Unaudited Condensed Half-Yearly Financial Report for the six month period ended 30 September 2017

Transcription

1 Unaudited Condensed Half-Yearly Financial Report for the six month period ended 30 September 2017

2 Contents Half-Yearly Board Report Financial Highlights, Performance Summary and Dividend History 1 Chairman s Statement 2 Executive Summary 3 Board Members 6 Investment Manager s Report 8 Directors Statement of Responsibilities 11 Condensed Statement of Comprehensive Income 12 Condensed Statement of Financial Position 13 Condensed Statement of Changes in Shareholders Equity 14 Condensed Statement of Cash Flows 15 Notes to the Condensed Financial Statements 16 Company Information Inside back cover

3 Half-Yearly Board Report Financial Highlights, Performance Summary and Dividend History Financial highlights Share buybacks In the six month period ended 30 September 2017, Oryx International Growth Fund Limited (the Company ) carried out 2 share buybacks, resulting in a total reduction of 444,000 shares for a cost of 2,782,500. These shares were subsequently cancelled. ( in millions, except per share data and the number of At At Ordinary Shares in issue) 30 September March 2017 Number of Ordinary Shares in issue 14,415,125 14,859,125 Market capitalisation 1 Ordinary Shares Net Asset Value ( NAV ) attributable to shareholders Ordinary Shares Investments Cash and cash equivalents NAV per share attributable to shareholders Ordinary Shares Share Price Discount to NAV (based on published NAV) (20.10)% (21.86)% Earnings per share Dividend history No Ordinary Share dividend was declared during the period. 1 Source: Bloomberg Page 1

4 Half-Yearly Board Report (continued) Chairman s Statement It is again my pleasure to report a good set of results for the six months ended 30 September The net asset value per share increased by 6.9% which compares favourably with the rise in appropriate indices. These results consolidate a period of strong growth over the last five years where the Company s NAV has increased by 120%. As has been stated on many occasions in the past, the success of this Company is derived from investing in situations where the Manager, Harwood Capital, led by Christopher Mills, is able to influence the maximisation of value in our holdings. This long term approach has been very successful and has given shareholders very strong returns over the last five years. Harwood Capital continue to look for new investments at attractive prices but this process can be time consuming and, in a rising market, frustrating. As is reported below, there are grounds for optimism in the medium term as investments continue to mature with good prices being achieved on exit and new opportunities identified. We continue to buy back shares and during the period, the Company purchased for cancellation 444,000 shares at an average discount of 18%. This policy continues to benefit shareholders. In accordance with our long established policy, the directors are not recommending a dividend. Nigel Cayzer Chairman 15 December 2017 Page 2

5 Half-Yearly Board Report (continued) Executive Summary This Executive Summary is designed to provide information about the Company s business and results for the six month period ended 30 September It should be read in conjunction with the Chairman s Statement on page 2 and the Investment Manager s Report on page 8 which gives a detailed review of investment activities for the period and an outlook for the future. Corporate summary The Company is a Guernsey Authorised Closed-Ended Collective Investment Scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended, and the Authorised Closed Ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission. It was incorporated and registered with limited liability in Guernsey on 2 December 1994, with registration number The Company has a premium listing on the Main Market of the London Stock Exchange. The Company s share capital is denominated in Sterling and each Ordinary Share carries equal voting rights. Harwood Capital LLP was authorised by the Financial Conduct Authority ( FCA ), on 27 October 2014, as a Small Authorised UK Alternative Investment Fund Manager ( AIFM ) under the Alternative Investment Fund Managers Directive (the AIFMD ) and the Company has been included in Harwood Capital LLP s Schedule of Alternative Investment Funds ( AIFs ). As a Small Authorised UK AIFM, Harwood Capital LLP is not subject to the full scope of the Directive but must report to the FCA annually on the Company and the other AIFs that it manages. Significant events In the six month period ended 30 September 2017, the Company carried out 2 share buybacks, resulting in a total reduction of 444,000 shares for a cost of 2,782,500. These shares were subsequently cancelled. Please refer to note 10 for more detail. Company investment objective and policy The investment objective of the Company is to seek to generate consistently high absolute returns whilst maintaining a low level of risk for shareholders. The Investment Manager and Investment Adviser during the period was Harwood Capital LLP (the Investment Manager and the Investment Adviser ) a United Kingdom limited liability partnership incorporated under the Limited Partnerships Act 2000 (partnership number OC304213) and regulated by the Financial Conduct Authority. The Company principally invests in small and mid-size quoted and unquoted companies in the United Kingdom and the United States. The Investment Manager targets companies that have fundamentally strong business models, but where there may be specific factors which are constraining the maximisation or realisation of shareholder Page 3

