Starvest plc
Company No. 03981468
Starvest plc
Report and Financial Statements
For the Year Ended 30 September 2022
Starvest plc
CONTENTS
Officers and professional advisers
Chairman’s statement
Investing policy statement
Review of trading portfolio
Board of directors
Strategic report
Directors’ report
Directors’ responsibilities statement
Corporate governance statement
Audit Committee report
Remuneration Committee report
Independent auditor’s report
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Notice of AGM
Page
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48
Starvest plc
2022 Annual Report and Financial Statements
Officers and professional advisers
Directors
Callum N Baxter – Non-Executive Chairman
Mark J Badros – Chief Executive Officer
Gemma Cryan – Executive Director
Secretary and
registered office
Business address
Auditor
Stephen Ronaldson
Salisbury House
London Wall
London EC2M 5PS
33 St. James’s Square
London SW1Y 4JS
info@starvest.co.uk
Tel: 02077 696 876
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Registered number
03981468
Solicitors
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Nominated adviser Grant Thornton UK LLP
30 Finsbury Square
London EC2A 1AG
Banker
Broker
Registrars
Clydesdale Bank/Virgin Money
Banking Hall
30 St.Vincent Place
Glasgow G1 2HL
Lloyds Bank
Threadneedle Street
London EC2R 5AU
SI Capital Limited
46 Bridge Street
Godalming
Surrey GU7 1HL
Share Registrars Limited
Molex House
Millennium Centre
Crosby Way
Farnham
Surrey GU9 7XX
Tel: 01252 821 390
Listing
AIM Market of the London Stock Exchange (AIM)
Ticker: SVE
Website
www.starvest.co.uk
1
Starvest plc
2022 Annual Report and Financial Statements
Chairman’s Statement
I am pleased to present my annual statement to Shareholders for the year ended 30 September 2022 and the
twenty-second since the Company was formed in 2000.
Results for the year
The continuing impact of the global pandemic and the ongoing war in Eastern Europe and its effect on energy
supplies have dominated the financial news this year for Starvest and its portfolio companies. Starvest’s strategy
to steer its portfolio toward precious metal investments in recent years has enabled the Company to position itself
attractively for the current environment. Although improved investor sentiment boosted certain precious metal
stocks and those of certain other natural resource companies, gold prices declined 5.5% for the year ended 30
September 2022. The post-pandemic global economy and interest rate hikes, particularly in the US, have kept
prices flat recently but we continue to believe that there is a solid foundation for precious metals going forward.
Our investment portfolio decreased approximately 56% in the year to 30 September 2022 to £6 million. However,
the discount to net asset value narrowed by 5 percentage points, from 34% to 29% as at 30 September 2022,
which is a significant improvement for shareholders.
Greatland Gold plc (AIM:GGP) remains our primary investment, with its Havieron gold-copper discovery in
Australia. Havieron’s initial inferred resource increased from 4.2M oz gold equivalent* to 6.5M oz gold equivalent**
during the year. The company secured funding through to production, expanded its board, and delivered
operational and financial improvements. While the share price has decreased over the last year, this is not
uncommon for a company in pre-production and we continue to see potential gains here.
Ariana Resources continues to expand its exploration and development footprint in Europe. As the Kiziltepe mine
has continued to meet production expectations, Ariana has focused on other projects in Turkey, such as Tavsan,
which is scheduled for first production in H2 2023. The alliance with Newmont, via its West Tethyan holding, allows
considerable scope to explore southeastern Europe over the next five years, and the recently acquired Kosovo
licence shows an interesting start to this US$2.5m agreement. Together with the Asgard Metals Fund, Ariana’s
exploration and development projects have expanded considerably since the company’s founding twenty years
ago.
Cora Gold continued to de-risk its Sanankoro project as it completed further drilling and increased its mineral
resource estimate by 14% while completing a feasibility study. After year-end the company announced that it had
received the Environmental Permit required for the project, a significant step forward.
We believe that the long-term outlook for gold prices remains favourable and we remain committed to our
strategy.
* GGP RNS dated 10 December 2020 ** GGP RNS dated 3 March 2022
Investing policy
The Company’s investing policy is set forth 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 6. Other investee companies are listed on the
websites from which further information may be obtained.
Shareholder information
The Company’s shares are traded on AIM.
Announcements made
from
www.starvest.co.uk, where historical reports and announcements are also available.
the London Stock Exchange are available
to
the Company’s website,
Callum N Baxter
Chairman
07 February 2023
2
Starvest plc
2022 Annual Report and Financial Statements
Investing policy statement
About us
The previous Board commenced to manage the Company as an investment company in January 2002, largely
investing in the natural resources sector. Following the appointment of Callum Baxter as Chairman in 2015, the
Board continued to focus the Company’s investment strategy on the natural resources sector.
Collectively, the current Board has significant experience investing in small-capitalisation new issues and pre-IPO
opportunities in the natural resources and mineral exploration sectors.
Company objective
The Company was 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’s investment mandate is not exclusively limited to natural resources, the
Board sees this sector as having considerable growth potential in the medium term. Historically, investments were
generally made immediately prior to an initial public offering on AIM or AQSE as well as in the aftermarket. As the
nature of the public equity markets has changed since 2008, it is more likely that the future investment portfolio
will include companies that have completed an IPO but remain in the early stages of identifying or, with the
appropriate financial backing, developing a commercial resource.
Direct Projects: The Company’s strategy is to invest predominantly through ownership of equity stakes in target
companies. However, the Company believes there may be opportunities to take direct interests in mining projects
and subsequently to acquire equity positions in target companies on favourable terms in exchange for these direct
project interests. Those companies would therefore become Starvest investee companies. The projects will be
operated by the investee company; Starvest does not intend to manage any projects. The addition of the Direct
Project strategy to the Company’s Investing Policy was approved by shareholders at the Company’s annual
general meeting held 1 December 2017.
Investment size: Initial investments are usually not greater than £100,000. Target companies invariably have an
ongoing need for additional funding 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 exceed £100,000.
High risk: The business is inherently high risk and cyclical, dependent upon fluctuations in world economic activity
which affects the demand for minerals. However, the Company affords investors the opportunity to participate in
diverse early-stage ventures, which the Board believes will offer the potential for significant returns for the
foreseeable future.
Lack of liquidity: Shares of investee companies typically trade in small volumes, even if they are quoted on AIM,
AQSE, ASX, or TSX-V. Therefore, during the early phase following an investment, it is rarely possible to liquidate
a position at the quoted market price so investors must remain patient until the investee company develops and
ultimately attracts greater market interest. If and when an exploration company finds a large exploitable resource,
it typically presents greater liquidity to patient investors as an acquisition target by a third party or as a much larger
and more actively traded independent entity.
Success rate: Of the multiple 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, we
expect that over time portfolio returns will be acceptable if not substantial. Accordingly, the Board is unable to give
any estimate of the magnitude or timing of returns.
Profit distribution: When profits have been realised, and adequate cash is available, the Board intends to
distribute up to half the profits realised.
3
Starvest plc
2022 Annual Report and Financial Statements
Investing policy statement, continued
Investing strategy, continued
Other matters: The Company currently has an investment in Equity Resources Limited, which itself is an
investment company.
The Company takes no part in the active management of investee companies, although directors of the Company
have served as directors on the boards of such companies.
4
Starvest plc
2022 Annual Report and Financial Statements
Review of trading portfolio
Introduction
During the year to 30 September 2022, the portfolio comprised interests in the companies discussed below, as
well as other active companies that are not discussed herein.
The economic shock of the global pandemic continued throughout 2022 and investors’ desire for traditional safe-
haven assets boosted precious metals stocks at times. However, supply chain issues and European conflict led
to rising energy prices, broader-based inflation and a shift in economic policies which caused market reactions
and precious metal price fluctuations as well as an overall decline year on year in metal prices when forecasts for
growth were downgraded. In this environment, we believe our strategy to focus on investments in gold producers
will prove to be rewarding on a risk-adjusted basis for our shareholders. However, during the year to 30 September
2022, the value of our trading portfolio decreased ~56% due to lower market prices for major positions. Including
our cash position, our net asset value (“NAV”) and NAV per share decreased 53.4% and 53.7%, respectively, over
the 12-month period to 30 September 2022. Given that Starvest’s market capitalisation decreased approximately
49%, the discount to NAV narrowed to 29% compared to 34% a year ago.
Transactions
During the year the Company did not raise capital through placing or subscription.
The Company disposed of its full holdings in Minera IRL during the year, along with a small portion of its positions
in Greatland Gold (3.8m shares at an average price of 12.83p per share) and Ariana Resources (2.2m shares at
an average price of 4.25p per share).
Trading portfolio valuation
Although gold prices declined slightly (~5%) year on year, this change masked greater volatility during the 12-
month period. The Company’s Net Asset Value decreased approximately 53% during the year to 30 September
2022 to £6.6m and the Company made a loss before tax of £7,540,842 compared with a loss before tax of
£3,861,014 in 2021.
However, we are pleased that the Company traded at an improved discount to its NAV of 29% compared to 34%
the previous year.
As part of routine operations, the Board regularly reviews its portfolio positions and may make adjustments to its
holdings to take advantage of what it believes to be temporary weakness in prices for precious metals.
Alternatively, the Board may consider strategic opportunities to better align the Company’s stock price with what
it regards as the intrinsic value of the Company’s portfolio.
Given the availability of actual trading prices for many of our portfolio assets, we value our holdings using closing
market quotes for the periods shown.
In addition, the Company believes it has a strong financial position as it has no outstanding debt and is well-
positioned to benefit from further strength in the natural resources sector through its exposure to early-stage
precious metal producers. We believe that worldwide economic growth and increasingly affluent consumers will
fuel demand for motor cars, air conditioning, consumer goods, computers, together with materials required in
switching to ‘greener’ technologies and other items that require the development and exploitation of natural
resources in order both to produce and power.
5
Starvest plc
2022 Annual Report and Financial Statements
Review of trading portfolio, continued
Trading portfolio valuation, continued
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.
