REG - Riverstone Energy Ld - Annual Report and Financial Statements <Origin Href="QuoteRef">RSER.L</Origin> - Part 3
28/02/2018 07:05
- Part 3: For the preceding part double click ID:nRSb1636Gb
Board formally met four times during the year and the other Board
committee meetings were called in relation to specific events or to issue
approvals, often at short notice and did not necessarily require full
attendance. The Chairman meets privately with the independent Non-executive
Directors before each scheduled Board meeting. Directors are encouraged when
they are unable to attend a meeting to give the Chairman their views and
comments on matters to be discussed, in advance. In addition to their meeting
commitments, the Non-executive Directors also make themselves available to
management whenever required and there is regular contact outside the Board
meeting schedule.
Attendance is further set out below:
Director ScheduledBoardMeetings(max 4) AuditCommitteeMeetings(max 5) NominationCommitteeMeetings(max 1) ManagementEngagementCommitteeMeetings(max 1) BoardCommitteeMeetings(max 7)
Peter Barker (1) 4 4 1 1 n/a
Patrick Firth (1)(2) 4 5 1 1 7
Richard Hayden(1) 4 4 1 1 n/a
Pierre Lapeyre 4 n/a n/a n/a n/a
David Leuschen 3 n/a n/a n/a n/a
Claire Whittet(1) 4 5 1 1 6
Ken Ryan 4 n/a n/a n/a n/a
Jeremy Thompson(1) 4 5 1 1 7
(1) Non-executive Independent Director
(2) Non-executive Senior Independent Director
A quorum is comprised of any two or more members of the Board from time to
time, to perform administrative and other routine functions on behalf of the
Board, subject to such limitations as the Board may expressly impose on this
committee from time to time.
Committees of the Board
The Board believes that it and its committees have an appropriate composition
and blend of skills, experience, independence and diversity of backgrounds to
discharge their duties and responsibilities effectively. The Board is of the
view that no one individual or small group dominates decision-making. The
Board keeps its membership, and that of its committees, under review to ensure
that an acceptable balance is maintained, and that the collective skills and
experience of its members continue to be refreshed. It is satisfied that all
Directors have sufficient time to devote to their roles and that undue
reliance is not placed on any individual.
Each committee of the Board has written terms of reference, approved by the
Board, summarising its objectives, remit and powers, which are available on
the Company's website (www.RiverstoneREL.com) and reviewed on an annual basis.
All committee members are provided with appropriate induction on joining their
respective committees, as well as on-going access to training. Minutes of all
meetings of the committees (save for the private sessions of committee members
at the end of meetings) are made available to all Directors and feedback from
each of the committees is provided to the Board by the respective committee
Chairmen at the next Board meeting. The Chairman of each committee attends the
AGM to answer any questions on their committee's activities.
The Board and its committees are supplied with regular, comprehensive and
timely information in a form and of a quality that enables them to discharge
their duties effectively. All Directors are able to make further enquiries of
management whenever necessary, and have access to the services of the Company
Secretary.
Audit Committee
The Audit Committee is chaired by Mr Firth and comprises Mr Barker, Mr Hayden,
Mr Thompson and Mrs Whittet. The Chairman of the Audit Committee, the
Investment Manager and the external auditor, Ernst & Young LLP, have held
discussions regarding the audit approach and identified risks. The external
auditors attend Audit Committee meetings and a private meeting is routinely
held with the external auditors to afford them the opportunity of discussions
without the presence of management. The Audit Committee activities are
contained in the Report of the Audit Committee.
Nomination Committee
The Nomination Committee is chaired by Mr Hayden and comprises Mr Barker, Mr
Firth, Mr Thompson and Mrs Whittet.
The Nomination Committee meets at least once a year pursuant to its terms of
reference and met on 27 February 2018. The Nomination Committee is convened
for the purpose of considering the appointment of additional Directors as and
when considered appropriate. The Nomination Committee recognises the
continuing importance of planning for the future and ensuring that succession
plans are in place. In considering appointments to the Board, the Nomination
Committee takes into account the ongoing requirements of the Company and
evaluates the balance of skills, experience, independence, and knowledge of
each candidate. Appointments are therefore made on personal merit and against
objective criteria with the aim of bringing new skills and different
perspectives to the Board whilst taking into account the existing balance of
knowledge, experience and diversity.
In the case of candidates for Non-executive Directorships, care is taken to
ascertain that they have sufficient time to fulfil their Board and, where
relevant, committee responsibilities. The Board believes that the terms of
reference of the Nomination Committee ensure that it operates in a rigorous
and transparent manner. The Board believes that, as a whole, it comprises an
appropriate balance of skills, experience and knowledge. The Board also
believes that diversity of experience and approach, including gender
diversity, amongst Board members is of great importance and it is the
Company's policy to give careful consideration to issues of Board balance and
diversity when making new appointments.
The Board is satisfied with the current composition and functioning of its
members. When appointing Board members, its priority is based on merit, but
will be influenced by the strong desire to maintain board diversity, including
gender.
All Directors are subject to annual re-election by Shareholders at the AGM.
Management Engagement Committee
The Management Engagement Committee is chaired by Mrs Whittet and comprises Mr
Barker, Mr Hayden, Mr Firth and Mr Thompson. The Management Engagement
Committee meets at least once a year pursuant to its terms of reference.
The Management Engagement Committee provides a formal mechanism for the review
of the performance of the Investment Manager and the Company's other advisors
and service providers. It carries out this review through consideration of a
number of objective and subjective criteria and through a review of the terms
and conditions of the advisors' appointments with the aim of evaluating
performance, identifying any weaknesses and ensuring value for money for the
Shareholders.
Board Performance and Evaluation
In accordance with Principle 7 of the AIC Code which requires a formal and
rigorous annual evaluation of its performance, the Board formally reviews its
performance annually through an internal process. Internal evaluation of the
Board, the Audit Committee, the Nomination Committee, the Management
Engagement Committee and individual Directors has taken the form of
self-appraisal questionnaires and discussions to determine effectiveness and
performance in various areas as well as the Directors' continued independence.
During 2017 the Board carried out an internal evaluation of the performance of
the Board and the Board Committees. The responses were consolidated and
anonymised and common themes identified in order for the Board to determine
key actions and next steps for improving Board and Committee effectiveness and
performance.
The Board believes that annual evaluations are helpful and provide a valuable
opportunity for continuous improvement. All Directors participated in the
evaluation, and the findings were collectively considered by the Board. No
significant areas of weaknesses were highlighted during the evaluation and the
Board concluded that it had operated effectively throughout 2017 which
supported the overall conclusion of the 2016 external evaluation that the
Board is collegiate, transparent and effective. The Board is confident in its
ability to continue effectively to lead the Company and oversee its affairs.
The Board believes that the current mix of skills, experience, knowledge and
age of the Directors is appropriate to the requirements of the Company.
New Directors receive an induction on joining the Board and regularly meet
with the senior management employed by the Investment Manager both formally
and informally to ensure that the Board remains regularly updated on all
issues. All members of the Board are members of professional bodies and serve
on other Boards, which ensures they are kept abreast of the latest technical
developments in their areas of expertise.
The Board arranges for presentations from the Investment Manager, the
Company's brokers and other advisors on matters relevant to the Company's
business. The Board assesses the training needs of Directors on an annual
basis.
Internal Control and Financial Reporting
The Directors acknowledge that they are responsible for establishing and
maintaining the Company's system of internal control and reviewing its
effectiveness. Internal control systems are designed to manage rather than
eliminate the failure to achieve business objectives and can only provide
reasonable but not absolute assurance against material misstatements or loss.
However, the Board's objective is to ensure that Riverstone Energy Limited has
appropriate systems in place for the identification and management of risks.
The Directors carry out a robust assessment of the principal risks facing the
Company, including those that would threaten its business model, future
performance, solvency or liquidity. The key procedures which have been
established to provide internal control are that:
· the Board has delegated the day-to-day operations of the Company to the
Administrator and Investment Manager; however, it retains accountability for
all functions it delegates;
· the Board clearly defines the duties and responsibilities of the
Company's agents and advisors and appointments are made by the Board after due
and careful consideration. The Board monitors the ongoing performance of such
agents and advisors and will continue to do so through the Management
Engagement Committee;
· the Board monitors the actions of the Investment Manager at regular
Board meetings and is given frequent updates on developments arising from the
operations and strategic direction of the underlying investee companies;
· the Administrator provides administration and company secretarial
services to the Company.
The Administrator maintains a system of internal control on which they report
to the Board; and
· the Board has reviewed the need for an internal audit function and has
decided that the systems and procedures employed by the Administrator and
Investment Manager, including their own internal controls and procedures,
provide sufficient assurance that an appropriate level of risk management and
internal control, which safeguards Shareholders' investment and the Company's
assets, is maintained. An internal audit function specific to the Company is
therefore considered unnecessary.
Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of Financial Statements for external reporting purposes. The Administrator and
Investment Manager both operate risk controlled frameworks on a continual
ongoing basis within a regulated environment. The Administrator has undertaken
an ISAE 3402: Assurance Reports on Controls at a Service Organisation audit
and formally reports to the Board quarterly through a compliance report. The
Investment Manager formally reports to the Board quarterly including updates
within Riverstone and also engages with the Board on an ad-hoc basis as
required. No weaknesses or failings within the Administrator or Investment
Manager have been identified.
The systems of control referred to above are designed to ensure effectiveness
and efficient operation, internal control and compliance with laws and
regulations. In establishing the systems of internal control, regard is paid
to the materiality of relevant risks, the likelihood of costs being incurred
and costs of control. It follows therefore that the systems of internal
control can only provide reasonable but not absolute assurance against the
risk of material misstatement or loss. This process has been in place for the
year under review and up to the date of approval of this Annual Report and
Financial Statements. It is reviewed by the Board and is in accordance with
the FRC's internal control publication: Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting.
Investment Management Agreement
The Investment Manager has been appointed as the sole investment manager of
the Company and the Partnership. Pursuant to the Investment Management
Agreement, the Investment Manager has responsibility for and discretion over
investing and managing the Company's and the Partnership's direct and indirect
assets, subject to and in accordance with the Company's investment policy. The
Investment Manager is entitled to delegate all or part of its functions under
the Investment Management Agreement to one or more of its affiliates.
The Company has delegated the provision of all services to external service
providers whose work is overseen by the Management Engagement Committee at its
regular scheduled meetings. Each year a detailed review of performance
pursuant to their terms of engagement is undertaken by the Management
Engagement Committee.
In accordance with Listing Rule 15.6.2(2)R and having formally appraised the
performance and resources of the Investment Manager, in the opinion of the
Directors the continuing appointment of the Investment Manager on the terms
agreed is in the interests of the Shareholders as a whole.
Relations with Shareholders
The Board welcomes Shareholders' views and places great importance on
communication with its Shareholders. The Company's AGM provides a forum for
Shareholders to meet and discuss issues with the Directors of the Company. The
Chairman is available to meet with Shareholders at the AGM to hear their views
and discuss any issues or concerns, including in relation to board
composition, governance and strategy, or at other times, if required. In
addition, Mr. Firth, as the Senior Independent Director, is also available to
Shareholders if they have concerns which contact through the normal channels
has failed to resolve or for which such contact would be inappropriate. The
Chairman, Senior Independent Director and other Directors are also available
to meet with Shareholders at other times, if required.
The Company reports formally to Shareholders in a number of ways; regulatory
news releases through the London Stock Exchange's regulatory News Service,
announcements are issued in response to events or routine reporting
obligations, an Interim Report is published in August each year, outlining
performance to 30 June, which is made available on the Company's website; the
Annual Report is published in February each year, for the year ended 31
December, which is made available on the Company's website. In addition, the
Company's website (www.RiverstoneREL.com) contains comprehensive information,
including company notifications, share information, financial reports,
investment objectives and policy, investor contacts and information on the
Board and corporate governance. Shareholders and other interested parties can
subscribe to email news updates by registering online on the website.
The Investment Manager has regular contact with Shareholders, including the
Cornerstone Investors, and any views that they may have are communicated to
the Board and vice versa. No sensitive information is provided to the
Cornerstone Investors that is not provided to the Shareholders as a whole and
at the same time. The Board is also kept fully informed of all relevant market
commentary on the Company by the Investment Manager and the Corporate Brokers.
Over the year, the Investment Manager's investor relations team and senior
management held several roadshows and over 100 meetings with investors and
equity research analysts.
Whistleblowing
The Board has considered the AIC Code recommendations in respect of
arrangements by which staff of the Investment Manager or Administrator may, in
confidence, raise concerns within their respective organisations about
possible improprieties in matters of financial reporting or other matters. It
has concluded that adequate arrangements are in place for the proportionate
and independent investigation of such matters and, where necessary, for
appropriate follow-up action to be taken within their organisation.
Principal Risks and Uncertainties
The Company's assets consist of investments, through the Partnership, within
the global energy sector, with a particular focus on opportunities in the
global exploration and production and midstream energy sub-sectors. Its
principal risks are therefore related to market conditions in the energy
sector in general, but also the particular circumstances of the businesses in
which it is invested through the Partnership. The Investment Manager to the
Partnership seeks to mitigate these risks through active asset management
initiatives and carrying out due diligence work on potential targets before
entering into any investments.
Each Director is fully aware of the risks inherent in the Company's business
and understands the importance of identifying, evaluating and monitoring these
risks. The Board has adopted procedures and controls that enable it to carry
out a robust assessment of the risks facing the Company, manage these risks
within acceptable limits and to meet all of its legal and regulatory
obligations. The Board is committed to upholding and maintaining our zero
tolerance towards the criminal facilitation of tax evasion.
The Board thoroughly considers the process for identifying, evaluating and
managing any significant risks faced by the Company on an ongoing basis and
these risks are reported and discussed at Board meetings. It ensures that
effective controls are in place to mitigate these risks and that a
satisfactory compliance regime exists to ensure all applicable local and
international laws and regulations are upheld.
For each material risk, the likelihood and consequence are identified,
management controls and frequency of monitoring are confirmed and results
reported and discussed at the quarterly Board meetings.
The Company's principal risk factors are fully discussed in the Prospectuses,
available on the Company's website (www.RiverstoneREL.com) and should be
reviewed by Shareholders.
The key areas of risk faced by the Company are summarised below:
1. The Company intends to only invest in the global energy sector, with a
particular focus on oil and gas exploration and production, and midstream
investments, which will expose it to concentration risk.
2. The Ordinary Shares may trade at a Discount to NAV per Share for reasons
including but not limited to: market conditions, liquidity concerns and actual
or expected Company performance. As such, there can be no guarantee that
attempts to mitigate such discount will be successful or that the use of
discount control mechanisms will be possible, advisable or adopted by the
Company.
3. Investments in the exploration and production and midstream sectors of
the global energy sector involve a degree of inherent risk.
· The countries in which the Company invests may be exposed to
geopolitical risks.
· The change in the price of oil could adversely affect the investment
valuations through the public market trading and transaction comparables, the
discounted cash flow rates, and potentially limit exit opportunities.
· A change in interest rates could adversely affect efficient access to
debt as a source of capital for both portfolio investments and potential
buyers of portfolio investments.
· The regulatory and tax environment of the Company's target investments
is potentially subject to change, which may adversely affect the value or
liquidity of investments held by the Company or its ability to obtain
leverage.
· The Company will be exposed to increased risk by investing in build-up
and early-stage investments that have little or no operating history and are
comparably more vulnerable to financial failure than more established
companies. The investor should be aware there can be no assurance that losses
generated by these types of entities will be offset by gains (if any) realised
on the Company's other investments.
· An investment's requirements for additional capital may require the
Company to invest more capital than it had originally planned or result in the
dilution of the Company's investment or a decrease in the value of that
investment.
· The Company may not have sufficient "dry powder" to participate in all
investment opportunities presented.
· Current regulations require SIFIs, specifically large banks, to hold
sufficient capital as a buffer against trading losses, or CAR / CRAR. Since
commodities are more volatile / risky in the current market, it could strip
large banks of commodity trading operations to alleviate the capital required
to maintain their CAR / CRAR. This could in turn impact the commodity prices
and therefore the value of REL's portfolio companies.
· REL's portfolio companies operate in a hazardous industry, which is
highly regulated by safety and health laws. Failure to provide a safe working
environment may result in harm to employees and local communities. Governments
may force closure of facilities or refuse future drilling right applications.
These inherent risks associated with investments in the global energy sector
could result in a material adverse effect on the Company's performance and the
value of Ordinary Shares.
The above key risks are mitigated and managed by the Board through continual
review, policy setting and updating of the Company's risk matrix at each Audit
Committee Meeting to ensure that procedures are in place with the intention of
minimising the impact of the above mentioned risks. The Board relies on
periodic reports provided by the Investment Manager and Administrator
regarding risks that the Company faces. When required, experts will be
employed to gather information, including tax advisors, legal advisors, and
environmental advisors.
The Company's financial instrument risks are discussed in Note 11 to the
Financial Statements.
By order of the Board
Richard Hayden
Chairman
27 February 2018
Report of the Audit Committee
The Audit Committee, chaired by Mr Firth, operates within clearly defined
terms of reference, which are available from the Company's website
www.RiverstoneREL.com, and include all matters indicated by Disclosure
Guidance and Transparency Rule 7.1, the AIC Code and the Corporate Governance
Code. Its other members are Mr Barker, Mr Hayden, Mr Thompson and Mrs Whittet.