6 Half-Yearly Board Report (continued) Executive Summary (continued) value, which may be realised through the pursuit of an activist shareholder agenda by the Investment Manager. Dividend income is a secondary consideration when making investment decisions. Information on the Directors remuneration is detailed in note 8. Other than fees payable in the ordinary course of business, there have been no material transactions with these related parties. Director interests The Board comprises seven non-executive Directors, five of whom are independent: Nigel Cayzer (Chairman), Walid Chatila, Rupert Evans, John Grace and John Radziwill. Christopher Mills is an employee of the Investment Manager and Sidney Cabessa is a Director of Harwood Capital Management Limited and are therefore not regarded as independent. Information on each director is presented on pages 6 and 7. Walid Chatila, Rupert Evans and John Radziwill are members of the Audit Committee and Nomination Committee. Nigel Cayzer, Sidney Cabessa, and John Grace are also members of the Nomination Committee. Christopher Mills is a Partner and Chief Executive Officer of the Investment Manager and Investment Adviser. Harwood Capital LLP is entitled to fees as detailed in notes 4 and 5. Rupert Evans is a consultant to the law firm Mourant Ozannes, the legal adviser to the Company. No fees were paid or are payable to Harwood Capital Management Limited where Sidney Cabessa is a director. (30 September 2016: Nil) The Company has not set any requirements or guidelines for Directors to own shares in the Company. As at the date of approval of the Half-Yearly Financial Report, Directors and their connected persons held the following number of Ordinary Shares in the Company: Director Directors holdings in the Company s Ordinary Shares Christopher Mills 328,716 John Grace 1 130, ,607 1 John Grace holds a beneficial interest of 130,000 Ordinary Shares. Mr Grace is also a member of a class of beneficiaries which holds an interest in 346,607 Ordinary Shares. Principal risks and uncertainties When considering the total return of the Company, the Board takes account of the risk which has been taken in order to achieve that return. The Board looks at the following risk factors as listed below: Investment activity and performance Level of discount or premium Market price risk Page 4

7 Information on these risks and how they are managed is given in the Annual Report and Financial Statements for the year ended 31 March In the view of the Board, these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were in the six months under review. Going concern Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern from the date of approval of the condensed financial statements. The Directors have considered the Company s investment objective and risk management policy, its assets and the expected income and return from its investments. The Directors are of the opinion that the Company is able to meet its liabilities and ongoing expenses as they fall due and they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, these financial statements have been prepared on a going concern basis and the Directors believe it is appropriate to continue to adopt this basis for a period of at least 12 months from the date of approval of these financial statements. operations until the 2019 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again. Events after the reporting date The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial periods not already disclosed in this report or the attached condensed financial statements. Future strategy The Board continues to believe that the investment strategy and policy adopted by the Company is appropriate for and is capable of meeting the Company s investment objective. The overall strategy remains unchanged and it is the Board s assessment that the Investment Manager resources are appropriate to properly manage the Company s portfolio in the current and anticipated investment environment. Please refer to the Investment Manager s report for detail regarding performance to date of the investment portfolio and the main trends and factors likely to affect those investments. The special resolution outlined in Article 51 of the Articles of Incorporation was not passed at the AGM on 31 August Hence, the Company will continue its Page 5

8 Board Members Directors All Directors are non-executive. Nigel Cayzer (Chairman) British Nigel Cayzer is Chairman of Aberdeen Asian Smaller Companies Investment Trust PLC. He is also a director of a number of private companies. He has been Chairman or a director of a number of Investment Companies and was Chairman of Maggie s, a leading cancer charity, from 2005 until Sidney Cabessa French Sidney Cabessa is also a director of Club-Sagem and Mercator/Nature et découvertes. He was Chairman of CIC Finance, an Investment Fund and a subsidiary of French banking group, CIC Credit Mutuel and was previously a Director of other investment companies. Walid Chatila Canadian Walid Chatila has more than 11 years of international audit and special assignment experience in the Middle East and North America. He is a Certified Public Accountant (Texas 1984) and a Certified Professional Accountant (Ontario 1991). From 1994 to 2006, he was the Finance Director of Emirates Holdings in Abu Dhabi, United Arab Emirates, and between 2006 and 2011, he assumed the role of General Manager of Al Nowais Investment LLC. He is currently advisor to the Chairman of Arab Development Establishment in Abu Dhabi. Rupert Evans British Rupert Evans is a Guernsey Advocate and was a partner in the firm of Ozannes between 1982 and 2003, since then he has been a consultant to Ozannes (now Mourant Ozannes). He is a non-executive director of a number of other investment companies some of which are quoted on recognised stock exchanges. He is a Guernsey resident. Page 6