Trading portfolio value
Company net asset value
Net asset value per share
Closing share price
Share price discount to net asset value
30 September
2022
at Closing
values
30 September
2021
at Closing
values
£6.2 m
£6.6 m
11.3 p
8.0 p
29%
£14.0 m
£14.1 m
24.4 p
16.0 p
34%
Market capitalisation
£4.7 m
£9.3 m
Change
%
-55.7%
-53.2%
-53.7%
-50%
5 percentage
points
-49.5%
Since the fiscal year end, values have improved. As at the close of business on 31 December 2022 the Company’s
Net Asset Value was £7.1m.
Review of the current market
Global markets and gold prices fluctuated throughout the year; with economies and governments trying to
rebalance and adjust to continuing post-pandemic and energy related uncertainties.
The price of gold fluctuated throughout the year with a peak of US$1,998 per troy ounce in March 2022 and a low
of US$1,629 in September 2022 but has remained at elevated prices relative to the last decade. Copper, nickel,
lead and zinc are all down year on year based on inflation and forecasted recessions.
Overall, investors are demonstrating greater interest in the natural resources sector, as the market looks forward
to economic growth, ‘green’ technology investments, and further government stimulus via major infrastructure
projects; long-term natural resources are still vital commodities and demand is forecast to increase.
The current market conditions allow for measured, strategic investment in undervalued, early-stage natural
resource projects.
6
Starvest plc
2022 Annual Report and Financial Statements
Portfolio review
Our primary investments in companies include the following:
Greatland Gold plc (www.greatlandgold.com)
Greatland Gold plc (“Greatland”), an AIM-listed exploration company, represents by far the largest part of the
Company’s portfolio and holds six exploration projects, four in Western Australia and two in Tasmania. Greatland
also has farm-in and joint venture agreements in place with its major partner, Newcrest Mining Ltd.
The company, in conjunction with Newcrest, has continued to report excellent drilling results from the Havieron
project and increased its Initial Inferred Mineral Resource estimate, independently of Newcrest, from 4.2Moz AuEq
to 6.5Moz AuEq in March 2022. The increased estimate was ratified in August 2022 when Newcrest released its
own resource upgrade. Neither resource takes into account drilling carried out after February 2022, which could
yield a significant increase in resource if included. Drilling to date has not yet closed off the deposit, with Havieron
remaining open at depth and in multiple directions, allowing for significant resource growth in the future.
In addition, Greatland took several corporate and financial actions this year. Newcrest boosted its stake in
Havieron to 70% but declined to exercise an option to acquire an additional 5% of the project. Greatland
subsequently raised US$35m in an over-subscribed placing and is well-funded to continue exploration and funding
its part of the Havieron development. In September 2022, the company announced that two former Fortescue
Metals Group executives would join the board in January 2023 and also added a former BHP executive, all of
whom add a new dynamic to Greatland’s leadership team and are able to take the company forward as a significant
mid-tier developer in the near term. Around the same time, the company entered into a significant finance
agreement, with a bank debt facility of A$200m committed through a syndicate of leading international banks and
secured a strategic equity investment of up to A$120m from Wyloo Metals, which will fund Greatland fully through
to production.
Significant activities since year end: Greatland announced that drilling permits have been granted on the Ernest
Giles licence. Havieron drilling updates continue to confirm the potential to greatly expand the size of this deposit
with high-grade extensions to mineralisation in the Eastern Breccia, South East Crescent Zone and Northern
Breccia. The mine decline is at over 900m development length and now in more competent rock. The feasibility
study is due during 2023 and will likely include more up to date drilling data once completed thus further de-risking
the project.
Greatland entered into an option agreement to sell its two Tasmania exploration licences to Flynn Gold for an
initial purchase price of A$200,000 with deferred consideration and a royalty equal to 1% net smelter returns from
any future production.
Ariana Resources plc (www.arianaresources.com)
Ariana Resources PLC (“Ariana”) is a United Kingdom-based company engaged in the exploration, development
and mining of epithermal gold-silver and porphyry copper-gold deposits in Turkey and exploration in Cyprus and
south-east Europe along with investments in other projects through its metals development fund, Asgard Metals.
During the year Ariana reported revenue of US$177m at Zenit Madencilik, its investee company, from continued
successful production at the Kilitepe mine. Through the first half of 2022, with production of 13,378 oz Au, it was
on track to exceed the company’s annual guidance of 25,000 oz for the fifth year running. The company reported
that this will allow them to sustain its business, enable growth and maintain its dividend rate. For the six months
to June 2022 (the latest published but unaudited accounts), Ariana earned £2.5m in profits before tax.
Elsewhere in Turkey Ariana received a positive Environmental Impact Assessment at its Tavsan project which
they are working to develop as its second gold mine, with a targeted annual production rate of approximately
30,000 oz Au. Construction of the mine is underway and scheduled for completion in H2 2023.
7
Starvest plc
2022 Annual Report and Financial Statements
Portfolio review, continued
Ariana Resources plc, continued
The Salinbas project has an inferred resource of 1.5Moz Au and the company is drilling at the Artvin gold project
to develop an understanding of that area.
In Cyprus, Ariana holds a 50% stake in Venus Minerals and the associated joint venture development of the
permitted Apliki coper-gold mine. Venus Minerals are planning a London listing on AIM. Ariana has a 75% stake
in West Tethyan Resources (WTR), who have a focus on southeastern Europe and are developing licences
primarily in Kosovo. During the year a strategic agreement was signed with Newmont who will invest US$2.5m to
develop an Exploration Alliance Agreement via WTR focusing on copper and gold in Bosnia and
Herzegovina, Bulgaria, Greece, Kosovo, North Macedonia and Serbia running for an initial five-year term.
Ariana's Asgard Metals fund has made investments in Australia-focused Panther Metals, Kazakhstan-focused
Pallas Resources and Indochina-focused Annamite Resources.
Significant activities since year end: Ariana Resources reported that gold production at the Kiziltepe mine was in
line with guidance and drilling was completed which was testing extensions of the vein system near mine.
Geophysical programmes are also underway to further aid near mine exploration. Construction of a second mine
at Tavsan is underway and the company has released an increase in JORC compliant resource for the Tavsan
project of 6.6Mt at 1.44g/t Au and 5.6g/t Ag for 307,000oz Au and 1.1M oz Ag, a 22% increase on the previous
resource.
Alba Mineral Resources plc (www.albamineralresources.com)
Alba Mineral Resource is a diversified mineral exploration company focused on oil and gas, gold and base metals
with holdings in UK (oil and gas, gold) and Ireland (base metals).
The company focused activities on its UK gold projects during the year, acquiring 100% of the Clogau property,
continuing with drill programmes at the historical mine site and also testing material from a waste tip on site at
Clogau in a pilot plant. The company’s application to dewater the Llechfraith Shaft was rejected by Natural
Resources Wales but Alba have submitted additional supporting data and analysis and have extended the
programme of ecological and species surveys. Regional exploration, with a view to near-mine resource
expansion, is also continuing, with an application for an unmanned aeromagnetic survey following up on
geochemical surveys carried out in 2019.
The Company’s UK oil and gas investments at Horse Hill, where they hold a 11.8% stake, remains ongoing with
production licences moving through legal channels and a Production Permit granted by the Environment Agency
in May 2022.
The Company’s Irish base metal licences have been extended through to May 2024, where they have three
principal target areas for follow-up drilling.
Alba holds a 54% majority interest in AIM-listed GreenRoc Mining plc, which the company spun out in September
2021. GreenRoc hold licences for graphite, black sands iron and multi-elements in Greenland and announced a
maiden JORC resource at its Amitsoq graphite deposit in March 2022 of 8.28Mt at 19.8% graphitic carbon. A
revised resource at the Thule Black Sands now stands at 19Mt at 8.9% in-situ ilmenite.
With a reported £2 million in cash at its interim report at the end of May 2022 the company is well-funded to move
forward this year.
Significant activities since year end: The company spun out GreenRoc to advance its Greenland graphite project.
Metallurgical test work showed that the material could potentially be used in the electric vehicle battery market.
In addition, the company appointed an adviser to assist in processing, sales and marketing going forward. On its
own projects, primarily the Clogau gold project in Wales, the company has appointed a gold supply chain expert
and completed a £0.5m placing in November.
8
Starvest plc
2022 Annual Report and Financial Statements
Cora Gold Limited (www.coragold.com)
The company’s exploration and development activities have continued in Mali on its flagship Sanankoro project.
The company completed a drill programme converting additional ounces from the inferred to indicated category,
increasing the total Mineral Resource Estimate by 14% and the oxide Indicated Minerals Resource by 22% in July
2022. Sanankoro comprises 24.9Mt of material grading at 1.15g/t Au of which 16.1Mt are indicated and 8.7Mt are
inferred for a total 920koz Au.
Drilling also identified two new mineralised areas in close proximity to the existing resource at Sanankoro and the
company carried out field work on a number of its other permits in southern Mali. The ongoing feasibility study for
Sanankoro is due to be completed by Q4 2022.
With $2m in cash reported at the end of June 2022 in its unaudited interim report and funding agreements in place,
the company is a good position to move forward with mine development over the next year.
Significant activities since year end: Cora announced in mid-October 2022 that it had been granted the
Environmental Permit for mining at its flagship Sanankoro project. The project’s JORC Exploration Target was
released in late November and contain between 26 and 35.2Mt Au with grades between 0.58 and 1.21g/t Au for
potentially 490-1,370k oz Au. This is in addition to the indicated and inferred mineral resource of 24.9Mt at 1.15g/t
Au for 920koz. The Exploration Target consists of 90% oxide and transitional material.
The company released a maiden reserve and definitive feasibility study in late November. Figures were based on
a gold price of $1,650/oz Au providing 10.1Mt at 1.3g/t Au for 422koz Au, with 90% recovery rate. Optimised DFS
economics were based on $1,750/oz Au giving a 6.8 year mine life, 1.2 year payback period, 52.3% IRR, $997/oz
AISC, 56,000oz pa average production. $234m free cash flow over life of mine.
Regional exploration has also continued with over 9km of gold structures identified from three separate zones.
Grab samples of up to 6g/t Au have been reported and future reconnaissance drilling is planned.
Oracle Power plc (www.oraclepower.co.uk)
Oracle Power was originally focused on developing and operating a coal mine and a power plant in Pakistan and
while those are still progressing it has recently diversified into green energy technology and gold projects.