Members of the Audit Committee must be independent of the Company's external
auditor and Investment Manager. The Audit Committee will meet no less than
three times in a year, and at such other times as the Audit Committee Chairman
shall require, and will meet the external auditor at least once a year.
The Committee members have considerable financial and business experience and
the Board has determined that the membership as a whole has sufficient recent
and relevant sector and financial experience to discharge its responsibilities
and that at least one member has competence in accounting or auditing having a
background as a chartered accountant.
Responsibilities
The main duties of the Audit Committee are:
· to monitor the integrity of the Company's Financial Statements and
regulatory announcements relating to its financial performance and review
significant financial reporting judgements;
· to report to the Board on the appropriateness of the Company's
accounting policies and practices;
· to review the valuations of the Company's investments prepared by the
Investment Manager, and provide a recommendation to the Board on the
valuation of the Company's investments;
· to oversee the relationship with the external auditors, including
agreeing their remuneration and terms of engagement, monitoring their
independence, objectivity and effectiveness, ensuring that policy surrounding
their engagement to provide non-audit services is appropriately applied, and
making recommendations to the Board on their appointment, reappointment or
removal, for it to put to the Shareholders in general meeting;
· to monitor and consider annually whether there is a need for the
Company to have its own internal audit function;
· to keep under review the effectiveness of the Company's internal
controls, including financial controls and risk management systems;
· to review and consider the Corporate Governance Code, the AIC Code, the
GFSC Code, the AIC Guidance on Audit Committees and the Stewardship Code; and
· to report to the Board on how it has discharged its responsibilities.
The Audit Committee is aware that several sections of the Annual Report are
not subject to formal statutory audit, including the Chairman's Statement and
the Investment Manager's Report. Financial information in these sections is
reviewed by the Audit Committee.
The Audit Committee is required to report its findings to the Board,
identifying any matters on which it considers that action or improvement is
needed, and make recommendations on the steps to be taken.
The external auditor is invited to attend the Audit Committee meetings at
which the Annual Report and Interim Financial Report are considered and at
which they have the opportunity to meet with the Committee without
representatives of the Investment Manager or Administrator being present at
least once per year.
Financial Reporting
The primary role of the Audit Committee in relation to financial reporting is
to review with the Administrator, Investment Manager and the external auditor
and report to the Board on the appropriateness of the Annual Report and
Financial Statements and Interim Financial Report, concentrating on, amongst
other matters:
· the quality and acceptability of accounting policies and practices;
· the clarity of the disclosures and compliance with financial reporting
standards and relevant financial and governance reporting requirements;
· material areas in which significant judgements have been applied or
there has been discussion with the external auditor including going concern
and viability statement;
· whether the Annual Report and Financial Statements, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for Shareholders to assess the Company's performance, business model and
strategy; and
· any correspondence from regulators in relation to our financial
reporting.
To aid its review, the Audit Committee considers reports from the
Administrator and Investment Manager and also reports from the external
auditor on the outcomes of their half-year review and annual audit. The Audit
Committee supports Ernst and Young LLP in displaying the necessary
professional scepticism their role requires.
Meetings
During the year ended 31 December 2017, the Audit Committee met formally five
times and maintained ongoing liaison and discussion between the external
auditor and the Chairman of the Audit Committee with regards to the audit
approach and the identified risks. The Audit Committee has met on one occasion
since the year end through to the date of this report on 27 February 2018. The
matters discussed at those meetings include:
· review of the terms of reference of the audit committee for approval by
the Board;
· review of the accounting policies and format of the Financial
Statements;
· review and approval of the audit plan of the external auditor;
· discussion and approval of the fee for the external audit;
· detailed review of the valuations of the Company's investment portfolio
and recommendation for approval by the Board;
· detailed review of the Annual Report and Financial Statements, Interim
Financial Report and quarterly portfolio valuations, and recommendation for
approval by the Board;
· assessment of the independence of the external auditor;
· assessment of the effectiveness of the external audit process as
described below; and
· review of the Company's key risks and internal controls.
Significant Areas of Judgement Considered by the Audit Committee
The Audit Committee has determined that a key risk of misstatement of the
Company's Financial Statements relates to the valuation of the investment in
the Partnership at fair value through profit or loss, in the context of the
judgements necessary to evaluate market values of the Investment Undertakings
of the Partnership.
The Directors have considered whether any discount or premium should be
applied to the net asset value of the Partnership, which is based on the fair
value of its Investment Undertakings. In view of the Company's investment in
the Partnership and the nature of the Partnership's assets, no adjustment to
the net asset value of the Partnership has been made, as this is deemed
equivalent to fair value.
The Audit Committee reviews, considers and, if thought appropriate, recommends
for the purposes of the Company's Financial Statements, valuations prepared by
the Investment Manager in respect of the investments of the Partnership. As
outlined in Note 6 to the Financial Statements, the total carrying value of
the investment in the Partnership at fair value through profit or loss at 31
December 2017 was $1,742 million (31 December 2016: $1,695 million). Market
quotations are not available for this financial asset such that the value of
the Company's investment is based on the value of the Company's limited
partner capital account with the Partnership, which itself is based on the
value of the Partnership's investments as determined by the Investment
Manager, along with the cash and fixed deposits held. The valuation for each
individual investment held by the Partnership is determined by reference to
common industry valuation techniques, including comparable public market
valuation, comparable merger and acquisition transaction valuation, and
discounted cash flow valuation, as detailed in the Investment Manager's Report
and Note 5 to the Financial Statements.
The valuation process and methodology was discussed with the Investment
Manager and with the external auditor at the Audit Committee meetings held on
31 October 2017 and 27 February 2018. The Investment Manager has carried out a
valuation quarterly and provided a detailed valuation report to the Company at
each quarter.
The Audit Committee reviewed the Investment Manager's Report. The Investment
Manager confirmed to the Audit Committee that the external auditor's work had
not identified any errors or inconsistencies that were material in the context
of the Annual Report and Financial Statements as a whole.
The external auditor explained the results of their audit work on valuations.
There were no adjustments proposed that were material in the context of the
Annual Report and Financial Statements as a whole.
The Audit Committee has reviewed going concern and has considered management's
forecasts. Following this review and a discussion of the sensitivities, we
confirmed that it continues to be appropriate to follow the going concern
basis of accounting in the Financial Statements.
For the Viability Statement, the Audit Committee endorsed the selection of a
three year time horizon as a basis for the statement and the approach to its
development.
Risk Management
The Board is accountable for carrying out a robust assessment of the principal
risks facing the Company, including those threatening its business model,
future performance, solvency and liquidity. On behalf of the Board, the Audit
Committee reviews the effectiveness of the Company's risk management
processes. The Company's risk assessment process and the way in which
significant business risks are managed is a key area of focus for the Audit
Committee. The work of the Audit Committee was driven primarily by the
Company's assessment of its principal risks and uncertainties as set out in
the Corporate Governance Report. The Audit Committee receives reports from the
Investment Manager and Administrator on the Company's risk evaluation process
and reviews changes to significant risks identified.
Internal Audit
The Audit Committee shall consider at least once a year whether or not there
is a need for an internal audit function. Currently, the Audit Committee does
not consider there to be a need for an internal audit function, given that
there are no employees in the Company and all outsourced functions are with
parties who have their own internal controls and procedures.
External Audit
Ernst & Young LLP has been the Company's external auditor since the Company's
incorporation. This is the fifth year of audit.
The external auditor is required to rotate the audit partner every five years.
The current Ernst & Yo- Part 3: For the preceding part double click ID:nRSb1636Gb
Board Committee Committee Engagement Committee
Meetings Meetings Meetings Committee Meetings
(max 4) (max 5) (max 1) Meetings (max 7)
(max 1)
Peter Barker ((1)) 4 4 1 1 n/a
Patrick Firth ((1)(2)) 4 5 1 1 7
Richard Hayden((1)) 4 4 1 1 n/a
Pierre Lapeyre 4 n/a n/a n/a n/a
David Leuschen 3 n/a n/a n/a n/a
Claire Whittet((1)) 4 5 1 1 6
Ken Ryan 4 n/a n/a n/a n/a
Jeremy Thompson((1)) 4 5 1 1 7
((1)) Non-executive Independent Director
((2)) Non-executive Senior Independent Director
( )
A quorum is comprised of any two or more members of the Board from time to
time, to perform administrative and other routine functions on behalf of the
Board, subject to such limitations as the Board may expressly impose on this
committee from time to time.
Committees of the Board
The Board believes that it and its committees have an appropriate composition
and blend of skills, experience, independence and diversity of backgrounds to
discharge their duties and responsibilities effectively. The Board is of the
view that no one individual or small group dominates decision-making. The
Board keeps its membership, and that of its committees, under review to ensure
that an acceptable balance is maintained, and that the collective skills and
experience of its members continue to be refreshed. It is satisfied that all
Directors have sufficient time to devote to their roles and that undue
reliance is not placed on any individual.