9 Christopher Mills British Christopher Mills is a Partner and the Chief Executive Officer of Harwood Capital LLP. He is also Chief Investment Officer of North Atlantic Smaller Companies Investment Trust plc ( NASCIT ). NASCIT is the winner of numerous Micropal and S&P Investment Trust awards. In addition, he is a non-executive director of numerous UK companies which are either currently, or have in the past five years been, publicly quoted. John Radziwill British John Radziwill is currently a director of INTL FC Stone, Goldcrown Group Limited, Fourth Street Capital Ltd, Fifth Street Capital Ltd and Vendor Safe Technologies LLC. In the past ten years, he also served as a director of Acquisitor Plc and Acquisitor Holdings (Bermuda) Ltd, Air Express International Corp., Radix Ventures Inc, Baltimore Capital Plc, Lionheart Group Inc, USA Micro Cap Value Co Ltd and Radix Organisation Inc. Mr Radziwill is a member of the Bar of England and Wales. John Grace New Zealander John Grace is actively involved in the management of several global businesses including asset management, financial services, and real estate. He is a Director and Founder of Sterling Grace International Ltd. Sterling Grace and its affiliates manage investments for high net-worth investors, institutions and investment partnerships. The company is active in global money management, financial services, private equity and real estate investments. He is also Chairman of Trustees Executors Holdings Ltd, owner of the premier and oldest New Zealand trust company established in It is the market leader in the corporate trust business. Its clients include government divisions, corporations and banks. The company is active in wholesale financial services including trust accounting, securities custody and mutual fund registry. It is also actively engaged in the personal trust business. Mr Grace graduated from Georgetown University. Mr Grace has served as a director of numerous public companies and charities. He currently supports genetic research and education initiatives in science at the university of Lausanne, EPFL École polytechnique fédérale de Lausanne and CERN, the European Organization for Nuclear Research. Page 7

10 Investment Manager s Report During the six month period under review, the net asset value per share rose by 6.9% which compares favourably with the rise in appropriate indices. Quoted equities: The major success for the period was a 100% rise in the value of Quantum Pharma following a takeover bid. Other stocks that performed well include EKF Diagnostics Holdings Plc (+10%), Minds Plus Machines Group (+20%), Bioquell Plc (+50%), Anpario Plc (+30%) and Ten Entertainment Group which is up 13% since the IPO in early April. The successes were offset by weakness in our two wealth management stocks, Harwood Wealth Management Group Plc and Frenkel Topping Group Plc which fell by around 15%. Lakehouse Plc also fell by over 25% due to its modest exposure to the Grenfell Towers disaster, although the share price has recovered in October. Augean Plc also fell by over 50% following an HMRC notice that it has underpaid landfill tax. The company intends to vigorously defend its position so we are optimistic that there could be a substantial recovery from the current price. Limited as a result of significant new contract wins. Outlook: We continue to believe that equities are fairly valued and there is significant market risk where companies report disappointing results. MIFID II will, in our opinion, further reduce market liquidity and therefore lead to increased volatility. The short term impact of this on the portfolio might be unfavourable although, in the long term, we believe it will create significant opportunities given our different investment strategy. Finally, we continue to expect further corporate activity over the next twelve months which should help build the net asset value over the medium term. Harwood Capital LLP 15 December 2017 Unquoted equities: No new investments were made during the period. Unfortunately, it was necessary to write down Sherwood Holdings Limited due to poor trading. This was partly offset by an increase in the valuation of Jaguar Holdings Page 8

11 Largest Equity Holdings as at 30 September 2017 M J Gleeson Plc Gleeson is a market leader in building affordable homes in the North of England. The company continues to perform well relative to market expectations. Recent results confirmed a significantly higher than expected dividend which should support further growth in the share price over the medium term. Quantum Pharma Plc The company is being taken over by Clinigen Group plc with the proceeds expected prior to the end of the calendar year. Satellite Solutions Worldwide Group Ltd The company provides fast broadband services for people living in remote locations. The company is a market leader with excellent prospects due to strong organic growth and add-on acquisitions. Minds Plus Machines Group The company is a worldwide company selling domain names including.london and.vip. In particular.vip has been very popular in China. The company has substantial net cash balances and is now profitable. EKF Diagnostics Holdings Plc The company is a leading supplier of point of care product for the hemoglobin and diabetes markets. Recent results have been very strong. The company has no net debt with cash balances rising strongly as the company completes its capital expenditure programme. Sportech Plc The company provides services to the gaming industry. Following the sale of its UK business, the company is significantly reducing its cost base which should result in a significant improvement in profitability over the next twelve months. TEN Entertainment Group Plc The company is the second largest indoor bowling business. The stock has performed well since the IPO and the recent trading statement shows that good progress is being made in the current year. Goals Soccer Centres Plc The company is the leading five-a-side soccer business in the UK. The company is in the midst of a major turnaround following years of under investment in the sites. A recent joint venture with City Football in the USA could materially improve profitability over the long term. The company also has very substantial cash balances which are expected to be returned to shareholders in the near future. Page 9

12 Largest Equity Holdings (continued) as at 30 September 2017 Frenkel Topping Group Plc The company is a market leader in providing financial advisory services to people who have suffered catastrophic injuries. In addition, the company has a fund management business that is growing rapidly. The company has substantial net cash with profits also growing rapidly. Lakehouse Plc The company provides compliance services mainly for the public sector. The share price was adversely impacted by the Grenfell Tower disaster but has recently won substantial new contracts. A non-core division was sold in early October which has significantly reduced group debt. The outlook for 2018 is encouraging. Page 10

