Final Results

RNS Number : 7553N

City Natural Res High Yield Tst PLC

03 October 2012

 

To:                    RNS

From:                City Natural Resources High Yield Trust plc

Date:                3 October 2012

Audited results for the year ended 30 June 2012

·      Net asset value total return of -29.8 per cent since 1 July 2011 compared to a total return of

-23.3 per cent from the benchmark index.

·      Ordinary share price total return since 1 July 2011 of -28.0 per cent.

·      Dividend of 4.8 pence per share for the year, an increase of 14.5 per cent.

·      Seventh consecutive increase in the annual dividend, with an increase of 142 per cent since 1 August 2003.

·      During the year the Company issued £40,000,000 nominal of 3.5% Convertible Unsecured Loan Stock 2018

·      Net asset value total return of 452.2 per cent since 1 August 2003 compared to a total return of 230.9 per cent from the benchmark index.

·      Ordinary share price total return since 1 August 2003 of 388.0 per cent.

The Chairman, Geoff Burns stated,

Introduction

A difficult year, as a market that seemed in January and February to have shrugged off the despondency of the last quarter of 2011 concluded that, after all, the US economy was weak; that China was more likely than not to have a hard landing; and, above all, that the Eurozone crisis remained intractable.  This was particularly the case in sectors perceived to be risky, including commodities.

Investment and Share Price Performance

This weakness was reflected in your Company's performance and in returns to shareholders.  As at 30 June 2012 your Company's net asset value stood at 245.2 pence, giving a net asset value total return for the year of - 29.8 per cent.  The benchmark index returned -23.3 per cent.

The Company's share price total return during the year of -28.0 per cent was broadly in line, the discount at which the Company's shares trade narrowing a little from 13.9 per cent to 11.9 per cent during the year.

Your Company has generated net asset value and share price total returns of 452.2 and 388.0 per cent respectively since 1 August 2003; the benchmark index has returned 230.9 per cent.

Income and Dividends

This is the one part of the Company's performance that it gives me pleasure to report, especially as it has been a constant focus since 2004.  Your Company paid a fourth interim dividend of 2.52 pence per share.  This took the dividend for the year to 4.83 pence, an increase of 14.5 per cent on last year and representing the seventh successive year of dividend increases, as illustrated below:

Financial Year    Total dividend              % increase

2004/05             2.00p                            -

2005/06             2.15p                            7.5%

2006/07             2.35p                            9.3%

2007/08             2.65p                            12.8%

2008/09             3.07p                            15.8%

2009/10             3.71p                            20.8%

2010/11             4.22p                            13.7%

2011/12             4.83p                            14.5%

The Company's dividends have grown by 142 per cent since 2004/05, and the Board intends to continue to implement a progressive dividend policy.

The yield on the Company's shares is 2.2 per cent as I write.

Gearing

The Company successfully issued £40 million nominal of 3.5% Cumulative Unsecured Loan Stock 2018 ('CULS') on 26 September 2011.  The Board believes that the CULS was attractive in its own right, that it provided seven year financing for the Company at an attractive interest rate, and also extended the Company's capital base.  The CULS price was 100.0 pence as at 30 June 2012.

£21 million of the proceeds of the issue was used to repay the Company's existing short term bank loan.  Some £5 million of the balance was gradually deployed during the year, and £10 million has been invested since the year end as the Manager has found opportunities amidst market turmoil.  £3 million of cash remains on the balance sheet as I write, leaving the Company 18.8 per cent geared.

Annual General Meeting

The Company's Annual General Meeting returns to London for the first time in several years and will take place at The Cavalry and Guards Club in Piccadilly at 12.30pm on Thursday 6 December 2012.  I do hope that as many shareholders as possible will join us and take the opportunity to meet the Directors and the Investment Managers over a buffet lunch after the meeting.

At the Annual General Meeting shareholders will be asked to approve a change to the Company's Articles of Association removing the provisions prohibiting the distribution of capital profits. This is in response to a modernisation of the investment trust regime. The Board has no plans to implement a capital distribution policy.