In January 2022, Oracle signed a MoU with Aui Southern Gas Company Ltd, a company listed on the Pakistan
Stock Exchange, relating to the buyback and joint development of a synthetic natural gas project using Thar
Block VI coal.
In October 2021 the company signed a non-exclusive cooperation agreement with PowerChina International
Group to jointly develop a green hydrogen production facility in Pakistan, targeting a 400MW capacity plant. An
update in December 2021 stated that a preliminary technical study was completed by PowerChina, establishing
key technical and commercial aspects, targeting a 400MW capacity hydrogen plant with planned hydrogen
production of 150,000kg per day. Technology suppliers were being sought and negotiations were underway with
provincial governments regarding infrastructure. In March 2022 the company entered a joint venture agreement
with His Highness Sheikh Ahmed Dalmook Al Maktoum (represented through Kaheel Energy) on the project and
established (a joint venture company), Oracle Energy. Oracle raised £800,000 in April 2022 and a further
£500,000 in August 2022 toward the project and an MoU was signed with Nuvera Fuel Cells LLC in June 2022
to jointly oversee a pilot hydrogen bus project. Oracle has also entered into an MoU with a hydrogen storage
company in China to jointly explore storage and infrastructure development.
In addition to its Pakistan projects, Oracle continued to develop its Australia gold projects with drilling and
metallurgical test work on samples from its Western Australia ground.
Significant activities since year end: Oracle has continued to focus on the green hydrogen project in Pakistan. It
appointed Thyssenkruoo Uhde to lead a technical and commercial feasibility study for the project and signed a
Memorandum of Understanding with Blue Carbon to collaborate on a decarbonisation roadmap.
9
Starvest plc
2022 Annual Report and Financial Statements
Portfolio review, continued
Oracle Power plc, continued
In addition, it signed a Letter of Intent with TUV SUD to explore green hydrogen and green ammonia certification
and leased a land package of 7,000 acres for 30 years in the Thatta district to locate its flagship green hydrogen
project.
Kefi Gold and Copper plc (www.kefi-minerals.com)
Kefi Minerals is an exploration and development company focused on gold and copper deposits in the Arabian-
Nubian Shield. Its main projects are Tulu Kapi in Ethiopia and the Jibal Qutmanand Hawiah projects in Saudi
Arabia.
Operation on the Tula Kapi Mine in Ethiopia continued throughout the year. The Ministry of Mines completed an
audit and endorsed historical project costs incurred through 2020 of circa US$80m which will now be reported to
the Ethiopian central bank and allow for development banks to provide funds once the Ethiopian government
ratifies this report.
While awaiting regulatory permissions to re-activate exploration for near-mine expansion in Ethiopia, the company
has switched its main exploration efforts to Saudi Arabia. The Hawiah VMS Copper-Gold project has a JORC
resource of 24.9Mt at 0.9% Cu and 0.62g/t Au. A preliminary feasibility study is due for completion by the end of
2022. Jibal Qutman was enlarged this year with a +500,000oz production plan over ten years with an open
pit/carbon-in-leach process. A mining licence and financing is being sought for the project. The company received
additional exploration licences to bring its total to nine licences covering over 630km2.
Significant activities since year end: The Jibal Qutman licence has been renewed for a five-year term. The
company intends to construct a pioneers camp and carry out environmental baseline studies and geotechnical
and metallurgical diamond drilling going forward. The feasibility study remains on target for completion in early Q1
2023 with environmental permits targeted for Q1 2023 also. In January 2023 the company announced an increase
in resources at the Hawiah project by 16% to 29mt as well as an expanded open pit domain to the project.
Sunrise Resources plc (www.sunriseresourcesplc.com)
Sunrise Resources hold ground in Nevada (USA) and Australia with commodities including precious and base
metals as well as industrial minerals. Its main focus is developing pozzolan-perlite deposits while looking to enter
into a JV or sell its other tenements.
Sunrise continued with development of its pozzolan-perlite project with discussions with companies in the cement
and concrete industries. As natural pozzolan has a key role in cement decarbonisation strategies towards net-
zero CO2 emissions, it may benefit from California state legislation and Implementation Priorities under the Biden
administration’s $1.2 trillion infrastructure bill.
The company also extended its pozzolan footprint to a new project site at Hazen with due diligence field visits
carried out by interested parties and sample testing underway. A permit was obtained during the year to extract
500 tons of sample material for commercial trials.
A new Mining Lease application was submitted on the company’s Bakers Gold project in Western Australia to
cover high-grade gold mineralisation intersected in a 2021 drill programme, with a highlight of 2m at 14.36g/t Au
from 64m downhole. The project is available for sale or JV according to the company’s website.
Significant activities since year end: Sunrise announced it has entered into a collaborative arrangement with an
existing pozzolan processor for mining and test grinding. It also announced funding of £480,000 through issue of
equity with an investment from Towards Net Zero a US based institutional investor focused on the green economy.
10
Starvest plc
2022 Annual Report and Financial Statements
Portfolio review, continued
Sunrise Resources plc, continued
The company’s Pioche sepiolite project is advancing under its agreement with Tolsa USA Inc with new approvals
for trenching on the licence received.
Other investments
The remaining non-core investments are available for sale when the conditions are deemed to be right. These
include
plc
(www.kendrickresources.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.
(www.blockenergy.co.uk)
Resources
Kendrick
Energy
Block
and
plc
11
Starvest plc
2022 Annual Report and Financial Statements
Board of directors
Callum N Baxter – Non-Executive Chairman
Mr. Baxter is a qualified Geologist (MSc Geol) and investor. His primary experience lies in early stage exploration
geology and he has been involved in several discoveries throughout his more than 25 years in the industry. Callum
has more than 20 years of experience in capital markets with many investments focusing on early-stage
exploration opportunities. He was an Executive Director of Starvest investee company, Greatland Gold plc
(AIM:GGP), from 2006 until 2021.
Mark J Badros – Chief Executive Officer
Mr. Badros has more than 18 years of financial and investment experience in public and private equities as an
analyst and investment manager at mutual funds and hedge funds, including Merrill Lynch Investment Managers,
Zweig-DiMenna Associates, Highland Capital and Ironbound Capital. Mark graduated from Princeton University
and received his law degree from Harvard Law School. He began his career practising securities, mergers and
acquisitions, and corporate law in New York.
Gemma M Cryan – Executive Director
Miss Cryan holds formal qualifications in geology (BSc Hons) and has over 20 years of industry experience in the
oil and gas industry, followed by mineral exploration, in both private and public companies throughout North
America, Europe, Australasia and Africa. Her time has been spent in the field, and in management roles assisting
with corporate matters. Gemma is well-versed in pre-IPO activities and early stage mineral exploration ventures
and she is a Non-Executive Director of Great Western Mining Corporation Plc (AIM:GWMO) and First
Development Resources Plc (unquoted).
12
Starvest plc
2022 Annual Report and Financial Statements
Strategic report
Principal activities and business review
Since the company’s inception in 2002, its principal trading activity has been to identify and, where appropriate,
support small company new issues, pre-IPO and ongoing fundraising opportunities with a view to realising profit
from disposals as the businesses mature in the medium term. The current directors have maintained this strategy
of seeking out investment opportunities in small-cap and pre-IPO mining and metals companies.
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’ & Strategic reports.
Finance Review
Over the 12 months to 30 September 2022 the Company recorded a loss before tax of £7,540,842, equating to a
loss of 12.96 pence per share with net cash inflow for the year of £327,830. This compares to a loss before tax of
£3,861,014 in the previous year that equated to a loss of 6.69 pence per share. The Company’s cash deposits
stood at £406,106 at the period end.
Key Performance Indicators
The Company’s key measure of performance is the market value of its investment holdings. As a secondary metric,
the Company seeks to manage the administrative and other expenses associated with achieving its investment
results. The Company does not have any operating activities and thus the directors take the opinion that analysis
using operating key performance indicators is not necessary for an understanding of the performance,
development or position of the business at the present time.
Key risks and uncertainties
This business carries a high level of risk and uncertainty with commensurately high potential returns. 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, even for securities quoted on AIM or
AQSE, such that the Company may have difficulty in realising the full value in an immediate or 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 total size of any
single commitment, both as to the absolute amount and percentage ownership of the target company.
Section 172 Statement
Section 172 (1) of the Companies Act obliges the Directors to promote the success of the Company for the benefit
of the Company’s members as a whole. This section specifies that the Directors must act in good faith when
promoting the success of the Company and in doing so have regard (amongst other things) to:
a) The likely consequences of any decision in the long term;
b) The interests of the Company’s employees;
c) The need to foster the Company’s business relationship with suppliers, customers and others;
d) The impact of the Company’s operations on the community and environment;
e) The desirability of the Company maintaining a reputation for high standards of business conduct; and
f) The need to act fairly as between members of the Company.
The Board of Directors is collectively responsible for formulating the Company’s strategy, which is to invest in
businesses where prospects appear to be exceptional at an attractive price and deliver good risk-adjusted
investment returns to its shareholders. Since 1 October 2021, the Board took the decision to reduce its
concentration of risk in one project by divesting some of its position. The Board places equal importance on all
shareholders and strives for transparent and effective external communications, within the regulatory confined of
a listed company. The primary communication tool for regulatory matters and matters of material substance is
through the Regulatory News Service (“RNS”). We also provide an environment where shareholders can interact
with the Board and management, as questions and raise their
13
Starvest plc
2022 Annual Report and Financial Statements
Strategic report, continued
concerns. The Directors believe they have acted in a way they consider most likely to promote the success of the
Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006.
The Corporate Governance Statement, in particular Principles 2 and 3 of the Quoted Company Alliance’s (“QCA”)
Corporate Governance Code for Small and Mid-Size Quoted Companies, available on pages 20-21 provides
further evidence for how Section 172 (1) has been applied to strategic issues, risks or opportunities across key
stakeholder groups. The Directors believe they have acted in the way they consider most likely to promote the
success of the Company for the benefit of its shareholders and stakeholders as a whole, as required by Section
172 (1) of the Companies Act 2006.
