
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 a person other than the Chairman of the 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 someone other than the Chairman, you are responsible
for ensuring that they attend the meeting and are aware of your
voting intentions.
5. To direct your proxy how to vote on the resolutions mark
the appropriate box with an ‘X’. To abstain from voting on a
resolution, select the relevant “Vote withheld” box. A vote
withheld is not a vote in law, which means that the vote will
not be counted in 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:
• completed and signed;
• sent or delivered to Share Registrars Limited at Suite E,
First Floor, 9 Lion and Lamb Yard, Farnham, Surrey
GU9 7LL; and
• received by Share Registrars Limited no later than 48
hours (excluding non-business days) before the time of
the meeting.
7. In the case of a member which is a company, this proxy form
must be executed under its common seal or signed on its behalf
by an officer of the company or an attorney for the company.
8. Any power of attorney or any other authority under which this
proxy form is signed (or a duly certified copy of such power or
authority) must be included with the proxy form.
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.
4. You may appoint more than one proxy provided each proxy
is appointed to exercise rights attached to different shares. You
may not appoint more than one proxy to exercise rights attached
to any one share. To appoint more than one proxy please contact
the registrars of the Company, Share Registrars Limited,
on 01252 821 390.
11. For details of how to change your proxy instructions or revoke
your proxy appointment see the notes to the notice of meeting.
12. You may not use any electronic address provided in this
proxy form to communicate with the Company for any purposes
other than those expressly stated.
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32 STARVEST PLC | 2015 AnnuAL REPoRT And finAnCiAL STATEmEnTS
Starvest plc
67 Park Road, Woking,
Surrey, GU22 7DH
Telephone : 01483 771992
www.starvest.co.uk