Investment Strategy and Outlook

At the resource company level many stocks look oversold, with modest valuation levels that do not reflect balance sheets that are much stronger than in 2008, nor improvements in the stewardship of shareholders' capital (witness recent project cancellations and the departure of failing chief executives at companies such as Barrick and Kinross), while the divergence between the share prices of metal producers and those of the underlying metal prices is eye catching.  It is in this context that the Investment Manager has been deploying a sizeable portion of the Company's unutilised gearing since the end of the year.

It is not this micro climate that sets the mood, however.  Looking back at my Statements to you over the last couple of years, it is discouraging to see how little has changed around the macro and political factors that seem to be informing movements in the equity markets.  A series of sticking-plasters have been applied to stop things getting worse in the short term, but the tough decisions needed to resolve long term problems have been postponed, with the inevitable consequence that those problems have become worse.  This applies in different ways to each of Europe, the United States and China (and the other BRIC economies).

This procrastination will almost certainly continue over the months ahead, but it is just possible that a pivotal moment is in the offing.  The last quarter of this year will see both the US Presidential contest concluded and the 18^th National Congress of the Communist Party of China confirm a new Chinese leadership in place.  We will then discover how the next US administration sets about tackling the "fiscal cliff" represented by the long term overhang of government debt and get a better idea of how the Chinese economy is likely to land - and to evolve.  In Europe Mario Draghi seems to have bought the Eurozone enough time to allow these events to play out, but perhaps not much more; it remains hard to see how Greece can remain a member indefinitely.  Whatever the outcome, there will be a delay before any changes can feed into a true growth recovery.

Investment Manager's Review

The macro economic clouds that have gathered since the global financial crisis of 2008 showed no sign of dispersing during the last year and indeed, it appears that global policy makers have made little, if any, progress to finding credible solutions to the debt and deficit problems of the developed world.  Faced with this uncertain back drop investors adopted a "risk off" stance and the resources sector, always at the sharp end of the risk aversion trade, suffered accordingly.  The HSBC Global Mining Index fell 29.2% over the year and the mid and smaller companies fared worse, with the Midcap 50 Resources Index falling 41%.

The first quarter of the year saw a surge in issuance from companies seeking to raise money for exploration and development of projects.  That resource companies should issue equity is not, in itself, a surprise but the volume was such that the equities struggled to push ahead.  The challenge for those companies is to put that cash to efficient use for shareholders and not to waste it on low return projects or to chase up the prices of labour or services to un-economic levels.

The summer months witnessed a sharp fall in the prices of many commodities, particularly the bulks such as coal and iron ore, as investors became concerned at the prospects for the Chinese economy.  Those fears combined with rising costs led many companies to defer or cancel spending on new projects.  BHP Billiton's Olympic Dam expansion and construction of the Outer Harbour at Port Hedland were just two such projects to be delayed, but these alone have major implications for the future supply of iron ore, copper and uranium.

The summer also saw the removal of the chief executives of both Barrick Gold Corp. and Kinross Gold after a period of poor share price performance, and while it may be too early to call this year a pivotal one in the behaviour of resource companies management teams, greater accountability, stronger corporate governance and improved capital discipline are all to be welcomed.

The gold price retreated from the all time high witnessed in September, but the Company remains overweight in gold and silver equities. We see further strength in the commodity price as loose monetary policies, over longer periods of time, are contemplated by policymakers both in Europe and the US.  The support for gold from the Central Banks of the developing world has been most notable this year as they attempt to diversify their foreign exchange holdings away from the traditional reserve currencies of the developed world.  Argentina, Kazakhstan, Mexico, the Philippines, Russia and Turkey are just some of the countries making additions to their holdings this year.  The probability of gold equities ending the multi year derating process has increased.  Firstly, because many companies have lost any premium relative to other mining companies, and secondly, many companies have returned to the dividend list or dramatically increased payments to shareholders albeit from low levels.  This is an attempt to differentiate themselves from the ETFs whose rise has attracted so much of the money flows that would have traditionally been directed to the gold equities and is to be welcomed. 