By order of the Board
Mark Badros
Chief Executive Officer
07 February 2023
Company registration number: 03981468
14
Starvest plc
2022 Annual Report and Financial Statements
Directors’ report
The Directors present their twenty-first annual report on the affairs of the Company, together with the financial
statements for the year ended 30 September 2022.
Results and dividends
The Company’s results are set out in the statement of comprehensive income on page 34. The audited financial
statements for the year ended 30 September 2022 are set out on pages 34 to 47.
The Directors do not recommend the payment of a dividend for the year (2021: £nil).
Directors
The Directors who served during the year are as follows:
Callum N Baxter
Mark J Badros
Gemma M Cryan
Substantial shareholdings
At the close of business on 2 February 2023, the following were registered as being interested in 3% or more of
the Company’s ordinary share capital:
WB Nominees Limited (of which 12,670,000 representing
21.74% are beneficially owned by Carole Rowan)
Hargreaves Lansdown (Nominees) Limited
Rock (Nominees) Limited (of which 8,090,753 representing
13.90% are beneficially owned by Callum N Baxter)
Interactive Investor Services Nominees Limited
Winterflood Client Nominees Limited (of which 3,664,817
representing 6.29% are beneficially owned by Philip J
Milton & Company Plc)
Barclays Direct Investing Nominees Limited
HSBC Nominees Limited
Ordinary shares
of £0.01 each
Percentage of
issued share
capital
12,692,261
21.78%
9,904,223
8,698,668
8,693,666
4,106,434
16.99%
14.93%
14.92%
7.05%
1,918,843
1,822,125
3.29%
3.13%
Charitable and political donations
During the year there were no charitable or political donations (2021: £nil).
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
30 days of receipt of invoice. At 30 September 2022, the Company’s trade creditors were equal to costs incurred
of 44 days (2021: 80 days).
Events after the end of the Reporting Period
There are no other material events to disclose other than those included in Note 20.
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 6 to the
financial statements.
15
Starvest plc
2022 Annual Report and Financial Statements
Directors’ report, continued
Management incentives
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.
Going concern
The Company finances its day-to-day activities from its available cash resources and, on occasion, by part
disposal of investments and the use of short-term loans.
The Directors are confident that adequate funding can be raised as required to meet the Company's current and
future liabilities, which has been confirmed within the cash flow forecast prepared by the Board for the 12 months
ending 28 February 2024. In the very unlikely event that suitable funding could not be raised, the Directors could
raise sufficient funds by disposal of certain of its current asset trade investments. Post-COVID-19 global
economics has had an impact on the company’s investments and their activities, however all investments held by
the company are Level 1 investments and hence the value at the balance sheet date approximates the fair value
which can be liquidated in order to settle the company’s liabilities as they fall due for the foreseeable future.
As at 30 September 2022, the Company has no Borrowings.
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. Therefore, the Company has prepared its
financial statements on a going concern basis.
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, 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 market/fair value less any provision for impairment. The movements between fair
and book value are set out in Note 10. 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.
16
Starvest plc
2022 Annual Report and Financial Statements
Directors’ report, continued
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 2 and in Note 18 to the financial statements.
Borrowing facilities
As at 30 September 2022, the Company has no borrowings (2021: £25,000 unutilised overdraft facility).
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.
Market price and credit risk
Management do not consider credit risk to be material to the Company. The Company is naturally exposed to
market price risk, by the nature of its trade in investments, and the fluctuation of market and fair prices of its
investment portfolio.
Statement of disclosure of information to auditors
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.
Independent Auditor
A resolution to appoint PKF Littlejohn LLP as auditor for the coming year will be proposed at the forthcoming AGM
in accordance with section 489 Companies Act 2006.
By order of the Board
Mark Badros
Chief Executive Officer
07 February 2023
Company registration number: 03981468
17
Starvest plc
2022 Annual Report and Financial Statements
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 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.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
18
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement
The Board of Starvest plc are committed to the principles of good corporate governance and believe in the
importance and value of robust corporate governance and in our accountability to our shareholders and
stakeholders.
The AIM Rules for companies, updated in early 2018, required AIM companies to apply a recognised corporate
governance code from 28 September 2018. Starvest has chosen to adhere to the Quoted Company Alliance’s
Corporate Governance Code for Small and Mid-Size Quoted Companies (the “QCA Code”) and listed below are
the 10 broad principles of the QCA Code and the Company’s disclosure with respect to each point.
The Board recognises the importance of good governance, agrees to the principals set out in the QCA Code, and
is compliant with the vast majority of the QCA Code. However, the Company does not achieve full compliance
with the QCA Code; specifically, Principles 5 and 7. The areas of non-compliance will be readily addressed as the
Company grows and additional members are added to the Board.
The Board recognises that it is non-compliant with Principle 5 where the QCA Code recommends that at least two
directors are independent. The QCA Code requires that the boards of AIM companies have an appropriate balance
between executive and non-executive directors. The Board believes, at this time in the Company’s development
and with respect to the Company’s size and goals of achieving good shareholder value through preserving cash
for investment opportunities, that the positions within the Board are sufficient to carry out good corporate
governance with a balanced approach to decisions. As the Company grows this matter will be reviewed and
addressed with the goal of appointing additional board members and filling a non-executive, independent role.
The Board recognises that it does not fully comply with Principle 7 in that Starvest currently does not have formal
evaluation procedures for individual board members but the Board recognises that a formal evaluation process
may become necessary in the near future.
QCA CODE:
1: Establish a strategy and business model promoting long-term value for shareholders:
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’s investment mandate is not exclusively limited to natural resources, the
Board sees this sector as having considerable growth potential in the medium term. Historically, investments were
generally made immediately prior to an initial public offering on AIM or AQSE 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
companies that have completed an IPO but remain in the early stages of identifying or, with the appropriate
financial backing, developing a commercial resource.
Direct Project: The Company’s strategy is to invest predominantly through ownership of equity stakes in target
companies. However, the Company believes there may be opportunities to take direct interests in mining projects
and subsequently to acquire equity positions in target companies on favourable terms in exchange for these direct
project interests; those companies would therefore become Starvest investee companies. The projects will be
operated by the investee company; Starvest will not manage any project. Prior to selling any projects to corporate
entities, Starvest may therefore have an interest in a number of projects. The addition of the Direct Project strategy
to the Company’s Investing Policy was approved by shareholders at the Company’s annual general meeting held
1 December 2017.
Investment size: Initial investments are usually not greater than £100,000. Target companies are invariably not
generating cash, but rather they have a constant need for additional funding 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 £100,000.
19
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
High risk: The business is inherently high risk and cyclical in nature dependent upon fluctuations in world
economic activity which impacts on the demand for minerals. However, the Company affords investors the
opportunity to participate in diverse early-stage ventures, which the Board believes will offer the potential for
significant returns for the foreseeable future.
Lack of liquidity: The investee companies, being small, almost invariably lack share market liquidity, even if they
are quoted on AIM, AQSE, 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 15 to 20 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 and Equity Resources Limited. The Company takes no part in the
active management of the companies in which it invests,
2: Seek to understand and meet shareholder needs and expectations
The Board recognises that it is accountable to Shareholders for the performance and activities of the Company
and to this end is committed to providing effective communication with the Shareholders of the Company.
Unpublished price sensitive information is disclosed in as timely a manner as possible and in accordance with
regulatory requirements for disclosure via a Regulatory Information Service provider.
Significant developments of investee companies are disseminated through stock exchange announcements and
by regularly updating the Company’s website, where descriptions of the investee company projects are available
and updated quarterly or whenever there is a significant event. In addition, copies of any research notes are
available.
The Board views the Annual General Meeting as an important forum for communication between the Company
and its Shareholders and encourages Shareholders to express their views on the Company’s business activities
and performance. Previous shareholder engagements at AGMs and other functions have been productive with
many questions answered by the Board. During other times of the year shareholder contact is primary through the
executive directors at investor events and via the company’s email: info@starvest.co.uk. Shareholder comments
or issues are disseminated to the Board and taken into account when reviewing the performance and development
of the Company.
The Board, through the Chief Executive Officer, the Executive Director and the Non-executive Chairman, also
maintains regular contact with its advisors in order to ensure that the Board develops an understanding of the
views of major Shareholders about the Company. The main point of shareholder contact is the CEO, Mr Mark
the other Executive Director, Ms Gemma Cryan, who are contactable via email at
Badros, and
info@starvest.co.uk, by telephone +44 (0)2077 696 876, or in writing to the following address; Starvest plc, 33
St.James’s Square, London UK, SW1Y 4JS
20
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
3: Take into account wider stakeholder and social responsibilities and their implications for long-term
success.
The Board recognises that the success of the Company is reliant on the stakeholders of the business and, to this
effect, the Company engages with these stakeholder groups, both internal and external on a regular basis.
The Company’s strategy to investment immediately prior to an initial public offering, on AIM or AQSE dictates that
we foster good relationships with broking firms, other professional service providers to the natural resource
industry and members of mining and exploration companies in order to keep abreast of potential investment
opportunities.
The Company engages with numerous established broking firms and a network of professionals within the natural
resource industry to keep abreast of new companies and investment opportunities becoming available. The
company deals only with ethically sound entities and, as such, reduces any risk to investment capital by unethical
business practices.
Investee companies and potential investee companies are reviewed with respect to country and community
commitments to social and environmental responsibility. It is the company’s belief that a good CSR (corporate
social responsibility) policy enhances an investee company’s standing and thus progress of a project/resource on
a local, regional and government scale.
Investment by the Company in resource projects generally brings positive benefits to local communities who gain
from employment, improved infrastructure and access to health facilities.
4: Embed effective risk management, considering both opportunities and threats throughout the
organisation
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.
Through the Board’s collective industry experience and thorough research and investigation into potential
investments, including but not limited to: geological setting, board and management experience, financial plans,
jurisdictional risk and market conditions both current and forecast; we strive to minimise the inherent risks yet still
avail of opportunities that will deliver good returns on investment capital in the medium to long term. The Company
maintains an Audit Committee and Remuneration Committee with each reporting directly to the Board. Each
Committee comprises one Executive Director and one Non-Executive Director.