13 Directors Statement of Responsibilities The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable Guernsey law and regulations. The Directors confirm to the best of their knowledge that: the unaudited condensed half-yearly financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting and give a true and fair view of the assets, liabilities, financial position and profit of the Company as at 30 September 2017, as required by the UK Listing Authority Disclosure Guidance and Transparency Rule 4.2.4R; 2. DTR 4.2.8R, being related party transactions that have taken place during the six months ended 30 September 2017 and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so. By order of the Board Walid Chatila Rupert Evans Director Director 15 December December 2017 the combination of the Chairman s Statement, the Investment Manager s Report, the Executive Summary and the notes to the unaudited condensed halfyearly financial statements include a fair view of the information required by: 1. Rule 4.2.7R of the Disclosure Guidance and Transparency Rules of the UK s Listing Authority ( DTR ), being an indication of important events that have occurred during the six months ended 30 September 2017 and their impact on the condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and Page 11

14 Condensed Statement of Comprehensive Income For the six months ended 30 September 2017 Six months Six months ended ended 30 September September 2016 (Unaudited) (Unaudited) Notes Income Investment income 3 359, ,988 Realised gain on financial assets designated at fair value through profit or loss 9 7,166,200 5,823,562 Unrealised gain on financial assets designated at fair value through profit or loss 686,561 6,726,551 (Loss)/gain on foreign currency translation (1,431) 1,738 Total income 8,211,122 12,839,839 Expenses Investment manager and investment advisory fees 4 648, ,367 Transaction costs 75,972 47,850 Directors fees and expenses 8 107,224 83,956 Audit fees 27,853 26,594 Administration fees 7 62,425 43,268 Legal and professional fees 69,907 38,653 Registrar and transfer agent fees 9,281 17,829 Custodian fees 6 15,836 13,577 Insurance fees 2,564 2,550 Regulatory fees 8,755 8,640 Printing fees 14,304 8,832 Other expenses 15,620 17,165 Total expenses 1,057, ,281 Profit before taxation 7,153,346 12,011,558 Withholding tax on dividends (11,585) (2,600) Profit after taxation and total comprehensive income 7,141,761 12,008,958 Basic and diluted earnings per Ordinary Share The Company has no items of other comprehensive income, and therefore the profit for the period is also the total comprehensive income. All items in the above statement are derived from continuing operations. No operations were acquired or discontinued during the period. The accompanying notes on pages 16 to 26 form an integral part of these financial statements. Page 12

15 Condensed Statement of Financial Position As at 30 September September March 2017 (Unaudited) (Audited) Notes Non-current assets Listed investments designated at fair value through profit or loss (Cost - 91,837,445 ( 31 March ,538,669)) 9 116,576, ,297,113 Unlisted investments designated at fair value through profit or loss (Cost - 4,169,118 (31 March ,183,538)) 9 3,939,675 8,247, ,515, ,544,934 Current assets Cash and cash equivalents 3,366,819 8,949,022 Amounts due from brokers 25, ,705 Dividends and interest receivable 41, ,025 Other receivables 6,982 3,212 Total current assets 3,441,354 9,466,964 Total assets 123,957, ,011,898 Current liabilities Other payables and accrued expenses 330, ,665 Amounts due to brokers 40, ,000 Amounts due for share buybacks 194,891 Total current liabilities 371, ,556 Net assets 123,585, ,226,342 Shareholders equity Share capital 10 49,900,846 50,122,846 Capital redemption reserve 1,246,500 1,246,500 Other reserves 72,438,257 67,856,996 Total shareholders equity 123,585, ,226,342 Net Asset Value per Ordinary Share basic and diluted 11, The condensed financial statements on pages 12 to 26 were approved by the Board of Directors on 15 December 2017 and are signed on its behalf by: Walid Chatila Director Rupert Evans Director The accompanying notes on pages 16 to 26 form an integral part of these financial statements. Page 13

16 Condensed Statement of Changes in Shareholders Equity For the six months ended 30 September 2017 (Unaudited) Capital Share redemption Other Capital reserve reserves Total Note Balance at 1 April ,122,846 1,246,500 67,856, ,226,342 Total comprehensive income for the period 7,141,761 7,141,761 Transactions with owners, recorded directly to equity Cancellation of shares 10 (222,000) (2,560,500) (2,782,500) Balance at 30 September ,900,846 1,246,500 72,438, ,585,603 For the six months ended 30 September 2016 (Unaudited) Capital Share redemption Other Capital reserve reserves Total Balance at 1 April ,289,346 1,246,500 53,181, ,717,477 Total comprehensive income for the period 12,008,958 12,008,958 Transactions with owners, recorded directly to equity Cancellation of shares (69,000) (744,750) (813,750) Balance at 30 September ,220,346 1,246,500 64,445, ,912,685 The accompanying notes on pages 16 to 26 form an integral part of these financial statements. Page 14