The fall in equity prices has inevitably led to an upsurge in M&A activity and the year saw Progress Energy, Neo Materials, Nautical Petroleum, Extorre Gold Mines and Adamus Resources all depart from the Company following takeover proposals.  Nowhere was the disparity between the strategic players and the equity market's perceptions of value greater than the uranium sector.  Since the earthquake in Japan last March and subsequent meltdown at Fukishima, uranium equities have been shunned but the major players; Cameco Corporation, Rio Tinto PLC and the China Guangdong Nuclear Power Corporation ('CGNPC') have all been on the offensive acquiring assets.  The most notable for the Company was the takeover by CGNPC of Extract Resources and Kalahari Minerals which have both been good servants to the Company over many years.

We constantly search for quality bonds and convertibles to provide income and as the low interest rate era stretches on, the ability to increase the Company's dividend has been helped by the number of equities increasing returns to shareholders.

Despite the ongoing uncertainty over the prospects for the global economy, the combination of low valuations of resource equities and increased insecurity of future supply of many commodities make the long term prospects for investing in the sector very compelling.

Enquiries:

Will Smith, New City Investment Managers:                     0207 201 6900

Ian Francis, New City Investment Managers:                    0207 201 6900

Martin Cassels, R&H Fund Services Limited:                    0131 625 2951

Beth Harris, Newgate Threadneedle                                 0207 653 9853

Audited Income Statement

for the year ended 30 June 2012

			2012	2012	2012
		Revenue		Capital	Total
	Notes	£'000		£'000	£'000
Losses on investments		-		(75,959)	(75,959)
Exchange losses		-		(154)	(154)
Income		6,314		-	6,314
Investment management fee		(616)		(1,850)	(2,466)
Other expenses		(609)		-	(609)
Net return before finance costs and taxation		5,089		(77,963)	(72,874)
Interest payable and similar charges		(296)		(1,502)	(1,798)
Net return on ordinary activities before taxation		4,793		(79,465)	(74,672)
Tax on ordinary activities		(886)		698	(188)
Net return attributable to equity shareholders		3,907		(78,767)	(74,860)
Return per ordinary share	1	5.84p		(117.81)p	(111.97)p

Reconciliation of Movements in Shareholders' Funds

	Year ended 30 June 2012 Audited  £'000	Year ended 30 June 2011 Audited  £'000
Opening equity shareholders' funds	236,788	151,109
(Losses) / gains on investments	(75,959)	86,661
Net return attributable to ordinary shareholders	3,907	3,404
Costs charged to capital	(2,654)	(1,643)
Exchange losses	(154)	(122)
Dividends paid	(2,982)	(2,621)
Issue of 3.5% Convertible Unsecured Loan Stock 2018	4,971	-
Issue of ordinary shares	29	-
Closing equity shareholders' funds	163,946	236,788

Audited Income Statement

for the year ended 30 June 2011

			2011	2011	2011
		Revenue		Capital	Total
	Notes	£'000		£'000	£'000
Gains on investments		-		86,661	86,661
Exchange losses		-		(122)	(122)
Income		5,447		-	5,447
Investment management fee		(676)		(2,028)	(2,704)
Other expenses		(534)		11	(523)
Net return before finance costs and taxation		4,237		84,522	88,759
Interest payable and similar charges		(88)		(264)	(352)
Net return on ordinary activities before taxation		4,149		84,258	88,407
Tax on ordinary activities		(745)		638	(107)
Net return attributable to equity shareholders		3,404		84,896	88,300
Return per ordinary share	1	5.09p		126.98p	132.07p

 