The Company maintains a risk register that identifies key risks in the areas of corporate strategy, and finances as
well as a comprehensive register for assessing investment opportunities. The register is reviewed periodically and
updated as and when necessary. If there are any significant changes to the trading environment then the register
is reviewed and updated as required.
Within the scope of the annual audit, specific financial risks are evaluated in detail, including in relation to foreign
currency, liquidity and credit.
5: Maintain the board as a well-functioning, balanced team led by the chair
Information on the company board members is available on the following website page as well as in the company’s
annual reports and accounts disclosures.
http://www.starvest.co.uk/board/
Board of Directors
The Board of Directors currently comprises three Directors, two of whom are Executive Directors.
21
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
Each member of the board is committed to spending sufficient time to enable them to carry out their duties;
Executive Directors commit a minimum of twenty hours per week, with periods where this is increased
considerably, such as mid-term and end of year reporting periods as well as times when investment transactions
are being undertaken. Non-Executive Directors are expected to commit at least one hour per week to the company
and, as with the executive team, are likely to exceed this many times throughout any twelve-month period.
Role of the Board
The Board has a responsibility to govern the Company rather than to manage it and in doing so act in the best
interests of the Company as a whole. Each member of the board is committed to spending sufficient time to enable
them to carry out their duties as a Director; through various activities including but not limited to: researching and
reviewing potential investments, shareholder engagement, stakeholder engagement, administrative and
accounting tasks, monitoring of market conditions and investee company activities.
Responsibilities of the Board
The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and
operating performance. Day-to-day management is devolved to the Executive Directors who are charged with
consulting the Board on all significant financial and operational matters.
Board meetings
All Directors are required to attend board and board committee meetings, every quarter at a minimum throughout
the year and to be available at other times as required for face-to-face and telephone meetings. Board meetings
are led by the Chair and follow an agenda that is circulated prior to the meeting. Every board meeting is minuted
and every Director is aware of the right to have any concerns minuted and to seek independent advice at the
Company’s expense where appropriate.
The Board meets regularly throughout the year.
Board member attendance during the financial year to 30 September 2022:
Position
Member
AGM
attendance
No. of
board
meetings
Attended
Non-Executive Chairman (formerly
Chairman/CEO)
Executive Director
CEO (formerly Non-Executive Director)
Board committees
C Baxter
G Cryan
M Badros
Yes
Yes
Yes
13
13
13
13
13
13
The Board has established an Audit committee and separate Remuneration Committee. There is no Nominations
Committee as it is not seen relevant to the company at this stage of development.
6: Ensure that between them directors have the necessary up-to-date experience, skills and capabilities.
Information on the company board members is available on the following website page as well as in the company’s
annual reports and accounts disclosures.
http://www.starvest.co.uk/board/
Directors
The Directors are of the opinion that the Board comprises a suitable balance. Current board members range in
age from early 40’s to early 50’s and is well-balanced with both male and female members. The Board offers a
range of backgrounds, experience and traits which when combined function well in delivering the Company’s
strategy.
22
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
All Directors have access to the advice of the Company’s solicitors and the Company Secretary; necessary
information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively and
all Directors have access to independent professional advice, at the Company’s expense, as and when required.
Callum Baxter’s active background in the mining industry (exploration geology) for more than 25 years and taking
companies through the IPO process, as well as personal experience in investing in the natural resource sector,
allows for an in-depth knowledge of the challenges potential investee companies face when progressing a
company towards expansion and/or public listing. Callum also has a wide range of connections in the natural
resource sector and supporting companies (e.g. brokering firms, NOMADs, corporate finance) from which to draw
information on potential investments. His skill set allows seasoned evaluation of the investment opportunities
presented to the Company before an informed decision is made. Callum regularly attends conferences and
meetings to keep fully abreast of the sector.
Mark Badros has extensive experience in investment in public and private equities and corporate law, as well as
a background in economics and business, including securities, mergers and acquisitions. Gemma Cryan’s
background in oil and gas and mineral exploration, both in the field and office environment, in numerous countries,
allows her to draw on personal experience and professional connections for information on potential investments
as well as the ability to review projects from a geological and corporate perspective with regards to risk
management. Her administrative and interpersonal skills are applied to corporate matters and seeking investment
opportunities. Gemma regularly attends sector meetings and conferences and participates in courses on both
technical and corporate matters.
The Directors remain active in their relevant sectors allowing them to keep their skills up to date. These activities
are strengthened by Directors’ regular attendance at relevant industry conferences and workshops throughout the
year assisting Directors to keep their skills aligned to current industry standards.
All Directors, jointly or independently, have access to the Company’s solicitor for external advice should they so
choose. The Company Secretary role is managed by the Company’s solicitor. Issues of compliance to government
or government body regulations and requirements are brought to the Boards attention as necessary and advice is
provided on methods required to comply fully. Matters arising with service contracts or agreements and general
Company administration are also referred to the Company’s solicitor and secretary for review and/or comment.
The Company’s Non-Executive Director for the period to 31st August 2022 is considered an Independent
Director. Mr. Badros has no ties to the major shareholders of the Company nor any significant personal investment
in the Company or in its investee companies, except as disclosed; as such the Board considers his input, advice
and support on the running of the Company and investment opportunities that arise as independent. Mr Baxter
took the role of Non-executive Chairman 1st September 2022 and is not considered independent.
7: Evaluate board performance based on clear and relevant objectives seeking continuous improvement.
The Board evaluates its performance effectiveness based on reviews carried out at every board meeting where a
critical review is carried out and performance objectives are benchmarked against current market dynamics.
During the year these critical reviews showed the Company had made positive progress and results were
presented to shareholders at the most recent AGM.
The Company does not currently have a formal evaluation procedure for individual board members. Board
members are able to communicate effectively, and members are actively encouraged to participate in continuing
professional development (CPD). The Directors remain active in their relevant sectors allowing them to keep their
skills up to date. These activities are strengthened by Directors’ regular attendance at relevant industry
conferences and workshops throughout the year assisting Directors to keep their skills aligned to current industry
standards.
23
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
Board committees: The Company has a Remuneration Committee and Audit Committee. Each committee reviews
relevant remuneration and audit matters and provides recommendations to the Board as a whole. Each Committee
meets several times per year as required. Committee matters are minuted and items recommended to the Board
are recorded in Minutes of meeting of the Board; significant events and matters are announced to market in a
timely fashion and noted in each Annual Report.
8: Promote a corporate culture that is based on ethical values and behaviours
Ethical decision making
In accordance with the engagement contracts board members enter into on joining Starvest, professional and
personal ethics are expected to be maintained to a high standard with any misconduct subject to termination of
their position. Requirements include maintaining high standards of business conduct; and acting fairly as between
the members of the Company.
Confidentiality
In accordance with legal requirements and agreed ethical standards, the Directors have agreed to maintain
confidentiality of non-public information except where disclosure is authorised or legally mandated. The Company
employs no other staff, although the accounting function is delegated to a suitably qualified professional
accountant.
Bribery
In accordance with the provisions of the Bribery Act, all Directors have been informed and have acknowledged
that it is an offence under the Act to engage in any form of bribery. The Company has an anti-bribery and
whistleblowing policy in force.
9: Maintain governance structure and processes that are fit for purpose and support good decision-
making by the Board.
The Chairman’s role is to communicate the strategy of the Board to shareholders of the Company. This role of the
CEO is to ensure the implementation and execution of the Board’s strategy. The Chairman and CEO are assisted
in these duties by an Executive Director. Each Executive Director is charged with communication with
shareholders.
The existing Governance structures and Corporate Cultures are appropriate to the current size of the Company
and adequate to address its capacity, appetite and tolerance for risk.
The Company currently has a Remuneration Committee and an Audit Committee. Relevant matters are
considered by each committee and recommendations are taken to the full board. Each committee meets several
times per year as required.
Matters reserved for the Board are those directly related to implementing the Company’s strategy. Good financial
management is a high priority and reviewed frequently. Market dynamics are monitored daily and long term
planning is key to delivering sound result.
The Board is constantly monitoring its state of affairs and intends to expand the Board when the Company
sufficiently increases in size. Evolution of the Company’s governance framework will follow growth and board
expansion
10: Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board recognises that it is accountable to Shareholders for the performance and activities of the Company
and to this end is committed to providing effective communication with the Shareholders of the Company.
24
Starvest plc
2022 Annual Report and Financial Statements
Corporate governance statement, continued
Significant developments are disseminated through stock exchange announcements and regular updates of the
Company website where descriptions of the investee company projects are available and updated quarterly or
whenever there is a significant event. In addition, copies of any third-party comment are available.
The Board views the Annual General Meeting as an important forum for communication between the Company
and its Shareholders and encourages Shareholders to express their views on the Company’s business activities
and performance.
Outcomes of Audit Committee reports and Remuneration Committee reports are summarised in each Annual
Report.
Historic annual reports and other governance-related material, including notices of all general meetings over the
last 5 years can be found here:
http://www.starvest.co.uk/announcements/
http://www.starvest.co.uk/financial-results/
By order of the Board
Mark Badros
Chief Executive Officer
07 February 2023
25
Starvest plc
2022 Annual Report and Financial Statements
Audit Committee Report
Audit Committee
The primary purpose of the Company's Audit Committee is to provide oversight of the financial reporting process,
the audit process, the Company's system of internal controls and compliance with laws and regulations.
The Audit Committee is authorised by the Board to investigate any activity within its Terms of Reference and to
obtain outside legal or other independent professional advice and to secure the attendance of outsiders with
relevant experience and expertise, if it considers this necessary.
The Board has appointed the Audit Committee to include the sole Non-Executive Director as well as one Executive
Director, given the current size of the Company and the board. During the year ended 30 September 2022 and up
to the date of this report, the Audit Committee comprised Gemma Cryan and Mark Badros, who acted as Chairman
until 31 August 2022. Upon Mr. Badros’s appointment to CEO he stood down from the Audit Committee and
Callum Baxter replaced him as Chairman. The Audit Committee formally met twice during the year.
Dear Shareholder,
On behalf of the Board, I am pleased to present the Audit Committee Report for the year ended 30 September
2022. The Audit Committee is primarily responsible for providing oversight of the financial reporting process,
the audit process, the Company's system of internal controls and compliance with laws and regulations and are
outlined in more detail in the below report.