Each committee of the Board has written terms of reference, approved by the
Board, summarising its objectives, remit and powers, which are available on
the Company's website (www.RiverstoneREL.com) and reviewed on an annual basis.
All committee members are provided with appropriate induction on joining their
respective committees, as well as on-going access to training. Minutes of all
meetings of the committees (save for the private sessions of committee members
at the end of meetings) are made available to all Directors and feedback from
each of the committees is provided to the Board by the respective committee
Chairmen at the next Board meeting. The Chairman of each committee attends the
AGM to answer any questions on their committee's activities.
The Board and its committees are supplied with regular, comprehensive and
timely information in a form and of a quality that enables them to discharge
their duties effectively. All Directors are able to make further enquiries of
management whenever necessary, and have access to the services of the Company
Secretary.
Audit Committee
The Audit Committee is chaired by Mr Firth and comprises Mr Barker, Mr Hayden,
Mr Thompson and Mrs Whittet. The Chairman of the Audit Committee, the
Investment Manager and the external auditor, Ernst & Young LLP, have held
discussions regarding the audit approach and identified risks. The external
auditors attend Audit Committee meetings and a private meeting is routinely
held with the external auditors to afford them the opportunity of discussions
without the presence of management. The Audit Committee activities are
contained in the Report of the Audit Committee.
Nomination Committee
The Nomination Committee is chaired by Mr Hayden and comprises Mr Barker, Mr
Firth, Mr Thompson and Mrs Whittet.
The Nomination Committee meets at least once a year pursuant to its terms of
reference and met on 27 February 2018. The Nomination Committee is convened
for the purpose of considering the appointment of additional Directors as and
when considered appropriate. The Nomination Committee recognises the
continuing importance of planning for the future and ensuring that succession
plans are in place. In considering appointments to the Board, the Nomination
Committee takes into account the ongoing requirements of the Company and
evaluates the balance of skills, experience, independence, and knowledge of
each candidate. Appointments are therefore made on personal merit and against
objective criteria with the aim of bringing new skills and different
perspectives to the Board whilst taking into account the existing balance of
knowledge, experience and diversity.
In the case of candidates for Non-executive Directorships, care is taken to
ascertain that they have sufficient time to fulfil their Board and, where
relevant, committee responsibilities. The Board believes that the terms of
reference of the Nomination Committee ensure that it operates in a rigorous
and transparent manner. The Board believes that, as a whole, it comprises an
appropriate balance of skills, experience and knowledge. The Board also
believes that diversity of experience and approach, including gender
diversity, amongst Board members is of great importance and it is the
Company's policy to give careful consideration to issues of Board balance and
diversity when making new appointments.
The Board is satisfied with the current composition and functioning of its
members. When appointing Board members, its priority is based on merit, but
will be influenced by the strong desire to maintain board diversity, including
gender.
All Directors are subject to annual re-election by Shareholders at the AGM.
Management Engagement Committee
The Management Engagement Committee is chaired by Mrs Whittet and comprises Mr
Barker, Mr Hayden, Mr Firth and Mr Thompson. The Management Engagement
Committee meets at least once a year pursuant to its terms of reference.
The Management Engagement Committee provides a formal mechanism for the review
of the performance of the Investment Manager and the Company's other advisors
and service providers. It carries out this review through consideration of a
number of objective and subjective criteria and through a review of the terms
and conditions of the advisors' appointments with the aim of evaluating
performance, identifying any weaknesses and ensuring value for money for the
Shareholders.
Board Performance and Evaluation
In accordance with Principle 7 of the AIC Code which requires a formal and
rigorous annual evaluation of its performance, the Board formally reviews its
performance annually through an internal process. Internal evaluation of the
Board, the Audit Committee, the Nomination Committee, the Management
Engagement Committee and individual Directors has taken the form of
self-appraisal questionnaires and discussions to determine effectiveness and
performance in various areas as well as the Directors' continued independence.
During 2017 the Board carried out an internal evaluation of the performance of
the Board and the Board Committees. The responses were consolidated and
anonymised and common themes identified in order for the Board to determine
key actions and next steps for improving Board and Committee effectiveness and
performance.
The Board believes that annual evaluations are helpful and provide a valuable
opportunity for continuous improvement. All Directors participated in the
evaluation, and the findings were collectively considered by the Board. No
significant areas of weaknesses were highlighted during the evaluation and the
Board concluded that it had operated effectively throughout 2017 which
supported the overall conclusion of the 2016 external evaluation that the
Board is collegiate, transparent and effective. The Board is confident in its
ability to continue effectively to lead the Company and oversee its affairs.
The Board believes that the current mix of skills, experience, knowledge and
age of the Directors is appropriate to the requirements of the Company.
New Directors receive an induction on joining the Board and regularly meet
with the senior management employed by the Investment Manager both formally
and informally to ensure that the Board remains regularly updated on all
issues. All members of the Board are members of professional bodies and serve
on other Boards, which ensures they are kept abreast of the latest technical
developments in their areas of expertise.
The Board arranges for presentations from the Investment Manager, the
Company's brokers and other advisors on matters relevant to the Company's
business. The Board assesses the training needs of Directors on an annual
basis.
Internal Control and Financial Reporting
The Directors acknowledge that they are responsible for establishing and
maintaining the Company's system of internal control and reviewing its
effectiveness. Internal control systems are designed to manage rather than
eliminate the failure to achieve business objectives and can only provide
reasonable but not absolute assurance against material misstatements or loss.
However, the Board's objective is to ensure that Riverstone Energy Limited has
appropriate systems in place for the identification and management of risks.
The Directors carry out a robust assessment of the principal risks facing the
Company, including those that would threaten its business model, future
performance, solvency or liquidity. The key procedures which have been
established to provide internal control are that:
· the Board has delegated the day-to-day operations of the Company
to the Administrator and Investment Manager; however, it retains
accountability for all functions it delegates;
· the Board clearly defines the duties and responsibilities of the
Company's agents and advisors and appointments are made by the Board after due
and careful consideration. The Board monitors the ongoing performance of such
agents and advisors and will continue to do so through the Management
Engagement Committee;
· the Board monitors the actions of the Investment Manager at
regular Board meetings and is given frequent updates on developments arising
from the operations and strategic direction of the underlying investee
companies;
· the Administrator provides administration and company secretarial
services to the Company. The Administrator maintains a system of internal
control on which they report to the Board; and
· the Board has reviewed the need for an internal audit function
and has decided that the systems and procedures employed by the Administrator
and Investment Manager, including their own internal controls and procedures,
provide sufficient assurance that an appropriate level of risk management and
internal control, which safeguards Shareholders' investment and the Company's
assets, is maintained. An internal audit function specific to the Company is
therefore considered unnecessary.
Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of Financial Statements for external reporting purposes. The Administrator and
Investment Manager both operate risk controlled frameworks on a continual
ongoing basis within a regulated environment. The Administrator has undertaken
an ISAE 3402: Assurance Reports on Controls at a Service Organisation audit
and formally reports to the Board quarterly through a compliance report. The
Investment Manager formally reports to the Board quarterly including updates
within Riverstone and also engages with the Board on an ad-hoc basis as
required. No weaknesses or failings within the Administrator or Investment
Manager have been identified.
The systems of control referred to above are designed to ensure effectiveness
and efficient operation, internal control and compliance with laws and
regulations. In establishing the systems of internal control, regard is paid
to the materiality of relevant risks, the likelihood of costs being incurred
and costs of control. It follows therefore that the systems of internal
control can only provide reasonable but not absolute assurance against the
risk of material misstatement or loss. This process has been in place for the
year under review and up to the date of approval of this Annual Report and
Financial Statements. It is reviewed by the Board and is in accordance with
the FRC's internal control publication: Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting.
Investment Management Agreement
The Investment Manager has been appointed as the sole investment manager of
the Company and the Partnership. Pursuant to the Investment Management
Agreement, the Investment Manager has responsibility for and discretion over
investing and managing the Company's and the Partnership's direct and indirect
assets, subject to and in accordance with the Company's investment policy. The
Investment Manager is entitled to delegate all or part of its functions under
the Investment Management Agreement to one or more of its affiliates.
The Company has delegated the provision of all services to external service
providers whose work is overseen by the Management Engagement Committee at its
regular scheduled meetings. Each year a detailed review of performance
pursuant to their terms of engagement is undertaken by the Management
Engagement Committee.
In accordance with Listing Rule 15.6.2(2)R and having formally appraised the
performance and resources of the Investment Manager, in the opinion of the
Directors the continuing appointment of the Investment Manager on the terms
agreed is in the interests of the Shareholders as a whole.