Balance Sheet

as at 30 June 2012

		As at 30 June 2012 Audited	As at 30 June 2011 Audited
		£'000	£'000
Fixed assets
Investments		183,864	253,745
Current assets
Debtors		4,062	1,636
Cash at bank and on deposit		14,277	57
		18,339	1,693
Creditors: amounts falling due within one year		(3,421)	(18,650)
Net current assets / (liabilities)		14,918	(16,957)
3.5% Convertible Unsecured Loan Stock 2018	4	(34,836)	-
Net assets		163,946	236,788
Capital and reserves
Called-up share capital	5	16,717	16,714
Special distributable reserve	5	30,386	30,386
Share premium	5	4,783	4,753
Equity component of 3.5% Convertible Unsecured Loan Stock 2018	5	4,424	-
Capital reserve	5	102,132	180,356
Revenue reserve	5	5,504	4,579
Equity shareholders' funds		163,946	236,788
Net asset value per ordinary share	2	245.18p	354.17p

Cash Flow Statement

for the year to 30 June 2012

	Year ended 30 June 2012 Audited	Year ended 30 June 2011 Audited
	£'000	£'000
Operating activities
Investment income received	5,719	5,103
Deposit interest received	4	7
Other income received	47	35
VAT on management fees received	-	180
Investment management fees paid	(2,533)	(2,626)
Other cash payments	(593)	(593)
Net cash inflow from operating activities	2,644	2,106
Servicing of finance
Interest on bank facility	(147)	(343)
Interest on 3.5% Convertible Unsecured Loan Stock 2018	(715)	-
Net cash outflow from servicing of finance	(862)	(343)
Taxation
Tax paid	(89)	(461)
Capital expenditure and financial investment
Purchases of investments	(92,107)	(127,226)
Disposals of investments	85,950	120,103
Net cash outflow from capital expenditure and financial investment	(6,157)	(7,123)
Dividends
Equity dividends paid	(2,982)	(2,621)
Net cash outflow before financing	(7,446)	(8,442)
Financing
Bank facility (repaid) / draw down	(17,400)	4,239
Issue of 3.5% Convertible Unsecured Loan Stock 2018	39,226	-
Issue expenses on ordinary shares	(6)	-
Net cash inflow from financing	21,820	4,239
Increase / (decrease) in net cash / (debt)	14,374	(4,203)
Reconciliation of net cash flow to movement in net cash / (debt) Increase / (decrease) in cash in the year	14,374	(4,203)
Repayment / (draw down) of bank facility	17,400	(4,239)
Exchange losses	(154)	(122)
Movement in net cash / (debt) in the year	31,620	(8,564)
Opening net (debt) at 1 July	(17,343)	(8,779)
Closing net cash / (debt) at 30 June	14,277	(17,343)

Notes

1.         The revenue return per ordinary share is based on a net profit after taxation of £3,907,000 (2011: £3,404,000) and on a weighted average of 66,860,111 ordinary shares in issue during the year (2011: 66,857,143).

The capital return per ordinary share is based on a net capital loss of £78,767,000 (2011: a net capital gain of £84,896,000) and on a weighted average of 66,860,111 ordinary shares in issue during the year (2011: 66,857,143).

2.         The net asset value per ordinary share is based on net assets of £163.9 million (2011: £236.8 million) and on 66,867,488 (2011: 66,857,143) ordinary shares, being the number of ordinary shares in issue at the year end.

3.         The Board declared a fourth interim dividend of 2.52p per share which was paid on 31 August 2012 to shareholders on the register on 10 August 2012, having an ex-dividend date of 8 August 2012. 