The main role and responsibilities of the Audit Committee are:
to monitor the integrity of the financial statements of the company and any formal announcements relating
to the company’s financial performance, reviewing significant financial reporting judgements contained in
them;
to review the company’s internal financial controls;
to monitor and review the effectiveness of the company’s internal control and risk management systems
(including without limitation fraud risk);
to monitor and review the effectiveness of the company’s internal and external audit arrangements;
to make recommendations to the Board, for it to put to the shareholders for their approval in general
meeting, in relation to the appointment of the external auditor and to approve the remuneration and terms
of engagement of the external auditor;
to review and monitor the external auditor’s independence and objectivity and the effectiveness of the
audit process, taking into consideration relevant UK professional and regulatory requirements;
to report to the Board, identifying any matters in respect of which it considers that action or improvement
is needed, and making recommendations as to the steps to be taken;
to consider the findings of internal investigations and management response; and
to report to the Board on any issues arising and how they may be dealt with.
Audit Committee Membership and Activities
The Audit Committee’s members during the year were Gemma Cryan, and Mark Badros as Chairman of the
Committee from 1 October 2021 to 31 August 2022, and Callum Baxter as Chairman from 1 September 2022 to
30 September 2022.
The Committee met independently twice during the year to perform the following activities:
1) review key accounting and audit judgements;
2) review and consider whether the information provided was complete and appropriate based on its own
knowledge;
3) review the external auditor issues that arose during the course of the audit and have subsequently been
resolved and those issues that had been left unresolved were satisfactorily concluded;
26
Starvest plc
2022 Annual Report and Financial Statements
Audit Committee report, continued
4) review the management letter in order to assess whether it is based on a good understanding of the
company’s business and establish whether recommendations have been acted upon and, if not, the
reasons why they have not been acted upon;
5) review management’s responsiveness to the external auditor’s findings and recommendations;
6) review whether the auditor met the agreed audit plan and understand the reasons for any changes;
7) obtain feedback about the conduct of the audit from key people involved;
8) reported to the Board on the effectiveness of the external audit process;
9) review the appointment or reappointment of the external auditor, and information on the length of tenure
of the current audit firm;
10) review any non-audit services provided by the external auditor during the financial year and what, if any
effect that would have to the audit process; and
11) review the timing and timeline of the annual audit.
Mark Badros
Former Committee Chairman
07 February 2023
27
Starvest plc
2022 Annual Report and Financial Statements
Remuneration Committee Report
Remuneration Committee
The Remuneration Committee is responsible for establishing and proposing to the Board a recommended
framework for the remuneration of the Chairman, other directors and designated senior executives and, pursuant
to the terms of the agreed framework, determining for such persons their total individual remuneration packages,
including, where appropriate, bonuses, incentive payments and share options or other share awards.
The remuneration of Non-Executive Directors is a matter for the Chairman and the executive members of the
Board. No Director is involved in any decision as to his or her own remuneration.
Details on the activities of the Remuneration Committee during the year are contained in the Remuneration
Committee Report below.
During the year ended 30 September 2022 and up to the signing of this report, the Remuneration Committee
comprised Mark Badros, who acted as Chairman from 1 October 2021 – 31 August 2022; Callum Baxter, who
acted as Chairman 1 September 2022 – 30 September 2022, and Gemma Cryan. The Remuneration Committee
formally met once during year and all members attended the meeting. Directors’ roles and remuneration were also
a point for general board meetings throughout the year.
Dear Shareholder,
On behalf of the Board, I am pleased to present the Remuneration Committee Report for the year ended 30
September 2022. The Remuneration Committee is responsible for establishing and proposing to the Board a
recommended framework for the remuneration of the Chairman, other Directors and designated senior executives
and, pursuant to the terms of the agreed framework, determining for such persons their total individual
remuneration packages, including, where appropriate, bonuses, incentive payments and share options or other
share awards. The Remuneration Committee is also responsible for ensuring the Company is compliant with all
relevant consultant and employment contracts and HMRC responsibilities.
As an AIM-listed company, Starvest is not required to comply with Schedule 8 of The Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008. The following disclosures are therefore made
on a voluntary basis. The information is unaudited.
Remuneration Committee Membership and Activities
The Remuneration Committee’s members during the year were myself, as Former Chair of the Committee (1
October 2021 to 31 August 2022), Callum Baxter, current Chair and Gemma Cryan.
The Committee met once during the year to perform the following activities:
review Executive Director remuneration arrangements (including cash or shares in lieu)
review changes in remuneration in relation to board role changes
review and approve the Executive Directors’ performance
review developments in corporate governance and best practice
Remuneration Policy
The Company’s remuneration policy is based on the following broad principles:
to provide competitive remuneration packages to enable the Company to recruit, retain and motivate
individuals with the skills, capabilities and experience to achieve its objectives;
to align the interests of management with the interests of shareholders;
to ensure remuneration levels support the Company’s strategy; and
to align pay with market conditions and the Company’s activities, taking due account of (i) pay and
conditions throughout the Company and (ii) best practices of corporate governance.
Executive remuneration consists of base pay. The Company does not currently have a bonus or incentive scheme
in place.
28
Starvest plc
2022 Annual Report and Financial Statements
Remuneration Committee report, continued
Executive Directors’ base pay is reviewed on an annual basis.
The individual salaries and benefits of Executive Directors are reviewed and adjusted taking into account individual
performance, market factors and sector conditions.
The Committee reviews base salaries with reference to:
• the individual’s role, performance and experience;
• business performance and the external economic environment; and
• salary increases across the Company.
Any base salary increases are applied in line with the outcome of the review as part of which the Committee also
considers average increases across the Company.
Non-Executive Directors’ fees
The Non-Executive Directors are paid a fee for carrying out their duties and responsibilities as disclosed in the
table below.
Service Contracts
Callum Baxter
Mr. Baxter entered into an updated agreement with the Company on 1 September 2022 to continue to serve as
its Chairman. The service contract provides for payments under PAYE in proportion to activities carried out on
behalf of the Company within the UK as a non-resident Director at £27,000 per annum to be taken as cash or
shares in lieu of cash payments (after any PAYE obligations are withheld).
Gemma Cryan
Miss Cryan entered into an updated employment agreement with the Company on 1 October 2021 to continue to
serve as an Executive Director The employment agreement provided for an annual salary of £53,000to be taken
as cash or shares in lieu of cash payments (after any PAYE obligations are withheld).
Mark Badros
Mr. Badros entered into an updated agreement with the Company on 1 September 2022 to serve as Chief
Executive Officer. The service contract provides for payments under PAYE in proportion to activities carried out
on behalf of the Company within the UK as a non-resident Director at £60,000 per annum to be taken as cash or
shares in lieu of cash payments (after any PAYE obligations are withheld).
All Directors are elected by the shareholders at an annual or special meeting, to serve until the next election and
until their successors are elected and qualified, or until their earlier death, resignation or removal.
Board Member
C Baxter
G Cryan
M Badros
Annual Remuneration £ Bonus £
Shares as at 30
Sept 2022
% Holding as at 30
Sept 2022
57,250
53,000
29,750
0
0
0
8,098,753
1,490,254
148,648
13.90
2.56
0.26
Mark Badros
Former Committee Chairman
07 February 2023
29
Starvest plc
2022 Annual Report and Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STARVEST PLC
Opinion
We have audited the financial statements of Starvest Plc (the ‘company’) for the year ended 30 September 2022
which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of
Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied in their preparation is applicable law
and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in
the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
give a true and fair view of the state of the company’s affairs as at 30 September 2022 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the company’s ability to continue to adopt the going concern basis of accounting included a review
of the cash flow forecasts prepared by management, challenging the assumptions made therein and evaluating
the ability of the company to realise its Level 1 investments, if required, to meet its liabilities as they fall due.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds
for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures.
Materiality for the company financial statements was set at £184,000 (2021: £422,000). This was calculated based
on 3% of net assets, of which equity investments comprise the majority of the balance. The basis for calculating
materiality is unchanged from the previous year, with the reduction reflecting the fall in fair value of equity
investments at year-end. The benchmark used is the one which we determined, in our professional judgment, to
be the key benchmark within the financial statements relevant to shareholders of an investment management
company in assessing financial performance. The key driver of the company and assessment of its performance
is linked to the valuation of its equity investments held. Performance materiality has been set at £128,800 (2021:
£295,400) being 70% of headline materiality, based upon our assessment of risk and the absence of any audit
adjustments in previous periods.
We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified
through our audit with a value in excess of £9,000 (2021: £21,100). We also agreed to report any other audit
misstatements below that threshold that we believe warranted reporting on qualitative grounds.
30
Starvest plc
2022 Annual Report and Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STARVEST PLC, continued
Our approach to the audit
In designing our audit, we determined materiality, and assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas where the Directors made significant judgements, comprising the fair
value of investments at level 2 or 3 of the fair value hierarchy. We also assessed the risk of management override
of internal controls.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Financial assets at fair value through profit or loss
(Note 10)
The Company holds equity investments with a car-
rying value of £6m (2021: £14m) as at 30 September
2022. The portfolio consists largely of listed invest-
ments, and thus are valued under Level 1 of the fair
value hierarchy.
Unlisted investments are subject to management
valuation, and thus are exposed to significant levels
of management judgement and estimation. These
investments have been written down to £Nil in pre-
vious periods.
Based upon the significance of the value of the in-
vestments held at the year end, this was determined
to be a Key Audit Matter.
Our work in this area included:
reviewing the valuation methodology for each
type of investment held and ensuring the carrying
values are supported by sufficient and appropri-
ate audit evidence;
ensuring that investments are categorised and
disclosed correctly in accordance with UK GAAP;
agreeing year-end fair values to independent
sources of price data;
ensuring that the company has legal title to the
investments held.; and
performing tests of detail on investment disposals
in the year
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The Directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
31
Starvest plc
2022 Annual Report and Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STARVEST PLC, continued
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
adequate accounting records have not been kept, 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.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
We obtained an understanding of the company and the sector in which it operates to identify laws and
regulations that could reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management and application of cu-
mulative audit knowledge.