Relations with Shareholders
The Board welcomes Shareholders' views and places great importance on
communication with its Shareholders. The Company's AGM provides a forum for
Shareholders to meet and discuss issues with the Directors of the Company. The
Chairman is available to meet with Shareholders at the AGM to hear their views
and discuss any issues or concerns, including in relation to board
composition, governance and strategy, or at other times, if required. In
addition, Mr. Firth, as the Senior Independent Director, is also available to
Shareholders if they have concerns which contact through the normal channels
has failed to resolve or for which such contact would be inappropriate. The
Chairman, Senior Independent Director and other Directors are also available
to meet with Shareholders at other times, if required.
The Company reports formally to Shareholders in a number of ways; regulatory
news releases through the London Stock Exchange's regulatory News Service,
announcements are issued in response to events or routine reporting
obligations, an Interim Report is published in August each year, outlining
performance to 30 June, which is made available on the Company's website; the
Annual Report is published in February each year, for the year ended 31
December, which is made available on the Company's website. In addition, the
Company's website (www.RiverstoneREL.com) contains comprehensive information,
including company notifications, share information, financial reports,
investment objectives and policy, investor contacts and information on the
Board and corporate governance. Shareholders and other interested parties can
subscribe to email news updates by registering online on the website.
The Investment Manager has regular contact with Shareholders, including the
Cornerstone Investors, and any views that they may have are communicated to
the Board and vice versa. No sensitive information is provided to the
Cornerstone Investors that is not provided to the Shareholders as a whole and
at the same time. The Board is also kept fully informed of all relevant market
commentary on the Company by the Investment Manager and the Corporate Brokers.
Over the year, the Investment Manager's investor relations team and senior
management held several roadshows and over 100 meetings with investors and
equity research analysts.
Whistleblowing
The Board has considered the AIC Code recommendations in respect of
arrangements by which staff of the Investment Manager or Administrator may, in
confidence, raise concerns within their respective organisations about
possible improprieties in matters of financial reporting or other matters. It
has concluded that adequate arrangements are in place for the proportionate
and independent investigation of such matters and, where necessary, for
appropriate follow-up action to be taken within their organisation.
Principal Risks and Uncertainties
The Company's assets consist of investments, through the Partnership, within
the global energy sector, with a particular focus on opportunities in the
global exploration and production and midstream energy sub-sectors. Its
principal risks are therefore related to market conditions in the energy
sector in general, but also the particular circumstances of the businesses in
which it is invested through the Partnership. The Investment Manager to the
Partnership seeks to mitigate these risks through active asset management
initiatives and carrying out due diligence work on potential targets before
entering into any investments.
Each Director is fully aware of the risks inherent in the Company's business
and understands the importance of identifying, evaluating and monitoring these
risks. The Board has adopted procedures and controls that enable it to carry
out a robust assessment of the risks facing the Company, manage these risks
within acceptable limits and to meet all of its legal and regulatory
obligations. The Board is committed to upholding and maintaining our zero
tolerance towards the criminal facilitation of tax evasion.
The Board thoroughly considers the process for identifying, evaluating and
managing any significant risks faced by the Company on an ongoing basis and
these risks are reported and discussed at Board meetings. It ensures that
effective controls are in place to mitigate these risks and that a
satisfactory compliance regime exists to ensure all applicable local and
international laws and regulations are upheld.
For each material risk, the likelihood and consequence are identified,
management controls and frequency of monitoring are confirmed and results
reported and discussed at the quarterly Board meetings.
The Company's principal risk factors are fully discussed in the Prospectuses,
available on the Company's website (www.RiverstoneREL.com) and should be
reviewed by Shareholders.
The key areas of risk faced by the Company are summarised below:
1. The Company intends to only invest in the global energy sector, with a
particular focus on oil and gas exploration and production, and midstream
investments, which will expose it to concentration risk.
2. The Ordinary Shares may trade at a Discount to NAV per Share for
reasons including but not limited to: market conditions, liquidity concerns
and actual or expected Company performance. As such, there can be no guarantee
that attempts to mitigate such discount will be successful or that the use of
discount control mechanisms will be possible, advisable or adopted by the
Company.
3. Investments in the exploration and production and midstream sectors of
the global energy sector involve a degree of inherent risk.
· The countries in which the Company invests may be exposed to
geopolitical risks.
· The change in the price of oil could adversely affect the
investment valuations through the public market trading and transaction
comparables, the discounted cash flow rates, and ung lead audit partner, Mr Michael Bane, started his
tenure in 2013 and his current rotation will end with the audit of the 2017
Annual Report and Financial Statements. There are no contractual obligations
restricting the choice of external auditor and the Company will put the audit
services contract out to tender at least every ten years. Under Companies Law,
the reappointment of the external auditor is subject to Shareholder approval
at the Annual General Meeting. The Audit Committee will continue to monitor
the performance of the external auditor on an annual basis and will consider
their independence and objectivity, taking account of appropriate guidelines.
In addition, the Committee Chairman will continue to maintain regular contact
with the lead audit partner outside the formal Committee meeting schedule, not
only to discuss formal agenda items for upcoming meetings, but also to review
any other significant matters.
The Audit Committee reviews the scope and results of the audit, its cost
effectiveness and the independence and objectivity of the external auditor,
with particular regard to the level of non-audit fees. Notwithstanding such
services the Audit Committee considers Ernst & Young LLP to be independent of
the Company and that the provision of such non-audit services is not a threat
to the objectivity and independence of the conduct of the audit.
To further safeguard the objectivity and independence of the external auditor
from becoming compromised, the Audit Committee has a formal policy governing
the engagement of the external auditor to provide non-audit services. This
precludes Ernst & Young LLP from providing certain services such as valuation
work or the provision of accounting services and also sets a presumption that
Ernst & Young LLP should only be engaged for non-audit services where Ernst &
Young LLP are best placed to provide the non-audit service for example, the
interim review and reporting accountant services. Note 14 details services
provided by Ernst & Young LLP.
To fulfil its responsibility regarding the independence of the external
auditor, the Audit Committee considers:
· discussions with or reports from the external auditor describing its
arrangements to identify, report and manage any conflicts of interest; and
· the extent of non-audit services provided by the external auditor.
To assess the effectiveness of the external auditor, the committee reviews:
· the external auditor's fulfilment of the agreed audit plan and
variations from it;
· discussions or reports highlighting the major issues that arose during
the course of the audit; and
· feedback from other service providers evaluating the performance of the
audit team.
The Audit Committee is satisfied with Ernst & Young LLP's effectiveness and
independence as external auditor having considered the degree of diligence and
professional scepticism demonstrated by them. Having carried out the review
described above, and having satisfied itself that the external auditor remains
independent and effective, the Audit Committee has recommended to the Board
that Ernst & Young LLP be reappointed as external auditor for the year ending
31 December 2018.
The Audit Committee has provided the Board with its recommendation to the
Shareholders on the re-appointment of Ernst & Young LLP as external auditor
for the year ending 31 December 2018. Accordingly, a resolution proposing the
reappointment of Ernst & Young LLP as our external auditor will be put to
Shareholders at the Annual General Meeting.
On behalf of the Audit Committee
Patrick Firth
Chairman of the Audit Committee
27 February 2018
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RIVERSTONE ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RIVERSTONE ENERGY LIMITED
Opinion
We have audited the Financial Statements of Riverstone Energy Limited (the
'Company') for the year ended 31 December 2017 which comprise the Statement of
Financial Position, the Statement of Comprehensive Income, the Statement of
Changes in Equity, the Statement of Cash Flows and the related notes 1 to 15,
including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards as adopted by the European
Union ('IFRS').
In our opinion, the Financial Statements:
• give a true and fair view of the state of the Company's affairs as at
31 December 2017 and of its profit for the year then ended;
• have been properly prepared in accordance with IFRS; and
• have been properly prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008.
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 below. 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.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Article 262 of the Companies (Guernsey) Law, 2008. 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.
Conclusions relating to principal risks, going concern and viability
statement
We have nothing to report in respect of the following information in the
Annual Report, in relation to which the ISAs (UK) require us to report to you
whether we have anything material to add or draw attention to:
• the disclosures in the Annual Report that describe the principal risks
and explain how they are being managed or mitigated;
• the Directors' confirmation in the Annual Report that they have carried
out a robust assessment of the principal risks facing the entity, including
those that would threaten its business model, future performance, solvency or
liquidity;
• the Directors' statement in the Financial Statements about whether they
considered it appropriate to adopt the going concern basis of accounting in
preparing them, and their identification of any material uncertainties to the
entity's ability to continue to do so over a period of at least twelve months
from the date of approval of the Financial Statements;
• whether the Directors' statement in relation to going concern required
under the Listing Rules is materially inconsistent with our knowledge obtained
in the audit; or
• the Directors' explanation in the Annual Report as to how they have
assessed the prospects of the entity, over what period they have done so and
why they consider that period to be appropriate, and their statement as to
whether they have a reasonable expectation that the entity will be able to
continue in operation and meet its liabilities as they fall due over the
period of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Overview of our audit approach
Risk of material misstatement:
We have determined that misstatement or manipulation of the valuation of the
Company's investment in the Partnership is the only risk of material
misstatement for the current year.