4.         3.5% Convertible Unsecured Loan Stock 2018   

	Number of units £'000	Liability component £'000	Equity component £'000
Balance at the beginning of the year	-	-	-
Issue of 3.5% Convertible Unsecured Loan Stock 2018	40,000	34,931	5,069
Expenses of issue	-	(676)	(98)
Amortisation of discount on issue and issue expenses	-	616	-
Transfer of CULS liability discount amortisation	-	-	(543)
Conversion during the year	(39)	(35)	(4)
Balance at the end of the year	39,961	34,836	4,424

On 26 September 2011, the Company issued a total of £40,000,000 nominal of 3.5% Convertible Unsecured Loan Stock 2018. The CULS can be converted at the election of holders into ordinary shares during the months of March and September in each year throughout their life, commencing March 2012 to September 2018 at a rate of 1 ordinary share for every 377.1848p nominal of CULS. On 12 April 2012, the Company issued 10,345 ordinary shares of 25 pence each in connection with the exercise of conversion rights by holders of £39,067 nominal of the Company's CULS. Once 80% of the nominal amount of the CULS issued have been converted, the Company is allowed to request that holders redeem or convert the remainder. Interest is paid on the CULS on 31 March and 30 September in each year, commencing 31 March 2012. 25% of the interest is charged to revenue in line with the Board's expected long-term split of returns from the investment portfolio of the Company.

As at 30 June 2012, there was £39,960,933 nominal of CULS in issue.

5.         Reserves

	Special reserve £'000	Share premium £'000	Equity element of CULS £'000	Capital reserve £'000	Revenue reserve £'000
At 30 June 2011	30,386	4,753	-	180,356	4,579
Exchange losses	-	-	-	(154)	-
Losses on investments	-	-	-	(75,959)	-
Management fees charged to capital	-	-	-	(1,850)	-
Finance costs charged to capital	-	-	-	(1,502)	-
Taxation credited to capital	-	-	-	698	-
Dividends paid	-	-	-	-	(2,982)
Retained net revenue for the year	-	-	-	-	3,907
Issue of 3.5% Convertible Unsecured Loan Stock 2018 ('CULS')	-	-	5,069	-	-
Expenses of CULS issue	-	-	(98)	-	-
Transfer of CULS liability discount amortisation	-	-	(543)	543	-
Issue of ordinary shares	-	30	(4)	-	-
At 30 June 2012	30,386	4,783	4,424	102,132	5,504

6.         The following are considered related parties: the Board of Directors (the Board) and CQS/New City  
            Investment Managers (the Investment Manager).

As at 30 June 2012, the Company held shares in New City Energy and Golden Prospect Precious Metals, these two investment companies are also managed by the Investment Manager.

Mr Collins is a non-executive chairman of Bahamas Petroleum.  As at 30 June 2012 the Company held 1,150,000 shares in Bahamas Petroleum valued at £105,570.  As at 2 October 2012 the Company held 2,150,000 shares in Bahamas Petroleum valued at £96,750.

7.         The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 June 2012. The financial information for 2011 is derived from the statutory accounts for 2011 which have been delivered to the Registrar of Companies.  The Auditors have reported on the 2011 accounts, their report was unqualified and did not contain a statement under section 498 of the Companies Act 2006.  The statutory accounts for 2012 are audited and the Auditors have issued an unqualified opinion. The statutory accounts for 2012 will be finalised on the basis of the financial information presented in this announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Principal Risks

The principal risks faced by the Company are: investment and strategy risk; market risk; sector risk; financial risk; earnings and dividend risk; operational risk and regulatory risk. These risks, which have not changed materially since the annual report for the year ended 30 June 2011, and the way in which they are managed, are described in more detail in the annual report for the year ended 30 June 2012.  The report will be made available on the manager's website www.ncim.co.uk during October 2012.

The Company's financial instruments comprise its investment portfolio, cash balances, bank facilities, debtors and creditors that arise directly from its operations.  As an investment trust the Company holds a portfolio of financial assets in pursuit of its investment objective.  The Company can make use of flexible borrowings for short term purposes, as detailed in the Chairman's Statement, to achieve improved performance in rising markets and to seek to enhance the returns to shareholders, when considered appropriate by the Investment Manager.  The downside risk of borrowings may be reduced by raising the level of cash balances held.