17 Condensed Statement of Cash Flows For the six months ended 30 September 2017 The accompanying notes on pages 15 to 21 form an integral part of these condensed financial statements. Six months Six months ended ended 30 September September 2016 (Unaudited) (Unaudited) Note Cash outflow from operating activities Profit after taxation and total comprehensive income for the period 7,141,761 12,008,958 Adjustments to reconcile profit after tax to net cash flows: Realised gain on financial assets designated at fair value through profit or loss 9 (7,166,200) (5,823,562) Unrealised gain on financial assets designated at fair value through profit or loss (686,561) (6,726,551) Net loss/(gain) on foreign currency translation 1,431 (1,738) Purchase of financial assets designated at fair value through profit or loss (23,609,924) (27,358,570) Proceeds from sale of financial assets designated at fair value through profit or loss 21,491,768 23,148,197 Changes in working capital Decrease in other receivables 136,499 81,008 Decrease in amounts due from brokers 306, ,381 Decrease in other payables and accrued expenses (9,769) (19,220) Decrease in amounts due to brokers (209,293) (354,959) Net cash outflow from operating activities (2,603,380) (4,888,056) Cash outflow from financing activities Cancellation of shares (2,977,391) (813,750) Net cash outflow from financing activities (2,977,391) (813,750) Net decrease in cash and cash equivalents in the period (5,580,771) (5,701,806) Cash and cash equivalents at the beginning of the period 8,949,022 19,514,960 Effect of exchange rate fluctuations on cash and cash equivalents (1,432) 1,738 Cash and cash equivalents at the end of period 3,366,819 13,814,892 The accompanying notes on pages 16 to 26 form an integral part of these financial statements. Page 15

18 Notes to the Condensed Financial Statements 1. General information The Company was registered in Guernsey on 2 December 1994 and commenced activities on 3 March The Company was listed on the London Stock Exchange on 3 March The Company is a Guernsey Authorised Closed-Ended Investment Scheme and is subject to the Authorised Closed-Ended Investment Scheme Rules The investment activities of the Company are managed by the Investment Manager and the administration of the Company is delegated to BNP Paribas Securities Services S.C.A., Guernsey Branch (the Administrator ). Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 2. Accounting policies The Annual Report and Financial Statements is prepared in accordance with the Disclosure Guidance and Transparency Rules of the FCA and with International Financial Reporting Standards as adopted by the European Union ( IFRS ) which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and interpretations issued by the International Accounting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee which remain in effect. The Half-Yearly Financial Report has been prepared in accordance with International Accounting Standards (IAS) 34 Interim Financial Reporting. They have also been prepared using the same accounting policies applied for the year ended 31 March 2017 Annual Report and Financial Statements. The Half-Yearly Financial Report has been prepared under a going concern basis. After analysing the following, the Directors believe that it is appropriate to adopt the going concern basis in preparing these financial statements: Working capital As at 30 September 2017, there was a working capital surplus of 3,069,751. The Directors noted that as at 30 September 2017 (i) the net investment income for the period from 1 April 2017 to 30 September 2017 was 7,141,761 and (ii) the Company had no borrowings, as such it has sufficient capital in hand to cover all expenses (which mainly consist of Investment Manager s fees, Directors fees, Administration fees and Legal and Professional fees) and to meet all of its obligations as they fall due. Closed-ended Company The Company has been authorised by the Guernsey Financial Services Commission as an Authorised Closed-ended Collective Investment Scheme, as such there cannot be any shareholder redemptions, and therefore no cash flows out of the Company in this respect. Page 16

19 Investments The Company has a tradable portfolio, as 97% of the investments are listed and can therefore be readily sold for cash. The special resolution outlined in Article 51 of the Articles of Incorporation was not passed at the AGM on 31 August Hence, the Company will continue its operations until the 2019 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again. There have been no changes in accounting policies during the period. The accounting policies in respect of financial instruments are set out below at 2.3 due to the significance of financial instruments to the Company. 2.1 Use of judgements and estimates In preparing these half-yearly financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements made by management in applying the Company accounting policies and the key sources of estimation uncertainty were the same as those applied to for the year ended 31 March 2017 Annual Report and Financial Statements. 2.2 Segment reporting The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company s investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole, which are evaluated regularly by the chief operating decision-maker (the Board with insight from the Investment Manager). 2.3 Financial instruments Financial Assets Classification All investments of the Company are designated as financial assets at fair value through profit or loss. The investments are purchased mainly for their capital growth and the portfolio is managed, and performance evaluated, on a fair value basis in accordance with the Company s documented investment strategy, therefore the Directors consider that this is the most appropriate classification. Initial recognition Financial assets are measured initially at fair value being the transaction price. Subsequent to initial recognition on trade date, all assets classified as fair value through profit or loss are measured at fair Page 17