32
Starvest plc
2022 Annual Report and Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STARVEST PLC, continued
We determined the principal laws and regulations relevant to the company in this regard to be those arising
from:
- Companies Act 2006
- FRS 102
- AIM Rules
We designed our audit procedures to ensure the audit team considered whether there were any indica-
tions of non-compliance by the company with those laws and regulations. These procedures included, but
were not limited to:
- Enquiries of management
- Review of board minutes and other correspondence
- Review of the company’s related party transactions and disclosures
We also identified the risks of material misstatement of the financial statements due to fraud. We consid-
ered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of
controls, that the existence and good title to investments represented the greatest risk of fraud.
We addressed the risk of fraud arising from management override of controls by performing audit proce-
dures which included, but were not limited to: the testing of journals and evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions reflected
in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is
also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
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.
David Thompson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
07 February 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
33
Starvest plc
2022 Annual Report and Financial Statements
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Administrative expenses
(Loss)/gain on disposal of financial assets
Movement in fair value of financial assets
through profit or loss
Investment income
Operating loss
Loss on ordinary activities before tax
Tax on ordinary activities
Loss for the financial year attributable to
Equity holders of the Company
Earnings per share
Basic
Diluted
Note
Year ended 30
September 2022
£
Year ended 30
September 2021
£
(305,944)
(53,398)
(7,234,928)
53,428
(7,540,842)
(7,540,842)
1,671,086
(5,869,756)
(290,993)
19,339
(3,645,360)
56,000
(3,861,014)
(3,861,014)
332,532
(3,528,482)
(10.09 pence)
(10.09 pence)
(6.11 pence)
(6.11 pence)
10
5
7
8
8
There are no other 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.
34
Starvest plc
2022 Annual Report and Financial Statements
STATEMENT OF FINANCIAL POSITION
30 SEPTEMBER 2022
Note
Year ended 30
September 2022
£
Year ended 30
September 2021
£
Non-current assets
Financial assets at fair value through profit or loss
10
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Provision for deferred tax
Total non-current liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Retained earnings
Total equity shareholders’ funds
9
11
7
12
6,156,173
6,156,173
14,038,887
14,038,887
77,424
406,106
483,530
(41,776)
(41,776)
63,539
78,276
141,815
(85,627)
(85,627)
-
-
(1,671,086)
(1,671,086)
6,597,927
12,423,989
582,824
1,888,863
4,126,240
6,597,927
579,820
1,848,173
9,995,996
12,423,989
These financial statements were approved and authorised for issue by the Board of Directors on 07 February
2023.
Signed on behalf of the Board of Directors
Mark Badros
Chief Executive Officer
Company No. 03981468
Gemma M Cryan
Executive Director
The accompanying accounting policies and notes form an integral part of these financial statements.
35
Starvest plc
2022 annual report and financial statements
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Share capital Share premium
£
£
Retained
earnings
£
Total Equity
attributable to
shareholders
£
At 1 October 2020
575,740
1,779,414
13,524,478
15,879,632
Loss for the period
Total comprehensive income
Shares issued
Total contributions by and distributions
to owners
-
-
4,080
4,080
-
-
(3,528,482)
(3,528,482)
(3,528,482)
(3,528,482)
68,759
68,759
-
-
72,839
72,839
At 30 September 2021
579,820
1,848,173
9,995,996
12,423,989
Loss for the period
Total comprehensive income
Shares issued
Total contributions by and distributions
to owners
-
-
3,004
3,004
-
-
(5,869,756)
(5,869,756)
(5,869,756)
(5,869,756)
40,690
40,690
-
-
43,694
43,694
At 30 September 2022
582,824
1,888,863
4,126,240
6,597,927
36
Starvest plc
2022 annual report and financial statements
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Cash flows from operating activities
Loss before tax
Shares issued in settlement of salary and fees
Movement in fair value of financial assets through profit
or loss
Loss/(profit) on sale of financial assets through profit or
loss
Increase in debtors
Decrease in creditors
Net cash used in operating activities
Cash flows from investing activities
Proceeds from sale of financial assets through profit of
loss
Net cash generated from investing activities
Note
30 September
2022
30 September
2021
£
£
(7,540,842)
(3,861,014)
43,694
72,839
7,234,928
3,645,360
53,398
(13,885)
(43,851)
(19,339)
(32,493)
(7,587)
(266,558)
(202,234)
594,388
594,388
160,145
160,145
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of year
14
327,830
78,276
406,106
(42,089)
120,365
78,276
The accompanying notes and accounting policies form an integral part of these financial statements.
37
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1.
Company Information
Starvest plc is a Public Limited Company incorporated in England & Wales. The registered office is Salisbury
House, London Wall, London, EC2M 5PS. The Company's shares are listed on the AIM market of the London
Stock Exchange. These Financial Statements (the "Financial Statements") have been prepared and approved by
the Directors on 07 February 2023 and signed on their behalf by Mark Badros and Gemma Cryan.
2.
Basis of Preparation
These financial statements have been prepared in accordance with applicable United Kingdom accounting
standards, including Financial Reporting Standard 102 – ‘The Financial Reporting Standard applicable in the
United Kingdom and Republic of Ireland’ (‘FRS102’), and with the Companies Act 2006. The financial statements
have been prepared on the historical cost basis. There are no fair value adjustments other than to the carrying
value of the Company’s trade investments. The financial statements are presented in pounds sterling, which is
also the functional currency of the company.
Going concern
The Company's day to day financing is from its available cash resources and, on occasion, by the part disposal of
investments and use of short-term loans.
The Directors are confident that adequate funding can be raised as required to meet the Company's current and
future liabilities, which has been confirmed within the cash flow forecast prepared by the Board for the 12 months
ending 29 February 2024. In the 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.
As at the date of this report, the Company has no borrowings.
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.
3.
Principal Accounting Policies
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.
Taxation
Corporation tax payable is provided on taxable profits at the current rates enacted or substantially enacted at the
balance sheet date.
Under FRS102, investments are valued on a mark-to-market basis using publicly quoted trading prices at year
end irrespective of whether they are classified as fixed or current assets. However, pursuant to Part 3, Chapter 3,
Corporation Tax Act 2009, any increase in the value of a current asset is recognised as a trading profit and
immediately subject to Corporation Tax when a company is classified as a trading company under HMRC rules
and regulations, whereas an increase in the value of a fixed asset is not subject to taxation until the asset is
disposed of when a company is classified as an investment company. Reported profit under UK GAAP is
unaffected.
38
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
3.
Principal Accounting Policies, continued
Taxation, continued
Historically, the Company’s previous board had filed as a trading company and described its investment portfolio
the Company’s
as a current asset. Following a comprehensive review of various
investment portfolio and strategy, including, among others, the frequency, timing, liquidity, trading activities,
development stage and investment horizon of such investments individually and the portfolio as a whole, the
Company’s current board have determined the Company is appropriately classified as an investment
company, and the investment portfolio is properly accounted for among the Company’s fixed assets. The Board
do not consider this to be a change in accounting policy; rather, it is a correction in presentation to reflect more
accurately the factual position.
factors related
to
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.
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the
reversal of deferred tax liabilities or other future taxable profits and are recognised within debtors. The deferred
tax assets and liabilities all relate to the same legal entity and being due to or from the same tax authority are
offset on the balance sheet.
FRS 102 requires that investments are valued each year on the mark-to-market basis and the revaluation
differences are reflected in the profit and loss account. However, the tax on any unrealised profit is calculated and
shown in the accounts as if the profit had been realised, but there is then an adjustment in the deferred tax to
move the tax that relates to the unrealised profit to the balance sheet.
Foreign Currencies
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in a foreign currency are translated into the functional currency at the
exchange rate ruling at the reporting date, unless specifically covered by foreign exchange contracts whereupon
the contract rate is used.
Investments
Current investments are stated at mid-market publicly quoted prices.
Investments in unlisted company shares are remeasured to available market values, or Directors’ valuations at
each balance sheet date. Gains and losses on remeasurement are recognised in the statement of comprehensive
income for the period. As at 30 September 2022 unlisted shares were valued at £nil (2021: £nil).
Investments in listed company shares are remeasured to market value at each balance sheet date under level 1
of the fair value hierachy. Gains and losses on remeasurement are recognised in the statement of comprehensive
income for the period.
Dividend income is recognised in the income statement when the right to receive payment is established from
investee companies.
Financial instruments:
Trade and other receivables
Trade and other receivables are not interest bearing and are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method less provision for impairment.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
39
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
3.
Principal Accounting Policies, continued
Trade and other payables
Trade and other payables are not interest bearing and are recognised initially at fair value and subsequently
measured at amortised cost.
Financial liabilities
All financial liabilities are recognised initially at fair value and are subsequently measured at amortised cost. There
are no financial liabilities classified as being at fair value through the statement of comprehensive income.
Share capital
The Company’s ordinary shares are classified as equity.
Share premium
Represents premiums received on the initial issuing of the share capital. Any transaction costs associated with
the issuing of shares are deducted from share premium, net of any related income tax benefits.
Retained Earnings
Retained earnings is the cumulative profit or loss that is held or retained and saved for future use as recognised
in the statement of comprehensive income.
4.
Segmental Analysis
Segmental information
An operating segment is a distinguishable component of the Company that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company’s
chief operating decision maker to make decisions about the allocation of resources and assessment of
performance and about which discrete financial information is available.
The Company is to continue to operate as a single UK based segment with a single primary activity to invest in
businesses so as to generate a return for the shareholders. No segmental analysis has been disclosed as the
Company has no other operating segments. The Directors will review the segmental analysis on a regular basis
and update accordingly.
The Company has not generated any revenues from external customers during the period.
5.
Operating Profit/(Loss)
This is stated after charging:
Auditor’s remuneration:
- audit services
Director’s emoluments – note 6
Year ended 30
September
2022
Year ended 30
September
2021
£
£
19,200
18,600
141,321
141,317
There are no employees, other than the Directors of the company (2021: Nil)
40
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
6.
Directors’ Emoluments
There were no employees during the period apart from the directors. No directors had benefits accruing under
money purchase pension schemes.