Audit scope:
We have audited the Financial Statements of Riverstone Energy Limited for the
year ended 31 December 2017.
The audit was led from Guernsey. The audit team mainly included individuals
from the Guernsey office of Ernst & Young LLP and from the New York office of
Ernst & Young LLP in the U.S. and utilised oil and gas industry valuation
experts from the Houston office of Ernst & Young LLP in the U.S. We operated
as an integrated audit team and we performed audit procedures and responded to
the risks identified as described below. The audit partner and senior members
of the engagement team from the Guernsey office, together with members of the
team from New York and valuation experts from Houston, visited the Investment
Manager's offices in New York and held discussions with, and assessed the work
performed by, management at the Investment Manager who were responsible for
valuing the investments held through the Partnership.
Materiality:
Overall materiality of $35 million (2016: $34 million), which is approximately
2 per cent. of equity.
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
year and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included 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 our opinion thereon, and we do not provide a separate
opinion on these matters.
Risk Our response to the risk Key observations communicated to the Audit Committee
Misstatement or manipulation of the valuation of the Company's investment in the Partnership ($1,742 million; 2016 $1,695 million)The fair value of the Company's investment in the Partnership is based on the Net Asset Value of the Partnership which, in turn, is based on the fair values of its net assets including the underlying investments held by the Partnership through the investing structure. Most of the underlying investments, which are primarily in early stage exploration and production companies in the oil and gas industry, are level three investments as defined in the IFRS hierarchy. Valuing such investments requires significant judgement and estimation as explained in note 3 to the Financial Statements and in the Audit Committee Report. It also requires significant industry expertise.The fair values of underlying investments may be misstated or manipulated by applying inappropriate valuation methodologies or metrics or by using inappropriate inputs to the valuation calculations. The fair values may also be misstated or manipulated by selecting inappropriate values from the range of reasonable values indicated by different valuation techniques.There is also a risk that proper adjustments are not made in the fair value calculations for the effects that tax and General Partner performance allocation will have on realised and unrealised gains of underlying investments. • We confirmed our understanding of the key controls, processes, policies and methodologies used by the Investment Manager for valuing level three investments held by We reported to the Audit Committee that we did not identify any material instances of uses of inappropriate methodologies and that the valuation of the Company's investment in the Partnership was not materially misstated.We also reported to the Audit Committee that there were no material matters arising from our audit work on the valuation of the Company's investment in the Partnership that we wished to bring to the attention of the Audit Committee.
the Partnership, and the processes used by the Board to review these valuations. We assessed whether such valuations had been done in accordance with IFRS and the
Company's accounting policies.• We selected all level three underlying investments for testing. This sample is more extensive than the sample required by our
methodology but we extended the sample size at the request of the Audit Committee.• We engaged our own internal oil and gas industry valuation experts to:a) use their
knowledge of the market to assess and corroborate management's market-related judgements and valuation metrics (including discount rates, current and future oil and gas
prices, valuation multiples and recent relevant transaction data) by reference to our expert's knowledge of comparable transactions, to independently compiled
- More to follow, for following part double click ID:nRSb1636Gd potentially limit exit
opportunities.
· A change in interest rates could adversely affect efficient access
to debt as a source of capital for both portfolio investments and potential
buyers of portfolio investments.
· The regulatory and tax environment of the Company's target
investments is potentially subject to change, which may adversely affect the
value or liquidity of investments held by the Company or its ability to obtain
leverage.
· The Company will be exposed to increased risk by investing in
build-up and early-stage investments that have little or no operating history
and are comparably more vulnerable to financial failure than more established
companies. The investor should be aware there can be no assurance that losses
generated by these types of entities will be offset by gains (if any) realised
on the Company's other investments.
· An investment's requirements for additional capital may require the
Company to invest more capital than it had originally planned or result in the
dilution of the Company's investment or a decrease in the value of that
investment.
· The Company may not have sufficient "dry powder" to participate in
all investment opportunities presented.
· Current regulations require SIFIs, specifically large banks, to
hold sufficient capital as a buffer against trading losses, or CAR / CRAR.
Since commodities are more volatile / risky in the current market, it could
strip large banks of commodity trading operations to alleviate the capital
required to maintain their CAR / CRAR. This could in turn impact the commodity
prices and therefore the value of REL's portfolio companies.
· REL's portfolio companies operate in a hazardous industry, which is
highly regulated by safety and health laws. Failure to provide a safe working
environment may result in harm to employees and local communities. Governments
may force closure of facilities or refuse future drilling right applications.
These inherent risks associated with investments in the global energy sector
could result in a material adverse effect on the Company's performance and the
value of Ordinary Shares.
The above key risks are mitigated and managed by the Board through continual
review, policy setting and updating of the Company's risk matrix at each Audit
Committee Meeting to ensure that procedures are in place with the intention of
minimising the impact of the above mentioned risks. The Board relies on
periodic reports provided by the Investment Manager and Administrator
regarding risks that the Company faces. When required, experts will be
employed to gather information, including tax advisors, legal advisors, and
environmental advisors.
The Company's financial instrument risks are discussed in Note 11 to the
Financial Statements.
By order of the Board
Richard Hayden
Chairman
27 February 2018
Report of the Audit Committee
The Audit Committee, chaired by Mr Firth, operates within clearly defined
terms of reference, which are available from the Company's website
www.RiverstoneREL.com, and include all matters indicated by Disclosure
Guidance and Transparency Rule 7.1, the AIC Code and the Corporate Governance
Code. Its other members are Mr Barker, Mr Hayden, Mr Thompson and Mrs Whittet.
Members of the Audit Committee must be independent of the Company's external
auditor and Investment Manager. The Audit Committee will meet no less than
three times in a year, and at such other times as the Audit Committee Chairman
shall require, and will meet the external auditor at least once a year.
The Committee members have considerable financial and business experience and
the Board has determined that the membership as a whole has sufficient recent
and relevant sector and financial experience to discharge its responsibilities
and that at least one member has competence in accounting or auditing having a
background as a chartered accountant.
Responsibilities
The main duties of the Audit Committee are:
· to monitor the integrity of the Company's Financial Statements
and regulatory announcements relating to its financial performance and review
significant financial reporting judgements;
· to report to the Board on the appropriateness of the Company's
accounting policies and practices;
· to review the valuations of the Company's investments prepared by
the Investment Manager, and provide a recommendation to the Board on the
valuation of the Company's investments;
· to oversee the relationship with the external auditors, including
agreeing their remuneration and terms of engagement, monitoring their
independence, objectivity and effectiveness, ensuring that policy surrounding
their engagement to provide non-audit services is appropriately applied, and
making recommendations to the Board on their appointment, reappointment or
removal, for it to put to the Shareholders in general meeting;
· to monitor and consider annually whether there is a need for the
Company to have its own internal audit function;
· to keep under review the effectiveness of the Company's internal
controls, including financial controls and risk management systems;
· to review and consider the Corporate Governance Code, the AIC
Code, the GFSC Code, the AIC Guidance on Audit Committees and the Stewardship
Code; and
· to report to the Board on how it has discharged its
responsibilities.
The Audit Committee is aware that several sections of the Annual Report are
not subject to formal statutory audit, including the Chairman's Statement and
the Investment Manager's Report. Financial information in these sections is
reviewed by the Audit Committee.
The Audit Committee is required to report its findings to the Board,
identifying any matters on which it considers that action or improvement is
needed, and make recommendations on the steps to be taken.
The external auditor is invited to attend the Audit Committee meetings at
which the Annual Report and Interim Financial Report are considered and at
which they have the opportunity to meet with the Committee without
representatives of the Investment Manager or Administrator being present at
least once per year.
Financial Reporting
The primary role of the Audit Committee in relation to financial reporting is
to review with the Administrator, Investment Manager and the external auditor
and report to the Board on the appropriateness of the Annual Report and
Financial Statements and Interim Financial Report, concentrating on, amongst
other matters:
· the quality and acceptability of accounting policies and
practices;
· the clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance reporting
requirements;
· material areas in which significant judgements have been applied
or there has been discussion with the external auditor including going concern
and viability statement;
· whether the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's performance, business model
and strategy; and
· any correspondence from regulators in relation to our financial
reporting.
To aid its review, the Audit Committee considers reports from the
Administrator and Investment Manager and also reports from the external
auditor on the outcomes of their half-year review and annual audit. The Audit
Committee supports Ernst and Young LLP in displaying the necessary
professional scepticism their role requires.