20 Notes to the Condensed Financial Statements (continued) 2. Accounting policies (continued) 2.3 Financial instruments (continued) Financial Assets (continued) Initial recognition (continued) value with changes in their fair value recognised in the Statement of Comprehensive Income. Transaction costs are separately disclosed in the Statement of Comprehensive Income. Fair value measurement principles Listed investments have been valued at the bid market price ruling at the reporting date. In the absence of the bid market price, the closing price has been taken, or, in either case, if the market is closed on the financial reporting date, the bid market or closing price on the preceding business day. Fair value of unlisted investments is derived in accordance with the International Private Equity and Venture Capital (IPEV) valuation guidelines. Their valuation includes all factors that market participants would consider in setting a price. The primary valuation techniques employed to value the unlisted investments are earnings multiples, recent investments and the net asset basis. Cost is considered appropriate for early stage investments. The relevance of this methodology can be eroded over time and in these cases the carrying values will be adjusted to reflect fair value. For certain of the Company s financial instruments, including cash and cash equivalents, dividends and interest receivable and amounts due from brokers, the carrying amounts approximate fair value due to their immediate or short-term maturity. De-recognition De-recognition of financial assets occurs when the rights to receive cash flows from financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. Financial liabilities Amounts due to brokers represent payables for investments that have been contracted for but not yet settled or delivered at the year end. Financial liabilities include other payables and accrued expenses, amounts due to brokers and amounts due on redemption of Ordinary Shares which are held at amortised cost using the effective interest rate method. Financial liabilities are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at amortised cost using the effective interest rate method. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires. Page 18

21 3. Investment income Six months Six months ended ended 30 September September 2016 (Unaudited) (Unaudited) Dividends 359, ,988 Total investment income 359, , Investment manager and investment advisory fees Harwood Capital LLP, the Investment Manager and Investment Adviser, is entitled to an annual fee of 1.25% on the first 15 million of the Net Asset Value of the Company, and 1% of any excess, payable monthly in arrears. The agreement can be terminated giving 12 months notice or immediately should the Investment Manager be placed into receivership or liquidation. The Investment Manager is entitled to all the fees accrued and due up to the date of such termination but is not entitled to compensation in respect of any termination. Investment Manager and Investment Adviser fees payable as at 30 September 2017: 216,684 (31 March 2017: 199,181). 5. Supplementary management fee The Investment Manager agreed to waive its right to exercise management options to subscribe for Ordinary Shares in exchange for a discretionary bonus ( supplementary management fee ). As at approval of these condensed financial statements, no recommendation was made in respect of the 2017 supplementary management fee. The supplementary management fee is paid annually in arrears. 6. Custodian fees BNP Paribas Securities Services S.C.A., Guernsey Branch was appointed as custodian on 1 April 2007 and is entitled to an annual safekeeping fee based upon the value of investments held plus transactions fees, subject to a minimum of 4,000 per annum. Custodian fee payable as at 30 September 2017: 2,571 (31 March 2017: 2,373). This amount is included in other payables and accrued expenses. 7. Administration fees The Administrator was appointed on 1 April 2007 and is entitled to an annual fee at a rate of 0.125% on the first 20 million, 0.10% on the next 20 million and 0.075% of any excess of the Total Assets, subject to a minimum of 50,000 per annum. Administration fee payable as at 30 September 2017: 18,212 (31 March 2017: 16,540). This amount is included in other payables and accrued expenses. Page 19

22 Notes to the Condensed Financial Statements (continued) 8. Directors fees, expenses and interests With the exception of the Chairman and Audit Committee Chairman, who are entitled to a fee of 27,500 and 25,000 per annum respectively, each Director is entitled to 20,000 per annum from the Company. In addition, all Directors are entitled to reimbursement of travel, hotel and other expenses incurred by them in course of their duties relating to the Company. The Company has no employees other than the Directors. Directors fees payable as at 30 September 2017 were 38,438 (31 March 2017: 37,708). This amount is included in other payables and accrued expenses. As at the date of approval of these condensed financial statements, Christopher Mills and John Grace held Ordinary Shares in the Company. Please refer to page 4 for further details. No other Director holds shares in the Company. No pension contributions were payable in respect of any of the Directors (31 March 2017: nil). 9. Financial assets designated at fair value through profit or loss 30 September March 2017 Cost at beginning of period/year 86,722,207 70,324,593 Additions 23,609,924 58,253,478 Disposals (21,491,768) (50,871,330) Net realised gains on investments 7,166,200 9,015,466 Cost at end of period/year 96,006,563 86,722,207 Net unrealised gain on investments 24,509,289 23,822,727 Fair value at end of the period/year 120,515, ,544,934 Representing: 30 September March 2017 Listed equities 116,576, ,297,113 Unlisted equities 3,939,675 8,247, ,515, ,544,934 Investments are predominantly comprised of equity and equity-related investments in small and midsized quoted and unquoted companies in the United Kingdom and United States. Page 20