Listed fixed asset investments held are valued at fair value.  For listed securities this is either bid price or the last traded price depending on the convention of the exchange on which the investment is listed.  Unlisted investments are valued by the Directors on the basis of all information available to them at the time of valuation.  The fair value of all other financial assets and liabilities is represented by their carrying value in the Balance Sheet. The fair value of the bank facility and the fair value of the 3.5% Convertible Unsecured Loan Stock 2018 are not materially different from their carrying value in the Balance Sheet.

The main risks that the Company faces arising from its financial instruments are:

(i)         market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency rate movements;

(ii)         interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates;

(iii)        foreign currency risk, being the risk that the value of investment holdings, investment purchases, investment sales and income will fluctuate because of movements in currency rates;

(iv)        credit risk, being the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company; and

(v)         liquidity risk, being the risk that the bank may demand re-payment of the loan or that the Company many not be able to liquidate quickly its investments.

Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments held.  It represents the potential loss the Company might suffer through holding market positions in the face of price movements.  To mitigate the risk the Board's investment strategy is to select investments for their fundamental value.  Stock selection is therefore based on disciplined accounting, market and sector analysis, with the emphasis on long term investments.  An appropriate spread of investments is held in the portfolio in order to reduce both the statistical risk and the risk arising from factors specific to a country or sector.  The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy. 

Interest rate risk

Financial assets

Bond and preference share yields, and their prices, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short term interest rates and international market comparisons.  The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.

Returns from bonds and preference shares are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds.  Consequentially, if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date.  However, over the life of a bond the market price at any given time will depend on the market environment at that time.  Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.

Interest rate risk on fixed rate interest instruments is considered to be part of market price risk as disclosed above.

Floating rate

When the Company retains cash balances they are held in floating rate deposit accounts.  The benchmark rate which determines the interest payments received on cash balances is the bank base rate for the relevant currency for each deposit.

Financial liabilities

The Company may utilise the bank facility to meet any liabilities due.  The Company has borrowed in sterling at a variable rate based on the UK bank base rate. The Board sets borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis.

Foreign Currency Risk

The Company invests in overseas securities and may hold foreign currency cash balances which give rise to currency risks. The Company does not hedge its currency exposure and as a result the movement of exchange rates between pounds sterling and the other currencies in which the Company's investments are denominated may have a material effect, unfavourable or favourable, on the returns otherwise experienced on the investments made by the Company. Although the Manager may seek to manage all or part of the Company's foreign exchange exposure, there is no assurance that this can be performed effectively.

The Manager does not intend to hedge the Company's foreign currency exposure at the present time.

Credit Risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company.  The Investment Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis.  The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date.

Credit risk on fixed interest investments is considered to be part of market price risk.

Credit risk arising on transactions with brokers relates to transactions awaiting settlement.  Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk.

The cash held by the Company and all the assets of the Company which are traded on a recognised exchange are held by HSBC Bank, the Company's custodian.  Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed or limited.  The Board monitors the Company's risk by reviewing the custodian's internal control reports.

Should the credit quality or the financial position of HSBC Bank deteriorate significantly the Investment Manager will move the cash holdings to another bank.

There were no significant concentrations of credit risk to counterparties as at 30 June 2012 and as at 30 June 2011.

Liquidity risk

The Company's financial instruments include investments in unlisted investments which are not traded in an organised public market and which generally may be illiquid.  As a result, the Company may not be able to liquidate these investments at an amount close to their fair value.

The Company's liquidity risk is managed on an ongoing basis by the Investment Manager.  The Company's overall liquidity risks are monitored on a quarterly basis by the Board.

The Company maintains sufficient cash, has a short term bank facility and readily realisable securities to pay accounts payable and accrued expenses.  The Company also maintains sufficient cash and readily realisable securities to meet any demand repayment on its overdraft facility.

Statement of Directors' Responsibilities in Respect of the Annual Financial Report

The Directors are responsible for preparing the Annual 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 they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

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 of the company and of the profit or loss of the company for that period. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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 have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Geoff Burns, Chairman

2 October 2012

 

END

 

 

FR FSUFLEFESEIS