Meetings
During the year ended 31 December 2017, the Audit Committee met formally five
times and maintained ongoing liaison and discussion between the external
auditor and the Chairman of the Audit Committee with regards to the audit
approach and the identified risks. The Audit Committee has met on one occasion
since the year end through to the date of this report on 27 February 2018. The
matters discussed at those meetings include:
· review of the terms of reference of the audit committee for
approval by the Board;
· review of the accounting policies and format of the Financial
Statements;
· review and approval of the audit plan of the external auditor;
· discussion and approval of the fee for the external audit;
· detailed review of the valuations of the Company's investment
portfolio and recommendation for approval by the Board;
· detailed review of the Annual Report and Financial Statements,
Interim Financial Report and quarterly portfolio valuations, and
recommendation for approval by the Board;
· assessment of the independence of the external auditor;
· assessment of the effectiveness of the external audit process as
described below; and
· review of the Company's key risks and internal controls.
Significant Areas of Judgement Considered by the Audit Committee
The Audit Committee has determined that a key risk of misstatement of the
Company's Financial Statements relates to the valuation of the investment in
the Partnership at fair value through profit or loss, in the context of the
judgements necessary to evaluate market values of the Investment Undertakings
of the Partnership.
The Directors have considered whether any discount or premium should be
applied to the net asset value of the Partnership, which is based on the fair
value of its Investment Undertakings. In view of the Company's investment in
the Partnership and the nature of the Partnership's assets, no adjustment to
the net asset value of the Partnership has been made, as this is deemed
equivalent to fair value.
The Audit Committee reviews, considers and, if thought appropriate, recommends
for the purposes of the Company's Financial Statements, valuations prepared by
the Investment Manager in respect of the investments of the Partnership. As
outlined in Note 6 to the Financial Statements, the total carrying value of
the investment in the Partnership at fair value through profit or loss at 31
December 2017 was $1,742 million (31 December 2016: $1,695 million). Market
quotations are not available for this financial asset such that the value of
the Company's investment is based on the value of the Company's limited
partner capital account with the Partnership, which itself is based on the
value of the Partnership's investments as determined by the Investment
Manager, along with the cash and fixed deposits held. The valuation for each
individual investment held by the Partnership is determined by reference to
common industry valuation techniques, including comparable public market
valuation, comparable merger and acquisition transaction valuation, and
discounted cash flow valuation, as detailed in the Investment Manager's Report
and Note 5 to the Financial Statements.
The valuation process and methodology was discussed with the Investment
Manager and with the external auditor at the Audit Committee meetings held on
31 October 2017 and 27 February 2018. The Investment Manager has carried out a
valuation quarterly and provided a detailed valuation report to the Company at
each quarter.
The Audit Committee reviewed the Investment Manager's Report. The Investment
Manager confirmed to the Audit Committee that the external auditor's work had
not identified any errors or inconsistencies that were material in the context
of the Annual Report and Financial Statements as a whole.
The external auditor explained the results of their audit work on valuations.
There were no adjustments proposed that were material in the context of the
Annual Report and Financial Statements as a whole.
The Audit Committee has reviewed going concern and has considered management's
forecasts. Following this review and a discussion of the sensitivities, we
confirmed that it continues to be appropriate to follow the going concern
basis of accounting in the Financial Statements.
For the Viability Statement, the Audit Committee endorsed the selection of a
three year time horizon as a basis for the statement and the approach to its
development.
Risk Management
The Board is accountable for carrying out a robust assessment of the principal
risks facing the Company, including those threatening its business model,
future performance, solvency and liquidity. On behalf of the Board, the Audit
Committee reviews the effectiveness of the Company's risk management
processes. The Company's risk assessment process and the way in which
significant business risks are managed is a key area of focus for the Audit
Committee. The work of the Audit Committee was driven primarily by the
Company's assessment of its principal risks and uncertainties as set out in
the Corporate Governance Report. The Audit Committee receives reports from the
Investment Manager and Administrator on the Company's risk evaluation process
and reviews changes to significant risks identified.
Internal Audit
The Audit Committee shall consider at least once a year whether or not there
is a need for an internal audit function. Currently, the Audit Committee does
not consider there to be a need for an internal audit function, given that
there are no employees in the Company and all outsourced functions are with
parties who have their own internal controls and procedures.
External Audit
Ernst & Young LLP has been the Company's external auditor since the
Company's incorporation. This is the fifth year of audit.
The external auditor is required to rotate the audit partner every five years.
The current Ernst & Young lead audit partner, Mr Michael Bane, started his
tenure in 2013 and his current rotation will end with the audit of the 2017
Annual Report and Financial Statements. There are no contractual obligations
restricting the choice of external auditor and the Company will put the audit
services contract out to tender at least every ten years. Under Companies Law,
the reappointment of the external auditor is subject to Shareholder approval
at the Annual General Meeting. The Audit Committee will continue to monitor
the performance of the external auditor on an annual basis and will consider
their independence and objectivity, taking account of appropriate guidelines.
In addition, the Committee Chairman will continue to maintain regular contact
with the lead audit partner outside the formal Committee meeting schedule, not
only to discuss formal agenda items for upcoming meetings, but also to review
any other significant matters.
The Audit Committee reviews the scope and results of the audit, its cost
effectiveness and the independence and objectivity of the external auditor,
with particular regard to the level of non-audit fees. Notwithstanding such
services the Audit Committee considers Ernst & Young LLP to be independent
of the Company and that the provision of such non-audit services is not a
threat to the objectivity and independence of the conduct of the audit.
To further safeguard the objectivity and independence of the external auditor
from becoming compromised, the Audit Committee has a formal policy governing
the engagement of the external auditor to provide non-audit services. This
precludes Ernst & Young LLP from providing certain services such as
valuation work or the provision of accounting services and also sets a
presumption that Ernst & Young LLP should only be engaged for non-audit
services where Ernst & Young LLP are best placed to provide the non-audit
service for example, the interim review and reporting accountant services.
Note 14 details services provided by Ernst & Young LLP.
To fulfil its responsibility regarding the independence of the external
auditor, the Audit Committee considers:
· discussions with or reports from the external auditor describing
its arrangements to identify, report and manage any conflicts of interest; and
· the extent of non-audit services provided by the external
auditor.
To assess the effectiveness of the external auditor, the committee reviews:
· the external auditor's fulfilment of the agreed audit plan and
variations from it;
· discussions or reports highlighting the major issues that arose
during the course of the audit; and
· feedback from other service providers evaluating the performance
of the audit team.
The Audit Committee is satisfied with Ernst & Young LLP's effectiveness
and independence as external auditor having considered the degree of diligence
and professional scepticism demonstrated by them. Having carried out the
review described above, and having satisfied itself that the external auditor
remains independent and effective, the Audit Committee has recommended to the
Board that Ernst & Young LLP be reappointed as external auditor for the
year ending 31 December 2018.
The Audit Committee has provided the Board with its recommendation to the
Shareholders on the re-appointment of Ernst & Young LLP as external
auditor for the year ending 31 December 2018. Accordingly, a resolution
proposing the reappointment of Ernst & Young LLP as our external auditor
will be put to Shareholders at the Annual General Meeting.
On behalf of the Audit Committee
Patrick Firth
Chairman of the Audit Committee
27 February 2018
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RIVERSTONE ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RIVERSTONE ENERGY LIMITED
Opinion
We have audited the Financial Statements of Riverstone Energy Limited (the
'Company') for the year ended 31 December 2017 which comprise the Statement of
Financial Position, the Statement of Comprehensive Income, the Statement of
Changes in Equity, the Statement of Cash Flows and the related notes 1 to 15,
including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards as adopted by the European
Union ('IFRS').
In our opinion, the Financial Statements:
• give a true and fair view of the state of the Company's
affairs as at 31 December 2017 and of its profit for the year then ended;
• have been properly prepared in accordance with IFRS; and
• have been properly prepared in accordance with the
requirements of the Companies (Guernsey) Law, 2008.
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 below. 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.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Article 262 of the Companies (Guernsey) Law, 2008. 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.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the
Annual Report, in relation to which the ISAs (UK) require us to report to you
whether we have anything material to add or draw attention to:
• the disclosures in the Annual Report that describe the principal
risks and explain how they are being managed or mitigated;
• the Directors' confirmation in the Annual Report that they have
carried out a robust assessment of the principal risks facing the entity,
including those that would threaten its business model, future performance,
solvency or liquidity;
• the Directors' statement in the Financial Statements about
whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material
uncertainties to the entity's ability to continue to do so over a period of at
least twelve months from the date of approval of the Financial Statements;
• whether the Directors' statement in relation to going concern
required under the Listing Rules is materially inconsistent with our knowledge
obtained in the audit; or
• the Directors' explanation in the Annual Report as to how they
have assessed the prospects of the entity, over what period they have done so
and why they consider that period to be appropriate, and their statement as to
whether they have a reasonable expectation that the entity will be able to
continue in operation and meet its liabilities as they fall due over the
period of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Overview of our audit approach
Risk of material misstatement:
We have determined that misstatement or manipulation of the valuation of the
Company's investment in the Partnership is the only risk of material
misstatement for the current year.