23 Fair value hierarchy Fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions, IFRS 13 Fair Value measurement (IFRS 13), establishes a fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the value hierarchy are as follows. Level 1: Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2: Inputs reflect quoted prices of similar assets and liabilities in active markets and quoted prices of identical assets and liabilities in markets that are considered to be inactive, as well as inputs other than quoted prices within level 1 that are observable for the asset or liability either directly or indirectly; and Level 3: Inputs that are unobservable for the asset or liability and reflect the Investment Manager s own assumptions in accordance with the accounting policies disclosed within Note 2 to the financial statements. 30 September 2017 Level 1 Level 2 Level 3 Total Financial assets at fair value (Unaudited) (Unaudited) (Unaudited) (Unaudited) through profit or loss Listed securities 116,576, ,576,177 Unlisted securities 3,939,675 3,939, ,576,177 3,939, ,515, March 2017 Level 1 Level 2 Level 3 Total Financial assets at fair value (Audited) (Audited) (Audited) (Audited) through profit or loss Listed securities 102,297, ,297,113 Unlisted securities 4,533,223 3,714,598 8,247, ,297,113 4,533,223 3,714, ,544,934 Page 21

24 Notes to the Condensed Financial Statements (continued) 9. Financial assets designated at fair value through profit or loss (continued) Fair value hierarchy (continued) The following table summarises the changes in fair value of the Company s Level 3 investments. 30 September March 2017 (Unaudited) (Audited) Opening balance 3,714,598 5,066,275 Net realised losses on investments (146,262) (1,798,896) Unrealised (losses)/gains on investments (608,167) 843,354 Purchase of investments 886,506 Sale of investments (1,631,997) Transfers from level 1 into level 3 93,000 3,602,575 Transfers from level 3 into level 2 (2,366,713) Closing balance 3,939,675 3,714,598 Change in unrealised losses on investments included in Condensed Statement of Comprehensive Income for Level 3 investments held 608, ,215 During the period ended 30 September 2017, there was one transfer from level 1 to level 3 resulting from an investee company s listing being suspended. There was one transfer from level 2 to level 1 resulting from one investee company being listed. (31 March 2017: There were three transfers from level 1 to level 3 and one transfer from level 3 to level 2). Transfers between levels are determined based on changes to the significant inputs used in the fair value estimation. The directors have selected an accounting policy to apply transfers between levels in the fair value hierarchy at the beginning of the relevant reporting period. Quantitative information of significant unobservable inputs Level 3 There were no significant unobservable inputs used at 30 September 2017 and 31 March 2017 in measuring financial instruments categorised as Level 3 in the fair value hierarchy. The financial instruments categorised as Level 3 have either a fair value that either approximates a recent transaction price or is cash held in escrow pending the outcome of certain post sale conditions (i.e. warranties). Page 22

25 Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy Level 3 No sensitivity analyses have been presented for the period ended 30 September 2017 and the year ended 31 March 2017 given, as mentioned above, there were no significant unobservable inputs used at 30 September 2017 or 31 March Please refer to note 2.3 for valuation methodology of financial assets designated at fair value through profit or loss. 10. Share Capital Authorised share capital Number of Shares Authorised: Ordinary shares of 50 pence each 90,000,000 45,000,000 Ordinary Shares Issued 1 April 2017 to 30 September 2017 Number Share Capital Ordinary Shares of 50 pence each of Shares At 1 April ,859,125 50,122,846 Cancellation of shares (444,000) (222,000) At 30 September ,415,125 49,900,846 Ordinary Shares Issued 1 April 2016 to 31 March 2017 Number Share Capital Ordinary Shares of 50 pence each of Shares At 1 April ,192,125 50,289,346 Cancellation of shares (333,000) (166,500) At 31 March ,859,125 50,122,846 Rights attributable to Ordinary Shares In a winding-up, the holders of Ordinary Shares are entitled to the repayment of the nominal amount paid up on their shares. In addition, they have the right to receive surplus assets available for distribution. The shares confer the right to dividends, and at general meetings, on a poll, confer the right to one vote in respect of each Ordinary Share held. Page 23

26 Notes to the Condensed Financial Statements (continued) 10. Share Capital (continued) Share buybacks In accordance with section 315 of The Companies (Guernsey) Law 2008, (as amended) (the Law ), the Company has been granted authority to make one or more market acquisitions (as defined in section 316 of the Law, of Ordinary Shares of 50 pence each in the capital of the Company ( Ordinary Shares ) on such terms and in such manner as the Directors of the Company may from time to time determine, provided that: a) the maximum aggregate number of Ordinary Shares authorised to be acquired does not exceed 10% of the issued Ordinary Share capital of the Company on the date the shareholders resolution is passed; b) the minimum price (exclusive of expenses) payable by the Company for each Ordinary Share is 50 pence and the maximum price payable by the Company for each Ordinary Share is an amount equal to 105% of the average of the middle market quotations for an Ordinary Share as derived from The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that Ordinary Share is purchased and that stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation being the higher of the price of the last independent trade and the highest current independent bid available in the market; c) subject to paragraph (d), this authority shall expire (unless previously renewed or revoked) at the earlier of the conclusion of the next annual general meeting of the Company or on the date which is 18 months from the date of the previous shareholders resolution; d) notwithstanding paragraph (c), the Company may make a contract to purchase Ordinary Shares under the authority from the shareholders before its expiry which will or may be executed wholly or partly after the expiry of the authority and may make a purchase of Ordinary Shares in pursuance of any such contract after such expiry; and e) the price payable for any Ordinary Shares so purchased may be paid by the Company to the fullest extent permitted by the Companies Law. A renewal of the authority to make purchases of the Company s own Ordinary Shares will be sought from existing shareholders at each annual general meeting of the Company. Between 1 April 2017 and 30 September 2017, the Company carried out two share buybacks, resulting in a total reduction of 444,000 shares for a cost of 2,782,500. These shares were subsequently cancelled. Page 24