Year ended 30 September 2022
C Baxter
G Cryan
M Badros
Year ended 30 September 2021
C Baxter
G Cryan
M Badros
Shares
issued in
settlement
of fees –
see note
£
15,000
6,847
-
21,847
Shares
issued in
settlement
of fees –
see note
£
45,000
27,839
-
72,839
Pension
£
-
1,321
-
1,321
Pension
£
-
1,317
-
1,317
Total
£
57,250
57,321
29,750
141,321
Total
£
60,000
54,317
27,000
141,317
Salary and
Fees
£
42,250
46,153
29,750
118,153
Salary and
Fees
£
15,000
25,161
27,000
67,161
Amounts paid to third parties and shares issued in settlement of fees
Included in the above are the following amounts paid to third parties:
In respect Callum Baxter’s total remuneration, £15,000 (2021: £45,000) was settled in shares in the
Company and at 30 September 2022 £nil (2021: £15,000) of his net salary remained outstanding.
In respect of Gemma Cryan’s total remuneration £6,847 (2021: £27,839) was settled in shares in the
Company and at 30 September 2022 £nil (2021: £6,847) of her net salary remained outstanding.
In respect of Mark Badros’s total remuneration, at 30 September 2022 £nil (2021: £6,750) of his net salary
remained outstanding.
7.
Corporation Tax
a) Analysis of credit in the period
United Kingdom corporation tax at 19% (2021: 19%)
Deferred taxation at 25% (2021: 25%)
41
Year ended 30
September
Year ended 30
September
2022
£
-
2021
£
-
(1,671,086)
(1,671,086)
(332,532)
(332,532)
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
7.
Corporation Tax, continued
b) Factors affecting tax charge for the period
The tax assessed on the profit/(loss) on ordinary activities for the year differs from the standard rate of corporation
tax in the UK of 19% (2020: 19%). The differences are explained below:
Year ended 30
September
Year ended 30
September
2022
£
2021
£
Loss on ordinary activities before tax
(7,540,842)
(3,861,014)
Loss multiplied by standard rate of tax at 19% (2021: 19%)
(1,432,760)
(733,593)
Effects of:
Utilised against carried forward losses
Losses carried forward not recognised as deferred tax assets
Deferred tax credit
c) Deferred tax
-
1,432,760
(1,671,086)
(1,671,086)
-
733,593
(332,532)
(332,532)
Deferred tax liability b/fwd at 30 September 2021 and 2020
Credit for the year
Deferred tax liability c/fwd at 30 September 2022 and 2021
1,671,086
(1,671,086)
-
2,003,618
(332,532)
1,671,086
Capital losses b/fwd at 30 September 2021 and 2020
(3,515,024)
(3,548,493)
Current year capital losses
Capital losses c/fwd at 30 September 2022 and 2021
Excess management expenses b/fwd at 30 September
Current year excess management expenses
Adjustments in respect of prior periods
Excess management expenses c/fwd at 30 September
Total losses
Profits b/fwd
Current year pre-tax loss
Profit attributable to deferred tax
Deferred tax at 25% (2021:25%)
42
191,959
33,469
(3,323,065)
(3,515,024)
(2,249,467)
(1,655,253)
(305,944)
-
(290,993)
(303,221)
(2,555,411)
(2,249,467)
(5,878,476)
(5,764,491)
6,684,345
10,545,359
(7,540,842)
(3,861,014)
-
-
6,684,345
1,671,086
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
7.
Corporation Tax, continued
c) Deferred tax, continued
A deferred tax liability provision of £1,671,086 has been released during the year (2021: £332,532) on the future
tax payable on profits, on disposal of investments.
The Company has not recognised a deferred tax asset due to the inherent uncertainty that future investment gains
will offset such a tax asset.
In May 2021, the UK Government enacted a budget that increased the corporation tax rate to 25% from the current
rate of 19%. The deferred tax liabilities in these accounts have been adjusted to reflect these enacted tax rates.
8.
Earnings Per Share
The basic earnings per share is derived by dividing the profit 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
There are no potential dilutive shares in issue.
9.
Trade and Other Receivables
Prepayments
Funds held on account
Dividends receivable
Year ended
30 September
2022
£
(5,869,756)
58,181,646
(10.09 pence)
Year ended
30 September
2021
£
(3,528,482)
57,755,713
(6.11 pence)
Year ended
30 September
2022
£
49,904
3,720
23,800
77,424
Year ended
30 September
2021
£
61,548
1,991
-
63,539
Short term loans to related parties
At 30 September 2022 loans to Equity Resources Ltd (“EQR”), an associate of the company, totalling
£20,000 (2021: £20,000) remain unpaid. The purpose of the loans was to assist EQR meet its necessary
operational costs during a period when it seemed inappropriate that EQR should realise cash from its
investments. The advances were made prior to appointment of the current board and approved by former
directors at 0% interest with no formal agreement as to repayment date. The Company holds 28.41% of
the equity in EQR. The Company has made a full provision for these loans, totalling £20,000.
43
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
10.
Financial assets at fair value through profit or loss
Listed equity securities
Fair value of investments at 1 October
Additions
Disposals
Fair value (loss) on financial assets through profit or loss
Fair value at 30 September
The fair value carrying values of the investments above were as follows:
Quoted on AIM
Quoted on foreign stock exchanges
30 September
2022
£
30 September
2021
£
14,038,887
-
(647,786)
(7,234,928)
6,156,173
17,825,053
-
(140,806)
(3,645,360)
14,038,887
6,156,173
-
6,156,173
14,029,001
9,886
14,038,887
The Company has holdings in the companies described in the review of portfolio on pages 7 to 11. Of these, the
Company has holdings amounting to 20% or more of the issued share capital of the following companies:
Name
Equity Resources
Limited – see note [1]
Country of
incorporation
England &
Wales
Class of
shares
held
Percentage
of issued
capital
(Loss) for the
last financial
year
Capital and
reserves at
last
balance
sheet date
Ordinary
28.41%
(£2,181)
(£39,918)
Accounting
year end
31 May
2022
Note [1]: Equity Resources Limited is considered to be an associated undertaking. Equity accounting has not been
used as Equity Resources Limited has a written down value of £nil.
The Company’s share of the net liabilities of its Associates at 30 September 2022 is £11,341. 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.
11.
Trade and Other Payables: Amounts falling due within one year
Trade creditors
Accruals
Employment and social security costs
Other payables
30 September
2022
£
19,792
21,470
514
-
41,776
30 September
2021
£
33,143
21,633
30,841
10
85,627
44
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
12.
Share Capital
The called up share capital of the Company was as follows:
Called up, allotted, issued and fully paid
As at 30 September 2020
Issued 2 June 2021 in lieu of fees at 18.5p
Issued 27 July 2021 in lieu of fees at 16.5p
As at 30 September 2021
Issued 16 November 2021 in lieu of fees at 16.5p
Issued 7 April 2022 in lieu of fees at 13p
As at 30 September 2022
Share Warrants
The Company currently has no unexercised warrants in issue.
Number of Shares
57,573,986
275,635
132,410
57,982,031
132,407
168,055
58,282,493
£
575,740
50,992
21,847
648,579
21,847
21,847
692,273
13. Share options
During the year ended 30 September 2022 no new options were granted and the Company currently has no
unexercised options in issue.
14. Cash and Cash Equivalents
Cash at bank
Net cash and cash equivalents
Year ended 30
September 2021
£
78,276
78,276
Cash flow
£
327,830
327,830
Year ended 30
September 2022
£
406,106
406,106
Capital Commitments
15.
As at 30 September 2022 and 30 September 2021, the Company had no commitments other than for expenses
incurred in the normal course of business.
16.
There were no contingent liabilities at 30 September 2022 (2021: £nil).
Contingent Liabilities
Related Party Transactions
17.
During the year Greatland Gold plc, a company which Callum Baxter was formerly a director of, provided shared
office space to the Company. At the year end there was £950 payable to Greatland Gold plc for October 2022 rent
(2021: £1,908). This amount was settled in full on 27 October 2022.
There were no other related party transactions during the year other than those disclosed in notes 6 and 9.
The key management of the Company are considered to be the Directors, the compensation for whom was
£141,321 (2021: £141,317). Refer to note 6 for more information.
Financial Instruments
18.
The Company’s financial instruments comprise investments, cash at bank and various items such as other
debtors, loans and creditors. The Company has not entered into derivative transactions nor does it trade financial
instruments as a matter of policy.
45
Starvest plc
2022 annual report and financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
18.
Financial Instruments, continued
Credit Risk
The Company’s credit risk arises primarily from short term loans to related parties and the risk the counterparty
fails to discharge its obligations. At 30 September 2022 there were no loans outstanding (2021: £nil).
Liquidity Risk
Liquidity risk arises from the management of cash funds and working capital. The risk is that the Company will fail
to meet its financial obligations as they fall due. The Company operates within the constraints of available funds
and cash flow projections are produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are cash at bank and in hand, which comprises money
at call. The interest earned in the year was negligible. The Directors believe the fair value of the financial
instruments is not materially different to the book value.
Foreign currency risk
The Company has no material exposure to foreign currency fluctuations.
Market risk
The Company is exposed to market risk in that the value of its investments would be expected to vary depending
on trading activity of its shares.
Categories of financial instruments
Year ended 30
September 2022
Year ended 30
September 2021
£
£
Financial assets
Trade investments at fair value through profit and loss
6,156,173
14,038,887
Dividends receivable at amortised cost
Cash and cash equivalents at amortised cost
Investment funds held on account at amortised cost
Financial liabilities at amortised cost
Accruals and payables
23,800
406,106
3,720
-
78,276
1,991
6,589,799
14,119,154
41,776
41,776
83,640
83,640
Capital Management
19.
The Company’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern
and develop its investment activities to provide returns for shareholders. The Company’s funding comprises equity
and debt. The directors consider the Company’s capital and reserves to be adequate. When considering the future
capital requirements of the Company and the potential to fund specific investment activities, the directors consider
the risk characteristics of all of the underlying assets in assessing the optimal capital structure.
20.
Events After the End of the Reporting Period
There are no events after the end of the reporting period to disclose.
21.
There is no ultimate controlling party.
Ultimate controlling party
46