Audit scope:
We have audited the Financial Statements of Riverstone Energy Limited for the
year ended 31 December 2017.
The audit was led from Guernsey. The audit team mainly included individuals
from the Guernsey office of Ernst & Young LLP and from the New York office
of Ernst & Young LLP in the U.S. and utilised oil and gas industry
valuation experts from the Houston office of Ernst & Young LLP in the U.S.
We operated as an integrated audit team and we performed audit procedures and
responded to the risks identified as described below. The audit partner and
senior members of the engagement team from the Guernsey office, together with
members of the team from New York and valuation experts from Houston, visited
the Investment Manager's offices in New York and held discussions with, and
assessed the work performed by, management at the Investment Manager who were
responsible for valuing the investments held through the Partnership.
Materiality:
Overall materiality of $35 million (2016: $34 million), which is approximately
2 per cent. of equity.
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
year and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included 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 our opinion thereon, and we do not provide a separate
opinion on these matters.
Risk Our response to the risk Key observations communicated to the Audit Committee
Misstatement or manipulation of the valuation of the Company's investment in • We confirmed our understanding of the key controls, processes, We reported to the Audit Committee that we did not identify any material
the Partnership ($1,742 million; 2016 $1,695 million) policies and methodologies used by the Investment Manager for valuing level instances of uses of inappropriate methodologies and that the valuation of the
three investments held by the Partnership, and the processes used by the Board Company's investment in the Partnership was not materially misstated.
The fair value of the Company's investment in the Partnership is based on the to review these valuations. We assessed whether such valuations had been done
Net Asset Value of the Partnership which, in turn, is based on the fair values in accordance with IFRS and the Company's accounting policies. We also reported to the Audit Committee that there were no material matters
of its net assets including the underlying investments held by the Partnership
arising from our audit work on the valuation of the Company's investment in
through the investing structure. Most of the underlying investments, which are • We selected all level three underlying investments for testing. This the Partnership that we wished to bring to the attention of the Audit
primarily in early stage exploration and production companies in the oil and sample is more extensive than the sample required by our methodology but we Committee.
gas industry, are level three investments as defined in the IFRS hierarchy. extended the sample size at the request of the Audit Committee.
Valuing such investments requires significant judgement and estimation as
explained in note 3 to the Financial Statements and in the Audit Committee • We engaged our own internal oil and gas industry valuation experts
Report. It also requires significant industry expertise. to:
The fair values of underlying investments may be misstated or manipulated by a) use their knowledge of the market to assess and corroborate management's
applying inappropriate valuation methodologies or metrics or by using market-related judgements and valuation metrics (including discount rates,
inappropriate inputs to the valuation calculations. The fair values may also current and future oil and gas prices, valuation multiples and recent relevant
be misstated or manipulated by selecting inappropriate values from the range transaction data) by reference to our expert's knowledge of comparable
of reasonable values indicated by different valuation techniques. transactions, to independently compiled databases/indices and to information
reported by comparable public companies;
There is also a risk that proper adjustments are not made in the fair value
calculations for the effects that tax and General Partner performance b) assist us to determine whether the methodologies used to value
allocation will have on realised and unrealised gains of underlying investments were in accordance with methods, particularly those specific to
investments. the oil and gas industry, usually used by market participants; and
c) assist us to determine whether appropriate judgements had been applied in
selecting point estimates from the range of reasonable estimates indicated by
different valuation techniques.
• We agreed significant valuation inputs used by management (including
production and acreage data, EBITDA and other financial performance measures)
to information from underlying investees and we tested the arithmetical
accuracy of the valuation calculations.
• We engaged our own tax professionals to assess whether the
mechanisms in place for capturing the tax effects of realised and unrealised
gains reflected the likely tax outcomes and their effect on fair value.
• We checked that the General Partner performance allocation
calculation had been performed in accordance with the terms of the agreement
and that the calculation correctly reflected both realised and unrealised
gains
• We assessed the Company's analysis of whether the fair value of its
investment in the Partnership was equivalent to the Net Asset Value of the
Partnership by testing whether the data used in the analysis was appropriate
and relevant and had been appropriately extracted from independent sources.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation
of performance materiality determine our audit scope for the Company. This
enables us to form an opinion on the Financial Statements. We take into
account size, risk profile, the organisation of the Company and effectiveness
of controls, including controls and changes in the business environment when
assessing the level of work to be performed. All audit work was performed
directly by the audit engagement team.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion.
Materiality
"Materiality" is the magnitude of omissions or misstatements that,
individually or in aggregate, could reasonably be expected to influence the
economic decisions of the users of the Financial Statements. Materiality
provides a basis for determining the nature and extent of our audit
procedures.
We determined planning materiality for the Company to be $35 million (2016:
$34 million), which is approximately 2 per cent. (2016: 2 per cent.) of
equity. This provided a basis for determining the nature, timing and extent of
risk assessment procedures, identifying and assessing the risk of material
misstatement and determining the nature, timing and extent of further audit
procedures. We used equity as a basis for determining planning materiality
because the Company's primary performance measures for internal and external
reporting are based on equity.
Performance materiality
"Performance materiality" is the application of materiality at the individual
account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the
Company's overall control environment, our judgement was that overall
performance materiality (i.e. our tolerance for misstatement in an individual
account or balance) for the Company should be 75 per cent. of materiality,
namely $26.25 million (2016: 75 per cent. of materiality, namely $25.5
million). Our objective in adopting this approach was to ensure that total
uncorrected and undetected audit differences in the Financial Statements did
not exceed our materiality level.
Reporting threshold
"Reporting threshold" is an amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all audit
differences in excess of $1.8 million (2016: $1.7 million) which is set at 5
per cent. of planning materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluated any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.
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.
Our opinion on the Financial Statements does not cover the other information
and, except to the extent otherwise explicitly stated in this report, we do
not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements, 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 audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the Financial Statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of the other information, we are required to
report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of the other
information where we conclude that those items meet the following conditions:
• Fair, balanced and understandable - the statement given by the
Directors that they consider the Annual Report and Financial Statements taken
as a whole is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's performance, business model
and strategy, is materially inconsistent with our knowledge obtained in the
audit; or
• Audit committee reporting - the section describing the work of
the audit committee does not appropriately address matters communicated by us
to the audit committee is materially inconsistent with our knowledge obtained
in the audit; or
• Directors' statement of compliance with the UK Corporate
Governance Code - the parts of the Directors' statement required under the
Listing Rules relating to the Company's compliance with the UK Corporate
Governance Code containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure
from a relevant provision of the UK Corporate Governance Code.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies (Guernsey) Law, 2008 requires us to report to you if, in
our opinion:
• proper accounting records have not been kept by the Company; or
• the Financial Statements are not in agreement with the Company's
accounting records and returns; or
• we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement, 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.
A further description of our responsibilities for the audit of the Financial
Statements is located on the Financial Reporting Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
Michael Bane
For and on behalf of Ernst & Young LLP
Guernsey
27 February 2018
Notes:
((1) )The maintenance and integrity of the Company's website is the sole
responsibility of the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditor accepts
no responsibility for any changes that may have occurred to the Financial
Statements since they were initially presented on the website
((2) ) Legislation in the Guernsey governing the preparation and
dissemination of Financial Statements may differ from legislation in other
jurisdiction
Statement of Financial Position
As at 31 December 2017
Notes 31 December 31 December
2017 2016
$'000 $'000
Assets
Non-current assets
Investment at fair value through profit or loss 6 1,742,457 1,695,406
Total non-current assets 1,742,457 1,695,406
Current assets
Trade and other receivables 545 545
Cash and cash equivalents 7 789 3,230
Total current assets 1,334 3,775
Total assets 1,743,791 1,699,181
Current liabilities
Trade and other payables 612 623
Total current liabilities 612 623
Total liabilities 612 623
Net assets 1,743,179 1,698,558
Equity
Share capital 8 1,317,496 1,317,496
Retained earnings 425,683 381,062
Total equity 1,743,179 1,698,558
Number of Shares in issue at year end 8 84,480,064 84,480,064
Net Asset Value per Share ($) 13 20.63 20.11
The Financial Statements of the Company were approved and authorised for issue
by the Board of Directors on 27 February 2018 and signed on their behalf by:
Richard Hayden Patrick Firth
Chairman
- More to follow, for following part double click ID:nRSb1636GdRecent news on Riverstone Energy
See all newsREG - Riverstone Energy Ld - Variation of Corporate Broker Services
AnnouncementREG - Riverstone Energy Ld - Notice of Annual General Meeting
AnnouncementREG - Riverstone Energy Ld Barclays PLC - Holding(s) in Company
AnnouncementREG - Riverstone Energy Ld - Holding(s) in Company
AnnouncementREG - Riverstone Energy Ld - Holding(s) in Company
Announcement