27 Between 1 April 2016 and 31 March 2017, the Company carried out six share buybacks, resulting in a total reduction of 1,179,486 shares for a cost of 6,161,989. These shares were subsequently cancelled. 11. Reconciliation of the net asset value to published net asset value 30 September March 2017 per share per share Published net asset value 125,854, ,667, Revaluation of investments at bid price (2,269,290) (0.16) (2,441,211) (0.17) Net asset value attributable to shareholders 123,585, ,226, Basic and diluted earnings per Ordinary Share Six months Six months ended ended 30 September September 2016 (Unaudited) (Unaudited) Total comprehensive income for the period 7,141,761 12,008,958 Weighted average number of shares during the period 14,433,180 15,116,835 Basic and diluted earnings per share Net Asset Value per Ordinary Share 30 September 31 March (Unaudited) (Audited) Net asset value 123,585, ,226,342 Number of shares at period/year end 14,415,125 14,859,125 Net asset value per share Related Parties All transactions with related parties are carried out at arm s length and the prices reflect the prevailing fair market value of the assets on the date of the transaction. The Investment Adviser is considered to be a related party. The fees paid are included in the Condensed Statement of Comprehensive Income and further detailed in notes 4 and 5. Page 25

28 Notes to the Condensed Financial Statements (continued) 14. Related Parties (continued) The Directors are also considered to be related parties and their fees are disclosed in the Statement of Comprehensive Income. At 30 September 2017, 43,479 (31 March 2017: 37,708) included in other payables and accrued expenses was payable to the Directors. Christopher Mills is a Director and shareholder of Oryx International Growth Fund Limited. He is also a Partner and the Chief Executive of Harwood Capital LLP, the Company s Investment Manager and Investment Adviser and Chief Investment Officer of North Atlantic Smaller Companies Investment Trust plc NASCIT, which is a substantial shareholder of Oryx. Rupert Evans is a consultant to the law firm Mourant Ozannes, the legal adviser to the Company. The Company neither paid fees to Mourant Ozannes during the period, nor had any dues outstanding at the Condensed Statement of Financial Position date (31 March 2017: nil). As at 30 September 2017, the Company held 2,500,000 shares in Harwood Wealth Management Group valued at 3,250,000. The Company considers Harwood Wealth Management Group a related party as Mr Christopher Mills, a non-executive director of Harwood Wealth Management Group, is also a member of key management personnel of the Company. Sidney Cabessa is a Director of Harwood Capital Management Limited, the parent company of Harwood Capital LLP. No fees were paid or are payable to Harwood Capital Management Limited. Christopher Mills and John Grace hold Ordinary Shares in the Company. Refer to page 4 for further details. 15. Subsequent events Management has evaluated subsequent events for the Company through 15 December 2017, the date the condensed financial statements were available to be issued, and had concluded there are not any material events that require disclosure or adjustment of the condensed financial statements. Page 26

29 Company Information Registered Office BNP Paribas House, St Julian s Avenue, St Peter Port, Guernsey, GY1 1WA Investment Manager and Investment Adviser Harwood Capital LLP 6 Stratton Street, Mayfair, London, W1J 8LD Custodian BNP Paribas Securities Services S.C.A., Guernsey Branch P.O. Box 482, BNP Paribas House, St Julian s Avenue, St Peter Port, Guernsey, Channel Islands, GY1 1WA Secretary and Administrator BNP Paribas Securities Services S.C.A., Guernsey Branch P.O. Box 482, BNP Paribas House, St Julian s Avenue, St Peter Port, Guernsey, Channel Islands, GY1 1WA Registrars Capita Registrars (Guernsey) Limited PO Box 627, St Sampson, Guernsey, GY1 4PP Stockbroker Winterflood Securities Limited The Atrium Building, Cannon Bridge House 25 Dowgate Hill, London, EC4R 2GA Independent Auditors KPMG Channel Islands Limited Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 1WR Legal Advisors To the Company as to Guernsey law: Mourant Ozannes 1, Le Marchant Street, St Peter Port, Guernsey, Channel Islands, GY1 4HP To the Company as to English law: Bircham Dyson Bell 50 Broadway London, SW1H 0BL Website